Finding the right fit: Inside the Evawsons merger
Written Chris Sheedy of The Hard WordFor Jeffrey Law and Matthew Lao, merging their accounting firms wasn’t just about succession or growth. It had a deep focus on finding the right partner and creating a structure that worked for both.
Accounting firm owner Jeffrey Law had been thinking about retirement for years when he met up with Matthew Lao.
Almost three decades earlier, Jeffrey had sold part of a previous accounting practice and moved the other part of the business to Melbourne’s outskirts, where he established Evawsons. He told clients then that he was going to take things easier.
Instead, the practice “just kept building and building and building”.
More recently, partly as a result of a long-term employee leaving, the pressure of running Evawsons began to change the equation. Jeffrey’s wife had retired, but he was still looking after 900 clients.
“When Anti Money Laundering regulation came in, that was what broke the camel’s back,” Jeffrey says.
He wanted more time to travel with his wife and less responsibility, but that didn’t mean he wanted to stop being an accountant.
And so he needed to find a match, not just a buyer
Jeffrey had been in contact in the past with Kev Ryan, transaction advisor from SELLERS. One of Kev’s most important roles, once Jeffrey brought him on board to manage the Merge-To-Retire process, was finding and filtering the potential matches.
Jeffrey was after somebody who would share his approach to looking after clients, and Kev eventually introduced him to Matthew, who came to the transaction from the opposite direction.
Matthew had spent around 18 months building his own practice and was ready for faster growth.
“If you want to accelerate the process, you need to buy a practice with an established client base,” Matthew says.
Success starts with an attitude match
When describing what a cultural fit between two businesses feels like, Matthew says it’s about “the attitude you take to what you do”.
“Jeffrey cared about his practice, where it’s going, who he brings in and his clients,” he says.
“It’s not necessarily about price, although we obviously had to agree on a value we were both comfortable with.”
Jeffrey describes the connection more simply.
“It was like love at first sight,” he smiles.
The two quickly realised they shared similar values around client service. That included a willingness, Jeffrey says, to tell clients when the practice couldn’t add value, rather than simply charging them anyway.
Matthew says Kev’s careful filtering of potential buyers was a vital part of reaching a successful conclusion. He had seen other transactions where expectations around price made it difficult to progress discussions.
Kev also provided something every transaction needs, a powerful level of momentum. He constantly checked into ensure various documentation was completed, so nothing had a chance of falling over.
The result, Jeffrey says, was what he describes as “a pretty easy, simple transaction”.
Making the merger work
The transaction officially took effect in July, but there was no sudden handover. Jeffrey was not disappearing, meaning there was a powerful level continuity for Evawsons’ clients.
Having constant access to the person who understands the history behind the numbers and the humans behind the tax file numbers was particularly valuable for Matthew.
“One of the good things when the existing owner stays on is you can always ask questions around the backstory,” Matthew says.
Jeffrey has been able to gradually introduce Matthew to existing clients, and the pair have also begun to visit larger corporate clients together. At the same time, Matthew has brought fresh eyes to the practice.
Matthew and Jeffrey consolidated technology, moved tax software from a local installation to a cloud-based system and made greater use of functionality they were already paying for through such platforms as Google Workspace. As a result, some technology costs have been halved.
For Jeffrey, however, the greatest benefit is a little less tangible.
Previously, whenever he attempted a holiday with his wife, he absolutely had to take his laptop to look after client requests. Now, for the first time in decades, Jeffrey can enjoy real holidays while Matthew holds down the fort.
“It has made my life a lot easier,” Jeffrey says. “I’m still working, but with not as much pressure.”
Matthew also benefits from the shared responsibility. Both have another experienced accountant with whom they can chat about various issues.
Jeffrey laughs about his processes prior to the merger: “If you saw me talking to myself, I was just having a staff meeting.”
Succession without retirement
The longer-term plan of this partnership isn’t necessarily for Matthew simply to replace Jeffrey.
Instead, Matthew says he’d like to bring people in to handle more processing work, which will free Jeffrey up to focus increasingly on client relationships and strategic directions.
This should enable Jeffrey to work fewer days but remain involved for as long as he chooses.
It also gives Matthew room to grow the firm without inheriting every task that Jeffrey once owned.
For accounting firm owners making their own succession plans, the experience offers a strong lesson around the fact that selling or merging a practice doesn’t have to mean walking out the door.
Similarly, finding a buyer needn’t start and end with the highest offer.
Most important is the identification of a buyer or a partner who is a fit in terms of attitude.
The positive outcomes in a successful venture are many. For Jeffrey, it’s about a new sense of freedom without abandoning clients. For Matthew, it’s accelerated growth via an established client base, as well as the benefit of decades of knowledge.
The experience has been such a good one that Matthew is already contemplating what’s next.
“I was telling Jeffrey, well, since it worked so well this time, maybe we might merge again,” Matthew laughs.
Jeffrey’s response?
“Just slow down.”
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