Archives for March 2015

Marks Paneth Acquires New Jersey Accounting Firm

New York-based Marks Paneth LLP (FY13 net revenue of $96.6 million) has acquired Fischer Barr & Wissinger LLC of Parsippany, N.J., effective Feb. 1.

Fischer Barr & Wissinger focuses on tax planning, business and medical practice valuation, litigation support, accounting, auditing and consulting services. Its international tax and high-net-worth capabilities enhance the already strong expertise Marks Paneth offers its clients in these areas of specialization. The firm now operates under the Marks Paneth name.

“We are delighted to bring on the expertise that Fischer Barr & Wissinger has become known for. Our combined client base will benefit from the deepened bench strength of experience,” says Mark Levenfus, MP of Marks Paneth.

The acquisition also adds expertise to Marks Paneth’s valuation practice. Eric Barr, a founder and co-managing member of Fischer Barr & Wissinger, has been named PIC of the valuation practice, part of Marks Paneth’s litigation and corporate financial advisory services group. He will advise clients on business valuation disputes relevant to economic damages, mergers and acquisitions, and changing regulatory requirements in the health care industry.

2012: J.H. Cohn – Reznick Group Strike A Deal, Strengthen National Footprint

Published 2012: After months of speculation, Roseland, N.J.-based J.H. Cohn (FY11 net revenue of $235.6 million) and Bethesda, Md.-based Reznick Group (FY11 net revenue of $202.5 million) announced plans to merge, which will result in a $450 million firm when it takes effect later this year.

“This is truly a merger of equals and decisions will be 50/50,” says J.H. Cohn MP and CEO Tom Marino. In a joint interview with IPA, Marino noted that it was “remarkably easy” to discuss issues as equals with Ken Baggett, Reznick Group’s MP and CEO. Baggett agrees. “These guys feel like our partners already – like someone we grew up with.”

The two firms found an affinity for one another early on, and decided against a three-way merger with Baker Tilly Virchow Krause. Although both MPs underscore their respect for BTVK and its CEO, they acknowledge that Cohn and Reznick were much more aligned from the start. Baggett says Reznick looked at 80 firms in investigating its merger prospects. In the Northeast, J.H. Cohn stood high above the rest.

Baggett says people have all kinds of ideas on what it means to ensure the cultures of two firms match, but what it really comes down to is, “Is this someone you want to continue to go out and have a beer with?” Partner groups at both firms believe the blend would be a natural fit. “It was almost a no-brainer,” Baggett says. “We had to get through issues, but they weren’t insurmountable.” Cohn is a member of Nexia International and Reznick is a member of IGAF Polaris. The firms are not ready to announce which association they will remain with after the merger.

Marino and Baggett will serve as co-CEOs and after three years, a vote of the members will choose the next CEO.

Another choice, which will have to be made soon, is the firm name. Both MPs say the plan is to market-test various options, although Marino notes that after all the investment in market testing it will likely end up being Cohn-Reznick. “How creative can you really be,” Marino jokes.

Both MPs are enthusiastic and eager to get started. The combined firm will have more than 2,000 employees and 25 offices nationwide. In 2011, Cohn ranked 18th on IPA’s 100 list; Reznick ranked 20th. Both firms have their own strengths and specialty areas, which complement each other and will help the combined firm gain more clients. Marino and Baggett are aiming for double-digit annual growth. Even during the last few recessionary years, both firms experienced organic growth of about 8% annually over the last 10 years, Marino says.

Reznick is strong in the affordable housing and commercial real estate industries, as well as the tax credit and governmental arenas; Cohn has specialized knowledge in manufacturing, entertainment and not-for-profits and has very diverse clients across a wide array of industries. Marino says the combined firm will offer “an unprecedented concentration of industry experience in real estate.” It is expected to dominate the East Coast with offices from Boston to Atlanta, but it also will be a truly national firm with expansion in California and additional offices in Texas and Chicago.

While Marino notes that “bigger isn’t better, better is better,” he also acknowledges that mergers are “where the profession’s going, to be honest with you.” He says he used to downplay the necessity of a geographic presence in a particular area, but no longer. “This will not be the last mega-deal that’s going to happen.”

Markets are demanding that firms have “boots on the ground” nationwide, that they have specialized, top-quality industry expertise and that they be of significant size, says Marino. “Private equity firms want their big clients to be serviced by one firm,” Marino tells IPA.

Baggett gives an example of a real estate client Reznick has been wooing for years, trying to offer more services. Once a health-care specialist from Cohn attended a meeting, two other firms in the running for the work were asked not to make a presentation. The company decided to go with the combination of Reznick and Cohn.

“We’re already putting in and winning joint proposals together,” Baggett tells IPA. “We have more doors we can walk through now.”

“Market permission is greater for large practices,” Marino says. “We’re getting more referrals from private equity firms, and we can attract more high-quality lateral partners.”

The next step is integration of the two firms. Committees have been working on go-to-market strategies in the industry specialties since December. Baggett says he expects the typical barriers – leadership, HR systems or other integration issues – won’t be barriers at all. Only one duplicate office, in Los Angeles, will close, but no employees will be let go. Even though some leadership positions will overlap, when a firm doubles in size, more senior leaders will be needed, both MPs tell IPA.

