In Brief

The seventh annual 2021 NYSSCPA–Rosenberg Survey identifies trends from the national 23rd Annual Practice Management Survey and provides profitability and growth data of participating New York CPA firms. This survey reflects how our profession has met the challenges during the coronavirus (COVID-19) pandemic, which have come at a velocity unlike anything else in professionals’ memory. The survey data reflects trends and performance from 2020 during the COVID-19 pandemic. A second part of the survey presents current analysis and conclusions from leading experts and practice management consultants on how accounting firms are adapting to the challenge of COVID-19. As Charles Hylan, managing partner of Rosenberg & Associates and author of the survey remarked: “In my 31 years in the profession, I have never seen a time where we’ve had to adapt, think new and different, and lead through change so quickly.” This year’s Rosenberg Survey provides valuable analysis, guidance, expert insight, and practical recommendations for CPAs on how to adapt and thrive during this crisis, as well as how to plan for what comes next.


The results of the national 23rd Annual NYSSCPA–Rosenberg Practice Management Survey provided many key takeaways for CPAs in public practice during the coronavirus (COVID-19) pandemic: 1) Our profession’s financial performance did struggle in 2020. Revenue growth was anemic during the period surveyed. 2) Income per partner increased only slightly, marking the lowest measure since 2017. 3) Almost all firms have adapted to a more virtual environment. Although there have been struggles and inefficiencies, our profession clearly sees the upside and will continue down this path. 4) Working virtually has forced many firms to better utilize digital communication platforms and technology to provide more advisory services, better manage their operations, increase their efficiencies, and ultimately compete with organizations from outside of accounting. 5) The pandemic—and being forced to work virtually—has required firm leaders to do a better job communicating within the partner group and across the firm, something firms are not known for but has been essential over the past 18 months. 6) Outsourcing, much like culling clients, is helping our profession grapple with the ongoing labor shortage. More and more firms are actually using offshore resources to augment their limited staffing situation. 7) The ratio of female-to-male professional staff has grown (now at 58% female, 42% male). For the past three years, the percentage of female equity partners across firms of all sizes has shown a steady increase. Between 2011 and 2020, the growth rate has gone from 13% to 19%. 8) CPA firms are struggling with realization (i.e., efficiency) as they adapt to a more virtual working environment. 9) Advisory services continues to be one of the critical areas of growth. Most recently, services like helping clients navigate the PPP process have further demonstrated the value firms can bring to their clients. In service to the public, the profession continues to move from compliance to advisory services and the pandemic only adds fuel to the fire.

The Rosenberg Survey analyzes national trends that all CPAs in public practice need to be aware of, covering the areas of revenue growth, merger and acquisition activity, leverage (partner-to-staff ratios), and demographics. The first part of this article details the results of the 23rd Annual Survey, conducted in 2021, based on firm results for calendar year ending 2020. The overall results are shown in Exhibit 1, Results at a Glance. The second part provides opinions from the experts on the impact of COVID-19 on the profession and how so many firms embraced change in service to their clients and the public.

