Accounting and Tax Planning Sections

Widening the Horizon

Whittlesey & Hadley Expands into the Western Mass. Market

Andrew (Drew) Andrews

Andrew (Drew) Andrews, managing partner of Whittlesey & Hadley

Tom Terry started with the Holyoke-based accounting firm Lester Halpern & Co. back in 1976.

And for as long as he can remember, there have been at least a few bowls filled with various types of candy at the reception desk to tempt visitors as they arrive, depart, or, quite often, both.

“Our clients love the candy, and our employees love it as well,” he told BusinessWest, adding that, when the Hartford-based firm Whittlesey & Hadley initiated discussions to acquire Lester Halpern more than a year ago, he and others at the company — not to mention some customers — made it clear that this was one tradition they wanted to see survive a change in the name over the door.

They needn’t have worried.

Indeed, Andrew (Drew) Andrews, managing partner at Whittlesey & Hadley (or W&H, as it’s sometimes called) has long kept candy at his desk and understands its importance to the broad mission of keeping clients happy.

“I just have to stay away from it myself,” he said with a laugh, adding quickly that continuation of the candy tradition is merely one of many ways the merger with Lester Halpern — the vehicle by which W&H has made its long-planned entry into the Western Mass. market — has been smooth and essentially seamless.

Andrews said there were many things about the Lester Halpern firm that appealed to W&H as it explored various merger opportunities in this market, including its size (nearly 20 accountants and roughly $4 million in annual revenues), location in Holyoke, and the mix and size of clients in the portfolio, which includes a number of tax-exempt entities and closely held businesses.

But it was Lester Halpern’s culture that was perhaps most important to this exercise, because it closely resembles the one at Whittlesey & Hadley, said Andrews, who described it in a number of ways, starting with the word ‘collaborative.’

“At some firms, people are very protective, taking the attitude, ‘that’s my client,’” he explained. “The better answer is, ‘that’s the firm’s client,’ and what’s best for the firm’s client is what we’re going to do. That’s our philosophy, and it’s the philosophy that existed here [at Lester Halpern], and that’s one of the reasons why this transition has gone so well.”

The similarity in corporate cultures extends to the way the two firms treat staff members, he went on, adding that, at the new/old company, the preferred term is ‘team members,’ not ‘employees,’ and the phraseology speaks volumes.

“We’re very concerned about everyone’s welfare, and we have very low turnover in our shop in Hartford,” he explained. “And they [Lester Halpern]seem to have the same culture of being very concerned for their team members’ needs.”

There have been a few minor challenges to overcome since the acquisition became official on Aug. 1 — the receptionist sitting just behind the candy dish has to get in the habit of saying the company’s new name when people call, and it’s taken some practice to pronounce and spell Whittlesey properly, said Terry, adding that, overall, there have been few, if any, problems.

“You read in articles that there are always going to be some bumps and there are always going to be some issues,” he said of the transition process. “But this has gone as smoothly as a transition possibly can.”

Tom Terry

Tom Terry says the merger of Lester Halpern and Whittlesey & Hadley has been essentially seamless.

And this solid start has only heightened the level of confidence as W&H seeks to gain market share in the competitive Western Mass. region, said Andrews, adding that he believes the Holyoke-based operation can match the Hartford office’s recent track record of roughly 8% to 10% growth a year.

He says to key to meeting this goal is to stress the additional resources that this ‘new’ firm can bring to the table through its operation in Hartford, and then deliver a broader array of services.

“We’re just a new player in town with added resources,” he explained. “We can provide more depth and other things that a 100-person firm can provide that a 20-person firm just can’t provide. So there’s more potential to the existing clients and the potential clients.”

For this issue and its focus on accounting and tax planning, BusinessWest talked with Andrews and Terry about this merger and what the future could hold. They both said that, while there is, indeed, a new name in this market, this is essentially the same old firm, only one that can now better serve clients.

By All Accounts

Tracing the history of the firm he joined as a staff accountant in 1984, Andrews said it was started by Bill Whittlesey in Hartford as a solo practice in 1961. He later expanded with the hiring of Bob Hadley as a staff accountant; he would become a partner in 1965.

The firm has achieved steady growth over the past 55 years or so, reaching $16 million in annual revenues and more than 100 employees at the start of this year.

Andrews, who became a partner in 1996 and managing partner in 2008, noted that, while the vast majority of clients’ firms are based in Connecticut, W&H has done some business in Western Mass. over the years, and recently made it a strategic initiative to do considerably more in the 413 area code.

Indeed, the question eventually became how, not if, the company would expand into this market, he told BusinessWest, adding that, while there were a few options, only one of them made real sense.

