Archive for the ‘Mergers’ Category

Thursday, October 15th, 2015

Merger Mania for CPA Firms

0 Avatar slide for blogIt seems that merger mania still reigns. It started with larger firms acquiring smaller firms and evolved to gigantic firms acquiring other gigantic firms and everything in between.

Have you recently been merged into a larger firm? Even though it is all about clients and industry niches, progressive firms still focus on the people side of things. In a merger, some people lose, especially those professional support people in the firm being acquired.

How did the acquiring firm in your situation perform relating to embracing your people into their culture? Did they orchestrate all of the on-boarding activities so that everyone felt included? Do you now have a clear sense of what is going to unfold during the next year? Or, do you feel like there is a dark cloud hanging over your head?

If you joined the right firm, they have a clear plan, well-documented and well-executed for making the people they are merging-in feel part of something extraordinary. They excel at communication.

How do you feel about going into the office this morning?

  • Nothing will work unless you do.
  • Maya Angelou

Thursday, April 9th, 2015

Change = Opportunity — Don’t Waste It

IMG_4817As I have worked with CPAs around the country, all ages and in firms of various sizes, I often am saddened by the wasted opportunities I encounter.

It’s usually a communication issue and the willingness among partners to be absolutely open and honest. Someone might get their feelings hurt. There might be an uncomfortable feeling within the group for a while… but it doesn’t last if everyone is focused on “the good of the firm” and not on their own, personal agenda.

Here are some examples of where change is a roadblock to opportunity (these are fictional, gathered from various interactions over my 30+ years working in the CPA profession):

  • A capable, experienced, passionate managing partner is prohibited from making the firm future-ready because she is constantly dealing with bickering partners.
  • A firm located in a great market never capitalizes on growth opportunities because they have made several people a partner when these people do not market, do not sell, do not network in the business community and some have actually never-ever brought in a new client.
  • A firm has a great expansion opportunity in a not-too-distant market, it slips through their hands because no partner will commit to being the champion of that endeavor. They are too comfortable with status quo.
  • A great merger opportunity falls through because ONE of the partners in the firm being acquired kills the deal usually because he knows he wouldn’t measure-up in the new environment.

These are some fairly major change-is-needed examples, however, I see firms miss opportunity because of unwillingness to change some simple, day-to-day activities.

In these firms, partner meetings turn into repeat discussions of old issues and Opportunity moves on down the road.

  • The wheel of change moves on and those who were down go up and those who were up go down.
  • Jawaharlal Nehru

Monday, December 15th, 2014

Solution to Succession – “Sell Out”

I was reading the story on Crain’s Chicago Business about a smaller firm “selling out.”

The MP and his partner are nearing retirement and no one at the firm was ready to take over. Sound familiar?

They talked to a similar size firm (15 people) and decided that a combination wouldn’t solve their problem. So they “sold out” to a firm about six times bigger than their firm.

A common story, you say. Yes, that’s right.

Todd Shapiro, president and CEO of the Illinois Society was quoted: “If you don’t have your succession plan by age 50, you’re going to sell your firm.” Just think how many firms are in this boat!

Here’s the part, from the managing partner of the smaller firm, that made me sad. I have heard similar comments by scores of small firm MPs.

The managing partner says he not only expects to adjust to his new role as one member of  the larger firms 13-person partner group, but he also welcomes the chance to focus on client work rather than management. “I’m not going to miss it,” he says.

My wish is that more CPA firm managing partners would make a heroic effort to learn more about management, read more about management, experiment with exciting trends, learn from their mistakes, engage with their people, quickly make decisions for “the good of the firm” and come to love managing their firm and be proud of their management accomplishments.

The managing partner of the larger firm, that has acquired 10 firms in the last eight years, was quoted as saying, pertaining to finding the right acquisitions, “I kiss a lot of frogs.”  Don’t let your firm be a frog.

  • Life is like a movie. Write your own ending.
  • Kermit the Frog

Monday, November 10th, 2014

Rarely Is It A Merger

I have a lot of random thoughts about mergers/acquisitions, I lived through about 5 of them (acquisitions).

In the CPA firm world, we almost always call them mergers when actually they are acquisitions. There is a dominant player and I think there should be. Trying to please everyone creates chaos. So, the acquiring firm, should clearly explain and communicate the expectations up front and the firm being acquired should air any concerns and negotiate, up front. It doesn’t have to be an argument… think negotiation and communication over and over again.

