may 2015, vol. 29 no. 5
TRANSCRIPT
MAY 2015
COPYRIGHT ©2015 THE PLATT GROUP/INSIDE PUBLIC ACCOUNTING. IT IS A VIOLATION OF FEDERAL COPYRIGHT LAW TO REPRODUCE ALL OR PART OF THIS PUBLICATION WITHOUT CONSENT.
Firms must grow. It’s a
business imperative.
May 2015 Vol. 29, No. 5
FIRMS Bitcoin Now Accepted At One CPA Firm 3
M&A M&A Attorney Shares Insights On Mergers 5
LEADERSHIP CHANGES KPMG 8 WeiserMazars 8 MaloneBailey 9
Lutz 10
PLATT’S PERSPECTIVE Connecting The Dots – Because Perspective
Matters 12
MOST ADMIRED PEERS Steve Tatone Shares Thoughts On Leadership 14
PARTNER RETREATS Five Topics For Partner Retreats 15
OTHER NEWS Association News 16 Mergers In The News 17 People In The News 17 Firms In The News 19
INSIDE PUBLIC ACCOUNTINGA publication of The Platt Group
insidepublicaccounting.com
Mitigating Risk: Careful Considerations For Client Acceptance And Retention
Not all business is created equal. Practitioners know this, but it’s easy to
come down with temporary amnesia when the possibility of a lucrative new
client presents itself.
Accepting new clients before asking the right questions (and documenting
the answers) can spell trouble in the form of aggravation, wasted time and
money, and a bigger risk of claims against the firm.
“We all spend a lot of time working
with clients,” says Dave Sukert,
senior vice president at Aon Affinity,
“and honestly, there are good ones
and ones that aren’t quite so good, and
we’re spending an amazing amount of
time on the not-so-good ones.” The
time spent trying to “rehab” them into
good clients is time that could have
been spent serving A-list clients or finding new clients who are better. “Is a
buck a buck? No, it’s not,” he says, because you might be spending two
bucks tending to issues that shouldn’t be there in the first place.
Sukert, whose company administers all the
insurance programs for the AICPA, believes
more thoughtful client acceptance procedures
can help firms protect assets so diligently built over the years. And a lot of
it is about asking the right questions and developing the skills to spot the
clients who are best to avoid.
Get to know potential clients before they become clients, Sukert says. Not-
so-good clients tend to shop around a lot. They tend to be involved in
litigation. They tend to have issues with other professionals, and they tend
to avoid paying on time.
NOT FOR REPRINT
MAY 2015 INSIDE PUBLIC ACCOUNTING / 2
COPYRIGHT ©2015 THE PLATT GROUP/INSIDE PUBLIC ACCOUNTING. IT IS A VIOLATION OF FEDERAL COPYRIGHT LAW TO REPRODUCE ALL OR PART OF THIS PUBLICATION WITHOUT CONSENT.
INSIDE PUBLIC ACCOUNTING ‐ (ISSN 0897‐3482) The Competitive Advantage For Accounting Firm Leaders since 1987. INSIDE Public Accounting (IPA) is the profession’s authoritative independent newsletter for analyzing news, trends, best‐practice strategies and insider information. Copyright ©2015 The Platt Group, LLC. All Rights Reserved. It is a violation of federal copyright law to reproduce all or any part of this publication or its contents by any means without written consent. INSIDE Public Accounting is published monthly by The Platt Group. Principals: Kelly Platt and Michael Platt. Editor: Christina Camara. Send address changes to The Platt Group, 4000 W. 106th St., Suite 125‐197, Carmel, IN 46032, or via email to [email protected]. Subscription Pricing: $459/PDF ‐ $558/PRINT. Contact our office regarding a firmwide license. Past issue copies: Subscribers $35; non‐subscribers $129. For custom reprints of articles and content contact our office.
Phone: (317) 733‐1920 Fax: (317) 663‐1030 Web: www.insidepublicaccounting.com
A central, but often overlooked, question to ask in the initial interview is, “Why are you
here?” If your firm is the third one the potential client has worked with, it’s legitimate to
question why, Sukert says. The conversation may be awkward, but it’s easier to preclude a
problem than to fix one later, he says.
Also, find out their expectations and timetable. If a potential client is asking for certain work
to be done in a rush, it’s a red flag. Doing work quickly compromises the firm’s ability to do
the work well. And remember to document all discussions.
Sukert also advises accountants to be honest with themselves when considering new work.
“Ask yourself, ‘Am I qualified to do the work they want me to do?’ If you’re not, you
shouldn’t do it, or get qualified to do it.” Some accountants see the dollar signs attached to
the work and think, “I’m a smart guy, I’ll figure it out.”
Ask specific questions about what the client wants the firm to do. Then
write it down. Craft an engagement letter, which Sukert describes as
“the rules of war drawn up in peace time.” There’s no substitute for a
clear engagement letter that defines the scope of services, and
accountants are sometimes reticent to ask for one. Without it,
“engagement creep” can set in, Sukert says, as accountants end up
doing more and more work to meet expectations of clients that may not match the
accountants’ expectations.
Long-term clients need to be asked the same kinds of questions periodically, Sukert says, as
an A-list client can turn into a “D” client over the years. “Usually, things don’t go bad all at
once,” he says, noting that accountants should be having regular contact with the client.
Client expectations can change over time as well. The “most trusted adviser” descriptor that
accountants use can cover a huge range of tasks. It’s difficult to give up revenue from a client
that’s been cultivated over many years, but sometimes it is necessary.
Turning down business is difficult, but it gets easier with practice, Sukert says, advising
accountants to outline their concerns with potential clients, who may not like it but would
most likely appreciate the professional candor. Accountants can tell potential clients that
they’d be happy to work with them after certain issues are resolved. Again, document
everything. Include a short note in the file that describes why the engagement was declined.
MAY 2015 INSIDE PUBLIC ACCOUNTING / 3
COPYRIGHT ©2015 THE PLATT GROUP/INSIDE PUBLIC ACCOUNTING. IT IS A VIOLATION OF FEDERAL COPYRIGHT LAW TO REPRODUCE ALL OR PART OF THIS PUBLICATION WITHOUT CONSENT.
