With critical issues on both a federal and firm-wide level impacting the profession in terms of profitability, human capital and growth CPA practices that don’t have a plan to drive revenues upward will find 2011 a very tough competitive climate.

“In 1993, of the 60 top accounting firms, 30 are gone and 30 are continuing to change,” said Allan Koltin, chief executive of the newly renamed Koltin Consulting Group at the Winning Is Everything conference in Las Vegas on Thursday.

“The prospect of organic growth over the next couple of years is slim,” said Gary Shamis, managing partner of Cleveland-based SS&G Financial Services. “There’s a high level of competition, and pricing has become a huge issue. Now you have a tremendous amount of movement by the Big Four who are pricing below regional and mid-level firms.”

Koltin and Shamis’s remarks came at a session entitled, “Today’s Perspectives on the Profession: Consultant and Managing Partner.”

“Ten years ago, the staffing environment was sizzling. All you had to do was bring in bodies,” explained Shamis. “SOX created 15 percent more volume for every firm. Then it [the staffing market] went to frozen. The younger employees are looking [for an] opportunity. What they’re seeing in a lot of today’s firms they don’t like, a huge percentage would leave if they could. Our inability to grow will affect staff retention.”

Shamis urged firms to take a look at their marketing and sales departments and cautioned against cutting back on those budgets, as well as exploring new niche services and selling additional services to existing clients.

“SOX deterred us from looking at additional services, but now maybe it’s time to re-examine them,” he said. “Because of the recession, most of us over the past two years did the best job ever of running our firms. We became more efficient and cut costs. We have 40 less people in our firm with the same volume. But you can’t keep going to the well.”

Both Koltin and Shamis agreed that the M&A landscape over the next three to four years will be furious.

“All the signs are there,” Shamis said.

“Over the last 10 years we began to run firms like a business,” said Koltin “Before that, leaders of firms spent a lot of time on metrics and not a lot of talk on strategy. How are we going to compete in our markets? The best-in-breed firms will be setting goals and meeting regularly. It’s a connected world. Since you’ve been sitting here, I guarantee most of you have gotten e-mails from clients with questions. The 24-hour rule no longer applies.”

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