Rebecca Ryan, 2EO of Next Generation Consulting, calls them the Giant Brain People, a term probably equivalent to the Dream Team in the accounting profession.
The people to whom Ryan referred are fellow members of the Advisory Board L. Gary Boomer, chief executive of Boomer Consulting in Manhattan, Kan.; Gale Crosley of Crosley + Company in Atlanta; Allan Koltin, chief executive of PDI Global in Chicago; and Gary Shamis, managing director of SS&G Financial Services in Cleveland.
All were on hand to facilitate a session called, Whats Happening Outside Your Firm and What it Means to You. Each spoke for about 20 minutes, sharing their insights about the profession and how outside influences are affecting firm growth.
There is a lot of focus on the protected class of accounting firms, said Boomer. All progress starts with the truth.
He pointed to three areas that have been important issues in the first eight months of the year: partner compensation, expense reduction and cash flow.
Boomer said one of the most common statements he hears from managing partners is the wish that all partners in a firm would go out and talk to clients.
The clients out there need you more than ever, he said. You just need to go talk to them and ask them whats keeping them up at night and listen. Not go out on a sales call, but go out and find out whats making them tick. If you talk to a client and sit there and listen for a while, you can find a lot of new work.
Boomer described the profession as in a period of transition. He said maintaining confidence within the firm with the people you manage and your clients is a full-time job right now.
Shamis followed Boomer and shared a brain dump of his thoughts on where the profession stood.
Youve heard that 50 is the new 40 and 60 is the new 50, he said. OK is the new great in your business.
Shamis believes the recession has been very good for public accounting firms, though he admitted the staffing carnage has been difficult. His firm has between seven and nine percent less people on staff as a result of the recession.
Shamis said he learned a valuable lesson from the cutbacks. If we had done what we needed to do when we should have done it, we would have released them into a better environment, he said. I think the recession was good. It forced us to be more proactive and look at workflow.
Firms are resorting to a variety of tactics to cope with the economy, Shamis noted. Those include deferring maintenance, laying off employees, holding partner compensation at the same levels, combing through unnecessary expenses, looking at savings in health care, selecting clients more carefully, staying close to clients, increasing marketing efforts, and looking for merger and acquisition candidates. The economy may allow firms to hire better people than they currently have on staff, he added.
Crosley talked about how the profession has had a fat cat syndrome for the past seven-and-a-half years. We got ourselves very complacent about growth, and growth matters, she said.
The issues of retention and recruiting had become front and center until the recession hit. Financial collections were suddenly the main concern, and HR issues took a back seat.
Competition right now is fierce, Crosley said of the market. The top trends in the profession right now, as she sees them, are cost controls, lowest-cost production, efficient growth and the hiring of business development specialists.
Crosley predicted that more commoditization of bread-and-butter services will continue, as well as specialization.
Most of our managing partners and senior partners grew up in a generalist world, she said. We are a mature profession right now. Specialization is king. Period. I tell all my young partners and managing partners, Will you please declare a major?
Koltin talked about the differences a few years make. For example, in 2007, good talent was hard to come by, but in 2008 mass layoffs among the Big Four occurred, and in 2009 more than 50,000 resumes were circulating.
He noted that firms have been coping with the recession it in a number of ways: multiple rounds of layoffs, no salary increases, across-the-board salary reductions, termination of partners, major cost-cutting initiatives, mandatory time off during the summer months (which many staff appreciate), delayed start dates of new hires and withdrawal of offers.
You dont want to go back to the college campuses this fall if this is what youre doing, Koltin said. Pulling back offers, I just dont think its good for business.
Koltin said 2008 was a surprisingly big year for mergers and acquisitions, and he predicted that 2009 would yield more mergers than 2008.
He said there is a new gauge of what makes a successful partner. The old school train of thought regarding partner compensation included questions such as, What is your book of business? How much new business did you bring in? and How many billable hours did you have?
The new school train of thought instead asks, Who did you recruit to the firm last year? On the upward evaluation, how many identified you as the reason they are with the firm? and How many current and future partners would identify you as their sponsor?
Succession planning is the No. 1 problem in CPA firms today, according to Koltin. Firms grow organically, he said, and by gaining lateral talent a strategy that has grown more in the past five years than in the last 20. He said lateral or merged in partners have become the No. 1 growth strategy of many top 100 CPA firms.
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