“I don’t think it can be underscored enough that clients look to accountants as their most
trusted adviser – that’s what they’re paying for, that’s what their expectations are,” Sukert
concludes. “You have to know how to manage and fulfill those expectations, and without
getting the right information, I don’t know how you can.”
CERTAIN CLIENTS ARE ASSOCIATED WITH HIGHER RISK
Aon administers the AICPA’s professional liability program, which covers about 25,000
firms, Sukert says. Most of the claims are from tax work simply because that’s what most of
the practitioners are doing – taxes. Other than that, the following types of clients are
associated with higher risk:
Public Audits: These claims are of larger magnitude. If a firm conducts an audit for Company
A, and the firm missed something or the company concealed information, the audit could
make the company look as if it’s in better financial shape than it actually is. Bank B could
then contend that it relied on the audit report to lend money to the now-bankrupt Company
A, resulting in a huge claim.
High-Net-Worth Individuals: If something goes wrong, these clients have the means and the
wherewithal to fight the firm in court if necessary.
Family Businesses: If a firm has done seemingly everything for the family over the years, the
firm can end up doing more than what is actually agreed upon. Engagement letters are
critically important to clearly outline the scope of services, especially when there’s a divorce
or a death and money must be divided up.
CFO Services: Again, make sure the role is perfectly clear in these arrangements. Some
accountants can end up making management decisions that’s outside their scope, increasing
their exposure to risk. IPA
Habif Arogeti & Wynne Anticipates Demand For Payment Alternatives, Begins Accepting Bitcoin
Not long ago, accounting firms would not take credit cards
from clients, but now most are doing so. Similarly, accepting
bitcoin as payment for services may seem “way out there,”
but may not be so strange in the near future.
For now, though, it’s so unusual that Habif, Arogeti & Wynne (HA&W) of Atlanta (FY13
net revenue of $64.3 million) contends it is now the first accounting firm in the U.S. to accept
the digital currency.
MAY 2015 INSIDE PUBLIC ACCOUNTING / 4
COPYRIGHT ©2015 THE PLATT GROUP/INSIDE PUBLIC ACCOUNTING. IT IS A VIOLATION OF FEDERAL COPYRIGHT LAW TO REPRODUCE ALL OR PART OF THIS PUBLICATION WITHOUT CONSENT.
Mitchell Kopelman
The payment method is fairly new and while it’s growing in popularity it isn’t exactly
mainstream. Bitcoin has been controversial because of the “pseudo-anonymous” nature of the
transactions and the bitcoin’s fluctuating value, which is based on supply and demand and is
not backed or linked to the traditional banking system and its regulations.
But for HA&W, a 2014 IPA Best of the Best firm, accepting bitcoin
is just another payment option for clients, who can already pay by
credit card or through PayPal, says Mitchell Kopelman, PIC of
HA&W’s technology and biosciences practice. The firm decided to
limit its risk, however, so the firm doesn’t have an online “wallet”
where bitcoins are stored. Instead, the firm converts all bitcoins to
currency.
BitPay, the leading bitcoin payment processor, is one of HA&W’s
clients, and Kopelman says the firm grew very comfortable with its
methodology and processes. The processor has 50,000 clients, and
HA&W views the digital currency as an evolving payment mechanism.
BitPay converts the bitcoins to cash and deposits it into the firm’s bank account. Likewise,
the majority of customers ask that bitcoins be instantly converted to cash – companies like
Dell, Expedia and Microsoft, which are accepting bitcoin payments. “I would say as a
general trend most of our larger businesses do choose a settlement in 100% U.S. dollars
because that’s how they do their accounting and finance,” BitPay co-founder Tony Gallippi
told Money magazine.
HA&W has a team of 10 professionals who work with bitcoin payment processers to develop
proper controls and apply best practices, such as ensuring the integrity of transactions,
understanding tax treatments for digital currencies and implementing IT risk management
controls. “We do think it’s important for us to stay current with changes in the FinTech
space,” Kopelman says.
Any client with bitcoin can pay the firm through that method, although no one has taken
advantage of it yet. Kopelman says the firm is getting ahead of the demand by making the
option available. He noted that very few clients used credit card payments initially either. “It
will take a while before the mainstream payer uses a different payment processor,” he says.
The firm will continue to monitor the volatility of bitcoin value. Last year, its value
plummeted by more than 50%, from $770 at the beginning of 2014 to the mid-300s by mid-
December, according to the CoinDesk Price Index. This year, as of May 1, its value stood at
$235 per bitcoin; it was at its lowest on Jan. 14 at $177 and highest on March 11 at $296.
MAY 2015 INSIDE PUBLIC ACCOUNTING / 5
COPYRIGHT ©2015 THE PLATT GROUP/INSIDE PUBLIC ACCOUNTING. IT IS A VIOLATION OF FEDERAL COPYRIGHT LAW TO REPRODUCE ALL OR PART OF THIS PUBLICATION WITHOUT CONSENT.
Russell Shapiro
Kopelman said the firm is often paid in other currencies that are converted to U.S. dollars
since it works with international clients. Monitoring fluctuations in value for bitcoin is really
no different.
HA&W auditor Bill Dupee noted that one benefit of using bitcoin for payments is that
processing costs are far less than similar costs associated with credit cards and wire transfers.
He’s also an advocate of the technology behind the digital currency. All transactions are
recorded on an online public ledger called the blockchain, which is transparent and open to
scrutiny. “The technology is continuously growing and we’re staying on top of it to best
serve our clients and gain future clients,” he says. IPA
M&A Attorney Shares Insights Into Issues That Could Make Or Break Deals
Russell Shapiro, partner at Chicago-based Levenfeld Pearlstein,
worked on two of the biggest mergers in the profession last year: The
acquisition by Chicago-based BDO (FY13 net revenue of $833 million)
of Cleveland-based SS&G Inc. (FY13 net revenue of $90.5 million)
and BDO’s acquisition of Chicago-based UHY Advisors’ Texas
practice.
