As if running a CPA firm didn't pose enough wrenching decisions for owners and managing partners on an almost daily basis, selecting a suitable framework for expansion has traditionally added to the litany of leadership headaches.

While the importance of strategic growth for survival and profitability is inarguable, constrained resources, a less-than-stellar economy and pressures on client fees and margins often dictated whether CPA firms pursued a geographical or vertical expansion avenue.

More recently however, a number of Accounting Today's Top 100 firms, such as Marcum, Clifton Gunderson, LarsonAllen, ParenteBeard, RubinBrown and Habif Arogeti & Wynne, have mined success deploying a combination of both.

"There's no question we're all going to need to provide a wide variety of services to our clients in the future, as well as make strategic acquisitions if the opportunity comes along," declared ParenteBeard chief executive Robert Ciaruffoli.

Over the past year, the Philadelphia-based firm has rolled out a series of new client services, including practices centering on sustainability, emerging growth services, transaction advisory services for both buy and sell side, and, more recently, XBRL. "One of our senior managers took it upon himself and came to us with a business plan for the XBRL practice," Ciaruffoli said. "For new services, we generally start in one geographic area, with the goal of blowing it out across the entire firm. So we let him run with it."

On the geographic front, the firm merged in a cross-state CPA firm, Pittsburgh-based McCrory & McDowell, in June, which doubled the size of ParenteBeard's existing Pittsburgh practice, in addition to bolstering its commercial industrial and health care niches.

"Our goal since 1994 has been to grow and build out our industry focus to a higher level," said LarsonAllen CEO Gordy Viere, whose firm is now spread over 13 states. "Even with the difficult economy over the past several years, we didn't slow down or speed up, we just waited for the right opportunities. If they make sense, we'll tuck them in."

In November, the Minneapolis-based firm established a presence in the Pacific Northwest, merging in LeMaster Daniels of Spokane, Wash. Two months later, it added Hansen NvO of Kennewick, Wash., and just last month announced that it would merge in Seattle-based Lockitch Clements & Rice PS in August.

Viere revealed that the firm is making a concerted effort to strengthen its outsourcing services, which it did by acquiring both a local consulting firm and a Washington, D.C., public accounting firm that specialized in that niche.

"Ultimately, we want to have a national presence," Viere said.



Since 2010, Milwaukee-based Clifton Gunderson has engineered some eight mergers, but CEO Krista McMasters said that it's not always about new geographies as much as it is getting stronger in markets where the firm already has an established presence.

"Currently, we're looking at some specialized areas, such as forensics, and taking that across the firm," she said. "We think there's tremendous opportunity out there. We're doing everything to leverage the strength we have in our marketplaces."

Last year's acquisition of U.S. Tax Advantage raised the practice's international tax expertise, another area that she sees as being a virtual service offered throughout the firm.

Prior to 2007, Atlanta-based Habif Arogeti & Wynne had only acquired two firms, according to managing partner and CEO Dan Simms. But one year later, the firm had merged in a 65-person practice and, to help build its wealth management practice, had absorbed a number of independent financial advisors. "Our goal is to be a 500-person firm within 24 months," said Simms, whose staff now numbers roughly 325. "We're targeting the South, the Atlanta market as well as Florida on the accounting side, but we're also looking to grow the wealth management business as well. We've also had discussions outside the South, and the Southwest and the East Coast could also be possibilities. But what we would like to do is acquire a 100-150-person firm in our area over the next 12-18 months. We've already identified some potential candidates."

HAW also increased market penetration of its IT assurance niche when it brought over a partner from New York-based Amper who was an Atlanta native and was interested in relocating back. "We convinced him we were the right firm to go with, and now it's a growth area," Simms said. "As we grow, it gives us the opportunity to attract more talent and branch out. For example, we're not in the automotive industry, but if there was an opportunity to acquire a firm with industry expertise in that area, we'd certainly be interested."



Few firms have achieved critical mass as quickly as New York-based Marcum, which made the decision in 2008 to transition from a regional firm to a national firm servicing the middle market and offering an alternative to the Big Four.

"We set our sights on the country's top 10 business markets," explained Marcum managing partner Jeff Weiner, who now oversees 22 domestic and three international offices. The series of ensuing mergers gave the firm footprints in Miami, Los Angeles, Philadelphia and Boston.

"We took a hub-and-spoke approach," he explained. "Boston gave us access to Hartford and New Haven. With Miami, you get Fort Lauderdale and West Palm, and in Los Angeles you get San Diego and Orange County. We've also identified Chicago to do something in this year, and are looking at Dallas, Denver and Washington, D.C."

It also plans on growing its Marcum Search unit, which provides permanent and temporary staffing, recruiting and business process outsourcing services

"We've achieved critical mass quickly, and now it's a matter of letting the infrastructure catch up," Weiner said. "We have several different business lines that have to grow with the firm, and you have to treat each one differently."

At RubinBrown, the largest CPA and business advisory firm in the St. Louis area, managing partner John Herber said that the firm's vision is to have established three national client practice niches by 2015, which would include its core real estate niche, as well as a number of growing practice areas.

More recently, it launched a life sciences service.

"I feel that one of the keys to our success is to take the younger partners and give them something to build and develop," said Herber. "You want them to come to work thinking about how to grow their areas of responsibility. New [practice] areas always come down to talent capabilities, if you can develop that and line up the right people with the right opportunities."

"We were a one-office firm for 50 years," explained RubinBrown chairman James Castellano. "Then the thought was that we would explore growth by replicating what we did in St. Louis in other markets. In 2005 we entered Kansas City."

In 2010, the firm entered the Denver market, and more recently expanded its presence in the Mile High City with the merger of Bondi & Co. in June, which strengthened its existing audit practice.

"We're very calculating," Castellano said. "We look for opportunities, but we do need to be in at least one new city by 2015."

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access