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Key Considerations for Accounting Firms Before Merger (2025)
M&A
Key Considerations for Accounting Firms Before Merger (2025)
In today’s hyperconnected economy, accounting firm mergers and acquisitions (M&A) have become more than just growth strategies - they’re survival tools for accounting firms grappling with globalization, digital disruption, and client demands for specialized expertise.
Yet, as the dust settles on headline-grabbing mergers like Forvis (born from BKD and Dixon Hughes Goodman’s $1.4 billion union), a sobering reality emerges: many mergers fail to deliver promised synergies. Why? Because spreadsheets and balance sheets alone can’t bridge the human, cultural, and operational chasms that define successful integrations.
But the accounting firm merger planning isn’t a theoretical exercise. Picture two firms: one steeped in traditional hierarchies, where decisions trickle down from ivory - tower partners and another where junior auditors brainstorm alongside C-suite leaders in open-plan offices.
When these worlds collide without preparation, the result isn’t synergy - chaos. Drawing from real-world case studies and industry insights, this blog unpacks the human elements behind the accounting merger benefits, offering actionable strategies to turn consolidation into transformation.
Planning the Accounting Firm Mergers: Beyond Mission Statements
Why Shared Values Aren’t Enough
Cultural alignment is often reduced when comparing mission statements during due diligence. But true compatibility runs deeper. Consider the 2022 merger that created Forvis: while both firms prioritized client service, their approaches diverged sharply.
Cross-functional task forces to map decision-making styles.
Anonymous employee surveys identifying friction points like dress codes or meeting norms.
Storytelling workshops where partners shared founding narratives to find common ground.
BKD’s Midwest conservatism clashed with Dixon Hughes Goodman’s entrepreneurial Southern ethos. The solution? A year-long “culture audit” involving:
“Mergers aren’t about blending cultures - they’re about building a new one,” notes M&A consultant Allan Koltin. This requires acknowledging differences openly. When Baker Tilly merged with forensic accounting firm RGL, leadership hosted “culture clash” town halls where staff debated topics like remote work flexibility. The result? A hybrid model preserving RGL’s agility while adopting Baker Tilly’s risk protocols.
The Hidden Costs of Cultural Debt
Ignoring cultural misalignment creates “cultural debt” - the accumulated friction that erodes trust. A 2023 study found that accounting firm mergers with unresolved cultural debt saw:
42% higher mid-level employee turnover within 18 months.
27% longer client onboarding times due to inconsistent service models.
2. 360-Degree Leadership Assessments: Evaluate how managers from both firms handle feedback and crises.
3. Narrative Integration: Co-author a “culture playbook” documenting rituals, from holiday celebrations to client pitch formats.
Strategic Alignment: When 1+1 Must Equal 3
The Pitfalls of “Bigger Is Better” Mentality
The 2020s have seen a surge in mergers driven by private equity investments and AI adoption pressures. But scale without strategy backfires. Take the cautionary tale of a mid-sized firm that merged with a tech-focused competitor to “future-proof” services.
Despite shared clients, their visions diverged: one aimed to automate 80% of compliance work, while the other prioritized advisory depth. Within months, conflicting KPIs paralyzed teams.
Planning the Accounting Firm Merger Synergy Roadmap
Effective strategic alignment requires answering the following:
Where Do We Divest? Mergers often falter when trying to keep all service lines. Post-2020, 68% of successful mergers shed underperforming niches within 12 months.
How Does Tech Enable, Not Dictate? When Citrin Cooperman merged with Berdon, they integrated AI tax tools only after aligning on which clients would benefit.
Case Study: A regional firm specializing in manufacturing clients merged with an international tax advisory. Their synergy plan included the following:
Coaching Pods: Manufacturing experts trained international teams on sector-specific regulations.
Client Tiering: Redirecting SMEs to the regional firm while reserving cross-border work for the merged entity.
Tech Stack Sunsetting: Retiring redundant tools (saving $2.3M annually) while adopting the international firm’s cloud audit platform.
Client Retention: The Art of Managing Expectations
The Silent Exodus
Post-merger client attrition averages 15–20% but jumps to 35% when communications falter. Why? Clients fear losing their trusted advisor’s attention. One ESG-focused startup nearly ditched its accounting firm post-merger when reassigned to a “generalist” team. The save? A 90-day “transition guarantee” with:
Biweekly check-ins from both legacy firm partners.
Free access to the merged firm’s AI benchmarking tools.
Custom reports comparing pre/post-merger service metrics.
Reimagining the Go-To-Market (GTM)
Successful accounting firm mergers rebrand with clients, not to them:
1. Co-Created Content: Joint webinars where clients ask merger-related questions (e.g., “Will your crypto tax expertise expand?”)
2. Tiered Communication:
Top 20% Clients: In-person roadmap sessions.
Mid-Tier: Video updates from their service lead.
Others: Personalized emails with merger FAQs.