Shapiro also helped structure and negotiate a merger of Springfield,
Mo.-based BKD LLP and Oakbrook Terrace, Ill.-based Wolf & Co. as
well as the merger of Charleston, W. Va.-based Arnett Foster
Toothman and New Castle, Pa.-based Carbis Walker.
With the rapid pace of mergers and acquisitions in the profession, IPA asked a lawyer who’s
structured numerous deals to share his thoughts on the merger process and possible legal
issues that could arise
Under what circumstances should a firm consider merging up? When it’s not growing, profits
are stagnant, partners don’t want to invest in people, technology or new service areas, when
they’re having difficulty recruiting and paying retirement benefits, and finally, if they think they
can expand their work with a bigger platform.
How do you find a compatible match? There are two ways. MPs start talking to people they know
in the area, or they hire a consultant to help them assess what kind of partnership they want and
to educate them on who is out there who might fit that bill.
MAY 2015 INSIDE PUBLIC ACCOUNTING / 6
COPYRIGHT ©2015 THE PLATT GROUP/INSIDE PUBLIC ACCOUNTING. IT IS A VIOLATION OF FEDERAL COPYRIGHT LAW TO REPRODUCE ALL OR PART OF THIS PUBLICATION WITHOUT CONSENT.
What should the smaller firm look for in courting a bigger firm? What due diligence should be
done before going out into the market? Look for strong financials and the willingness of the
acquiring firm to invest in their firm and their market. See what their track record is in other
cities and learn their reputation by talking to other people.
What kind of due diligence should be done by the acquiring firm? Look for a firm with a similar
mindset in terms of growth and client development, good geographical positioning and expertise.
Principally, bigger firms are looking for geographic reach and niches, but some firms just want to
add people and they feel if they get to a certain size they can take on larger clients. If you get
bigger you can concentrate in one practice area even if you’re not buying a niche.
What are the biggest mistakes you see firms make during the merger process? I don’t know if I
see that firms are making mistakes, but I see difficulties in the process that could be avoided. I
think that MPs underestimate how much is going to be involved. An MP needs a right-hand
person, because the due diligence and contracts are overwhelming.
The other thing that can go wrong in the process is how the acquired firm partners are handled.
It’s important that the process is managed. Some partners may not want to go along. It can be
very time-consuming dealing with that, and that is sometimes unexpected. I’ve been involved in
quite a lot of mergers, mostly larger firms acquiring smaller firms, but when it’s two firms of
about the same size coming together, it’s a lot more complicated.
‘Culture’ is a nebulous term. How can you determine the cultural fit? Honestly, it’s difficult to
really determine culture before you get married. It’s important to meet the people and feel like
you could work with them to bridge any differences. You have to have a comfort level with their
philosophy, and the MPs of both firms must be able to work well together.
What kind of legal issues can arise during the transaction process? The
first stage is the confidentiality agreement, which includes a “no-
poaching” provision. Entering into an agreement ensures discussions
remain confidential while providing a legal remedy if one firm starts
raiding the other’s employees.
A letter of intent, or a term sheet, spells out the deal. It’s not binding,
but it may have a “no-shop” provision that outlines a period of time in which the seller is barred
from soliciting a purchase proposal from any other party.
After the due diligence process, negotiation surrounds issues in the definitive agreements, on
liability, indemnification and winding down of the old partnership, as in how the remaining
assets are going to be divided up.
How can leaders manage the emotions involved in the process? Partners of the firm being
acquired will grieve. They helped build the firm and it’s been their baby. It’s what they’ve known
MAY 2015 INSIDE PUBLIC ACCOUNTING / 7
COPYRIGHT ©2015 THE PLATT GROUP/INSIDE PUBLIC ACCOUNTING. IT IS A VIOLATION OF FEDERAL COPYRIGHT LAW TO REPRODUCE ALL OR PART OF THIS PUBLICATION WITHOUT CONSENT.
and liked, and even if they want to go along with it, they grieve. The MP and others need to
understand that it’s normal and it will take time.
How should clients be handled when the merger decision is made so that clients are retained?
You know, keeping the clients is not that big a deal. Clients are attached to their partners. Tell the
clients that the partner and the price will be the same, but the firm can add services and offer
better access to expertise.
Some mergers result in partners leaving for other firms, or
starting a new firm. Is this expected? Most firms have non-
solicit agreements or non-compete agreements. Some will
leave, but I don’t see that as a major issue impacting these
transactions. Obviously, the acquirer wants to make sure
the main partners are on board. That is a major issue
impacting these transactions.
What are some of the legal issues that could arise in the agreements?
Let’s go through a number of them.
One is obligations to retired partners. Usually, when a buyer acquires another firm,
significant obligations have to be paid out and they may not be able to give as good a
deal to the current partners. Sometimes retired partners must be paid out more quickly
if there’s a merger – that’s something to look out for – and sometimes the retired
partners have some say-so in whether the firm merges at all.
Know your partnership agreements.
Retirement benefits in the newly merged firm must be understood as well. Some older
partners may be able to negotiate a slightly different deal than younger partners if they
would be receiving a lower retirement payout under the new arrangement. Less
experienced partners typically go along with what the new firm is offering.
And then there are compensation guarantees. Typically a firm will be able to negotiate
a one- to two-year compensation guarantee as long as the revenues are roughly
equivalent to what they were prior to the merger. These issues can be sticky.
In addition to agreeing to the terms, questions surround which revenue is counted
toward the guaranteed compensation. Sometimes bonuses can be negotiated too, but is
that extra revenue divided equally among the partners or should it be based on who
produced the revenue? These are questions that may involve more discussion and
negotiation. IPA
MAY 2015 INSIDE PUBLIC ACCOUNTING / 8
COPYRIGHT ©2015 THE PLATT GROUP/INSIDE PUBLIC ACCOUNTING. IT IS A VIOLATION OF FEDERAL COPYRIGHT LAW TO REPRODUCE ALL OR PART OF THIS PUBLICATION WITHOUT CONSENT.
