Archives for 2018

HHM CPAs Acquires Local Accounting Firm

Chattanooga, Tenn.-based Henderson Hutcherson & McCullough (FY17 net revenue of $24.4 million), an INSIDE Public Accounting Best of the Best Firm, has announced its acquisition of Grisham Wildman & Work (GWW,) a Memphis, Tenn., firm that focuses on automobile dealerships.

The combined firms will operate as HHM CPAs at HHM’s Memphis location at 1755 Kirby Parkway.

Prior to starting their own firm, Dave Wildman and Jerry Grisham spent more than 15 years working at George B. Jones, one of the first CPA firms to specialize in the automotive industry. They began their own firm in 1993, working with dealerships in the Memphis area and across the nation.

“The automotive industry experience Dave and Jerry bring to the table will complement the depth of service provided by HHM’s dealership group, and we are looking forward to strengthening the relationships with their clients that have been built over their long careers,” says HHM partner Darrin Yoder, who leads the Memphis office dealership practice.

The acquisition brings HHM’s employee total to 155, including the 30 team members in the Memphis office. All GWW’s employees were retained in the merger. Both Wildman and Grisham joined HHM as directors.

Marcum Partner Named Technology Leader of the Year by LEA Global

Peter Scavuzzo

Peter Scavuzzo

New York-based Marcum (FY17 net revenue of $469.5 million) announces that Peter Scavuzzo has been named Innovative Technology Leader of the Year by LEA Global, an international association of accounting and advisory firms.

Scavuzzo was recognized for leading Marcum’s digital transformation and his advocacy of leveraging technology to ensure the firm maintains long-term competitiveness.

“The winner in the technology leader category promotes initiatives that are focused on digitally modernizing traditional processes and engaging technology to drive efficiency and maximize productivity,” says Karen Kehl-Rose, LEA Global president, adding that he “focuses on driving business innovation, digital transformation, customer digital experience, data analytics and security/risk aversion.”

Scavuzzo is responsible for creating and executing the strategic technology programs across all Marcum Group companies. He has played a key role in his firm’s expansion from two to 32 offices, successfully integrating more than 30 M&A transactions and expanding and relocating more than 15 offices.

Squar Milner, Boas & Boas Combine

Steve Milner

Newport Beach, Calif.-based Squar Milner (FY17 net revenue of $91.8 million), an IPA 100 firm, announced that it will combine with Boas & Boas of San Francisco on Jan. 1.

The firm’s partners and associates will relocate to Squar Milner’s San Francisco office. Squar Milner has seven offices throughout California.

Boas & Boas, founded in 1938, has $3 million in revenue and over 10 professionals and staff. It specializes in high-end tax services.

Squar Milner MP Steve Milner says, “We will continue to work to be the very best significant accounting practice in the Bay Area. We are very excited about our combination with Boas & Boas. They have a sophisticated client base, talented people, and a stellar reputation in San Francisco. We truly believe we are creating something wonderful.”

David Arrick of Boas & Boas adds that the combination with Squar Milner “will not only mirror our firm’s ethos, but also strengthen our professional capability. We are looking forward to the positive opportunities ahead for our clients and employees alike.”

TDT CPAs and Advisors Opens Larger Office in Des Moines

Jerry Kirkpatrick

Centerville, Iowa-based TDT CPAs and Advisors (FY17 net revenue of $11.3 million) has relocated its West Des Moines office to a new and larger space.

The space features TDT’s new branding, which was unveiled in May. The new office also provides the TDT staff with a mix of traditional office and open space, meeting the needs of staff in a variety of positions and generations. A large conference room, two small collaboration rooms, and multiple open collaboration spaces can be found among the personal offices and pods of cubicles.

MP Jerry Kirkpatrick says, “We entered the Des Moines market in February of 2016 with our primary goal being recruiting new team members. In the following two years, our Des Moines team and goals have grown. This larger space exemplifies our future firm, brand, and purpose to proactively help our clients achieve better results. We plan to see continuous progression, development, and advancement of our team and our clients in our new space.”

