What kind of year was 2017? What were the major trends you observed? What were the issues you saw firms struggling with the most?

Marc Rosenberg, The Rosenberg Associates

Firms are continuing to step up their efforts to be more liberal and staff-friendly with their staff policies. More unlimited PTO [paid time off] policies, including many variations of this, working remotely, staff setting their own hours, etc. Unfortunately, I am not seeing any changes in the lip service most partners give to staff mentoring—80% of firms never make it to the second generation—many reasons for this, but a big one is that the quality of partner mentoring sucks. Every new firm under $10 million that I meet—not just most, but every firm—starts immediately talking about their biggest problem: how hard it is to find qualified staff, retain them, and develop them into leaders.

Allan Koltin, Koltin Consulting

As leases are expiring, firms are also rethinking office space requirements due to advanced technology and the wants and needs of millennials. We continue to see a shift from partners with large outer offices to partners with smaller inside offices and the height of staff cubicles being minimized so that the look and feel (call it millennial space) is a window view for everyone. Most of the new office designs and layouts today include much more open architecture and really address the issue that, as the profession moves to a work anytime/anywhere environment, why does office space exist? The answer seems to be largely around collaboration. As part of that, we have seen much more of a “Starbucks feel,” with smaller open areas and additional conference rooms being part of the redesign of office space. We’re also seeing firms taking training much more seriously and making investments in more substantial training centers than I’ve ever seen before. Having toured some of these offices, I will say it looks and feels great, and replaces the old-school stuffy office design that has been with us for the past 50 years.

Terry Putney, Transition Advisors

The market for mergers is clearly moving toward narrow selection criteria for the acquiring side of transitions. Part of this is due to the increasing numbers of firms seeking to be acquired that are available. However, acquiring firms are also much more strategic with their objectives for an acquisition. Strong organic growth means pure revenue acquisition is not enough anymore. Firms with a need for near-term succession of a substantial portion of the partner group are finding fewer takers amongst the larger firms. Firms that can be acquired to help grow and launch nontraditional, noncompliance-oriented service lines are in high demand.

Roman Kepczyk, Xcentric

2017 was the most profitable year ever, with similar sentiments echoed by virtually every firm I partnered with this year. With my focus being strategic IT production and workflow, I saw cloud, workflow optimization, and security being the top three trends impacting firms in 2017. The march of firms outsourcing all or part of their IT infrastructure to cloud applications and hosting providers accelerated. More than half of firms participating in the 2018 CPAFMA IT Benchmarks survey today have the majority of their applications in the cloud. Xcentric and parent company RightNetworks both benefited significantly from this trend with record surges in onboarding firms.

Security is one area where firms are struggling, particularly as accounting firms are being directly targeted by hacking syndicates. While internal IT are doing a reasonable job on the components they personally control in their own server room, the shortfalls are consistently in the areas of staff security training and awareness and use of secure access technologies to minimize hacks, which is where many firms are exposed.

Michelle Golden, Fore LLC

Firms continue to grapple with M&A effects long after the deal. …With process and systems integration, more meetings and training, reassuring the team and clients, and dealing with predictable turnover—all on top of client work—there’s little energy for growth. Most firms also find that silos are exacerbated with mergers. Take outsourced accounting/CFO services, where each firm (or each office, really) pretty much has its own M.O. [modus operandi] (and some territorialism), so it’s rare to get enough approach consistency to share work between locations.

Based on your experiences this year, what are you seeing? What are the major trends? What are firms struggling with, and what are they working on as the year progresses?

Marc Rosenberg, The Rosenberg Associates

2018 is finally the year where the merger market has completed its shift from a sellers’ to a buyers’ market. There are so many sellers that buyers are rejecting more and more previously attractive merger candidates than ever before because they find even better ones. … Now, it’s cultural and strategic fit. Firms are asking: “How will this firm make us better and different? What do they bring to us that we don’t now have?”

Wealth management is entering the picture more than ever before. Buyers tell me they are more interested in sellers’ wealth management practices than the CPA work.

Allan Koltin, Koltin Consulting

With the Big Four predicting a 50% reduction in college campus recruitment of accountants in 2020, I see great hiring opportunities for local, regional, and midsized national firms on college campuses. For many years there was a feeling that the professors were brainwashed to only recommend the Big Four to their “best and brightest,” and I think with the Big Four moving to artificial intelligence and, hence, having less of a need to hire accounting graduates, we will begin to see an abundance of good talent for all of the other firms over the next couple of years.