[IMGCAP(1)]The last thing on my mind was merging, but it happened.
My partners Peter Weitsen and Frank Boutillette and I had previously decided we had to either grow our practice or it would decline—we could not remain where we were. We needed to show growth to retain staff and had to grow to make sure we kept up with the expanding needs of our clients.
We developed a plan and made substantial investments in growing. We hired a marketing coordinator, started an advertising campaign and looked to acquire a good-sized practice. In February 2004 we purchased a practice that added clients, services, niches and staff. The farthest thing from our minds was merging. Four months later we met Bill Hagaman, a partner at WithumSmith+Brown, at a Chamber of Commerce luncheon. At that lunch, Peter was being installed as treasurer and Kristen Celii, our marketing coordinator, was receiving an award, so we took our entire firm.
As customary when I met partners at larger firms, we exchanged pleasantries and always ended by saying that we should get together. I never follow up because I wasn’t interested in merging, and they usually don’t follow up because of their firm’s disorganization.
But Bill followed up. Besides being an extraordinary person, he is extremely organized in keeping in touch and following up. I figured that meeting him and John Mortenson for lunch with Peter and Frank couldn’t hurt, and they would be introduced to the types of discussions that occur with a larger firm seeking to have us merge with them.
The lunch went great, with Bill concluding by telling us what type of deal they would make with a firm our size, and if we were interested, how we should proceed. When Peter, Frank and I discussed it afterwards, there was not only nothing wrong with his proposal, but it seemed like the right thing for us to do. We had a number of further meetings that led to our merging and becoming part of WithumSmith+Brown.
The benefits were enormous for us and our clients. The day after the merger became effective, a giant step was taken for us to become state of the art digitally. To this day, I have not seen or heard of a CPA firm with better technology than ours.
Many of the partners at WS+B had specialties that we were able to offer to our clients and help them in ways we weren’t previously able to imagine. We were relieved of the responsibilities of administering and running a business and were able to concentrate on servicing clients, which is what we really always wanted. Staffing at many levels was available for our clients' work, and there was no such thing as not being able to get our clients’ work completed on time.
Peter, Frank and I became able to use our newfound time to provide better service to clients and to develop new opportunities with existing or potential clients. And the merger arrangement provided a much greater degree of financial security for us than had existed in our smaller practice.
We moved into the New Brunswick office which, at that time, was about double our size so we were not swallowed up, as could happen with mergers of smaller firms into bigger ones. From head to toe, every facet of the merger worked out perfectly. If we had known what technology was available that we weren’t even scratching the surface with, we would have looked for a merger much sooner, just for that reason alone.
FYI, January 1, 2014 was our ninth anniversary of being part of a great firm with fantastic people.
Edward Mendlowitz, CPA, is a partner in WithumSmith+Brown, PC, CPAs. He has authored 20 books and has written hundreds of articles for business and professional journals and newsletters plus a Tax Loophole article for every issue of TaxHotline for 27 years. Ed also writes a blog twice a week that addresses issues his clients have at www.partners-network.com. He is the winner of the Lawler Award for the best article published during 2001 in the Journal of Accountancy. He has also taught in the MBA graduate program at Fairleigh Dickinson University, and is admitted to practice before the U.S. Tax Court. Ed welcomes practice management questions and he can be reached at WithumSmith+Brown, One Spring Street, New Brunswick, NJ 08901, (732) 964-9329, firstname.lastname@example.org.