Victor Wahba
Lynne Doughtie
KPMG Elects Lynne Doughtie As U.S. Chairwoman & CEO
New York-based KPMG (FY13 gross revenue of $6.1 billion) has
elected Lynne Doughtie as its next chairwoman and CEO for a five-
year term starting July 1.
Doughtie joined KPMG’s audit practice in 1985 and went on to
serve in a number of national, regional and global leadership roles,
including the lead engagement partner for some of the firm’s major
clients. She is a member of the U.S. firm’s management committee
and KPMG International’s global advisory leadership team.
Doughtie currently leads KPMG’s advisory business.
Doughtie succeeds John Veihmeyer, who has served as U.S.
chairman and CEO since 2010 and simultaneously as global chairman of KPMG
International since February of 2014.
“Lynne has been a key member of our management team during a period in which we have
built a strong culture within KPMG, that promotes integrity, high performance, and diversity
and inclusion, and I know she will continue to champion these values,” Veihmeyer says.IPA
Leadership Changes Track With National Expansion Plans
New York-based WeiserMazars LLP (FY13 net revenue of $142.4 million) has put a new
leadership team in place to solidify the firm’s foothold in Chicago as well as expand from
San Francisco to San Diego and into Texas.
WeiserMazars has offices in six states, Israel and the Cayman
Islands, but is seeking “critical mass” in key regions to create a
truly national presence. Mergers may be one way to get there, says
new CEO Victor Wahba, who took on the role April 1. On the
same day, James Blake was made the first-time MP of the firm to
head up day-to-day operations while continuing to lead the New
Jersey office.
Blake and Wahba, who previously served as New York OMP and
oversaw mergers and acquisitions, spoke to IPA recently to
discuss the firm’s plans.
MAY 2015 INSIDE PUBLIC ACCOUNTING / 9
COPYRIGHT ©2015 THE PLATT GROUP/INSIDE PUBLIC ACCOUNTING. IT IS A VIOLATION OF FEDERAL COPYRIGHT LAW TO REPRODUCE ALL OR PART OF THIS PUBLICATION WITHOUT CONSENT.
James Blake
WeiserMazars has a small office in Chicago, but the market is ripe
for growth, Wahba says. The firm opened an office in Sacramento,
Calif., after acquiring pmpm Consulting Group, a health care
consulting firm last year, but is eyeing moving southward in the
state. The Dallas-Houston area is a key hub for growth in Texas,
Wahba says, but the firm is also looking at Austin and San
Antonio. In addition to mergers, the firm may also hire teams of
people in specific industries.
Blake says the consulting practice, which made up 5% of revenues
five years ago, now accounts for 20%, with focus on the health
care sector and financial services. The size of the health care
practice has tripled over the last few years. Expansion in Chicago and the West Coast match
well with WeiserMazars’ key service areas: manufacturing and distribution, energy and
utilities, real estate and financial services.
WeiserMazars is the independent member firm of Mazars Group. Unlike some firms,
WeiserMazars first shored up international services before looking at U.S. expansion, Wahba
says, because clients were coming to the firm with challenges associated with operating
internationally.
Both noted that the transition to an MP and new CEO – Wahba is replacing Douglas
Phillips, who will stay on as chair – has been over a year in the making.
Both Wahba and Blake are tasked with maintaining and guiding the culture of the firm,
which will evolve as the firm grows. The firm gets high marks from staff for its commitment
to diversity, career development and giving back to the community. With the talent wars
heating up, these leaders say WeiserMazars is challenged with having the best story to tell
and the best opportunities for advancement. “These are some exciting times at
WeiserMazars,” Wahba says. IPA
MaloneBailey Announces Retirement Of Founding Partner John Malone
Houston-based MaloneBailey (FY13 net revenue of $11.4 million) announced that after
four decades of serving the accounting profession, founding partner John Malone retired in
May. Malone founded MaloneBailey in 1982 as a general practice offering audit, tax,
bookkeeping and consulting services – the standard full-service mix of the majority of local
CPA firm practices.
MAY 2015 INSIDE PUBLIC ACCOUNTING / 10
COPYRIGHT ©2015 THE PLATT GROUP/INSIDE PUBLIC ACCOUNTING. IT IS A VIOLATION OF FEDERAL COPYRIGHT LAW TO REPRODUCE ALL OR PART OF THIS PUBLICATION WITHOUT CONSENT.
Mark Duren
John Malone
Malone is credited with revolutionizing the way audits are conducted for small public companies by instituting a number of changes to the standard CPA firm practice model. The
changes maximize the efficiencies that the smaller SEC companies require: lower costs, faster service and more competent work product. Such changes included early transition to a 100% paperless approach and remote auditing capability to serve clients around the world and across the nation from its Houston headquarters as well as a strong in-house training program and recruiting initiative to attract top talent from universities nationwide.
In 1996, the firm had two SEC reporting clients. Today, the firm has
more than 190 SEC-registered clients, including NYSE-, NASDAQ-
and AMEX-listed companies, and six full-time SEC audit partners. MaloneBailey is No. 7 in
the world in terms of the number of U.S. public company clients served. MaloneBailey is in
exclusive company as one of nine in the world that audits more than 100 issuers annually.
MaloneBailey participates in more than 700 SEC filings per year.
“I am truly grateful for the tremendous support I got from our community, the various
professionals who helped me directly along the way, and our great employee team,” says
Malone. “It is time to step down and let my outstanding partners lead the charge to our next
round of growth.” IPA
IPA Best Of The Best Names Duren Managing Shareholder
Mark Duren was named managing shareholder of Lutz (FY14 net revenue of $27.1
million) of Omaha, Neb., on May 1.
Duren succeeds Gary Witt, who served the firm as MP since 1994.
Witt will remain with the firm in a consulting role. Duren will
continue to build on the momentum established over the last 20
years and uphold the emphasis on superior client service.
