Fresh off the 2008 financial crisis, Jan. 1, 2009, was undoubtedly a “tough time to do a merger,” reminisced HoganTaylor CEO Randy Nail (pictured). But more than ten years later — and with the firm just having joined Accounting Today’s list of the Top 100 Firms — there’s no doubt that the decision has proved beneficial.
“We were a $20 million firm [at that time] … and our budgets and revenues for this year are $56 million, so we’ve had some really good organic growth,” he said.
From the merger between two 25-year-old Oklahoma accounting firms in 2009, HoganTaylor was born. The firm now spans both Oklahoma and Arkansas, with offices in Tulsa, Oklahoma City, Fayetteville and Little Rock. It currently employs over 300 personnel, with more than 100 CPAs and 43 partners across its four offices, and is also a member of PrimeGlobal. The firm was No. 88 on Accounting Today’s 2020 Top 100 Firms list.
Nail figures that half of his firm’s success was based on organic growth, and the other half on mergers and acquisitions. “The largest was the acquisition of our Little Rock, Arkansas, office, effective Jan. 1, 2018,” Nail added. “That was a big jump in our growth because that was another $10 million firm.”
“We have had a merger acquisition philosophy — I wouldn’t say it’s aggressive, but it is for our markets and the services we offer — but if we find something out there, then we certainly are interested in it,” he said.
Nail added that the firm has recently made its first acquisition in the non-accounting services space — RainRock IT Services, now dubbed HoganTaylor Technology. The new subsidiary will provide HoganTaylor’s clients with information technology service offerings, including managed services, CIO and technology solutions, cybersecurity services, and IT strategy.
People person(s)
HoganTaylor’s meat-and-potatoes firm services aren’t too different from its competition, as Nail will tell you, with one major exception: advisory.
“We talk around here about the four legs of a barstool: assurance, tax, advisory and what we call ‘CBS’ — core business services,’” said Nail. “And that particular leg takes care of the other three. … But the major growth in the firm is happening in what we call ‘H.C. [human capital] Advisory.’”
It’s this facet of the firm that Nail sees as both HoganTaylor’s calling card and its future — the idea that a firm can and should be a wholly involved asset for its clients. “I think what’s unique about a firm our size ... we offer a human capital and organizational development division,” Nail said. “So we actually have our HR people serving our clients in a human resources capacity. We have financial management services, and that’s where our outsourced accounting and controllers and CFOs reside. … We also have business valuation and litigation support services. … We’re going to do a lot in technology … whether it’s help desk or cybersecurity services. We don’t have them yet, but we will have engineers on staff — developers who will build products for our clients.”
“There is a gap in the accounting profession with firms who are simply adding new services to their client services offerings,” Nail added. “Then there’s another kind of firm … where we are transforming into something new altogether, and that is a business advisory firm. We’re a business advisory firm first, and we also happen to provide CPA services.”
Working, together
To change the firm into an advisory-heavy practice, HoganTaylor relies on its leaders to create and promote a culture that drives its staff members, according to chief human resources officer Shannon Hammons.
“The [firm’s] culture aspect … plays into the reputation we have in our market, which a lot of times brings people to us, people who want to be part of our organization,” she said. “Our leadership has … not just a vision, but a boldness to know where we want to go, how do we get there, and what is it going to take to do it. Growth, whether it’s in the sense of our revenue or size or services, takes a willingness to step out of your comfort zone to take on new challenges.”
These challenges include molding HoganTaylor’s staff to be more advisor-focused. Nail sees this as involving a culture of different kinds of professionals.
“You can peel the roof off of HoganTaylor five years from now and it won’t just be a CPA firm doing some cool things,” he said. “It’s going to have a lot of professionals from a lot of disciplines and we just figure out how, culturally, to work together around answering the question of, ‘What are our client needs, and how do we make their lives better? How do we make a difference in their lives and their companies?’”
All for one
HoganTaylor knows that its current and future staff — and the skills they bring — will be critical to its success.
“We’re recruiting a different person and we’re asking the traditional CPA candidate to do new things. It’s going to, by definition, create a change,” said Nail. “I’d say the hurdle is going to be constantly lining up our people policies and training ... to see purpose and mission, to keep that alive so that we can move forward.”
“[It’s finding] what does the ideal candidate look like for the future,” added Hammons, “looking at students from different disciplines as our priorities change.”
On the client side, Nail said that the customer may very well determine HoganTaylor’s hiring policies going forward. “[It’s] the answer to the question, ‘What do our clients need?’” he said. “They need something that we can learn to provide to them, and that’s how we’re going to grow. You would have to say that’s in the same disciplines as technology, human resources and marketing. I think we will have acquisitions in all of those spaces.”
Above all, Nail emphasizes that the client remains HoganTaylor’s biggest priority.
“We do have a goal to have $75 million in revenue by the end of 2022, but that’s not our [main] goal. … It’s where you put your emphasis. We want to say it’s about our clients because that’s what we believe our mission is.”
