Most every merger needs to define and address differing partner goals. That is not the challenge. The challenge is when a firm elects not to consider a merger and must tackle the differing goals and desires of its partners internally, when the firm infrastructure will not support or cannot support the realization of such goals. When that happens, it is unfortunate but many firms choose to ignore the obvious and march on as if the issue is not relevant. This situation significantly contributes to the firm (and the remaining partners) experiencing decreasing value.

This issue is being significantly compounded by the effect of the Baby Boomers reaching the age of retirement. Many firms are experiencing difficulty replacing the more tenured partners with younger partners because there are a limited number of partners, or managers capable of being partners, available.

If a firm currently does have younger partners, another concern being experienced is the potential the younger partners are going to experience inordinate financial challenges as they become responsible for the retirement packages or buy-outs of the retiring partners.

Another challenge facing many multi-partner firms is when two or more partners have the same retirement goal and the impact of two or more reducing their roles will be a negative ripple effect due to the inability of the firm to replace the role of the retiring partner or partners, not just replace the partner.

Because of the above a merger may often have a series of agreements; a master agreement addressing the merger of the firms and separate agreements addressing the specifics of each partner's individual goals or desires. This multi-agreement requirement may also affect value, individually or collectively, depending on many factors including but not limited to:  

• How the firm operates and allocates compensation and bonuses at the partner level. Does the firm operate with an "eat what you kill" compensation structure or something different?
• What is the size of the partner group and will several be leaving within a short period either of each other or of the merger date?
• What is the competency level of staff, manager or potential partner-level staff?
• What are the purposes, goals and expectations for the merger? These questions are often more cumbersome than fulfilling the goals of the individual partners, even when they differ.  

There are many positive reasons for firms to merge, especially when the due diligence of opportunity is performed efficiently. It is true that the differing goals of the partners may very well be a positive and not a concern. The review of the individual goals should be benchmarked against the opportunities, internal and external, because only then will the potential for a good decision be realized.

One of the most powerful questions you can ask is, "What if….?"  Every firm should respond to a series of "what if" questions:

• What if we do nothing?
• What are the positives?
• Negatives?
• Exposures?
• Effects on the business?
• Effects on profits?
• Effects on continuity?
• Effects on value?