Another trend appears to emerging related to the way CPA firms are structuring themselves as they adjust to their rapidly changing environment and also work to position themselves as more than tax and accounting houses to their clients.
Some large regional firms are moving toward a holding company structure. The latest is the Pittsburgh-based firm formerly known as Schneider Downs & Co. The $26.7 million firm has reorganized itself into five separate divisions that will all operate under the umbrella Schneider Downs Holdings LLC.
Fellow regional giant Indianapolis-based Crowe Chizek made a similar move last year, when it formed a holding company, Crowe Group LLP, to house its accounting and consulting practice, Crowe Chizek & Co. LLC, along with its investment banking arm and its financial advisory services entity, as subsidiaries. That move, like Schneider Downs', was also accompanied by a new brand identity program. And Cleveland-based SS&G Financial Services, formerly Saltz Shamis & Goldfarb, has operated under a similar structure for years.
By establishing the holding company as a single parent company with multiple entities, in addition to separation among those entities, the firm gains flexibility. Specifically, the firm has the flexibility to facilitate nontraditional ownership by naming non-CPAs as shareholders of the different entities, according to Raymond W. Buehler Jr.
Under the new structure, Buehler, formerly the president of Schneider Downs & Co., is now chief executive of Schneider Downs Holdings LLC, as well the president of Schneider Downs National Inc., the practice that encompasses all of the firm's traditional accounting, tax and technology practice that comes from outside of Pennsylvania. The unit that encompasses the in-state piece of the same areas, Schneider Downs Pennsylvania Inc., is being headed up by Gennaro DiBello. The other entities are Creative Financial Staffing of Pittsburgh LP, led by Brian O'Brien, and Schneider Downs Corporate Finance LP and Schneider Downs Wealth Mgmt LP, both led by Don Linzer.
Buehler said the move had little to do with Sarbanes-Oxley. Rather, he said, the firm had external and internal reasons for wanting to re-brand. With everybody operating just as Schneider Downs, as the firm continued to diversify, he said, there was external and internal confusion about what products the firm delivered.
The restructuring came out of the firm's strategic planning initiative, which Buehler admitted was accelerated by the changes in the profession. He also noted that the strategic planning process highlighted a couple of things. It reinforced that the branding process -- both external and internal -- is important. It also highlighted structural issues that the firm had in trying to develop its own leaders among its shareholder and manager ranks.
By slotting its services into those five groups, Buehler said, "We defined to the market that we do all of these things, but we're still Schneider Downs." Internally, he said, the move gave internal definition to the firm's staff as to what their primary responsibilities are, while also making sure they -- and their clients -- are aware of those other areas.
"I'm convinced we're better situated for the growth that we expect to come to us. It's given us focus and put our people in positions of empowerment."
Whatever the reasons, those sounds like good results to me.
