Friedman’s co-managing partners tackle new ways of doing business
Friedman LLP has been undergoing some major changes since co-managing partners Harriet Greenberg and Frederick Berk took the helm at the New York-based Top 100 Firm at the beginning of 2017.
They succeeded Bruce Madnick, who had been running Friedman for 35 years. “We want to continue his culture,” said Greenberg. “That was our number one takeaway from taking over as co-managing partners of Friedman.”
But they are also making extensive changes at the firm by getting into new technologies such as cryptocurrency, with software the firm has developed on its own for auditing virtual currencies like Bitcoin, as well as giving employees more options to make their work lives more flexible.
“Because everybody has a different personality and a different concern, we decided to change it up a little in terms of how we treat our most valuable asset, our staff,” said Greenberg. “We’ve instituted a number of policies, including an alternative work arrangement, core hours where people have flexibility as to their working day, whether to work from home or work from the office, to treat them more like professionals and not treat them like nonprofessionals.”
Another new policy is called “Dress for Your Day.”
“What happens is you dress for your meetings,” said Greenberg. “If you have a meeting with a banker, and everybody is dressed in business suits, that’s what you wear. If you’re going to spend the day in the office, we’re OK with jeans. We want people to use their professional judgment in how to conduct themselves, and so far it’s been exceedingly successful.”
The firm also has town hall meetings where anybody can ask questions about what’s happening at Friedman.
“Fred and I instituted town hall meetings so at least three to four times a year we’ve had meetings with everyone under the partner level to talk about what’s going on in the firm, our direction, what we see as our highlights, our challenges, new practice areas, very much what we do with our partners and principals at our monthly partner meetings,” said Greenberg. “So now everybody knows. It’s not just the partners that know. You can ask any question that you want at a town hall meeting without fear, no matter what it is. I always say, ‘Ask us how much the partners make. There’s nothing we won’t tell you, within reason.’”
“People are thirsting for knowledge, and the more open you are, the more comfortable they become,” said Berk.
The firm’s offices are closed on Fridays throughout the summer.
“One of the things that we started, and I’m really surprised more firms aren’t doing, is our Summer Fridays,” said Berk. “We’re completely closed on Fridays, 100 percent closed. If somebody has to work, they’ll figure it out. They’ll get the work done, but 99 percent of the people do not work on Fridays. No office services, no receptionist, nobody. We shut down, which people love. That has been an amazing recruiting and retention tool for us.”
“It’s the number one thing that our staff loves because they get to spend the weekend with their families,” said Greenberg.
The firm is also planning to move to a brand new office space in New York within a year.
“The other thing that’s really exciting right now, and it’s a big buzz within the New York City office, is in less than a year, we’re going to be moving to new space,” said Berk. “It’s going to be a state of the art, terrific, fantastic space. Right now we’re on three floors. Most likely we’ll be on one open floor plan, so the staff is excited about that also.”
The exact location hasn’t been set yet, but the headquarters will remain in Manhattan.
“It’ll be very cool,” said Greenberg. “There will be a lot of amenities like couches and private phone booths and everything that a new millennial will desire in an office location.”
The offices will likely be more open to allow employees to feel like they are working more closely together.
“It’s a better work environment,” said Berk. “People like to be collaborative today. And from a business perspective, space is very expensive, so you have to figure out a way where you can work effectively, efficiently, and try to reduce your costs a little.”
“We’ve been looking at amenities like bike rooms and showers in the building or facilities, all those things that make people happier and easier to come to work,” said Greenberg.
New Practice Areas
She and Berk have also been developing some new practice areas for Friedman.
“We started a cybersecurity division called CyZen,” said Greenberg. “CyZen is a solution for people’s cyber needs. It starts out with small things like assessments of the architecture of people’s IT systems, and it goes up through penetration testing and solution providers. That’s been very well accepted, both within our clients and by our prospects. We expect that to grow dramatically because everyone needs it.”
On top of that, Friedman has opened a cryptocurrency blockchain division that’s using auditing software developed by Friedman CyZen. “We started a cryptocurrency blockchain division where we’re providing consulting and auditing services for clients in that space,” said Greenberg. “Our CyZen division has developed programs to directly access the blockchain and these cryptocurrencies so that we can audit them. It’s amazing how the two have worked together. There aren’t other firms that I know of that are doing that. Some Big Four firms have developed some of those programs, but we’re 100 percent unique in a firm of our size being able to do that. In fact, other firms have reached out to us to see if we’re willing to license our technology, and we’re not sure of the direction we’re going to go on that.”
The technology is able to go to the blockchain for Bitcoins and verify that a client has, for example, the 100 Bitcoins they claim they have.
Friedman has also been developing its international tax practice.
“An outgrowth of that, which is a large area for us, is international tax, and a lot of these cryptocurrency transactions, these ICOs [initial coin offerings], are coming in from overseas,” said Berk. “We’re actually bringing in a new partner in the month that is a blockchain/cryptocurrency expert. There’s lot of exciting stuff going on.”
Friedman’s China practice has also been expanding. The firm has approximately 30 to 40 people who work in the U.S., but spend at least half their time in China, helping give Chinese companies access to the U.S. capital markets. The practice is headed by four China-based partners who regularly visit the U.S. The practice has been in business for approximately eight to 10 years, but is really booming right now despite tensions between the U.S. and China over trade policy.
“A year and a half to two years ago, Harriet and I went over to China to do a road show to help them drum up business,” said Berk. “Last year, we didn’t go because there was so much business we didn’t have to go.”
Another growing practice for Friedman has been Forensic Accounting and Valuation Services, which has approximately 40 people.