He will be responsible for driving the firm’s strategic direction and
continuing to grow both its traditional and non-traditional service
offerings including technology, financial services, M&A and talent.
Lutz is an IPA 200 firm, a 2014 IPA Fastest-Growing Firm, and a 2013-14 IPA Best of the
Best. IPA
©Copyright ConvergenceCoaching, LLC 2000-2015. All rights reserved.
w w w. c o n v e rg e n c e c o a c h i n g . c o m
At ConvergenceCoaching, LLC we are committed to developing leaders and transformingteams. We do this through coaching, practice consulting - including retreats, strategic planning, and training - and by providing a wealth of additional resources and tools to help our clients achieve success.
Many factors are transforming the accounting profession: shifting workplace trends, the retirement of approximately 78 million Baby Boomers and the impending leadership gap, and a new generation of professionals who demand a different way of working, learning and progressing. To successfully recruit and retain top talent, your human resource (HR) programs must be top notch and your HR personnel empowered and supported. ConvergenceCoaching provides a variety of HR-related services designed to take your people strategies to the next level and make your firm an inviting and engaging place to work.
Customized Leadership Development Programs A comprehensive, progressive and challenging learning strategy is crucial for developing your people and grooming your best and brightest for professional growth and leadership positions. At ConvergenceCoaching, we customize firm-specific, in-house leadership development and training programs that enhance performance management and motivation. We work with your firm to craft a well-rounded program that considers several factors: • Program participants: You may be seeking a development program for your partner
group, your senior managers and managers, or one that includes a variety of employee levels. Whoever the program audience is, the objectives of the program will focus on the competencies and development goals of that specific audience
• Length of program: We’ll work together to determine the appropriate length of theprogram’s duration based on your firm’s people development goals. Programs range anywhere from 6-months to 2-years
• Program content: We’ll craft a program that includes a variety of topical content fromcommunication, people management and development, to personal and organizational leadership and growth strategies. We also offer programs strategically focused on a specific area such as business development
Employee Engagement and Retention Your people are your most important asset. Ensure that they are satisfied with their career at your firm, engaged in their work, and being challenged personally and professionally in pursuit of both your firm’s and the individuals’ goals. We offer strategic retention services including:• Measuring employee engagement levels and developing strategies to address areas
for improvement • Identifying your people’s key motivators and how to engage your team members
based on those motivators• Coaching your leaders on specific HR program implementation including help with
anytime, anywhere work (ATAWW) and performance management systems• Enhancing your firm’s ability to embrace diversity among your employees, including –
generational, gender, and personality consulting and workshops
Enhancing Your People Strategy
For more information about our strategic HR services and customized people developmentprograms, visit www.convergencecoaching.com or contact us at [email protected].
“We initially engaged
ConvergenceCoaching
to facilitate a one-year,
in-house leadership
development program for
our firm’s nineteen partners
and have experienced great
results. Through the learning
we gained from the leadership
assessments, individual
coaching, and virtual and in-
person training, our partner team
is now operating at a higher level.
And now we’ve started a new
leadership development program
for our next tier of employees
including senior managers and
new partners. We are committed
that leadership development be
a valued part of our firm’s culture
and believe that our people, our
clients, and our firm benefit
tremendously from our focus
on always getting better.”
~ Matt CosciaCo-Managing Partner,
Montgomery Coscia
Greilich LLP
MAY 2015 INSIDE PUBLIC ACCOUNTING / 12
COPYRIGHT ©2015 THE PLATT GROUP/INSIDE PUBLIC ACCOUNTING. IT IS A VIOLATION OF FEDERAL COPYRIGHT LAW TO REPRODUCE ALL OR PART OF THIS PUBLICATION WITHOUT CONSENT.
Platt’s Perspective: Connecting The Dots – Because Perspective Matters
It’s amazing how perspective changes a landscape.
At one time or another, all of us have gone up a glass elevator, looking
out at the entire landscape unfolding before us. What looked like a
cluttered mess on ground level reveals itself to be a manicured, well
laid-out design that makes sense only when seen from above. The trees,
the landscaping, the water features, the roads, the sidewalks –
everything is in order and all the pieces come together to form a
harmonious landscape.
As a partner, you most likely enjoy this higher-altitude view of your firm. The “cluttered
mess” makes sense when you rise above it. Your “landscape” includes the long-term vision,
strategy, values, the various departments, services, niches, technology, staff, referral sources,
client approaches, compensation, community activity, training, marketing, leadership
development and all the other components that together create a harmonious landscape.
But staff rarely get a chance to ride that elevator to catch a glimpse of the total landscape.
They are hacking through the weeds on the ground, not always sure of where they are going
or how close they may be to getting there.
Remember that scene toward the end of the movie “The African Queen” when Humphrey
Bogart and Katherine Hepburn all but give up on their long journey down the Ulanga – stuck
in the reeds unaware that open waters are just yards away? The camera pans up and the
audience can see that they are so close – but the main characters at water level despair and
lose hope.
That’s not dissimilar to what may be happening in your firm. Staff may not know that they
are contributing to the success of the firm and its clients. They may not recognize that they
are on the right track and moving toward “success.” They may not see the open waters just
beyond the reeds and they bail out – looking for other opportunities, even though they were
“so close” to getting there in your firm.
Your responsibility as a leader is to help your staff see the well-manicured landscape. Take
them for a ride in the elevator every now and then and show them the view. Connect the dots
for them so they can see the well thought-out design behind the seeming chaos at ground
level. Show them how close they are to achieving their objectives so they stay motivated to
break through the reeds and get to the open waters ahead.
What’s the risk? Yes, they may find out they are afraid of heights. But they may discover that
they get very excited about the view. IPA
Mike Platt
“1st Global knows how to integrate financial services into large CPA firms like Beall Barclay. Their understanding of our unique challenges and opportunities has helped us grow a highly profitable wealth management division that has resulted in greater client retention and satisfaction.”
