background image
Connecticut CPA
May/June 2012
Clients will be unhappy (or
poorly serviced) and leave. This
is often the merged-in firm's owner(s)
greatest fear (especially since the
transaction's financial rewards are of-
ten based on client retention). In re-
ality, if the owner(s) stay for two or
more years, if the location stays the
same for a year, if staff stays, and if
fees charged to clients are not in-
creased (or only moderately), cli-
ents will generally NOT leave. Cli-
ents usually don't care if the firm's
name changes, as long as continu-
ity (people and fees) is maintained.
If the smaller firm's owner(s) provide
their clients with a positive explana-
tion about the merger, why would cli-
ents leave? They greatly respect the
owner(s) that have serviced them for
years, and will, therefore, follow their
We have all heard hor-
ror stories of clients
leaving after a merg-
er, but in the mergers
that I've been associ-
ated with (which were
all handled properly
by the owners of both
firms), client retention
has been excellent.
Staff will be un-
happyandwillleave. This is again
an unfounded concern if staff is treated
fairly. The acquired firm's staff should
always receive the same (or better)
salaries and fringe benefits. Travel and
assignments should be maintained.
Furthermore, since it continues to be
difficult to find good staff, merged-in
personnel are generally retained.
Other fears/concerns Owners
worry about other things, such as be-
ing unhappy or that the
firm will not pay them
their full buy-out amount.
Finding post-merger hap-
piness can be a realistic
concern. The key is to as-
sure that the smaller firm's
owner(s) spend adequate
time, prior to finalizing
the merger, with the other
firm's owners and perform
a careful "due diligence"
review of the culture and reputation of
the larger firm.
As far as "not getting paid" in my ex-
periences, this has never happened.
Since agreements are carefully crafted
by attorneys, and because accounting
firms generally produce annuity-type
client continuity (high client retention
and ongoing recurring fees), future
payments are quite secure.
Clients usually
don't care if
the firm's name
changes, as long
as continuity
(people and fees)
is maintained.
paid advertisement