Some partners are strongly against being acquired. It is usually the poor performing partners because they fear that they might… just might be held accountable and might not live up to the expectations of the new entity.

Mergers/acquisitions are the way to go if you want to grow rapidly or if you want to cash in your chips. I like to see mergers be structured as a win-win and they can be (even if it is really an acquisition).

Here’s a story I heard from a large firm partner many years ago about Bob, the long-time managing partner of a smaller firm.

Bob (this was back in the old days) had a button on his desk that he would push to summon his secretary. He usually pushed it when he wanted something specific done or wanted her to summon someone to his office. Of course, the employees joked about the button and always dreaded it when Bob “pushed his button.”

After being acquired by a large firm, Bob agreed to continue working for a couple of years for transition purposes.  The larger firm managing partner (Tom) found Bob very challenging. Bob continued to push his button to convey his wishes to others.

One day Bob’s button disappeared. Bob immediately went Tom and asked in a demanding tone, “What happened to my button?!” Tom simply replied, “Bob, you sold your button.”

So, if you are being acquired by a larger firm – you are selling your button. That doesn’t mean it is a bad thing. It means you will have to change in some ways. Probably in ways you should have changed several years ago.

  • If you wait, all that happens is you get older.
  • Larry McMurtry

Friday, June 6th, 2014

M&A – – Due Diligence

Terry Putney, is that you with Rita?Terry Putney and Joel Sinkin of Transition Advisors have been writing a series of articles for the Journal of Accountancy over the last 12 months. It has been a year-long look at issues affecting succession for CPA firms.

The most recent issue of the Journal is out and Putney and Sinkin have focused their last article on the Do’s and Don’ts of Due Diligence.

I relate to how they describe due diligence as beginning when you first meet a potential M&A candidate and it every step along the way. You are continually assessing whether a combination of firms would meet your goals and expectations.

However, there is a more specific, intensive review of firm data that we usually think of when we hear the words: due diligence.

The authors tell us that the first step, as you start formal due diligence, is to exchange lists of what each side wants to see. To manage time and priorities, break the review down into three categories:

  • Things that are readily available and can easily be delivered, for instance, by email. Examples are financial statements, tax returns, employee handbooks, leases, and employment agreements.
  • Things that might require some effort pulling together, such as accounts receivable, breakdowns of client information (fees, industries, tenure), and operating metrics on productivity.
  • Information that can be gathered only in the field, such as a review of workpaper files and quality-control processes, inspections of office and equipment, and interviews of key people.

Be sure to follow the link, above, and read the entire article in the Journal. The link to the article will also give you links to the other eleven articles in the series.

(Terry Putney, is that you with Rita?)

  • What we hope ever to do with ease, we must first learn to do with diligence.
  • Samuel Johnson

Thursday, June 5th, 2014

We Call It M&A – Merger & Acquisition. Get Real.

In the CPA profession, we talk a lot about M&A (Merger & Acquisition). Yes, it is because so many baby boomers are aging out, cutting back, retiring or, in many cases, semi-retiring.

You can read a lot about M&A for the accounting profession profession. Just Google it.

You might think that “merging” is mostly about small firms or sole-practitioners “merging” their firm into a larger practice, but in recent times we have seen very large firms “merging,” too.

Here comes the “get real” part – it is an acquisition. If you are not the suitor firm, you have sold your button. There is a story that goes with “sold your button” but I will tell you that story in another post. But, I bet you get the meaning.

On AccountingWEB you can read about the recent “deal” with Rothstein Kass and KPMG. The reason I want you to read the article is the last paragraph.

You might not be a very large firm, like these two, but it is likely that you will be in discussions about M&A for your firm sometime in the near future. I always urge practitioners to talk to other firms and continually explore the M&A options, it doesn’t mean that deal will quickly occur. It is more likely that it will involve talking for a year or more before things are finally settled.

And, don’t be fooled by the comment in that last paragraph, I mentioned above:  “We are looking forward to a seamless transition….. ” Being acquired or acquiring another accounting firm is never easy nor seamless.

