NY Metro Area CPA Market: Top Trends and Predictions for 2014
January 2014 - Dear Colleagues and Friends,
I have spent a fair amount of time since the beginning of the year speaking and meeting with Managing Partners, attending New York State Society of CPA meetings and reading industry publications. What I will share below are my observations on what I see as the most significant trends for 2014. As for 2015 and beyond, let's hope for the best or at least a continuing of a "better" economy.
I cannot say enough about the people aspect as they are the fuel that makes the engine run. Almost every firm I speak with wants and needs better people. At the partner level, with some specialty skills exceptions, a book of business is essential. This is, of course, tempered by covenants not to compete and liquated damages to be negotiated. Tax managers and seniors also seem to be in very high demand.
Take great care of your A and B people.
Hire staff out of college and develop them.
Take the time to find the best experienced hires possible.
Throw away the rule book about salary parity and administration if you want to attract and keep the A players.
Partners really have to pull their weight. We know that only a small percentage are good and steady new business generators and we know that there is also good value in high level technical skills. But, every partner has to be a great partner in my view. Examples would include setting a top example by achieving high realization rates, low client turnover, industry specialization, help in recruiting and otherwise promoting the firm.
Give the younger and any under performing partners the tools and training to improve such as how to conduct a needs analysis in new business pitching and specific techniques for increasing realization.
Be aware of the normal tension between more junior vs senior partners regarding compensation, equity and firm direction and take actions to minimize good people leaving.
New Partner Development
Almost all of the managing and senior partners I know are in their late 50's or early 60's (i.e., young, like me!) There are younger partner groups and high potential managers in the wings, but, in most cases, there is not a clear cut future leader like the current one. I don't see great immediate cause for worry because there is usually a very strong senior partner group who can steer the ship given a disability or death of the Managing Partner, but there needs to be a concerted plan for a future #1 and the next one after that.
In addition to the above, I would be very remiss not to mention fee discounting, M&A trends and expansion of consulting services, but more about those another time.
If you'd like to discuss this or any other issues related to your practice or career, please don't hesitate to contact me: My direct line is (212) 490-9700. Or email me here. Absolute confidentiality always assured.
- Robert Fligel, CPA
P.S. See "Lateral Partner Forecast 2014"