Barbara Hambrick, CPAManaging Partner
Beall Barclay & Company, PLCFort Smith, AR
LEARN MORE WITH1st Global’s Wealth Management
Feasibility Analysis & Consultation™With 22 years of research and
consulting to multi-partner firms nationwide, 1st Global provides
a proven process for high-performing CPA firms to move from success to significance.
The results of your firm’s financial services practice may vary.Copyright © 2015 1st Global. All Rights Reserved. 1st Global Wealth Management Feasibility Analysis and Consultation is a registered trademark of 1st Global
Partners. Securities offered through 1st Global capital Corp., Member FINRA, SIPC. Investment advisory services offered through 1st Global Advisors, Inc.
MAY 2015 INSIDE PUBLIC ACCOUNTING / 14
COPYRIGHT ©2015 THE PLATT GROUP/INSIDE PUBLIC ACCOUNTING. IT IS A VIOLATION OF FEDERAL COPYRIGHT LAW TO REPRODUCE ALL OR PART OF THIS PUBLICATION WITHOUT CONSENT.
IPA’s Most Admired Peers Discuss The Challenges Of Leadership Part Four: Steve Tatone
Every year IPA asks leaders to name peers they most admire in the
profession. Five MPs were named most often by the more than 540
firm participants in IPA’s Annual Survey and Analysis of Firms. As
we have previously, this month we continue to share thoughts on
leadership challenges from the 2014 IPA Most Admired Peers.
Our fourth of five IPA Most Admired Peers continues with Steve
Tatone, MP of Salem, Ore.-based AKT LLP (FY13 net revenue of
$38.2 million).
We use the term servant leadership here and it manifests itself in everything we do,” Tatone
says. The firm sets the conditions for professionals to grow and thrive, no matter what they
end up doing, even if it’s outside public accounting. The committed, caring team approach at
AKT is a magnet for talent and turnover is low.
Tatone points out that self-knowledge is important – understanding your own motivations
and reactions – as well as having a good understanding of other people’s emotions. The Bible
has helped Tatone learn to be a better leader. Over the last 30 years, he has embarked on
three 8-year Bible studies, which cover “every leadership situation imaginable.” He also
spends time with successful leaders, not just in business, but also in the public sector and
nonprofits. In addition, he observes different styles of leadership in his volunteer activity and
reads leadership books.
Important influences in his life were his parents, who taught him the value of hard work,
taking calculated risks and integrity. He also points to retired partner and former Salem, Ore.,
mayor Kent Aldrich, who gave Tatone the opportunity to lead at an early age, and his oldest
son, who “challenges me to think about things differently.”
Constantly remind the team of the firm’s mission, vision and values; set the conditions for
people to grow and thrive; don’t over-react. “Over-communicate, but don’t over-react. The
leader sets the tone and constantly has to send it from a good space, not a reactive space.”
Tatone says he’d like to improve in all areas of management and leadership. He foresees big
data having a significant impact on the way accountants do their work, and while personnel
costs are going up, fees aren’t keeping pace, so the profession will have to develop new ways
to provide valuable services in a more efficient way. “I think with what we do is going to
change pretty significantly in 5 to 10 years and we need to make sure our leadership is
innovative enough to stay with that change.”
Leadership Talent
Mentoring
Leadership Advice
Leadership Improvement
Leadership Improvement
Steve Tatone
Leadership Style
Leadership Style
Mentoring
Leadership Advice
MAY 2015 INSIDE PUBLIC ACCOUNTING / 15
COPYRIGHT ©2015 THE PLATT GROUP/INSIDE PUBLIC ACCOUNTING. IT IS A VIOLATION OF FEDERAL COPYRIGHT LAW TO REPRODUCE ALL OR PART OF THIS PUBLICATION WITHOUT CONSENT.
The entire purpose of owning an accounting firm is to improve the lives of clients, employees
and people in the community, Tatone says, so growth is only partly about revenue. While
firm leaders in 2002 set a goal of going from a $10 million to a $25 million firm in five
years, and did it in four, AKT is looking at growing industry niches and improving processes
and leadership abilities of professionals at the firm.
Leadership speaks with one voice at AKT, Tatone says, and partners are held accountable for
living out the culture. “It’s not just words on a page, it’s a lifestyle.” IPA
Five Suggested Topics For Your Firm’s Annual Partner Summit By Joseph A. Tarasco, founder and CEO of Accountants Advisory Group
As accounting firm leaders begin planning the agenda for their annual partner summits,
consider the following discussion topics.
1. Putting the firm in a strategic position to create and sustain a competitive advantage.
Strategic positioning is defining how your firm will best compete now and in the
future for clients and talent. Strategic positioning is established by developing a
business model that includes:
Developing new, innovative service offerings to meet the needs of clients and the
marketplace.
Targeting clients of the right size, in specific industries, that the firm has the best
possible chances of engaging.
Establishing and enhancing niches and specialties in focused areas rather than many
small initiatives.
Establishing additional business locations to expand the firm’s geographic market
reach.
Developing leaders and professional talent within certain niches and specialty areas.
Maximizing lead generation in target markets.
2. Accepting what made the firm successful in the past may not make it successful into
the future. Long-term success depends on the partners’ ability to avoid being
squeezed between the past and the present. Firms need to analyze, explore and
determine new strategies to capitalize on marketplace opportunities and respond
quickly with an appropriate action plan. Partners should review their professional
talent, the firm’s processes and structure and how they are aligned.
3. Managing the pyramid for future success. Many firms have become very top heavy
and under-leveraged, which has been fueling the volume of merger activity over the
last five or so years. Developing a proper pyramid structure with the right partner-to-
Growth and Culture
MAY 2015 INSIDE PUBLIC ACCOUNTING / 16
COPYRIGHT ©2015 THE PLATT GROUP/INSIDE PUBLIC ACCOUNTING. IT IS A VIOLATION OF FEDERAL COPYRIGHT LAW TO REPRODUCE ALL OR PART OF THIS PUBLICATION WITHOUT CONSENT.
staff ratio is difficult but necessary for delegation and succession planning. There is a
direct connection between partner-to-staff ratio and profitability, growth and
succession planning.
