What Accounting Firm Consolidation Means for Independent Firms

If you run an independent accounting firm, the wave of private equity investment sweeping the industry may have created a communications opportunity for you.

A recent Philadelphia Business Journal story looked at just how quickly private equity has changed the accounting industry. We’ve seen it happen here in our own backyard, too. Longstanding regional firms have merged, been acquired or taken outside investment as firms look for capital, scale, technology and solutions to succession challenges.
There’s nothing inherently wrong with that. For many firms, it’s the right move. But, it creates an opportunity for the firms that aren’t making that move.

For years, being an independent regional accounting firm wasn’t particularly noteworthy. As that number shrinks, independence itself becomes more distinctive.

That doesn’t mean firms should suddenly slap “Proudly Independent” across their websites. Most clients aren’t choosing an accountant based on an ownership structure. They’re choosing people they trust.

The communications opportunity is explaining what independence allows your firm to do differently.

For one firm, that might mean decisions are still made by partners who live and work in the same communities as their clients. For another, it might be the ability to think about a client relationship over decades instead of through the lens of a larger organization. Another firm may point to a culture it has intentionally protected as it has grown.
Those are much more interesting stories than simply saying you’re independent.

And right now, there are several ways firms could be telling them.

Put your leadership into the consolidation conversation.

Reporters covering accounting M&A are understandably spending a lot of time talking to the firms doing deals, private equity investors and industry analysts. But, there’s another perspective worth hearing.

What does the consolidation wave look like from the managing partner of a significant firm that isn’t participating in it? Why has the firm remained independent? Has that become harder as competitors gain access to outside capital? Does independence affect recruiting, technology investment or succession planning?

Those are real business questions, and an independent managing partner can offer a perspective reporters may not be getting from everyone else.

Rather than waiting until your firm has news to announce, this is an opportunity to become part of a larger industry story that’s already being covered.

Make independence relevant to clients.

“We’re independent” isn’t much of a message on its own.

“We’re independent, and here’s what that means when you work with us” is different.

If decisions about clients are made locally, say so. If partners have greater flexibility in how they build relationships, explain it. If remaining independent allows the firm to preserve something clients consistently tell you they value, put that into words.

The important part is resisting the temptation to create a generic list of supposed benefits of independence. If those things aren’t genuinely true about your firm, clients will see through them.

Instead, ask a more useful question: If we were acquired tomorrow, what would our clients worry might change?
The answers may tell you exactly what is worth communicating today.
Don’t overlook recruiting.

Clients aren’t the only audience watching consolidation.

Accounting professionals are watching it happen to their industry, too. Some may be excited by the resources and career opportunities that come with larger platforms. Others may prefer a firm where they know the partners, have access to leadership and can see a different path for their careers.

An independent firm shouldn’t try to be everything to everyone. But if independence genuinely shapes your culture and employee experience, this is the time to be more deliberate about telling that story.

That can happen through media coverage, executive thought leadership, social media, recruiting content and the way firm leaders talk publicly about growth.

The accounting industry is changing quickly. That means the stories accounting firms tell about themselves probably need to change with it.
For independent firms in particular, there may be a window right now that didn’t exist several years ago. The market is paying attention to who is selling, merging and taking investment.

It’s worth making sure people are paying attention to the firms taking a different path, too.