Down the road, the combined firms will consider further acquisitions. South Florida, Texas, Chicago, Denver and the San Francisco Bay area are particularly attractive. However, both Baggett and Marino emphasize that they are not looking at expansion now, and are focusing on their existing clients and the work ahead of them with the newly merged firm.

“Our clients come first,” Baggett says. “We don’t want to look like we’re too big for our britches and forget the clients that brought us here.”

Salary Caps Force Tough Decisions

Joe Tarasco

Joe Tarasco

By: Joe Tarasco, Accountants Advisory Group LLC

According to the 2014 IPA National Benchmarking Report, profit margins are generally being challenged across most commodity service lines by rising personnel costs and lower productivity, thus forcing firms to increase profitability and productivity at the partner level rather than using leverage.

While accounting firms don’t use a staff salary cap on a contractual basis, it makes good business sense to use it as an organizational or segment budgeting and planning tool.

According to the last IPA survey, average professional staff personnel costs have risen to 45% of revenues, while firms are finding it increasingly difficult to increase client fees.

Using a salary cap as a formal budgeting tool will force firm leaders to make the tough, but right, long-term business decisions and increase profitability without relying on maximizing volume, especially at the partner level. Using a budgeting type salary cap for the various professional staff levels and business segments will force firms to:

  • Make the tough decisions to replace high-priced comfort-zoners and high-level staff with less costly staff from within the firm’s ranks or recruit from other firms. It will be increasingly difficult to carry managers and directors who have peaked in their careers and will not be part of the firm’s partner succession planning.
  • Evaluate compensation and bonus criteria more carefully. There is an epidemic of high-level staff who feel entitled to compensation and bonus increases each year, but are not attaining higher levels of performance, nor are they adding additional value and profitability to the firm.
  • Require partners to delegate more work to high-level staff so partners can spend more time with their best clients and on developing the practice.
  • Be more selective in recruiting entry-level staff who have the potential to be part of the firm’s succession planning.
  • Provide more effective training to staff at all levels so that they can work at a higher billing rate on higher-value services and consulting projects.
  • Institute career development and leadership training to move staff quickly to higher levels.
  • Carefully review the profitability and future potential of each staff person.
  • Grow or establish services and niches that are valued highly and therefore are billed at a higher rate. Transition away from fee-sensitive commodity work.
  • Stop serving low-profit clients and be very selective in accepting only highly profitable new clients.
  • Put staff in positions to be more focused on their highest and best use of their time.

Too many firms have made growth and size, rather than profitability and succession planning, their strategic priority. In order to successfully implement succession planning and sustain higher levels of profitability, firms need to make the right business decisions and be more proactive in responding to the changing marketplace.

Accountants Advisory Group LLC (, is a strategic consulting firm that incorporates practice management, marketing and human capital strategies to assist CPA firms in achieving long-term success and profitability.

The National Center for the Middle Market and Cherry Bekaert Announce Strategic Alliance

The National Center for the Middle Market (NCMM) and Richmond, Va.-based Cherry Bekaert LLP (FY14 net revenue of $130.8 million) announced a strategic alliance to provide ongoing insights into innovation and growth strategies for middle market companies.

“The National Center for the Middle Market is the premier resource on the U.S. middle market economy,” says Kip Plowman, MP of strategic markets at Cherry Bekaert. “The NCMM alliance enables us to keep a pulse on the key business trends driving innovation, capital investments and expansion and to directly benefit our clients and the business community. This type of proprietary thought leadership will be a key facet of THInc, our new specialty practice that serves the innovative needs of clients in the technology, health and industrial sectors.”

With revenues between $10 million and $1 billon, the nearly 200,000 companies that comprise the U.S. middle market encompass 44.5 million jobs, account for one-third of total private employment, and generate more than $10 trillion in combined revenues annually. “As a firm known for its innovative CPA and advisory practices, Cherry Bekaert advances our ability to look at the middle market in new and dynamic ways,” says Tom Stewart, executive director for the NCMM.

The two organizations conducted their first co-sponsored event in Atlanta in February for middle market CEOs and CFOs. Facilitated by Stewart of NCMM, in addition to a panel of renowned experts and business leaders, the group reviewed and discussed Q4, 2015 results from NCMM’s Middle Market Indicator—a measure of progress, plans and perspectives on growth collected from more than 1,000 senior executives from U.S. middle market companies.

RubinBrown Launches New Cyber Security Advisory Services

Rob Rudloff

Rob Rudloff

St. Louis-based RubinBrown (FY14 net revenue of $73.6 million) announced the formation of a new cyber security advisory services group. Additionally, the national accounting and business consulting firm added Rob Rudloff to lead the group.

“In today’s technology-driven world, all organizations, no matter the industry, size or location, are susceptible to a cyber-security breach. We recognize the growing need for cyber security assistance for our clients as their services and organizations continue to expand and interact within the digital space,” says Rudloff.

