Deal Structure

Bridging Compensation Gaps in a Merger

Originally published in the Journal of Accountancy January 2012
Accounting-firm mergers must overcome numerous obstacles. One of the most common—and challenging—involves compensation and benefits for partners and staff. Merging firms usually have differences in compensation levels, compensation methods and benefits packages. It’s crucial for staff and partner retention that the merging firms combine the varying systems into one without people feeling like they came out losers.
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The Great Mystery: How Do Billing Rates and Profitability Affect a Firm’s Worth?

Originally published in the Practicing CPA by the AICPA July/August 2011

When you are buying a CPA firm, historical profit is almost irrelevant. Even less relevant are the partner billing rates. What? How can that be? When establishing the value of any business isn’t its profitability the most important metric to consider? Isn’t partner billing rates the most important way to know if two firms are a good fit?
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Who Would Run Your Firm? Practice Continuation Agreements Help Plan For the Worst.

Originally published in the Journal of Accountancy by the AICPA February 2011
There comes a time when every sole practitioner or small firm owner needs to consider the consequences of a disruption in leadership of his or her CPA practice. Illness, disability, family obligation or death can be devastating for the CPA’s clients, family and employees. Proper planning, however, can mitigate the consequences.
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Untying the Knot: Planning for a De-Merger

Originally published in the Journal of Accountancy by the AICPA October 2007
Celebrity divorce is often the cause of rampant public speculation, especially if a prenuptial agreement is not in effect. while a pre-nup agreement is an obvious necessity to some, planning for divorce is rarely at the top of anyone’s list when entering into marriage. Similarly, when two accounting firms agree to merge, they focus on the deal’s positive aspects and invest significant time in due diligence to ensure the merger will be successful. But having a sound de-merger agreement in place may also be a prudent part of the merger planning process
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Unique Approaches to Succession Planning for Accounting Practices

Originally published in Leaders Edge, the Michigan State Society of CPAs March/April 2007
An overview of the varying considerations in planning for an internal or external succession. This includes the timing as to commencing your succession plan, valuing your firm, choosing a successor and some transition tips.
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Understanding the Market for Accounting Firm Mergers and Acquisitions

Originally published in the MNCPA Footnote Dec06/Jan 07
What are the factors that are driving what seems to be an unprecedented level of activity in the accounting profession for mergers and acquisitions? How are deal structures being affected?
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The Cull-out Sale: Partial Retention of a Practice

Originally published in The CPA Journal by the New York State Society of CPAs November 2006
Many professionals think of their transition to retirement in black-in-white terms. However, there are a plethora of ways to address succession that allow professionals to make a change in their organization and career short of the finality associated with an outright sale. One option is a cull-out sale.
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Tax Considerations When Buying or Selling an Accounting Firm

Originally published in New Jersey CPA January/February 2006
Whether you are selling or buying an accounting firm, no proposal is truly complete until each party understands and agrees on the treatment of payments for tax purposes.
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