4. Exploring mergers and acquisitions to achieve the next level of success. Evaluate
mergers and acquisitions to grow the practice and obtain the necessary talent to
provide the right combination of services and expand the firm’s geographic reach.
Keeping up with local competition for clients and staff while the profession
consolidates is a necessary strategy that should be evaluated on an annual basis.
5. Evaluating partner performance and leadership. Partner performance accountability
and related compensation decisions are an integral part of what defines a firm and its
future success. It’s worth the time and effort to evaluate partner performance and to
encourage the behaviors needed to add value to your firm. Chances of reaching peak
potential are better if partners are formally accountable to each other for performance
and attaining stated leadership goals and objectives. Getting your firm to the next
level of success is not just about working hard and producing billable hours, it’s also
about inspiring change, unleashing talented partners, and making contributions for the
firm’s long-term future. Leaders need to be role models by being prepared to change
how they act, evaluate and reward. IPA
Ramsey, N.J.-based Weber Shapiro & Co. joined Alliott Group North America. W&S provides businesses and individuals with a full range of accounting and consulting services, including international taxation and global business services. In addition to a comprehensive roster of domestic clients, W&S provides services to businesses and individuals in a number of international locales, including France, the United Kingdom, Italy, Australia, Sweden and Portugal. The W&S team offers expatriate taxation services and expert guidance in corporate structure and formation for foreign businesses seeking to operate in the U.S.
The Crowe Horwath LLP National Tax Office (NTO) recently accepted its 33rd CPAmerica International member firm. The 10-month old program, which gives members access to NTO resources and specialists, has already exceeded CPAmerica’s participation expectations. CPAmerica member firms that participate are treated similarly to Chicago-based Crowe Horwath LLP’s (FY14 net revenue of $670.2 million) own regional offices. Some benefits that are offered by NTO include having a senior member of NTO assigned to each member firm, professional time for technical consultations at a discounted rate and expert advice on tax services including mergers and acquisitions, accounting methods and periods, high level partnership issues and accounting for income taxes.
Tyler Simms & St. Sauveur of Lebanon, N.H., joined CPAmerica International. Founded in 1986, the firm has grown to become the largest firm headquartered in the upper Connecticut River Valley of New Hampshire and Vermont. IPA
MAY 2015 INSIDE PUBLIC ACCOUNTING / 17
COPYRIGHT ©2015 THE PLATT GROUP/INSIDE PUBLIC ACCOUNTING. IT IS A VIOLATION OF FEDERAL COPYRIGHT LAW TO REPRODUCE ALL OR PART OF THIS PUBLICATION WITHOUT CONSENT.
The external audit and tax practices of Shatswell MacLeod & Co. of West Peabody, Mass., will join forces with Portland, Maine-based Baker Newman Noyes (FY13 net revenue of $27.7 million) on July 1. Glen MacLeod, CEO of Shatswell MacLeod, along with partners John Marsh, Kevin O’Brien and Joseph Jalbert, will become audit principals at BNN. John Fitzgibbons, the leader of Shatswell MacLeod’s tax practice, will also join BNN.
Chicago-based Crowe Horwath LLP (FY14 net revenue of $670.2 million) acquired Simsbury, Conn.-based Saslow Lufkin & Buggy, effective July 1. Established in 1999 by Richard Buggy, Glenn Saslow and Robert Lufkin, the firm, has 90 professionals, including eight partners.
Hauppauge, N.Y.-based Fuoco Group acquired MCG Financial Services, Approved Accounting Associates and NHC Hospitality Consultants, three accounting and consulting firms based in Boca Raton, Fla., which were founded and operated by Joel Mason. In addition to providing traditional accounting and tax services, Mason’s experience in the hotel and hospitality sector, as well as other industries, provides added diverse knowledge and capabilities to the Fuoco Group. This merger is part of Fuoco Group’s Florida strategic growth plan. The firm is also eyeing growth opportunities in Atlanta, Washington, D.C., Philadelphia, New Jersey and Boston.
New York-based KPMG LLP (FY13 gross revenue of $6.1 billion) entered into an agreement to acquire substantially all assets of Weymouth, Mass.-based Beacon Partners, Inc., a health care consulting firm that offers strategic management and clinical and information technology consulting services to health care providers. The addition of Beacon Partners’ credentialed consultants will provide KPMG with broad-based capabilities in core provider business applications and Electronic Health Records (EHR) systems. Beacon Partners will mark the ninth acquisition KPMG has made in the last 17 months.
Chicago-based McGladrey LLP (FY14 net revenue of $1.5 billion) reached an agreement to acquire substantially all the assets of San Diego-based PKF San Francisco (one partner and 13 staff) and Wolfe Nilges Nahorski (four partners and 40 staff) of St. Louis. McGladrey expects to enter into definitive agreements and close both transactions on Aug. 1.
Pittsburgh-based Schneider Downs (FY13 net revenue of $57.6 million) will acquire Pittsburgh-based The Meridian Group, an investment banking and management consulting company. The Meridian Group specializes in providing corporate workout/turnaround management services, financing, management consulting and merger and acquisition consulting. The arrangement will create a new entity, Schneider Downs Meridian, and will meld services from the two organizations.IPA
Richmond, Va.-based Cherry Bekaert LLP (FY14 net revenue of $130.8 million) admitted Mark Giallonardo as a tax principal in the firm’s Coral Gables, Fla., office. Giallonardo will provide expertise in the areas of entity structuring, accounting method changes and planning for partnerships, S corporations and their owners. He will also serve as Cherry Bekaert’s Florida regional tax leader.
Zubin Mistry has been admitted to the Los Angeles office of New York-based CohnReznick LLP (FY14 net revenue of $508.2 million) as partner. Mistry has more than 20 years of experience serving
MAY 2015 INSIDE PUBLIC ACCOUNTING / 18
COPYRIGHT ©2015 THE PLATT GROUP/INSIDE PUBLIC ACCOUNTING. IT IS A VIOLATION OF FEDERAL COPYRIGHT LAW TO REPRODUCE ALL OR PART OF THIS PUBLICATION WITHOUT CONSENT.
privately held and public companies in the emerging and middle markets as well as mature companies in the Fortune 100. The firm also admitted James Wienclaw to the New York office as a partner. Wienclaw brings nearly 20 years of diversified public accounting experience with an extensive background in providing tax services to public and private companies, as well as to the individual owners of closely held businesses.