Exhibit 1

The 2021 Rosenberg Survey Based on 2020 Data Results at a Glance

Multi-Partner Firms Over $20M in Net Fees (43 Firms); $10-20M in Net Fees (77 Firms); $5-10M in Net Fees (102 Firms); $2-5M in Net Fees (63 Firms); Under $2M in Net Fees (18 Firms) Income per equity partner; 687,739; 518,570; 504,005; 343,495; 257,532 Fee growth: 2020 – including mergers; 7.4%; 5.9%; 6.0%; 2.7%; -0.5% Fee growth: 2020 – excluding mergers; 6.7%; 4.7%; 5.0%; 0.9%; -1.4% Fee growth projected for 2021; 6.4%; 6.4%; 6.2%; 4.3%; 4.9% Fees per equity partner; 2,437,830; 1,906,064; 1,645,417; 1,101,949; 654,313 Fees per professional; 252,358; 232,727; 228,555; 217,131; 193,092 Fees per person; 206,798; 191,877; 188,107; 179,282; 158,402 Realization; 85.6%; 84.6%; 87.0%; 89.2%; 90.2% Average equity partner billing rate; 405; 355; 334; 302; 256 Overall net firm billing rate; 183.05; 162.82; 154.61; 148.01; 143.30 Average equity partner charge hours; 1,052; 1,065; 1,163; 1,180; 1,220 Average staff charge hours; 1,499; 1,477; 1,508; 1,450; 1,392 Staff to equity partner ratio; 9.0; 7.3; 6.5; 4.3; 2.5 Admin to total headcount percentage; 17.3%; 17.4%; 17.5%; 16.9%; 16.5% Professional staff turnover; 14.5%; 15.6%; 15.3%; 15.9%; 18.0% Utilization; 52.1%; 52.8%; 54.5%; 54.8%; 54.8% Months of A/R + WIP; 2.2; 2.6; 2.8; 2.5; 2.7 Staff salaries/benefits as % of fees; 48.3%; 49.1%; 46.1%; 43.4%; 39.8% Overhead expenses per person; 40,666; 39,005; 38,335; 39,070; 42,362 Assurance services as % of total fees; 34.5%; 29.8%; 26.3%; 26.3%; 23.8% Average fee per 1040 return; 1,832; 1,337; 1,086; 920; 960 % of firms offering investment advisory; 58.1%; 32.5%; 23.5%; 22.2%; 17.6% Formal written marketing plans; 83.7%; 61.0%; 39.2%; 19.4%; 5.6% Offer virtual (remote) work; 97.7%; 100%; 99.0%; 98.4%; 88.9% Typical new partner buy-in; 163,432; 159,742; 190,111; 193,648; 131,138 Non-equity partner position at firms; 88.4%; 77.9%; 49.0%; 27.0%; 11.1% Male/Female professional staff breakdown; 47%/53%; 41%/59%; 43%/57%; 38%/62%; 35%/65% % female partners; 18.8%; 24.1%; 23.7%; 33.2%; 20.4% Expected acquisition in 3 years; 63.4%; 52.6%; 41.6%; 32.3%; 23.5% Average age of partners; 53.3; 52.9; 52.8; 52.9; 57.7 % of partners over age 50/60; 59%/22%; 59%/24%; 60%/24%; 60%/25%; 75%/43% Comp committee for allocating partner income; 74.4%; 54.5%; 26.5%; 6.4%; 0.0% Formula used for allocating partner income; 11.6%; 22.1%; 30.4%; 31.7%; 22.2% Closed compensation system—% usage; 62.8%; 46.1%; 25.7%; 5.0%; 0% Buyout method—multiple of compensation; 63.2%; 55.2%; 48.4%; 44.0%; 14.3% Average valuation of goodwill; 69.2%; 74.5%; 75.2%; 81.7%; 90.5% % of firms making partner buyout payments; 90.5%; 75.3%; 67.6%; 60.3%; 33.3%

Revenue and Profits

The annual revenue growth nationally of 5.7% was down from 6.4% the previous year, as shown in Exhibits 2 and 3.

Exhibit 2

Annual Growth: 2011 To 2020 (Firms Over $2 Million)

Exhibit 3

Annual Revenue Growth, by Firm Size

2020; 2019; 2018; 2017; 2016 Over $20M; 7.4%; 9.1%; 9.9%; 9.8%; 9.8% $10-$20M; 5.9%; 7.7%; 9.7%; 8.1%; 9.4% $5-$10M; 6.0%; 5.1%; 7.0%; 7.8%; 6.8% $2-$5M; 2.7%; 5.1%; 4.8%; 5.0%; 6.5% All firms >$2M; 5.7%; 6.4%; 7.7%; 7.0%; 7.8%

Profits, as measured by income per equity partner, were up 5% from the prior year nationally, from $497,000 to $521,000. Income per partner in New York State was $582,000, an increase of 3.7% over the prior year. See Exhibit 8 for overall revenue increases and Exhibit 6 for overall partner billing rates.

