Top Firms 2022: Targeting growth

March 14, 2022 5:06 PM

Most accounting firms have been very busy over the past two years — with COVID-19’s impact on the economy and the government’s response creating plenty of new work — but with the pandemic winding down (hopefully), this year’s Regional Leaders aren’t going to rely on circumstances to keep themselves busy going forward. (See this year's full report.)

Instead, they’re moving into the new normal with a major collection of proactive strategies for growth; rather than waiting for the phone to ring, they’re out there searching for new clients, new work and new opportunities.

Below are the eight most-common growth strategies cited by the 2022 Regional Leaders, in rough order of how common they are — but it’s worth noting that none of these firms is relying entirely on any single strategy; most of them are using a handful or more.

M&A

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It’s common to view mergers and acquisitions as a growth strategy only for the largest firms, but in fact many of the midsized members of the Regional Leaders are looking to add in smaller practices themselves, to add staff, build out service lines, and expand geographically.

“We continue to seek out strategic merger partners,” reported Jay Rammes, managing director of Cincinatti-based Barnes Dennig. “We’ve been very successful in this space for the past decade or so and feel we have a solid proven model. We’re not too large — so merging firms aren’t feeling they’ve lost their autonomy, but we’re large enough to really provide some deep resources and staffing to grow the merging firm’s practice. And that makes it better for all of us — our clients, our team, and our community.”

Dallas-based Lane Gorman Trubitt’s approach to M&A exemplifies one attraction of the model: the ability to expand services without growing them in-house. “For many years, our growth strategy for bringing in new business has been an organic one,” explained managing member Lee Ann Collins. “After seriously entertaining but ultimately declining a proposed merger of our own, the partner group turned our attention to the idea of strategic acquisition of smaller firms to retain our independence while also beginning to offer new lines of business to our clients.” The firm was particularly interested in adding services that were adjacent to its traditional lines, and the result was two small acquisitions that expanded LGT’s capabilities.

Focusing on niches

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Being all things to all people is not a priority for this year’s Regional Leaders; instead, many of them see growth in doing a specific set of things very well. That can mean excelling in a short list of service offerings, or being the go-to experts for a select industry or group of industries — or both.

Arizona-based Henry & Horne, for instance, added niche practices in R&D tax credit studies and cost segregation over the course of 2021. “Of course, we expect to grow the new niches we implemented in 2021, otherwise we are going to continue to grow our existing niches,” reported co-managing partners Chuck Goodmiller and Chuck Inderieden. “We are well recognized in specific specialties, and we expect those to excel in the coming years.”

Adding services

Closely related to a focus on new niches is the addition of new service offerings; these can be tied to a select industry niche, or offer value to all of a firm’s clients.

“Our growth strategies for 2022 include a strong focus on industry group growth as well as investing in new services which we can provide to new and existing clients,” said Jared Holumn, president of Oregon-based Perkins & Co. “The combination of industry group focus and new service offerings should provide significant growth in 2022.”

Maryland-based E. Cohen & Co. is adding to what it can do for clients. “Expanding our offerings, from tax services and beyond, will continue to be a large focus for us,” according to director of operations and growth Stephen White. “We will keep enhancing and expanding our tax services platform and consulting services, all while working to appeal to the needs of high-net-worth individuals and small and midsized businesses. Our IT consulting services will also continually strengthen, with a focus on larger corporate enterprises and government. Our cybersecurity and breach remediation services will continue to evolve as our reputation as experts in the field becomes more prevalent.”

Moving to advisory

Not only are firms adding services — they’re also moving away from purely compliance-based services.

“Our profession is changing, and to survive and thrive in our 50th anniversary year, we are focusing on making the transition from the technical and tactical to the strategic and consultative by assessing and evolving our client relationships, operations, technology, and business development activities,” said Dave Stonesifer, managing partner of Pennsylvania-based Herbein + Co. “Therefore, we are committed to broadening our non-traditional consulting services, and exploring growth in new geographies.”

And Atlanta-based Windham Brannon has made a significant investment in pursuing that kind of work: “We hired a business development director to primarily focus on business development in advisory services, the primary focus for the firm’s growth,” reported marketing manager Jacqueline Harnevious. “In 2022, not only will we focus on advisory services like strategic growth, risk advisory, cybersecurity, outsourced accounting services, health care advisory, valuation, forensic and litigation services, we seek to strengthen our referral relationships in that space.”

Talent = growth

More and more firms are realizing that recruiting and retention are critical to their success. As Michael McCarthy, managing partner of Georgia-based Hancock Askew & Co. put it, “We plan to keep hiring good people. Good people are the key to growth.”

Hancock Askew has increased staff compensation in the face of staffing shortages, and also hired a number of executives and managers to better structure the flow of work. “This will allow for our partners and other senior leaders to spend more time on business development and client relationships,” McCarthy explained.

Many of the Regional Leaders are both hiring new talent and boosting the skills of their current staff. “The focus of the firm’s growth strategy has shifted from client/revenue growth opportunities to focus on staff growth and accelerated training for the development of staff skills,” said Rachel McGrew, business development director at Arkansas-based Landmark CPAs. “Demand for services is at an all-time high, therefore the firm has shifted its focus to staff recruiting and training to meet increasing demand.”

Getting the word out

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The old quip that most accounting firms’ main marketing tactic is answering the phone no longer applies: The top firms take marketing and business development very seriously.

“The primary growth strategies for Baldwin CPAs in 2022 include targeted marketing campaigns directed at prospects in the service and industry lines which the firm looks to increase,” said Alan Long, managing member of the Kentucky-based firm. “The firm maintains regular pipeline meetings to meet quarter and year growth goals.”

Firms are also making sure they’re using the latest technologies. “It's no surprise that our world is becoming more digital,” said Brian Staats, managing partner of Kansas-based Adams Brown. “The digital trend continues from a marketing strategy standpoint, too. We continue dedicating resources to digital marketing, thought leadership and content creation, social media, and being a resource clients and prospects across the nation can look to for solutions.

Tighter relationships

Since growth inevitably comes from clients, many of the top firms are putting an emphasis on deeper and stronger engagement, and better client service.

“Another main focus for the coming year is our total client relation initiative, where we are cultivating and creating more meaningful relationships with our new and existing clients through strategic marketing approaches,” said Jennifer Carroll, marketing guru at Houston-based Miller Grossbard Advisors.

And Windham Brannon’s Harnevious added, “We’ll continue to remain client-focused, focusing on our client experience, ensuring excellence, as well as cross-selling our services to help our clients achieve their strategic goals.”

Culling clients

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Serving current clients better isn’t the only client-focused growth strategy: Another is to improve their client roster — one way or another.

“We are culling poor-performing clients, or those that are difficult to work with,” said Roz Allyson, managing partner of Mahoney CPAs in Minnesota. “With this added capacity, we will add clients that fit our ideal client profile. This will improve our overall practice.”

And Philadelphia-based Drucker & Scaccetti is “focusing on our more complex existing clients to provide real-time advice and planning, while intentionally disengaging with less complex, compliance-only clients,” explained chief business officer Dottie Leonardi.