The cyber security advisory services team performs services in four key areas, security advisory services, such as high-level health checks to CISO (chief information security officer) on-call services; technical security services, including vulnerability and penetration testing; breach response planning, such as plan development and vendor validation; and SOC 2 (Service Organization Control reporting), which includes auditing security and reporting.

RubinBrown’s team of security and IT professionals average 20 years of experience in the industry, performing assessments and advisory services across a broad range of compliance, best practice and internationally recognized standards.

Rudloff, located in the Denver office, leads the cyber security advisory services team. Audrey Katcher, a longtime partner at RubinBrown, also serves as practice lead for the group.

Speltz Joins DHG Private Equity as National Business Development Executive

Jesse Speltz

Jesse Speltz

Jesse Speltz has joined Charlotte, N.C.-based Dixon Hughes Goodman (DHG) (FY14 net revenue of $329.2 million) as a national business development executive for the firm’s national private equity practice. He has more than 25 years of professional experience working with asset-based lenders, corporations, private equity groups, hedge funds, attorneys and corporate finance companies.

“As our practice continues to expand nationally, we are looking forward to Jesse working with our clients in meeting their growing needs,” says Scott Linch, MP of DHG private equity. “His extensive industry experience, dedication to the private equity industry, and reputation for working with clients providing a one-stop solution fit very well with our team at DHG and our values.”

KatzAbosch Debuts New Niche Website for Government Contractors

Timonium, Md.-based KatzAbosch (FY13 net revenue of $14.4 million) announced a new website dedicated solely to government contracting. The new website displays the firm’s government contract consulting services introduced with the hiring of government contracting advisor Linda Lang.

The firm has now broadened its expertise to holistic government contract consulting in addition to accounting proficiency. KatzAbosch GovCon showcases the team, comprehensive list of services, timely alerts, current news and events, industry affiliations and client testimonials.

“We are really excited about the growth that is happening at KatzAbosch. The acquisition of a new website dedicated solely to our government contractor friends and clients differentiates us from the rest of the consulting industry. We now have additional online real estate but also the ability to really hone in on what is essential in government contracting to better address our clients’ motivations and pain points,” says Kelly Ernest, marketing manager, at KatzAbosch. “Our firm is unique in that we provide a customized business solution through our vast list of service offerings and specialized expert human capital.”

HoganTaylor Professionals Named Trailblazers by Oklahoma Society of CPAs

The Oklahoma Society of Certified Public Accountants named four Tusla, Okla.-based HoganTaylor (FY13 net revenue of $26 million) professionals as 2015 Trailblazers. Each year, 20  members are selected for the honor, which recognizes their innovation, professional dedication and community commitment.

HoganTaylor’s 2015 Trailblazers are: Dan Bomhoff, Natasha Morrison, David Stiles and Ann Tran.

Bomhoff is a senior manager in the tax department at HoganTaylor. He came to the firm in 2013. Morrison is a manager in the assurance department at the firm. She joined HoganTaylor in 2007. Stiles joined HoganTaylor in 2009. He is a manager in the assurance department. Tran is a manager in the tax department. She joined HoganTaylor in 2005.

Kaminsky Joins Grant Thornton as Chief Communications Officer

Marci Kaminsky

Marci Kaminsky

Marci Kaminsky has joined Chicago-based Grant Thornton LLP (FY13 net revenue of $1.3 billion) as chief communications officer, based in the firm’s headquarters.

In this role, Kaminsky will lead the management of the firm’s reputation and strategic communications, including external and media relations, internal and executive communications and crisis and issues management.

“Marci brings three decades of strategic communications skills to our firm, including Fortune 500 leadership experience in corporate communications, public relations and corporate responsibility,” says J. Michael McGuire, CEO of Grant Thornton. “Her insights will be vital in driving our reputation to achieve our goal of being an audit, tax and advisory leader for dynamic growth organizations.”

Kaminsky most recently served as senior vice president, corporate relations at The Allstate Corp. As a board-elected officer of the company, she led a public relations department of more than 100 team members with responsibility for reputation leadership, public affairs, media relations, strategic business communications, crisis communications and issues management and CEO communications. She has held leadership positions with Stryker Corp., United Airlines Inc., USG Corp., BMO Harris Bank N.A., NutraSweet Co. and Quaker Oats Co.

Weaver Admits Mihills to Partner

James Mihills

James Mihills

Fort Worth, Texas-based Weaver (FY14 net revenue of $88.1 million) announced that James Mihills has been admitted to partner in financial institutions consulting.

“We are pleased to announce the promotion of James, who has provided outstanding service to our clients while demonstrating great leadership,” says Tommy Lawler, Weaver’s MP and CEO. “As Weaver continues to grow, we believe his skills and experience will be crucial to our financial institutions consulting practice.”

Mihills joined Weaver’s Fort Worth office in June 2012 when the firm merged with Delong Consulting Services. He has more than 20 years of experience serving financial institutions, performing internal audits for banks. Mihills oversees the audit plans for numerous banking clients and conducts independent interest rate risk and liquidity risk reviews for financial institutions across the nation.