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10
When Two CPA Firms Become One:
A Merger Success Story
By Caitlin Q. Bailey O'Neill, Assistant Editor
W
hen Branford CPA firm Bailey, Schaefer & Errato, LLC was looking for a new
technology firm to service its technology needs, its partners got a little more
than they bargained for.
They got a merger with Branford CPA firm Murphy Sloman & Company, CPAs.
The technology firm in question gave
Camille Murphy's name to partner
Michael Bailey as a reference.
It's a small world, as it turns out;
Bailey's brother David (also a partner
at the firm) had graduated from
Quinnipiac University with Murphy, so
she was happy to talk.
"One day, Michael Bailey called me to
ask about a technology company that
used us as a reference," Murphy
remembered. "Shortly thereafter, David
and I had a breakfast meeting with no
particular agenda, and before long we
started talking about `what if...'"
The negotiations (which did not include
a broker) took approximately six
months, between July and December
of 2009, but the merger became effec-
tive on July 1, 2010 after tax season.
"We took our time planning carefully,"
said Murphy. "We met every other
week for a few months ironing out the
details, legal agreements ..."
"I was surprised at the amount of time
and meetings it took to make this hap-
pen," Bailey agreed, listing considera-
tions including but not limited to network
systems, retirement plans, tax soft-
wares, billing, etc. ("Phone lines, faxes,
emails, websites, technology conver-
sions, server capacity, paper, copiers,
scanners, processes and procedures,
announcements, library decisions,
employee locations in our physical
space, painting, construction of offices,
set-up and configuration of files ..."
Murphy chimed in.) "The moving
pieces took longer than I thought."
Luckily, he laughed, "Camille's really
good at putting systems into place and
organization."
Both firms agree that the transition was
rather smooth, considering the firm
grew from four partners to six and from
15 employees to 25. Bailey, Schaefer
& Errato, LLC had a second wing to
their office they formerly rented but
leased back to the landlord. They
asked for the space back, renovated,
and welcomed their new firmmates.
"There were some minor changes,
such as hours worked, the start of our
work day; during two months of the
summer [Murphy Sloman & Company,
CPAs] closed on Fridays at noon.
There were some middle-ground
agreements," said Bailey. The firm no
longer closed early on Fridays in the
summer, but increased personal days
gave employees the option of taking
Fridays off if they chose to do so.
The two formerly separate firms have
learned to embrace each others'
strengths in regards to both culture and
technology. Bailey, Schaefer & Errato,
LLC was paperless for audits, while
Murphy Sloman & Company, CPAs
was paperless for taxes. Together,
The partners of the recently formed Bailey Murphy + Scarano, LLC (from left) David Y. Bailey, William R. Sloman II, Camille R. Murphy, Michael E. Bailey,
Andrew J. Errato, and Dominic Scarano Jr.
s u c c e s s i o n p l a n n i n g s p e c i a l s e c t i o n