Given their frequency, the impact of mergers -- and in particular, how long it really takes to meld two firms into one -- are perennial topics of discussion within the accounting profession.

While there are no hard and fast rules, anecdotal evidence supports the notion that it takes at least a year to gauge the success -- or failure -- of a union. The latter are surely easier to measure. Mergers that fall apart can unravel rather rapidly, although the sorting out of de-merger agreements can sometimes take longer than the original deal itself. When a merger flops, you can be sure both halves of the pact know it.

Inevitably, firms that are about to tie the knot -- or are still in the “honeymoon” phase, having merged within the previous two or three months -- will say publicly that everything is going smoothly, that their firms are so similar, there aren’t any hurdles to overcome, and that they share the same culture and values. Funny how even deals that are announced to great fanfare can fall apart -- quietly if you’re lucky, and noisily if you’re not.

Anyone who has witnessed a few deals at close range or who has been involved personally in just one will tell you that the work continues long after the name on the door changes.

As an example, look at the union that created what is today the Financial Planning Association. It’s been four years since the predecessor groups -- the International Association for Financial Planning and the Institute of Certified Financial Planners -- merged. It took years of work by both groups for the merger to take shape and the combined entity is still working out the kinks and refining its focus.

So, how do you judge whether a merger is a success? Can a merger be considered a success simply by the fact that it doesn’t come undone after a year?

I called up an acquaintance who consults on such issues to find out. The short answer he gave me is that it takes the requisite 12 months, at minimum, to see if a union stands a chance. At that point, the firms can look at the financial projections they set for themselves and see whether they met those projections or not. But that’s not the half of it.

It seems obvious to say that addressing sticky issues such as culture, compensation and vision before a merger takes place can improve the chances of success. But it may prove harder in practice than the firms expect.

One of the most common reasons this consultant said that CPA firm deals fall apart is that the people involved spend most of the time talking about the financial aspects of the deal, and almost none talking about the integration issues or their cultural values. He raised as one example the issue of compensation. If firm A pays X, and firm B pays Y, how will the joined entity compensate employees? And how will the employees feel about it?

The longer answer is that it can take one, two or even three years to truly join two separate organizations and to work out all of the integration issues.

So, how do you know when a merger is really complete? The so-called acid test, according to my source, is that the merger is really complete when both firms stop talking about how they used to do things, no longer refer to their old firms and talk instead about how they do things now.

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