CohnReznick to Combine with Watkins Meegan - A Trend and an Opportunity for Other Firms
September 2014 -
Analysis and Commentary by Robert Fligel, CPA
Greetings Colleagues and Friends,
I remember as if it were yesterday when I moved to New York more than 30 years ago. Firms like JH Cohn, David Berdon, and Richard A. Eisner were part of the fabric of the New York Metro CPA industry. These were firms of merely 10 or 15 partners and maybe 150 people each.
Well, that was then. It was a pre-internet and practically a pre-fax world. It was before mergers, specialization, different categories of partners, lateral partner movement and all of the changes that are now rocking the profession.
Fast forward to today. Due to economic growth, technology and other factors, many of these firms now have over 150 partners, with 1,500 total people each. Kudos to them!
I share the latest CohnReznick deal as part of the trend of the big, or let's call them "super-regionals," continuing to grow. I think most of these firms have specific geographic expansion in their sights, in addition to growing existing niches or establishing new ones.
So, what does that mean to the smaller and mid size firms? I think it means a lot as the gap between the "super-regionals" and everyone else is growing. But that's creating new opportunities.
Here are three prime opportunities:
1. Smaller and mid-size clients may prefer a firm that isn't so large and maybe at a different price point. (Notwithstanding serious fee discounting we see, but that's a different topic.)
2. Partners may want a smaller environment where they have more of a voice and really do have "a seat at the table."
3. Staff people may be attracted to a smaller firm where they can see and do more at an earlier stage and the path to partner isn't as crowded.
Yes, the world has changed. And it's changing faster than ever. But the opportunities for smart firms are only getting better.