MPs Discuss Impact of Recession

Source: CPA Trendlines

Consultant Marc Rosenberg regularly surveys members of his National E-mail Managing Partner Roundtable on issues that affect the accounting industry. Recently he asked the group -- which consists of around 100 accomplished CPA firm MPs across the country -- about the recession's impact on their firms.

Of the 54 firms that responded, 12 have annual fees of $2 million to $5 million, 28 have annual fees of $6 million to $10 million, and 14 have annual fees of more than $10 million. Here are some highlights of the survey:

• Overall, the firms showed a 0.6% increase in annual net fees from 2008 to 2009.
• Income per partner was down 2.5% in 2009.
• Respondents project a 3% increase in fees in 2010.
• 50% of smaller firms laid off staff in 2009, compared to 39% of mid-sized firms and 71% of larger firms.
• 75% of smaller firms saw a meaningful increase in the quality of available staff, compared to 68% of midsize firms and only 50% of larger firms. 60% of respondents hired these newly available employees, indicating that firms took advantage of an opportunity to upgrade staff quality.
• 43% of larger firms plan to hire in 2010, compared to 50% of midsize firms and only 17% of smaller firms. Only 9% of all firms plan to lay off staff this year, compared to 50% that did so last year.
• 62% of firms plan to increase marketing expenditures in 2010.
• Despite the recession, only 4% of respondents held off on mergers.
• The most popular strategies for "weathering the storm" included:
  • Spending more time with existing clients,
  • Engaging in more marketing and practice development, such as networking, aggressively targeting niches, proactively asking clients for additional work, and focusing on smaller clients of Big 4 firms, and
  • Improving processes, efficiency, and productivity.

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From CPA Trendlines, http://cpatrendlines.com, March 9, 2010, "Recession Flattens Accounting Firms in '09."