Within the accounting industry, a growing trend is emerging. Across the country, large corporate accounting firms are rapidly acquiring midsize firms. While these acquisitions have created obstacles for some, other independent firms like 415 Group see them as an opportunity for growth.
“When a firm is acquired by a large corporate entity, suddenly their fees increase with no noticeable additional services,” said 415 Group Partner Rich Craig. “While the acquisitions have created obstacles for larger firms relating to price and service, smaller firms competing with mid-size firms lack the resources to properly serve businesses due to lack of resources to keep up with the constantly changing tax laws—both nationally and state by state—while larger firms may drop those clients who don’t generate enough work to maintain the higher fee structure. That’s where we step in. We have the internal capacity to serve those businesses at a more affordable rate.”
As tax law becomes increasingly complex, Craig said it’s crucial for independent firms to maintain their professional affiliations. As a member of CPAmerica International and other strategic alliances, 415 Group shares resources and expertise both nationwide and internationally, particularly in niche accounting areas like sales and use tax, franchises, flow-through entities, tax credits and merger and acquisition assistance. “We can offer the same services as the national firms through these alliances by providing affiliate offices in nearly every state and major country,” Craig said.
A couple factors appear to be driving these firm acquisitions: the lack of internal talent to takeover for partners approaching retirement age, succession planning and the need for more business.
Craig said 415 Group has taken proactive steps to offer career opportunities to its associates, including a path to partnership, an option that may not be as easily attainable at larger firms.
“Our firm has spent a lot of time over the last five years developing our internal talent,” said Craig. “Within the last year, we’ve added five new partners to our leadership team. That’s going to allow us to promote from within, and it will ensure that we have the best talent available to take over, as part of our long-term plans to remain independently owned.”
Looking toward the future, Craig said he expects these firm mergers and acquisitions to continue.
“I don’t expect this trend stop anytime soon,” said Craig. “It’s going to be important for businesses and industry professionals to adapt and find their position in the market.”