The Rosenberg Survey has tracked the correlation between firm size (in terms of net fees) and the corresponding profit (in terms of income per partner). Although being a larger firm does not guarantee larger profits, economies of scale factor into why larger firms are more profitable than smaller firms. Hylan also attributes increased firm profitability to engaging in marketing and practice development, soliciting larger clients, attracting and recruiting staff, having the resources to train staff more effectively and work as a team, and adhering to a strong set of core values. Non-tax and non-attest clients also tend to be more profitable, and larger firms tend to offer a higher ratio of consulting and advisory services.


A firm’s staff-to-partner ratio (i.e., leverage) correlates closely with income per partner and, therefore, profitability. Firms that have staff-partner ratios greater than 10:1 boast income per partner 92% greater than firms that have ratios of less than 3:1.

Tax Season Impact

As CPA firms have moved from compliance-related services to advisory-led relationships, there has been a corresponding decrease in the percentage of annual billable hours worked during tax season. This trend continued this year. The survey concluded that firms which spread their work across the whole year will realize higher profitability. More importantly, according to Hylan the benefits of spreading billable hours throughout the course of a year are as follows:

  • Happier staff
  • Increased profitability
  • Advanced levels of service
  • Higher realization
  • Higher utilization.

Mergers and Acquisitions

In the current environment, mergers and acquisitions have been uneven across the market. For large firms (greater than $20 million in net fees), merger growth as a percentage of revenue decreased significantly, from 14% to 9%. This was just opposite of the trend in smaller firms, where growth from mergers increased significantly (from 12% to 17%, for firms $5–10 million in net fees) or even dramatically (14% to 67% for firms $2–5 million in net fees).

Financial Advisory Services

By a notable margin, larger firms are more likely to offer financial services than smaller firms. Nationally, there was a slight downward trend in firms offering financial services over the past two years. The number of firms under $20 million offering such services dropped by two percentage points or more across these size categories.

Audit Work

For the sixth consecutive year, the firms with the lowest percentage of audit and review work reported the highest income per partner and outperformed firms with the highest percentage of audit and review work. The reasons are generally understood to be pressure on fees, an inability to attract and retain qualified staff, and increased regulation. Many of the consultants who contributed to the Rosenberg Survey commented that the move from compliance to advisory services yields many opportunities for firms, including a reduced reliance on attest services, which face greater regulatory scrutiny. More importantly, CPA firms providing tax services face even greater competition from non-CPA firms. Exhibit 5 displays the audit practice impact on key metrics.

New Partners

As noted by Hylan, this is the first year in the past five that has been a slight decrease in the average buy-in amount for new partners. The average buy-in for all firms with over $2 million in net fees was $166,000. This is approximately the same as the $163,000 new partner buy-in for the largest firms (greater than $20 million in net fees). This represents a noticeable decline of about 10% in partner buy-ins over the past year from $176,000.

Mandatory Partner Retirement

This year’s survey reports a slight increase in the percentage of firms with mandatory retirement provisions. According to Rosenberg, the number of firms that have mandatory retirement provisions in their partner agreements remained relatively steady, after an upward trend over the past few years. As Hylan noted, mandatory retirement does not mean it is mandatory for partners to stop working; it means that partners must relinquish their equity to the partnership and begin the capital and goodwill payment process. A well-structured succession strategy allows partners to continue working, so long as it is a win-win for them and the firm. This year, there was a big jump in mid-size firms (between $2–5 million in net fees) that have a documented retirement plan. As Hylan notes, it is imperative that firms formalize their retirement systems so that everyone is in agreement with the process. Exhibit 4 reports the average age of partners by firm size.

Exhibit 4

Partner Age

Average Age of Partners; % of Partners Over Age 50 2020; 2019; 2018; 2009; 2020; 2019; 2018; 2009 Over $20M; 53; 53; 53; 51; 59%; 60%; 60%; 53% $10-$20M; 53; 53; 54; 51; 59%; 62%; 62%; 54% $5-$10M; 53; 53; 53; 51; 61%; 61%; 60%; 61% $2-$5M; 53; 53; 53; 51; 60%; 62%; 66%; 58% <$2M; 58; 55; 56; 53; 75%; 72%; 71%; 59% All firms >$2M; 53; 53; 53; 51; 60%; 61%; 61%; 56%

