Canadian firm RSM Richter has merged with independent accounting firm Chamberland Hodge. Chamberland Hodge will add 40 staff, including six partners to the merged entity. Its fee income for 2007 was C$5 million ($4.8 million).
The combined practice in Montreal will comprise of 465 staff, including 43 partners. Denis Chamberland and Robert Hodge, co-managing partners at Chamberland Hodge, will sit on the board of directors.
Nationally, RSM Richter is among the top ten accountancy firms in Canada, generating fee income of more than C$114 million for the year ended August 2008.
RSM said it pursued the merger, which became effective earlier this month, to help the firm improve its service to Quebec’s largely French-speaking business community.
“RSM Richter’s goal is to expand its service offering, specifically to better serve Quebec’s mid-sized francophone business market. Through its familiarity with this market, Chamberland Hodge is the ideal partner for us to pursue our interests in this area,” RSM Richter co-managing partner Stephen Rosenhek said.
“In Montreal, half the population are francophones and the other half are anglophones or allophones (mixed French and another race). In fact, in Greater Montreal and Quebec almost 80 percent of the province is mother-tongue French.
“Richter is an anglophone firm and has really flourished in the audit and tax end of the anglophone market. We have also had some penetration into the allophone market, but a very small penetration into the francophone market. In the past five years or so, the province has evolved and the communities are much more accepting of one another. The francophone community has really blossomed and has really become the engine of Quebec in terms of both dominant larger companies and small- and medium-sized businesses.”
Rosenhek said he hopes the merger will put the combined firm in a much more prominent position in the Quebec market. The firm is planning to grow the tax and assurance practices by 10 percent in the next three years.
“We are hoping that we will grow much faster than the market, especially due to the merger. It’s been 83 years for the first merger to happen and we may never do another one again,” he said.
“From Chamberland Hodge’s perspective, they have taken their firm to a certain size,” he added. “What they now have is an international network that they can leverage on. It means that they can now have clients in London, for example, should they wish to. We also have a full range of services that they can offer clients. This is a big advantage to them and also fulfils one of their main objectives. It’s a win-win for both parties.”
Besides moving beyond the barriers of their traditional business, both firms share similar cultures and corporate values, which they aim to build upon to expand future opportunities, Rosenhek said. He noted the two firms use the same software packages to deliver their audit files and run their marketing and human resource processes in a similar manner.
“One thing that we are aware of is that mergers make a lot of sense but you have to get them right afterwards. So we are very focused on the subject of cultural differences and making sure our people feel comfortable,” he added.