Mergers in accounting are often framed as slow-burn strategies — complex, risky and only rewarding in the long run. But when structured correctly and aligned with the right platform, a merger can unlock profit, capacity and partner leverage far sooner than many principals expect. The difference lies not in merging itself, but in merging into strength rather than symmetry.
Within the accounting profession, mergers tend to sit in an uncomfortable category. They are often spoken about as necessary, occasionally strategic, but rarely as desirable. The prevailing narrative is that mergers are complex, distracting, culturally risky and — most importantly — something that only pays off in the long term.
That narrative is not entirely wrong. Mergers are complex. They require discipline, compromise and an unusual degree of honesty between partners. Poorly executed mergers can destroy value quickly.
But what is often overlooked is a quieter truth: the right merger, with the right merger partner, can deliver partner profit uplift far earlier than most principals expect — sometimes almost immediately.
The difference lies not in the concept of merging itself, but in who you merge with and why.
The mistake of viewing mergers as symmetry exercises
Many firms approach mergers as if they are exercises in symmetry — similar-sized firms, similar economics, similar structures, similar problems. The thinking is intuitive: similarity reduces friction.
In practice, symmetry often limits upside.
A merger between two firms with comparable inefficiencies rarely creates a step-change in performance. At best, it produces marginal improvements. At worst, it compounds complexity without addressing underlying constraints.
By contrast, mergers that create immediate economic value are usually asymmetric. One party brings scale, infrastructure and operating leverage; the other brings revenue, client relationships and partner capacity that can be absorbed into an already efficient platform.
This distinction matters.
A structural example from the market
Consider a well-established Australian accounting firm with turnover comfortably north of $10 million.
The firm enjoys a strong reputation in its market, solid long-standing banking support, and a partner group that has already invested heavily — and deliberately — in its operating platform. Over time, it has built a mature offshore outsourcing capability, institutionalised its marketing and HR functions, and secured office infrastructure capable of supporting further growth.
None of this came cheaply. Significant capital and management time were committed well before the returns were fully realised.
Yet despite carrying that infrastructure, the firm performs exceptionally well. Its profitability is strong, its cash flow predictable, and its systems proven under load.
Importantly, it now finds itself with capacity already in place — in people, systems and space — that is not yet fully utilised.
That is where the merger opportunity emerges.
What the smaller firm is really accessing
When a one-, two- or three-partner practice merges into a platform of this nature, it is not simply combining fee bases. It is gaining access to infrastructure that would be difficult — if not irrational — to replicate independently.
In practical terms, this often includes immediate access to a proven outsourcing operation, reducing local recruitment pressure and delivery risk; the ability to shed or materially reduce office occupancy costs; removal of duplicated administrative and compliance functions; access to professionalised HR, marketing and systems support; and a meaningful reduction in partner time spent on internal management rather than client work.
For many smaller firms, these are not abstract benefits. They are precisely the friction points that cap growth, exhaust partners and dilute profitability.
When those constraints are removed, the economic impact can be felt far sooner than most expect.
Why profit uplift can occur earlier than expected
One of the less intuitive outcomes of these mergers is that incoming partners often experience an improvement in effective profitability per unit of equity relatively quickly, even after allowing for integration costs and transition effort.
This occurs for structural reasons rather than optimistic forecasts.
Revenue that previously relied on high-cost local labour can be transitioned to lower-cost, high-quality offshore teams. Fixed costs that were unavoidable at smaller scale disappear entirely. Partner time is redeployed away from administration and compliance toward higher-value advisory and client development work.
Crucially, this uplift does not depend on aggressive growth assumptions. It is largely the result of operating leverage already embedded in the host firm’s platform.
This is why the quality and profitability of the acquiring or host firm matters so much. A merger into an average platform produces average outcomes. A merger into an exceptionally well-run platform can change the economics meaningfully — and quickly.
Complexity still matters — and should not be ignored
None of this diminishes the complexity of merging. Cultural alignment, governance, decision-making authority, equity pathways and partner expectations remain central — and are often where value is either protected or destroyed.
However, complexity should be acknowledged and managed, not used as a default reason to defer action indefinitely.
In the current market, the more common risk is not entering into the wrong merger, but waiting too long — allowing succession pressure, partner fatigue or key-person dependency to erode leverage and optionality.
Firms that explore merger opportunities early, while performance is strong and alternatives remain open, consistently achieve better outcomes than those forced to act under time pressure.
Reframing the purpose of a merger
At its core, a merger is not about size for its own sake. It is about allocating risk, capital and effort more efficiently across a broader economic base.
For some firms, independence will remain the right answer. For others — particularly those operating below optimal scale — a well-chosen merger can unlock value that would otherwise remain permanently out of reach.
The key is recognising that not all mergers are created equal, and that merging into strength is fundamentally different from merging out of necessity.
In an Australian accounting market characterised by margin pressure, talent scarcity and increasingly complex succession dynamics, that distinction matters more than ever.
The firms that recognise it early tend to shape the outcome. Those that delay often find the decision made for them.
And in a profession built on foresight, that is a lesson worth heeding.