“We do a lot of matrimonial work and white collar crime,” said Berk. “From an accounting firm perspective, we have one of the largest forensic groups, other than the Big Four. That group is constantly growing; talented guys.”
Friedman currently has eight offices in the U.S., plus a ninth location in China where the New York-based partners and staff can work. Most of the offices are located in South Jersey, Philadelphia, North Jersey, and Long Island, along with the firm’s Manhattan headquarters. However, the firm has been looking to expand further down the East Coast.
“We’re seeing an interesting trend,” said Greenberg. “There was a merger frenzy and then the merger transactions in the last year or so have slowed down because there weren’t that many companies of size left. Now we’re getting a call every week, and if we’re any indication, there seems to be more activity.”
For firms that are interested in combining forces with Friedman, the firm has launched a web page for potential merger candidates.
“That’s something we’re very interested in here is mergers,” said Berk.
“It has a message you can check out, and we have some videos we have recorded of some of the partners who have successfully merged in with us, where they’re talking,” said Friedman chief marketing officer Jill Jacobs. “There’s a booklet that they can download with more information about the firm and how we can be successful together.”
Building a Presence
The firm mainly targets the middle market, with a large client base in the real estate industry, particularly in New York, but also nationally and internationally. “We brought ourselves to a point where we never want to be in the position where a client comes to us and says I need a specific service and we say to them we can’t provide a service,” said Berk. “Because once you say that, you’re putting the whole accounting relationship at risk. We have gotten to a size and a position where we can provide just about everything a client could need.”
One area of particular interest lately has been the tax overhaul that Congress passed last December.
“There is a lot of confusion and people coming to us for help,” said Berk. “We’ve actually developed a task force within Friedman that’s going to just about every client to help them understand the impact and create planning opportunities for this new tax law. I won’t say it’s been advantageous for a lot of clients because some of the clients have been negatively affected by this law and some of them positively. But from an accounting firm perspective, our clients realize we are trying to do the best we can for them. They’re happy they have us as a resource and we’re able to charge for it.”
“We’ve been to every significant client or anyone who expressed an interest with a presentation on the new law, sitting with the owners and management, explaining the new law in easily understandable terms and how it’s going to affect them as a company and individuals,” said Greenberg. “We’ve done that since before the law was passed.”
Encouraging the Next Generation
Friedman has also recently added an intranet to help staffers communicate, along with a mobile time entry system.
“It’s called FLIP,” said Greenberg. “It’s a better resource for our staff to communicate with each other, find out what’s going on at the firm and also access information that they would like or should know. We just instituted a mobile time entry system to make people easily accessed by their phones. That’s something the staff wanted. They always had access from their homes, but now it’s mobile.
The firm also started a Go Green Committee and a Friedman Gives Back Committee to encourage volunteering.
“We always as a firm did a lot of that, but now there’s a formal committee where there’s a representative in each office organizing volunteer events and charitable initiatives on an ongoing basis,” said Jacobs. “We’ve done bike-a-thons, we’ve gone to soup kitchens. We were just in Philadelphia for an organization called MANNA and prepared sandwiches. Last summer we had a whole day of Friedman Gives Back where each office was closed. In each region we went out and volunteered in all kinds of different ways, from working in fields to soup kitchens and animal shelters. We gear it all towards what the staff wants. Rather than the firm dictating, it’s all from the bottom up.”
The firm has also created a Women’s Development Network to encourage female leaders like Greenberg advance through the ranks.
“The Women’s Development Network has been amazing,” said Jacobs. “They just sponsored the Superlative Awards. Each office has ongoing events quarterly. Then they also sponsor other initiatives with charitable initiatives. In the After Tax Party this year, we had our first ever Superlative Award, and it was all voted on firmwide. There were awards like Most Charitable, Most Green, Best Mom and Best Dad.”
“The purpose of the Women’s Development Network is to make it easier for women to stay in our profession, in our firm, and become more important to management,” said Grenberg. “Grow to be partners and teach them how to network, make them more comfortable, deal with issues in their lives such as family situations, whether it be children or aging parents, to give them the guidance that helps them stay in the profession. That came out of our alternative work arrangement. That was something that women in the firm needed to stay in the profession.”
Greenberg is a mother of two and she credits Friedman’s flexible work arrangement with her ability to stick with the firm. “Were it not for Friedman’s ability to be flexible, I would not be here,” she said. “I worked an alternative work arrangement before it was fashionable. I worked four days a week in the office and I’m co-managing partner. How amazing is that? Forty-seven percent of our people are women. We have women partners in every office, from the smallest office to the largest office.”
Co-managing the Firm
She and Berk split their responsibilities, with Berk focusing more on the tax practice while Greenberg spends more time on the audit practice.
“We both know when something rises to a magnitude that it requires both of us to discuss,” said Berk. “We know when that’s appropriate, and we have those conversations. And those conversations are great. It’s not a matter of me trying to convince her or her trying to convince me. It’s a conversation of the two of us trying to brainstorm and figure out what’s best for the organization.”
“Our personalities are different,” said Greenberg. “Our core competencies are different. I appreciate having a sounding board, and I think this is the management of the future. I prefer having collaboration. We’ve changed our management style. Our partners have a lot more information now. It’s just the way we manage, and it’s nice to have help. We have an amazing responsibility here for 500 families. Should one person take that on alone?”
“By being co-managing partners, we both have a book of business, and we understand the pain that our partners are going through,” said Berk. “It’s our job to help alleviate as much of that pain as possible. You can’t if you don’t understand what it is.”
“It’s a different management style, different than the patriarchal typical style of firms of yore, where you had this one all-knowing male partner who told you what you what was going to be good for you,” said Greenberg.