Predictions by consultants Steve Erickson, Albuquerque; Robert J. Gallagher, Pittsburgh; Jeffrey S. Pawlow, St. Louis; Bill Reeb, Austin; and Marc Rosenberg, Wilmette, Illinois, include:

• Use of non-CPAs will increase leverage. At the IPA 100 firms, leverage is now 6.4 to 1. Smaller firms will find it necessary to increase their leverage even though it is more difficult for them.
• Women will be the majority in the accounting profession. Keeping them is a problem. Getting away from hourly assignments and moving toward client responsibilities will help. Part-time partners will be common.
• Technology and standardized back-offices will increase efficiency, especially as older, technology-averse partners retire. Scheduling will be standardized—it is critical that the right people are assigned to jobs.
• Accounting firms will spend $4,000 per professional on training.
• The number of accounting firms will decline from 45,000 today to 42,000 in five years. Succession planning will become part of compensation programs.
• In 2006 SOX 404 work will decrease by 40 percent. Big 4 people will migrate to local and regional firms. There will be increased competition for business among accounting firms.
• Some accounting firms will be penalized for violations of the Privacy Act.
• Desktop computers will have dashboards for people to measure performance against goals. Annual pay raises will no longer be routine—pay will be based on performance.
• Leadership programs are necessary to prepare people to deal with changes such as the flat tax and government controlled audits.
• Some firms will fail because of the burdens of retirement.
• Partnerships will become less democratic.
• It will become a buyer’s market for acquisition of accounting firms. Firms must plan to sell to their partners.

From Inside Public Accounting, December 2005, p. 5. Hudson Sawyer Professional Services Marketing Inc. www.hudsonsawyer.com. Subscription $345 per year; back issues—nonsubscribers $35. 404-264-9977. [email protected].