Many of the problems I experienced in the unsuccessful merger of my practice with a larger firm were not covered in your article, "Solo, But Not Alone" (JofA, Apr.99, page 35).
My practice grossed $50,000 its first year, and I was averaging two to three new referrals a week. Suffering the same frustrations outlined in the article—wearing too many hats and unable to keep up with the changes—I responded to an ad seeking a partner-level CPA to assume a retiring partner's equity.
After an exhaustive interview process, I merged my practice three months later. That's when everything went wrong.
The senior partner was not present on my first day and none of the staff, many of whom had been competing for the same position, knew I was arriving.
When I confronted the senior partner about the situation, he secretly informed me that he expected a minority shareholder to sell her shares back to the firm and that I would assume her interest.
I struggled for months to make the situation work. Finally, while reviewing my billing, I discovered that the firm had raised its rates dramatically. When questioned, the senior partner said he had no intention of notifying clients of the rate change. In addition, he was unsympathetic to the concerns of the clients I had brought to the firm.
What did I learn from all of this? I learned that, despite the small size of my practice, I should have examined the integrity of the firm that was acquiring my business. Rather than worrying about meeting its standards, I should have inquired about what those standards were.
There is a happy ending. I am now sharing space with two other CPAs, which enables us to also share costs and expertise. Just six months after I left the larger firm, my practice is grossing $150,000; I have hired my first full-time CPA; and I am acquiring a smaller firm—which will, ultimately, bring the gross to $250,000.
Curt R. Germundson, CPA