3. Feedback Loops: Quarterly “pulse surveys” measuring perceived service changes
Pro Tip: Use merger milestones as PR opportunities. When Forvis launched, they published a “Merger Diary” blog series, demystifying integration challenges and boosting client retention by 11%.
Financial & Operational Due Diligence: Reading Between the Lines
The Valuation Trap
Traditional metrics like EBITDA often overlook:
Realization Rates: A firm billing $500/hr but collecting only 60% vs. one at $300/hr with 95% collections.
Client Concentration Risks: A “Top 100” firm lost 40% post-merger value when due diligence missed one client, representing 35% of revenue.
Hidden Liabilities: Unfunded pension obligations or pending class actions (e.g., a 2024 case where an accounting firm merger collapsed over undisclosed GDPR fines).
Operational Integration: The Nuts & Bolts
1. Tech Stack Harmonization: Map all software (99% of mergers have ≥5 redundant tools). Prioritize:
Client-Facing Portals: Unified interface within 60 days.
Back-Office Systems: Phase legacy tools out over 6–12 months.
2. Billing Alignment: One merger floundered when Firm A billed hourly and Firm B used value pricing. Solution: A hybrid model with AI-driven price benchmarking.
Talent Strategy: Beyond Retention Bonuses
The “Dual Pipeline” Problem
Mergers often create overlapping roles but divergent promotion paths. At a merged Top 50 firm, ex-Firm A staff expected promotions every 2 years, while ex-Firm B had a 5-year track. The fallout? A 30% spike in exits until they implemented:
Skill-Based Levelling: Roles tied to competencies, not tenure.
Cross-Firm Mentoring: Partners from each legacy firm co-coaching high-potentials.
Transparent Succession Plans: Public 3-year leadership roadmaps.
Upskilling as Currency
With 58% of accountants citing skill gaps in AI and ESG, smart mergers offer:
Certification Stipends: $5 - 10K annually for courses like blockchain auditing.
Rotation Programs: High-performers spend 6 months in merged offices.
Idea Flow: Number of cross-firm process improvements submitted.
Psychological Safety Scores: Regular anonymous polls on risk-taking comfort.
Conclusion: Writing the Next Chapter - Together
Mergers aren’t finish lines - they’re prologues. The accounting firms thriving in this consolidation wave aren’t just bigger; they’re braver. They acknowledge that behind every balance sheet, there are humans: anxious employees, sceptical clients, and leaders weighing legacy against evolution.
A famous saying reminds us: “AI can’t replace the human touch - it amplifies it.” The future belongs to firms that wield M&A not as a weapon of conquest but as a loom weaving together diverse expertise, cultures, and aspirations.
The question isn’t whether to merge but how to merge to honour the past while inventing the future -one human connection at a time.
FAQs
The most common reasons include cultural misalignment, poor strategic alignment, client attrition, operational inefficiencies, and leadership conflicts. Accounting Firm Merger planning is often the most underplayed facet behind this. Many firms underestimate the human and structural challenges that arise post-merger, leading to failed integrations despite financial synergies.
Firms should conduct a pre-merger “culture audit” by:
Organizing cross-functional task forces to map decision-making styles.
Running anonymous employee surveys to identify friction points.
Holding storytelling workshops where partners share firm values to find common ground.
Acknowledging and addressing cultural differences openly helps prevent “cultural debt” that can erode trust post-merger.
To prevent client attrition, firms must communicate proactively and transparently.
Best practices include:
Offering personalized transition plans for top-tier clients.
Hosting joint webinars to address client concerns about service continuity.
Providing biweekly check-ins from both legacy firm partners.
Sending custom reports comparing pre/post-merger service metrics.
A structured Tech Stack Harmonization Plan is essential:
Identify redundant tools and sunset them in phases (6–12 months).
Prioritize integrating client-facing portals within 60 days for seamless access.
Standardize billing models if firms use different pricing structures (e.g., hourly vs. value-based).
Merging firms often have different promotion timelines and career structures, which can create dissatisfaction. Strategies to retain top talent include:
Implementing skill-based leveling instead of tenure-based promotions.
Launching cross-firm mentoring programs to build relationships across legacy teams.
Offering certification stipends ($5–10K annually) to upskill employees in AI, ESG, and blockchain auditing.
Creating rotation programs where high performers work in different offices for 6 months.
Shawn Parikh is the CEO and Co-Founder of MYCPE ONE. A Chartered Accountant by qualification, he has over 15 years of experience of being a problem solver for small to mid-size firms and over time he has given consultation to thousands of CPAs, accountants and tax pros. Shawn has always been a big believer and advocate of social enterprises and small accounting firms & businesses. He consults and speaks on several topics ranging from Building Remote Team - Remote Working, Offshore Staffing, strategic planning, Scalability of Accounting Practice, cloud accounting, practice management, LinkedIn marketing, etc.
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