Back to the Future: Thoughts on the 1991 Debut of the Bowman 100 – Part 3

IPA asked several consultants, thought leaders and influential members of the accounting profession their thoughts on the 1991 debut of the Bowman 100. As part of our 30th anniversary celebration, we will be highlighting some of the responses.

Domenick Esposito, Esposito CEO2CEO

Domenick Esposito

Domenick Esposito

IPA: What are your initial impressions are when looking at the 1991 Bowman 100? What stands out, what’s of most interest to you, what do you see in that listing that reveals something about where we are today? What was behind the consolidations of the ’90s?

Esposito: When I read the Bowman 100 (1991) and compare the compilation to the IPA 100 (2015) one data point is striking to me:

  • The high, median and low revenue for the 100 firms are staggeringly different when comparing 1991 to 2015:
Revenues 1991 2015 ~% Change
High $2.3B $14.9B ~600%
Median $10.3M $71.3M ~700%
Low $6.0M $32.4M ~500%

On top of this explosive growth, it is important to note that there are only 24 firm names that appear on both the Bowman 100 (1991) and on the IPA 100 (2015). To me, this data screams out:

  • Size matters, and
  • Brand recognition is critical

While a good portion of the growth at these 100 firms during the period 1991 to 2015 was organic, a healthy portion was also achieved through mergers and acquisitions. Organic growth in 2016 and the immediate future is going to be very difficult and, as a result, we will see more and more mergers.

In January 2016 alone, there have already been announcements of 22 mergers and acquisitions, including 13 at the Top 100 firms. If this pace continues, we can expect to see over 260 CPA firm mergers and acquisitions in 2016 with about 150 being with the 100 largest firms. That’s more than twice that of 2015! My conclusion is that the largest firms will continue to get bigger, stronger and more profitable.

My observation is that more than one out of every two CPA firms of any significant size is either discussing a merger combination, acquisition or sale or is planning to do so in the near future. Why?

  • The economy is not robust. Clients aren’t growing. Margins are thin.
  • Partner demographics are an inverse pyramid; top heavy with baby boomers and lean with “under 40” partners.
  • Firms do not have enough rainmakers and business people.
  • Partner lead talent, particularly tax talent, is nearly impossible to find.

So if now isn’t the time for firms to consider an alternative path to a go-it-alone strategy, when is? Firms should not wait until the last inning when key partners are nearing retirement. As long as the economy stays anemic and clients aren’t in need of special services (i.e. higher margins), CPA firm valuations aren’t going to get better soon.

If you have any feedback, comments or observations, contact us at

After 46 years in the public accounting profession, including CEO of Grant Thornton, Dom Esposito launched ESPOSITO CEO2CEO, LLC, a boutique advisory firm, to consult to small and mid-sized CPA firms with strategy including mergers and acquisitions.

View Part 1 – August Aquila

View Part 2 – Allan Koltin