Exhibit 5

Audit Practice Impact on Key Metrics

Ranking by % of audit and review work done compared to total fees; Percentage of total fees represented by audits and reviews; Annual Net Fees; 2020 IPP; 2019 IPP; 2018 IPP; 2017 IPP Highest 25%; 50.7%; 14,394,000; 473,938; 469,315; 482,637; 441,044 Middle 50%; 26.3%; 14,211,000; 488,555; 472,590; 428,628; 423,058 Lowest 25%; 8.6%; 9,808,000; 634,262; 575,860; 526,043; 464,898 All firms >$2M; 28.0%; 13,156,000; 521,490; 497,417; 466,347; 438,015

Exhibit 6

Partner Billing Rates (by Same Population Market)

Population Range; Upper 25%; Middle 50%; Lower 25% Average Partner Billing Rate; IPP; Average Partner Billing Rate; IPP; Average Partner Billing Rate; IPP >2M; 474; 744,000; 362; 543,000; 277; 369,000 1–2M; 405; 677,000; 327; 473,000; 252; 362,000 250K–1M; 380; 490,000; 300; 459,000; 233; 353,000 <250K; 315; 516,000; 271; 362,000; 212; 280,000

Client Retention for Retiring Partners

This year’s survey, backed up by the experience of the consultants at Rosenberg, indicated there is a 92–94% plus client retention rate when partners leave a firm. Larger firms are putting a greater emphasis on properly transitioning clients as a partner nears retirement. These efforts appear to be paying off; as noted last year, more than 90% of firms of all sizes now have a documented retirement system. According to the Rosenberg Survey, best practices for firms include the following:

  • Partner agreement provisions that require partners to give at least two years’ notice
  • A formal client transition plan that includes dates and responsibilities
  • Client service training for managers and senior managers
  • Staff and managers that have ownership of certain client relationships early in their career, so they are prepared to take over the clients of a retiring partner when the time comes.

Partnership Buy-out

The Rosenberg Survey presents detailed information on different buyout arrangements. Just as last year, the gold standard remains the multiple of compensation method. Retiring partners are paid their share of the tangible and intangible value of the firm; 95% or more of these arrangements are unfunded. The multiple-of-compensation method includes book of business, ownership percentage, a percentage of goodwill, and net fees, as well as a fixed amount. For many years, internal partner retirement payments settled around the 80% mark, but this figure dropped to around 77% over the past few years. In terms of the multiple used to value partner retirement benefits, large firms (more than $20 million in net fees) have seen a slight increase from 67% to 69% in the current survey. Rosenberg sees the valuations for the intangible portion of the buyout decreasing over time. Exhibit 7 shows the partner retirement buyout options.

Exhibit 7

Partner Retirement/Buyout

2–4 Partners; 5–7 Partners; 8–12 Partners; 13+ Partners; 2020 Total; 2019 Total; 2018 Total Multiple of compensation; 43%; 55%; 50%; 62%; 51%; 47%; 48% Book of business; 6%; 12%; 8%; 0%; 7%; 9%; 10% Ownership percentage; 25%; 11%; 9%; 9%; 15%; 15%; 15% AAV; 13%; 11%; 22%; 18%; 15%; 17%; 16% Fixed; 11%; 10%; 9%; 9%; 10%; 10%; 9% Equal; 2%; 1%; 2%; 3%; 2%; 2%; 2% Firms with no retirement provision; 22%; 6%; 5%; 5%; 12%; 14%; 12%

Exhibit 8

Overall Revenue Increase

Firm Size; 2020 Overall Revenue Increase Total; Organic; From Mergers; Merger Growth as % of Total Growth 2020; 2019; 2018 >$20M; 7.4%; 6.7%; .7%; 9%; 14%; 30% $10-$20M; 5.9%; 4.7%; 1.2%; 20%; 21%; 32% $5-$10M; 6.0%; 5.0%; 1.0%; 17%; 12%; 16% $2-$5M; 2.7%; .9%; 1.8%; 67%; 14%; 8% All firms over $2M; 5.7%; 4.4%; 1.3%; 23% 2019; 6.4%; 5.4%; 1.0%; 16% 2018; 7.7%; 5.9%; 1.8%; 23% 2017; 7.0%; 4.3%; 2.7%; 39% 2016; 7.8%; 5.8%; 2.0%; 26% 2015; 8.1%; 5.8%; 2.3%; 28%

Are We There Yet?

