As trust was being built, we watched for the very human tendency to see “ghosts” where none existed. We paid close attention to how individuals responded to different requests. We also watched closely to see what was driving compromises. Was it the desire to get the deal done or the spirit of developing a more equitable transaction? Taking the time to understand the reasons behind compromises was important, as was remembering that initial compromises can be changed at a future date.

At times, people showed great self-interest. But at other times they showed a willingness to sacrifice for the betterment of the future firm. It was important for us to observe and understand these behaviors to move a complex process forward and help identify future high-capacity leaders on both sides of the deal.

Additionally, Brightworth built trust by including second-generation partners on our management and other key decision-making committees. First-generation partners made some concessions in their own financial interest to second-generation partners to better reflect the upcoming leaders’ contribution and importance to the firm and the future growth of their divisions.

The Dealings

Part of the challenge in acquiring a large and growing firm is understanding our boundaries and knowing they would be tested. We had to know the difference between what we must have and what we would like to have. This included the way we addressed the investment philosophy—something every firm holds dear. Fortunately, both firms not only found common ground, but we will have a more robust set of solutions for clients going forward. Doing an acquisition is a great opportunity to re-evaluate that philosophy and reaffirm what you truly do for clients.

We also invested a great deal of time and effort in drafting our letter of intent. An acquirer must detail certain issues up front, while others can be addressed in the transaction documents. However, any issues with the letter of intent must be dealt with first, and that will often lead to multiple discussions up until the finalization of the purchase agreement. Identifying the issues that have to be addressed early (as opposed to those that can be spelled out after the transaction is closed) is critical to an expeditious process. Likewise, ensuring that people will have a future voice in those post-close decisions is helpful.

Other Takeaways

On the day we announced McGill had become part of Brightworth, most of the staff in both cities immediately pivoted into the process of integration. While I was also preparing for these challenges, I drew strength from knowing we’d already successfully developed and implemented an acquisition strategy, one that positioned us for strategic growth.

But there are some additional thoughts for potential acquirers:

• Don’t fall in love with numbers. It is important to remind your partners that an acquisition model is just that—a model—and to think in terms of the long-term value and risks of the acquisition.