What Would a Merger Mean to You?

CPA firm deals are booming, but is what’s best for business best for you? By Sheryl Nance-Nash | Digital Exclusive - 2017

M&A was hot in 2015. Seemingly every other day another deal was announced.

As Carl Peterson, CPA, vice president of small firms at the American Institute of CPAs (AICPA) in New York City, points out, “We saw one of the highest volumes of mergers and acquisitions in 2015 compared to recent years, and that pace is continuing.”

He says that much of the activity is being driven by succession planning within small and medium-sized firms, but that’s not the only reason. “Other mergers are more due to specialization. You see many firms in the G400 and above acquiring consulting firms and firms that are highly focused and have specialized knowledge,” Peterson explains.

Lisa Hanlon, a partner with accounting services at Marcum LLP, in Deerfield, Ill. offers another take. “It’s the growth and expansion of our clients. As the recession retreats further in our rearview mirrors, businesses are beginning to thrive again in new and innovative ways.”

Whichever way you cut it, strategic mergers are giving accounting firms access to much-needed resources and technical expertise as they compete in the marketplace, battle to win and maintain long-term client relationships, and strive to expand their reputations and geographic footprints.

The bottom line, though, is that mergers and acquisitions bring about a lot of changes and uncertainty, says Steve Lickus, metro market manager with Robert Half Management Resources in Chicago. That uncertainty can breed fear of job loss.

The truth is, some of the value of the acquisition is unlocked by eliminating redundant costs, says Doreen Remmen, CMA, senior vice president of operations and CFO of the Institute of Management Accountants (IMA) in Montvale, NJ.

Recalling her own experiences as a young controller, Remmen notes that she missed an opportunity when her employer was exploring a sale. “I knew something was up when the owner began meeting frequently with attorneys and accountants, but I didn’t think it was my place to ask too many questions. On the day the sale was announced, I was devastated to learn that my entire accounting department would be eliminated within three months,” she recalls. “In retrospect, I knew I missed an opportunity to participate and use my skills to help the owner negotiate the true value of his business.”

While the flurry of latest deals may make perfect business sense, the question is, will they lead to greater business success—a proposition that often hinges on a firm’s ability to manage the human side of the transition.

And that’s where you come in.

What every professional wants to know is how a merger or acquisition will impact his or her career. However, what you really should focus on instead is how you’re going to survive and thrive in the new environment. After all, a merger or acquisition could even be a career booster.

“In one merger, a particular young professional from the firm being acquired was engaged and made an impression on every partner and staff leader, so the audit team wanted to keep him on their team, the tax team wanted him to move to their team, and the emerging business practice wanted him,” Peterson points out encouragingly.

But transitions can also test your patience. Consider the potential challenges, like additional work hours, work-life imbalance, stress and culture clashes, Lickus warns. That’s not to say it won’t be worthwhile, however. “I see much opportunity for accountants who stick with the company during the uncertainty,” says Lickus. “This typically comes with retention bonuses, a potential speedy promotion if your manager leaves the company, and valuable job experience that you likely wouldn’t have been exposed to had the transaction not taken place.” 

The way to come out on top is to learn as much as you can about the transaction and how it will affect your company, department, position and growth potential. Ask questions about the short- and long-term implications of the merger. Make sure your supervisor understands the depth and breadth of all that you contribute to the organization. Seek a mentor who understands the effects of the merger or acquisition, and can provide advice for succeeding in the new environment. “Most importantly, stay positive and focused,” says Lickus. “Continue to work hard, meet deadlines and excel. You’ll prove to management how valuable you are.”

A last word of advice: If you’ve never been through a merger before, talk to the people in your network who have experience with a similar situation. In particular, ask about interacting with incoming managers and what it’s like to adjust to another company’s culture. Try to gauge the stability of both the new company and your role within it. Look at your future role and where it may lead. And if you foresee friction, then just maybe you don’t want to stay after all.

How to Survive a Company M&A

Surviving and thriving in the wake of a merger or acquisition means proving your worth. Here we highlight some strategies that will make you indispensable in your new environment.

Volunteer: Being open to new assignments demonstrates your initiative and interest in finding new ways to contribute to the organization.

Stay relevant. “Carve out a niche. Pick an industry or set of industries that are common among your clients and can be areas where you become smarter than your competitors,” advises Colin Tierney, marketing manager for Sageworks in Raleigh, NC.

Be the go-to guy/girl. “You want to be the one who knows the clients, and who they rely on and expect on engagements. This is critical for retention,” says Tim Gagnon, CPA, professor of accounting at the D’Amore McKim School of business at Northeastern University in Boston.

Be flexible. “Be willing to embrace change and new technologies. The ceiling is higher in a larger firm; there are many roles to fill and many ways to bring value. You may be able to move to leadership positions that didn’t exist at your former firm,” says Hanlon.

Be patient. “Not all the opportunities are going to be right in front of you in the first week. But don’t sit and be silent either. Be a part of the firm from day one. Interact with your peers, ask questions, be engaged and be yourself,” says Peterson.

Network. “Take advantage of events and meetings—any chance you can grab hold of to get to know your new co-workers. Be visible. The acquiring firm is looking for people to help them get up and running in the new location. Be one of those people,” says Tom Callum, director of operations and HR consulting for CDH, headquartered in Itasca, Ill.

Don’t run. “Don’t leave the company before you know the plan. I’ve seen M&A transactions actually create several new jobs and opportunities for quick advancement,” says Lickus.