The new office is located at 1245 Jordan Creek Parkway in West Des Moines. The firm operates nine offices across the state of Iowa.

Friedman Leases Entire 21st Floor at One Liberty Plaza

Fred Friedman

New York-based Friedman LLP (FY17 net revenue of $101.5 million) is moving its headquarters from Midtown Manhattan to Lower Manhattan, renting 44,767 square feet at Brookfield Properties’ One Liberty Plaza.

“People are at the heart of everything we do,” says Friedman Co-MP Fred Berk, “and investing in our employees’ personal and professional well-being is built into the fabric of our firm. Moving our headquarters to One Liberty Plaza in Lower Manhattan will give our employees access to some of the best community amenities in the entire city and access to a major transportation hub.”

Friedman Co-MP Harriet Greenberg says, “Beyond the neighborhood, we are planning a state-of-the art office that reflects our commitment to our people.” She says the space “will be more reminiscent of a tech firm than an accounting firm,” with open spaces, bright colors, breakout rooms, the latest technology and an 1,800 square foot café.

One Liberty Plaza is a 2.3-million-square-foot office tower prominently located in the heart of the New York City’s financial district at Liberty Street and Broadway.

Armanino Launches Program to Encourage More Women to Become Partners 

Andy Armanino

San Ramon, Calif.-based Armanino LLP (FY17 net revenue of $242.7 million) has launched a program designed to drive career advancement for female managers.

Called the Executive Access Program, the initiative will match high-potential female managers with executive committee members to provide them the opportunity to build relationships and understand the path to partnership. The inaugural class includes 18 women.

The firm also announced a Transparency to Partnership educational track to provide clearer insight and more transparency about what it takes to be a partner. Training modules will offer information on partner qualifications, the benefits of partnership, flexibility and expectations, partner profiles and other relevant topics. These courses will be available to all interested firm employees, in order to address misconceptions and barriers.

Both initiatives were developed by Armanino’s Women’s Advancement Network (WAN) and comes after extensive survey findings of male and female Armanino partners and managers provided insights on barriers and opportunities for female partner promotion.

Results revealed that women were opting out of the partner track at twice the rate of men and that executive sponsorship was one of the most important factors in achieving partnership. The survey also revealed gaps in the understanding of the qualifications and benefits of partnership for both men and women. The Accounting MOVE Project conducted the internal survey.

“Armanino is committed to not only meeting but exceeding the industry average of female partners,” says MP Andy Armanino. “In the past three years, 29 percent of internal partner promotions were women, a trend we would like to see increase in the future.”

PKF O’Connor Davies Establishes German Desk

Ralf Ruedenburg

New York-based PKF O’Connor Davies (FY17 net revenue of $160 million) announced that it has hired Ralf Ruedenburg to serve as principal and practice leader of the new German Desk specializing in audit, tax and advisory services, merger and acquisition advice and tax structuring for U.S., German, Austrian and Swiss clients.

“Ralf is exactly the right person to lead this exciting expansion,” says MP Kevin J. Keane. “As our international footprint continues to grow, his leadership and experience will be essential in further establishing a robust offering for U.S. clients conducting business in Germany and German, Austrian and Swiss clients conducting business in the U.S.”

This growth is part of PKF O’Connor Davies’ initiative to solidify world-class services for international markets and answer the call from clients to extend the firm’s practice areas. The German desk will provide clients with international insights, technical expertise and a deep cultural understanding of German business needs and priorities. The firm also has a China Desk, serving Asian clients.

“I’m proud to join the incredible international team at PKF O’Connor Davies to expand our presence in the market where I began my career,” says Ruedenburg. “German-owned companies have a unique set of accounting needs, and I look forward to building a practice with exceptional professional services to drive better results for current and new clients.”

Noell Agnew & Morse Joins K·Coe Isom

Jeff Wald

Salina, Kan.-based K·Coe Isom (FY18 net revenue of $68.2 million) announced it has added the business, specialization, partners and employees of Noell Agnew & Morse.

The combined firms will bolster the dedicated agricultural solutions and financial services for farming operations and producers in California. Noell Agnew & Morse has offices in Sacramento and Visalia.

