Finding That Perfect Match
| Merger/ Merging |
Acquisition/ Acquiring |
Transition | Succession 4+ Partners |
Internal Succession |
Practice Continuation |
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It does not matter what the goal of a merger is, first and foremost, there must be the right chemistry between the firms. Culture and firm personality must be almost parallel with one another for a merger to work. CULTURE. Culture can include employee benefits, vacation policies, dress codes, recordkeeping, organization and how different departments and staff communicate or pass work or what they expect from each other. A very important step is the review of the other firm's employee handbook, work charts or guidelines and ask probing questions. Prior to the actual merger but after the basic agreement has been established spend some time observing the day-to-day activities of each other's practices. You can do so on a per diem basis or as a consultant in the beginning to maintain confidentially. Understand different is not a bad thing, it is just different! EGOS. Egos will play a significant part. Egos will have an impact on the name of the new firm, the titles, the order of names on the letterhead, compensation, office accommodations and, most important, control. This is a natural occurrence but the question must be asked constantly, "What is the business case for any decision?" If ego can increase billing rates, bring in new business or enhance profitability, great. If it cannot, make a business decision. SYNERGY. Synergy and opportunity must be identified and analyzed. A merger of clones produces mass. Mass does not necessarily translate into growth or higher profit. This is exactly why it is important to understand different is not a bad thing, it is just different! BILLING. Billing rates must be analyzed. Very few firms charge the same hourly or project rate because many firms make internal decisions regarding what services are included in a particular fee rate. Billing rates are important but realization rates are more important. If in fact, two firms do have significantly different billing rates it is important to evaluate what level of staff can perform the work being billed. Often a manager or other level can perform the work previously done by a partner of the merged firm. GOALS. Goals of each firm must be analyzed to ascertain if each will be met. If your firm is merging for purposes of succession and the partners of the other firm are similar in age or just a few years younger, this will not work well. If a firm is looking to merge for purposes of cross-selling their audit services and the firm being considered does not have clients needing audits, the goal of the merger may not be fully realized. POLICIES. Policies and procedures must be compared as they contribute to a firm's culture. Firms with vastly different procedures or processes may not match well for purposes of a merger. No firm is a perfect clone of another, so often there will be differences and the need to make changes. The deciding question must be: Will making that change alter the firm's personality or culture? If the answer is yes, do not complete the merger unless you are ready to accept this cultural change wholeheartedly! More information on finding a merger partner:
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