Want your merger to work? Implement these 10 ideas

4 common mistakes often prevent accounting firm combinations from reaching their potential. Here’s how to avoid them and take a better path.
By Jennifer Wilson

Merging. Everyone seems to be doing it—or talking about it—these days. With increasing retirements, more firms are facing the need to merge to address leadership shortages. The resulting market opportunity for firms committed to remaining independent is considerable—and yet the risks of making a mistake by merging with the wrong firm are real. All too often, we see firms undertake an opportunistic merger and then spend months—even years—struggling to make it a success.

In my experience, firm mergers fail to reach their full potential due to four common mistakes: (1) incongruent goals at the outset, (2) divergent cultural attributes that cause friction and an inability to “get along,” (3) a lack of proper due diligence leading to unpleasant discoveries after the merger has occurred, and (4) poor integration after the deal is done.

Instead of making these common merger mistakes, follow these 10 ideas to pursue a truly strategic approach to your firm’s merger pursuits:

  • Formulate your merger mission. What are you seeking to gain by merging with or acquiring a practice? Perhaps you’re seeking to recruit talent or attract a specific skill to your firm. Maybe you would like to add a new specialty service or industry revenue stream—or expand into a new geography. As you embark on your M&A journey, be sure to gain unity around your firm’s goals and expected outcomes.
  • Define your ideal target merger candidates. Based on your M&A mission, define the ideal merger or acquisition candidates in terms of revenues, number of employees, geography, products/services offered, industries served, infrastructure already in place, cultural attributes and values, and the type of people or skills you’re seeking to gain. Be as specific as possible—even down to identifying your ideal target’s average billing rates by level to ensure a fit with your firm’s billing practices. By defining your ideal target, you’ll be more apt to search in the right places and you’ll be in a better position to tell others what you’re seeking so that your network can refer you firms who fit your profile.
  • Network! Let your vendors and consultants know what you’re seeking. Tell peer firms within your alliance or association. Use social media and Google to identify potential targets. Place an ongoing ad in your state society newsletter, and let your state society contacts know of your plans and ideal targets. Make sure your firm’s key leaders have the profile so they are on the lookout in their daily work. Get the word out!
  • Produce a merger target list. Using Google, social media, and referrals from trusted sources, develop a list of potential merger candidates with as much detail about each as you can gather. Assign a team member to conduct deeper research into each firm to either confirm eligibility or help you eliminate them. Assign one high-level leader on your team to act as the primary point of contact and strategist for each target.
  • Reach into your targets. Your merger point person should contact each remaining target’s CEO or managing partner. When introducing your firm, share your merger plans and ideal target profile and ask if the firm has an interest in pursuing further dialogue to explore possibilities. If the firm has no interest, keep in touch because things can change. If the firm does have an interest, begin developing rapport and understanding what their ideal merger profile looks like.
  • Conduct cultural due diligence. Dig in and get close to the merger candidate’s leaders as people and understand their motivators, fears, and values. Observe how they conduct themselves in the process, to better assess their culture—are they trusting and open or close to the vest and reserved? Do they view things from a “bounty” or a “scarcity” perspective? Are they progressive or conservative? Do they empower and elevate their young people, or are they running a more typical, hierarchical model? Are they fun or serious? Are they organized and structured or more laissez-faire? Take the time to understand the approach and mindset of the firm’s leaders, with a significant emphasis on the cultural desires of the target firm’s future leaders. More than anything else, cultural disconnects post-merger can distract your firm’s leadership and derail your success.
  • Conduct more due diligence. Dedicate a team of quality leaders to research and understand where the target candidate stands in terms of financial performance against benchmarks, billing rates and practices, employee benefits, turnover rates, revenue growth, revenue breakdown by service and industry, client gains and losses, employee satisfaction/engagement, technology deployed throughout the firm, quality service delivery and performance within any peer or internal reviews, marketing and sales processes, facilities, and more. Look for areas where you can help each other improve but be cautious when you identify significant gaps or any area where you believe that the clients, employees, or firm leaders of either the merger candidate’s firm or yours will experience a significant takeaway. While a merger may not provide an immediate return to both parties, you want to be cautious when engaging in a merger that has “deal breaking” differences or where it’s hard to clearly identify the win-win for both parties and your stakeholders.
  • Structure the right deal. No two deals are exactly alike because the reasons that lead both parties to the table are different and their “must haves” vary based on those motivators. One thing is certain: You don’t want to overpay, and the other party doesn’t want to leave money on the table either. Seriously consider using an accounting firm broker to guide you in the latest best practices for structuring a deal that allows both parties to get as close to what you want as possible.
  • Invest in integration. One observation that disappoints me is that firms spend a lot of energy in the pursuit and deal-making process only to leave the all-important integration to fit into the “day job” of their already-stretched-thin operational leaders. This leads to a less-thoughtful approach to integration ,which can undermine trust and collaboration and can keep you from achieving the economies of scale needed to realize your ROI. Be sure to dedicate the resources necessary to plan and manage a thorough integration process—from a well-executed communication strategy, thorough technology and data integration mapping, integration of HR programs, branding, incorporating service teams and methodologies, and more. Form an integration team with members from both firms and give those serving on it permission to perform fewer of their “normal” duties to do a quality job on integration.
  • Keep driving organic growth. Once your firm executes a successful merger, you’ll want to pursue more. But be careful that your zeal to grow inorganically doesn’t cause you to take your talented leadership and management resources off of their very important “day jobs” of driving industry and service line growth, on-campus and experienced hire recruiting, building rainmaking skills, and other very important elements of organic growth. Don’t jeopardize your ability to grow “the old fashioned way” by diluting the focus of key leaders—be sure to resource both!

Mergers are on the rise, and most firm leaders are interested in participating in the trend. Before you do, though, avoid the common merger pitfalls and take the time needed to devise your merger mission and strategy, identify the right merger targets, delve deeply enough in your due diligence to identify any deal-breakers, and invest in thorough integration. When you do, you’ll ensure that your merger activity truly contributes to the firm’s ongoing success.

Jennifer Wilson is a partner and co-founder of ConvergenceCoaching LLC, a leadership and marketing consulting and coaching firm that helps leaders achieve success. Learn more about the company and its services at

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