K·Coe Isom devotes two-thirds of its business to providing solutions for the food-supply chain and the financial, legislative and operational issues they face. It also provides consultancy and CPA services to its community-based businesses and industries.

Commenting on the acquisition, K·Coe Isom CEO Jeff Wald says, “When we met with Noell Agnew & Morse, our missions aligned. Their partners and employees serve agribusinesses with the same drive and passion that our firm values – committed to providing specialization, expertise and resources to help agribusinesses nationwide, with the ultimate goal to improve and secure the future of America’s farming operations and production.”

Founded in 1983, Noell Agnew & Morse is an accounting, tax and consulting services firm with 75% of its business focused on agribusinesses, with a special emphasis on vertically integrated growers, processors and marketers of fresh fruits and nuts. The firm primarily serves clients throughout the Central San Joaquin Valley of California.

Partner and co-founder Kevin Noell states, “This opportunity exceeded our hopes in finding a partner firm that offers a complementary service and industry offering, as well as embodies the same values and tradition we have for providing an elevated level of expertise, and an environment our clients and employees will want to be a part of.”

The partners and employees from Noell Agnew & Morse’s two offices will either remain at the Sacramento office location, or join K·Coe Isom’s office in Fresno, Calif.

A Case for Mandatory Partner Retirement With a Soft Landing

Dom Esposito

By: Dom Esposito

Most, if not all, of the Top 10 CPA firms have mandatory retirement provisions in their partnership agreements. For the Top 10, mandatory partner retirement is narrowly defined and means just that – mandatory retirement. With a limited number of exceptions, when a partner at a Top 10 firm hits a certain age, usually 65, he/she must retire from the firm. If a Top 10 retired partner is enjoying good health and wants to keep active, it is not unusual for him/her to join Boards or small and mid-sized CPA firms as Top 10 partner talent, skills and networks are very valuable to these smaller firms.


Most, if not all, small and mid-sized CPA firms struggle with the notion of mandatory partner retirements. We understand the myriad of reasons or myths why this is the case but, as articulated below, we respectfully do not agree with many of them. Accordingly, many small and mid-sized CPA firms don’t have mandatory retirement provisions in their partnership agreements. Partners can be partners as long as they have their health and want to keep active. Even for those small and mid-sized CPA firms with mandatory retirement provisions, mandatory retirement is loosely or liberally defined. For these firms, mandatory partner retirement typically does not mean that a partner must retire from the firm at age 65. Instead it usually means that, at age 65, a partner must give up his/her equity in the firm and move to part-time status, in many cases, keeping the partner title.

In Our Opinion

In Our Opinion, the lack of tight mandatory partner retirement provisions, but not necessarily those that mirror the Top 10 firms, is a major reason why so many small and mid-sized CPA firms are merging up into larger firms. At many of these firms, an overwhelming majority of partners who approach age 65 continue to work as partners. Lack of young partners with quality relationship skills cause these firms to seek a transaction with larger, healthier and better managed firms. We don’t think this is healthy. At a minimum, it certainly isn’t the best way to perpetuate the firm.

The purpose of this newsletter perspective is to offer a small and mid-sized CPA firm a solution that provides mandatory retirement with a soft landing. Before we explain, let’s summarize some of the myriad of reasons or myths that many small and mid-sized CPA firms deal with when it comes to mandatory retirement provisions:

  • “I’m an owner in the firm and an owner should not be forced to retire.”
  • “The firm couldn’t survive without me. These younger people can’t bring in business and can’t handle my book.”
  • “I have a good chunk of the equity in this firm and the younger people can’t afford to buy me out.”

Unfortunately, firms that find themselves in this position usually also find that:

  • Many senior partners start slowing down as they get older but are not willing to acknowledge that they no longer are contributing to the firm as they were when they were younger. As a result, they do not want to see their compensation get reduced to an amount that better reflects current value to the firm.
  • Many senior partners do not transfer their client and network relationships in a timely manner. They hold on to everything they built-up over the years, risking that these relationships do not get transferred to younger partners in a timely and methodical fashion. These same partners view their deferred compensation buy-outs as entitlements as opposed to monies that they earned as “good soldiers” which includes transferring client and network relationships.
  • Young stars and future partners look around the firm and see a lot of “gray hair” hanging around and interpret this as an environment that will not provide them the opportunity to become partners. They ask themselves: “Why should I stick around this firm if there is little, if any, chance of me becoming a partner one day?”