Roseville, Calif.-based GALLINA LLP (FY13 net revenue of $37.1 million) admitted Todd Benson as CFO after nearly two decades of leadership under CFO Mary Bradley. Benson joined the firm on April 6. Bradley will retire next month.
Liz Wallace joined Chicago-based Grant Thornton LLP (FY13 net revenue of $1.3 billion) as managing director in the firm’s strategic federal tax services practice, based in Metropark, N.J. Wallace joins Grant Thornton from KPMG, where she was a senior manager and leader of the Metro New York commercial tax credits practice.
Ridgeland, Miss.-based HORNE LLP (FY13 net revenue of $67.4 million) admitted Ashley McAdams and Scott Keller to partner. McAdams is part of HORNE’s financial institutions team. Keller serves on the firm’s government services team.
Brentwood, Tenn.-based Lattimore Black Morgan & Cain (FY14 net revenue of $71.8 million) admitted Brian McCuller to PIC of the firm’s SALT practice. Prior to joining LBMC, McCuller was a managing director in the CBIZ national tax office for three years.
The Massachusetts Society of Certified Public Accountants (MSCPA) named Amy Pitter as the association’s CEO. Pitter will join the MSCPA from her previous role as commissioner of the Massachusetts Department of Revenue, where she was responsible for overseeing nearly 2,000 employees.
Chicago-based McGladrey LLP (FY14 net revenue of $1.5 billion) named Bill Kracunas national leader of its management consulting practice, succeeding Jim Lamb who retired April 30. Based in Boston, Kracunas is a principal of the firm and currently leads McGladrey’s technology and management consulting practice in the Northeast region. Kracunas joined the firm in 2010 with the firm’s acquisition of New England-based Caturano and Co.
Sacramento, Calif.-based MGO (Macias Gini & O’Connell) (FY13 net revenue of $33.4 million) admitted Brandy Davis to partnership in the firm’s media and entertainment practice. Her areas of expertise include tax planning, estate planning, financial planning, risk management and consulting.
Seattle-based Moss Adams LLP (FY13 net revenue of $403 million) admitted five partners. Bob Hinton, who has served as the PIC of the Tacoma, Wash., office for eight years, will now serve as the PIC of both the Tacoma and Seattle offices. Rob Grannum was named the new PIC of the Everett, Wash., office. Jarret Rea assumed the role of PIC for the firm’s Kansas City, Kan., office. Steve Fein serves as the firm’s PIC in Portland, Ore., taking over for Joe Karas, who served in the role for 25 years. Chris Paris takes over as the new PIC of Santa Rosa and Napa, Calif., focusing on market opportunities in the area.
Beverly Hills, Calif.-based NSBN LLP (FY14 net revenue of $14.3 million) admitted Eric Adler, Tayiika Dennis and Carey Heyman to partnership on May 1. Adler provides advice on business growth, taxation and planning to the real estate, horse racing and entertainment industries. Dennis
MAY 2015 INSIDE PUBLIC ACCOUNTING / 19
COPYRIGHT ©2015 THE PLATT GROUP/INSIDE PUBLIC ACCOUNTING. IT IS A VIOLATION OF FEDERAL COPYRIGHT LAW TO REPRODUCE ALL OR PART OF THIS PUBLICATION WITHOUT CONSENT.
provides audit and tax services for nonprofit organizations. Heyman provides accounting, audit, tax and consulting services to the real estate industry.
New York-based WeiserMazars LLP (FY13 net revenue of $142.4 million) announced that as part of its ongoing national expansion of the health care practice it has named principal Debra Bornstein as the new leader of the health care practice, replacing Ken Fischer.
Long Beach, Calif.-based Windes (FY14 net revenue of $24.1 million) admitted Michael Barloewen to partnership in its audit and assurance services practice. Barloewen joins Windes with more than 15 years of professional experience in accounting and auditing. Barloewen’s experience spans a wide range of industry experience, which includes the commercial real estate, oil and gas, media and entertainment, manufacturing and distribution, software development and nonprofit sectors. IPA
New York-based Berdon LLP (FY13 net revenue of $101 million) launched Berdon Fund Services LLC (BFS), a wholly owned affiliate. Michael Gottstein, an audit partner with Berdon and chair of BFS, has more than 20 years of experience in accounting and finance.
New York-based KPMG LLP (FY13 gross revenue of $6.1 billion) opened the first of several planned high-tech work environments designed to facilitate teamwork critical to the successful design and delivery of emerging solutions to its clients. Dubbed “Ignition Centers,” the environments are modeled after leading technology parks and business incubators around the world that feature dedicated, project-focused workspaces designed for information sharing, collaboration and increasing efficiencies during the creative process.
Fort Worth, Texas-based Weaver (FY14 net revenue of $88.1 million) launched a new IT advisory service that provides payment card industry (PCI) data security assessments. Brian Thomas, partner, and Brittany George, senior manager, both in Weaver’s IT advisory services, have earned the qualified security assessor (QSA) certification from the PCI Security Standards Council. This achievement positions Weaver as one of the few select accounting firms to offer this level of certification as a QSA company. IPA
The 2015 Annual Survey and Analysis of Firms…is
open to all accounting firms in North America. The results
of the survey is the annual IPA National Benchmarking
Report, which is one of the most complete, independent,
up-to-date sets of economic and management statistics
available about the accounting profession.
THE DEADLINE IS JUNE 5
Contact IPA regarding participation.
www.cpamerica.org • 352-727-4070
KEEP CLIMBING
member-driven accounting association
Improving Through Sharing
CPAmerica International helps � rms continuously improve, make more money,
strengthen relationships, and bring prestige both domestically and internationally.