  • Sometimes your best investments are the ones you don't make.
  • Donald Trump

Wednesday, January 22nd, 2014

In The CPA Firm World It Is Merger Mania

AquilaI just keep writing about and talking about the topic of CPA firm mergers. Why? Because I see a news release nearly every single day about so and so merging with so and so.

Yesterday I was reading a newsletter from August Aquila of Aquila Global Advisors and it was about, “Merger Mania – What You Need To Know.” Aquila probably has more CPA firm M&A experience than almost any consultant out there and he always shares valuable information to help you navigate the M&A waters.

The article addresses:

  • Does this make sense for me?
  • Who do I want to merge with?
  • How do I know when I found the right candidate?
  • Make the hard calls first.

The article has extensive comments under each of these bullet points. Read the entire article here.

  • A merger has to be a win-win event or it won't stand the test of time.
  • August Aquila

Wednesday, December 18th, 2013

Reflect Back But Don’t Forget To Reflect Forward

It’s that time of year. Many of us reflect back on the current year. We think about what went right and what went wrong relating to our business life in the CPA profession (or any profession for that matter). I wanted to pass along two quotes from men of accomplishment. Men we lost in 2013.

Some of you may have left your firm and joined another firm. Some of you may have merged your firm “upward” and some of you have acquired other firms. In either case, both sides have had to struggle with maintaining and embracing culture, brand and identity.

Sometimes, you don’t get your own way….. here’s a quote for any time you are feeling bitterness in your life:

“As I walked out the door toward the gate that would lead to my freedom, I knew if I didn’t leave my bitterness and hatred behind, I’d still be in prison.” – – Nelson Mandela

Some of you might be very new in your career in public accounting. Just because you are in the accounting profession doesn’t mean you should not be bold. It doesn’t mean you should not take more risks with your career. It doesn’t mean you should blame the accounting profession for your boredom. Even very experienced CPAs are way too tentative about many things. Never settle for status quo. Continually move toward opportunity. This quote applies to men and women….

“I will not be a common man. I will stir the smooth sands of monotony. I do not crave security. I wish to hazard my soul to opportunity.” – – Peter O’Toole (at age 18)

  • Everyone can rise above their circumstances and achieve success if they are dedicated to and passionate about what they do.
  • Nelson Mandela

Friday, July 19th, 2013

Lighten-Up Thoughts About Mergers For Friday

IMG_0084Every where you turn there is something published about the merger frenzy that is occurring in the public accounting profession. Almost every day I read of another combination of firms. Some are larger firms gobbling up smaller firms and many are smaller firms banding together in hopes of survival.

If you are a regular follower of this blog, you know that my mind often drifts into some quirky thinking. I was thinking of all the mergers and this came to mind:

Merger, merger every where,

The number of firms to shrink;

Merger, merger every where,

What are we to think?

Of course, the inspiration for this comes from The Rime of the Ancient Mariner. It is the longest major poem by the English poet Samual Taylor Coleridge, written in 1797-98 and published in 1798. It’s an interesting story. Read more about it here.

You probably learned the memorable lines as a child, as I did. Here’s a refresher:

Day after day, day after day,

We stuck, nor breath nor motion;

As idle as a painted ship

Upon a painted ocean.


Water, water, every where,

And all the boards did shrink;

Water, water, every where

Nor any drop to drink.

The phrase, “an albatross around one’s neck” also comes from this epic poem, meaning a burden which some unfortunate person has to carry.

This sailors was contemplating survival. The Mariner was carrying an albatross.

How about you?


  • The Devil knows how to row.
  • from The Rime of the Ancient Mariner

Tuesday, July 9th, 2013

Allan Koltin – Yes, he’s cherubic and chirpy

IMG_2335I’ve known Allan Koltin for a very long time.

When I first met him he was simply selling newsletters to CPAs to send to their clients. We have become good friends over the years and he has always been an advocate, mentor and advisor as I have made my way through a complex career within the CPA profession.

Allan moved with ease from salesman to consultant/advisor to some of the most prestigious CPA firms in the country. Now, according to Crain’s Chicago, he’s “the most interesting man in accounting.

Check out the article published on July 8th to read about how Koltin has become the #1 “mover and shaker” when it comes to CPA firm M&A. They call him “cherubic and chirpy.” It makes me smile because I would never have thought of those words to describe him, but they are true.

Congratulations on the great article, Allan.

  • There are no shortcuts to any place worth going.
  • Helen Keller