Barry Melancon of the AICPA has been quoted in a communication to the Equal Employment Opportunity Commission that: “an accounting firm’s business model has thrived and prospered for decades while serving the public interest and provide for  a predictable progression of lesser tenured, and offer more diverse individuals into the partnership, and facilitate the orderly transition of a firm’s clients from senior partners to those who will succeed them.” We believe that Barry has it right!

Here are our thoughts on how a small and mid-sized CPA firm can require mandatory retirement (in a tight sense) and yet provide partners with a soft landing. In its partnership agreement, the firm needs to stipulate that:

  • There is a mandatory retirement age (65 works best).
  • A partner can earn his/her full deferred compensation amount at age 62 but stay until age 65. Between age 62 and 65, a partner’s responsibilities include the timely and methodical transfer of client and network relationships. A haircut to the deferred compensation amount can occur if the firm concludes that these relationships are not being adequately transferred.
  • At its annual option, the partner could be extended three times as either a partner or consultant. These extensions often are part-time and reflect market compensation.
  • Beyond the annual extension option referred to above, a consulting arrangement (usually at one-third the billing rate) is available to a partner if the firm believes it is beneficial to certain client relationships.

In Conclusion

You may ask if mandatory partner retirement is still legal? The short answer is yes!

While the Equal Employment Opportunity Commission has acted against Deloitte and PwC, it is not clear at this time if the Commission is going to be successful in doing away with mandatory partner retirement. In our view, the Top 10 firms will begin to find it very difficult to enforce mandatory partner retirement as their partners are increasingly becoming employee shareholders rather than partners who have control over their activities and function like business owners. On the other hand, partners at small and mid-sized CPA firms (at least equity partners) do have many more characteristics of a business owner and are therefore exempt from age discrimination rules provided by federal law.

To prevent the loss of their best and brightest talent who seek a path to partnership, we believe that small and mid-sized CPA firms should provide mandatory retirement provisions with a soft landing. Such provisions will also permit adequate time for an orderly transition of client and network relationships.

Reprinted with permission of the author.

Dom Esposito is the CEO of ESPOSITO CEO2CEO, a boutique advisory firm consulting to leading CPA and other professional services firms on strategy, succession planning and mergers/acquisitions. “In Our Opinion” is a continuing series for leading CPA firms where Dom shares insights, experiences and wisdom with firm leaders.

UHY Expands in Northeast With Acquisition of New York Firm

Michael Mahoney

Chicago-based UHY Advisors (FY17 net revenue of $140.8 million) and UHY LLP have announced that they will expand their portfolio in the Northeast region with the acquisition of Flynn Walker Diggin CPA of Saratoga Springs, N.Y. The firm operats under the UHY banner.

The acquisition marks further expansion in New York for UHY.

“We are pleased to welcome the highly experienced team at Flynn Walker Diggin to the UHY network. Their addition will further strengthen our presence in the capital region and help us advise clients in the local marketplace,” says Michael Mahoney, CEO of UHY Advisors in New York.

“The team at Flynn Walker Diggin exemplifies the UHY ethos, with significant accounting experience across industries, personalized relationships with clients, and active involvement in the community,” says Howard Foote, OMP of the Capital Region of UHY LLP and CFO of UHY Advisors in New York. “We pride ourselves on providing clients with the highest quality of service in our role as their trusted advisors and look forward to working closely with this group of professionals.”

All associates of Flynn Walker Diggin are expected to continue in their roles.

“We look to leverage our personal expertise in audit, accounting, tax and management services to benefit individuals, closely held companies, and not-for-profit and government entities,” says Patrick J. Diggin, MP of Flynn Walker Diggin. “As part of UHY, we will continue to help our clients meet their goals with the addition of international resources that UHY offers.”