Rosen Seymour Shapps Martin & Company LLP has been undergoing major changes as 13 of RSSM’s 24 partners have left in recent months to join other major firms in New York, Citrin Cooperman and WeiserMazars, including two former managing partners.
“Essentially the firm is going through a restructuring,” said RSSM partner Alan Willinger, who has remained with the firm. “We did have partners who departed for Citrin. Some partners departed for Weiser.”
He said there had been a philosophical split in the firm, with some partners pushing to merge with Citrin and others to merge with WeiserMazars.
“It’s been a philosophical split on how to manage the firm and where the firm’s future was going,” said Willinger. “Many of the partners felt we should merge, but more than half the partners wanted to stay and operate independently. We took a vote and we decided to remain independent, and that caused a lot of anguish among the partners. Those were the partners who departed. None of us wanted to go through this, but it was inevitable because we couldn’t make those mesh, so to speak.”
Citrin Cooperman announced Monday that four audit partners—Corey D. Bell, Robert A. Modansky, Mitchell Rubin and Matthew Murphy—and approximately 15 staff people who were formerly with RSSM have joined Citrin. In addition, Fred E. Shapss, the firm’s former managing partner, has joined Citrin Cooperman as a consultant.
“We are delighted to welcome Fred, Corey, Robert, Mitch, Matt and their staff to our firm,” said Citrin Cooperman CEO Joel Cooperman in a statement. “We feel that they will fit well with the team culture that we have established, and their deep audit expertise will be of great benefit to us. We look forward to working with their clients.”
A WeiserMazars spokesperson did not immediately respond to a request for comment.
In September, Grassi & Co. announced that it had merged in The Hochman Practice Group, which had formerly been part of RSSM, with four partners—Michael Hochman, William Hughes, Richard McGuinness and Maryann Schugmannn—joining Grassi’s offices in New City, N.Y. (see Grassi & Co. Merges in Hochman Practice Group).
Many of the departures came as a result of disagreements over mergers. “With Hochman, the merger didn’t work,” Willinger explained in an interview Thursday. “They felt like they were better on their own, operating as a separate firm. We mutually agreed to split in August.”
However, many of the departures have occurred in the past month, as some partners pushed RSSM to merge with either Citrin Cooperman or WeiserMazars, while other partners disagreed. “Basically what’s happened in the last 30 days is we’ve had nine partners who have left,” said Willinger.
He pointed out that Shapps was no longer a managing partner at the time he left for Citrin. “He was a retired partner,” said Willinger. “His retirement payments were being made. This was something he chose to do. But he was managing partner in 2008 and he was replaced at that point.”
Martin Greenberg replaced Schapps and remains at the firm. However, Michael Bernstein took over as managing partner in 2010, and he is one of the partners who left for WeiserMazars last month. “He was among the partners who were pushing the firm toward a merger,” said Willinger.
The firm currently has no managing partner and has been managed by its executive committee since October 20. RSSM currently has 11 partners, down from 24 only a few months ago.
“At the end of the day, we’re looking at a much more cohesive firm,” said Willinger. “We will have a smaller footprint. We will be more efficient and more agile, and we will be a more competitive firm in the future.”
The firm is looking to hire more staff to replace the employees who left with the partners for the other firms and hopes to hire another 10 to 20 employees, according to a spokesperson.
For now, there are no plans to change the name of the firm, and Willinger said it rebranded as RSSM back in June. However, the full name of the firm, including Shapps’s name, remained on the Web site’s home page and elsewhere across the site as of this morning.
Willinger said the firm still has a strong base of clients who have remained loyal, even though many of the partners who left the firm also took their clients with them.
“Most of them took the book of business they came in with,” he said. “Most of the partners who departed really were more recent additions who had a book of business.” Many of the clients of those partners have left, but some chose to stay with RSSM.
“We have been in business for 50 years, and we’re loyal to our clients,” said Willinger. “Our main goal is to end up with a firm that better services our clients.”
RSSM ranked 82nd on Accounting Today’s 2014 list of the Top 100 Firms, with $40 million in annual revenue in 2013, but that was down from the previous year, when it had $49 million in revenue. Willinger estimates that annual revenues will probably now be in the range of $15 million to $20 million.
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