The resurgence of big-ticket M&A will please many partners because the work runs throughout their entire practices, stimulating demand for several different services. Yet structural change can also have a traumatic effect on cash flow. There can be few events more disruptive than a key client becoming the subject of a merger or acquisition. Longstanding relationships can be lost as senior contacts move or lose out in organisational change; some practices lose lucrative contracts as work is consolidated under suppliers favoured by acquirers; others lose places on client panels.
For small firms, the effect can be catastrophic. They often have a foothold in a major company due to the preference of one individual. If that individual moves and if that income stream is a major percentage of the practice’s income, hard times follow.