“We thought this was an area we really wanted to expand into, because we see a lot of similarities in culture to Hartford in this area,” he noted. “But, as in Hartford, if you’re not in the marketplace — even though it only took me 25 minutes to drive here from my office in Hartford — you’re a foreigner; you really need to live and breathe in the marketplace. I was invited once to an event that one of the banks held at the Basketball of Hall of Fame; I went with one of my partners. Everyone seemed to know each other, but no one knew us, and we felt like outsiders.

“We explored the possibility of simply opening an office, hanging out a shingle here — putting someone there and seeing what happens,” he went on. “But we didn’t think that would make a lot of headway, so we started exploring whether there was a local firm that had similarities to us in terms of how we deliver client service, how we treat employees, and wanted to get in with a larger firm so they could offer more services to their existing client base.”

W&H did some research, relying heavily on team members who lived in this area for insight, and eventually started talking with Terry and others at Lester Halpern.

“And, of course, with accounting firms, it takes a lot longer than with regular businesses to pull something like this off,” Andrews told BusinessWest, adding that talks began in January 2013, were then set aside for tax season, picked up again later in the year, and completed several months ago. “That’s because accountants, in general, are conservative, and accountants, in general, are very individualistic and like to do things their way, even though we all tend to do things in a similar fashion; it’s all about getting to know each other.”

Both Andrews and Terry said a good amount of due diligence went into making sure the fit was right between the two firms, and this research ultimately concluded that it would be an effective match.

“They [Whittlesey & Hadley] did their homework, but we did ours, too, as far as finding a partner to team up with,” he explained. “We were pretty confident that we picked the right partner, and that’s turned out to be the case. Our cultures match perfectly, our philosophy in terms of how we work with our clients — they’re very similar.

“And our clients are very similar as well,” he went on. “We both have a similar focus, with a strong not-for-profit sector in our work, but also an equally strong for-profit sector as well.”

Numbers Game

As he talked with BusinessWest about his firm’s prospects in this market, Andrews acknowledged that Western Mass. is generally considered a low- or no-growth area.

Which means that, if W&H is going to reach that goal of 7% to 8% growth for the Holyoke office, it will have to take market share from existing firms. And he believes it has the assets and attributes needed to do that.

For starters, it has the base that Lester Halpern has built over the years, he said, as well as accountants who are well-known in the Western Mass. market and understand the needs of clients here.

“We’ve tried to figure out a way to get into different markets without merging with a firm already in a market, and we haven’t been able to figure that out real well,” Andrews explained. “So that’s why we’ve gone this merger route. And one of the keys to it is to listen to the people that are already here, because they’re successful here.

“Even through we’re not that far away from each other, this is a different marketplace,” he went on. “And what succeeds in Hartford may not succeed in Western Mass. So we’re learning from our partners here, and we’re trying to do what they’ve been successful at doing since 1959 and leverage that.”

But Whittlesey & Hadley also has the resources of a much larger firm thanks to the staff, and it’s expertise, in Hartford, he went on, adding that these resources could become a strong selling point.

“As we’ve grown, pretty much organically, and become a larger firm, we’ve found that we’re better able to attract different types of talent and have in-house resources that traditionally aren’t available in smaller firms because there aren’t as many people,” he explained. “For instance, I have experts in different areas, and if my client has a complicated tax issue that’s very unique, I might have someone who’s dealt with it and is an expert on it. When you have a larger firm, you have different talents and skill sets, and you can provide a more-in-depth package of services to your existing client base.”

Terry agreed, and told BusinessWest that, in just the first 20 days of operating under the W&H umbrella, there were instances where he called on that expertise Andrews mentioned, and to the benefit of clients.

“There have been three instances already where clients have had questions that I would not have been able to answer,” he explained. “But because of the very strong tax department that’s located down in Hartford, I’ve been able to use those resources — and we’re only three weeks into it.

“We’re really just getting started,” he went on, “and to have that resource is extremely helpful.”

One of the challenges ahead for W&H is to make the region more familiar with the company’s name, acronym, and operating culture, said Andrews, adding that the firm intends to be visible, with some aggressive marketing as well as involvement with many area business organizations and their events and programs.

Ultimately, though, word of mouth will carry the most weight, he said, adding that, if the company can provide the depth and quality of service that he believes it will, that will be the best way to get the word out and build market share.

The Bottom Line

On the day BusinessWest visited the W&H facility on Bobala Road, the company’s new signage was not yet in place — it will be arriving later this month.

And outwardly, there were few, if any, signs (literally or figuratively) that anything had changed. Indeed, there were three bowls at the reception desk containing everything from chocolate to jellied candy.

But some change has come to the business beyond a new name, said Andrews and Terry, adding that, mostly, there is new opportunity to make this operation a stronger force in the local accounting market. n

George O’Brien can be reached at [email protected]

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