Lexington, KY - Greg Mullins describes what led to the marriage of the Lexington accounting firm Potter and Co. with Indiana-based Blue Co. as a "long courtship."
"We really took our time and so did Blue," said Mullins, who was director of the Potter Lexington office and now has that same title under Blue.
After the first conversations started in fall 2008, Potter officially became part of the Blue family on Jan. 1, 2010.
Potter was a Lexington-based firm with about 65 employees, including 30 certified public accountants, in Lexington and Louisville offices. It has joined with Carmel, Indiana-based Blue, which has offices in Indiana and in Ohio. Before the merger, its only Kentucky presence was an office in Louisville. Blue & Co. has been ranked in the top 100 U.S. public accounting and consulting firms for more than 10 years, according to the Public Accounting Report and now has nearly 300 employees.
The merger is the second in recent months for a Lexington CPA firm. In 2009, Mountjoy and Bressler merged with Chilton & Medley of Louisville to create, Mountjoy Chilton Medley. The merger created a firm of more than 100 CPAs and 200 total employees.
While the marriage with Blue has meant a name change, the folks at the former Potter & Co. said it doesn't mean giving up all of its freedom.
"We're not going to feel like an employee," Mullins said. "Blue is not so big that it creates that sort of feeling."
The mutual attraction between the two firms centers on the health care industry.
Blue's presence in Kentucky had been limited to mostly being a health care consultant out of its Louisville office.
"Blue was very interested in expanding its footprint in Kentucky," Mullins said.
And the Potter merger is expected to kickstart that strategy.
C. Michael Stigler, Blue's director-in-charge in the Kentucky market, said the merger "will enhance the services and expertise available to our clients and will expand our niche industries in construction, not-for-profit, manufacturing and distribution, business valuation and litigation support, as well as add a sizable governmental practice."
And Potter was interested in expanding its health care business, which had been a small part of its portfolio.
"Our little office was much more of a traditional CPA firm," Mullins said of the firm that dates back to 1918. "But an industry we really weren't heavily into was health care," Mullins said.
So while Potter & Co. gave up its name, it gained expertise in an industry that is growing during a difficult economy. And if there is any state where the Blue name should be an easy sell, it's Kentucky.
"We want the Blue name to get out. If you're in the health care industry in Kentucky, you've probably heard of Blue," Mullins said. "Outside of health care, there's not a lot of name recognition. We need to work on that."
Some of that responsibility falls to Craig Browning. Browning was in charge of marketing and new business management for Potter and will have the same role with Blue, coordinating marketing efforts of all the branches.
Browning's role is an example of another advantage to the merger: economies of scale.
Blue & Co., while larger, did not have a designated marketing executive.
It does have people dedicated to training and to recruiting and retention, and those executives will be able to share their expertise with the new Blue offices.
Being a bigger firm may have some other advantages. It is now large enough to be part of the
Public Company Accounting Oversight Board. That is a minimum requirement to bid on auditing jobs for some large or publicly held corporations.
"Potter didn't really need to be," Mullins said of PCAOB certification, "but that is something that might open some doors for us."
But the merger doesn't mean Blue partners or employees will be relocating to Lexington and vice versa.
Mullins said technology makes such an integration much easier than in the past.
"A lot of our connectivity is through technology," Mullins said. "Sharing resources, sharing staff, sharing expertise .... doesn't require people to move."
The company plans to maintain two offices in Louisville, which is where the first flirtations of the eventual marriage took place. A conversation between partners in each of the firms was the spark.
"It was more coincidence than anything on the timing," Mullins said.
As part of the pre-nuptials, an independent firm was hired to do a study of both businesses. Mullins said that independent study was helpful and enlightening, and it helped reveal two things that really mattered to the Potter staff: the similarities of the offices' culture, and the importance of autonomy.
"It really revealed a depth of feeling about our autonomy," Mullins said. And the Lexington firm was satisfied that it was not going to be told what to do by the people in Carmel. And as evidence of their similarity in workplace culture, Mullins pointed to some awards won by each of the firms.
Blue was named as one of the 2009 Best Places to Work in Indiana. Potter was selected as the 2009 Alfred P. Sloan Award for Business Excellence in Workplace Flexibility, in addition to being named by Accounting Today as one of the nation's 100 Best Accounting Firms to Work for (2009).
And while the study was helpful, Mullins said "what mattered most was that it just felt right."