In many respects, 2021 has been a chaotic year for CPAs. The data from 2020 indicates that, at a macro level, revenues were trending positively for the profession. The COVID-19 pandemic and concurrent economic shutdowns undoubtedly continue to impact the practice environment. Although nothing mitigates the tragedy of the ongoing crisis, as the business world adjusts to a “new normal,” CPAs would do well to remember that clients and the public will remember those professionals that have stood fast in challenging times.

The State of the Profession:

Trends and Challenges 2021

Opinions from the Experts

Charles Hylan
The Growth Partnership and the Rosenberg Survey

Firms are trying to understand how they can deal with the labor shortage in the profession. Unfortunately, this issue will only get worse before it gets better and firms need to think outside the box about whether they get work out the door. … Culling and outsourcing will help the situation but other strategies being deployed include:

  • Hiring nontraditional professional/graduates
  • Putting more resources into retaining and developing staff
  • Utilizing mergers and acquisitions to help with succession issues and obtaining more resources
  • Hiring more administrative staff and rethinking responsibilities …
  • Dedicating internal resources to extensive recruiting efforts.
Marc Rosenberg
The Rosenberg Associates

The pandemic will be a seminal life event that will always be remembered like the assassinations of the 1960s and 9/11. … It most certainly will have a permanent impact on the accounting industry.

  • More remote work. Firms are projecting more than double the remote work than before the pandemic. Firms have amazed themselves at how effective working remotely can be. Partners who were skeptical naysayers about remote work have now become believers.
  • More focus on how to truly manage people. Before the pandemic, supervisors evaluated staff based on billable hours and “butts in the seats.” With the dramatic increase in remote work, there is more focus on evaluating the quality of work performance and satisfying client’s needs.
  • The value of in-person contact. With the increase in remote work, firms are experiencing efficiency increases and a broadening of their markets. But the bad news is that many are suffering from Zoom fatigue and, being social animals, we miss live contact with our fellow humans. The lack of interpersonal contact and mentoring has been particularly harmful to young staff.
  • Recruiting. Recruiting people from across the country is a tactic that 99% of local firms never considered before the pandemic. But with remote work becoming more mainstream than an oddity, more firms are recruiting nationally instead of restricting their focus to the local market.
Alan Koltin
Koltin Consulting

I think we will someday look back at 2020 and 2021 and refer to them as the greatest transformation years of potentially the last four decades. … I think there is one ramification that is probably bigger than all of the others combined, which has to do with talent. I think those firms that have truly moved to hybrid scheduling and a new workplace model will have a major competitive advantage, versus those that are simply tweaking the old model. …

I’m already seeing this transformation, in the last couple of months, whereby larger market firms (this doesn’t necessarily mean large firms!) from Los Angeles, San Francisco, New York City, and other large markets are dialing into small and mid-sized markets and offering positions with their firms as remote employees. … if they were to “jump ship,” they could be receiving as much as a 30–40% increase in compensation on day one. They also are being told they will be welcomed to the firm completely as a remote employee and there will be no second-class culture or stigma associated with that. …

I also believe that, as firms are moving to more of a virtual workplace, Mondays and Fridays as we know them will go the way of the buggy whip. My gut is that Tuesdays, Wednesdays, and Thursdays will have more to the workforce in the office, but Mondays and Fridays will be reserved for only those that absolutely want or need to be in the office.

Jim Boomer
Boomer Consulting

Some of the primary areas that I think will be different going forward:

  • Remote Work—The demand for more flexibility and remote work options was already growing prior to the pandemic. The last 18 months have only accelerated this growth and shifted it from a perk to more of an expectation among current and future employees.
  • Digital Workflow—Many organizations made five or more years of progress in terms of shifting to a more digital workflow during the pandemic. The last thing we want to do is back-track to the way things were before in search of “normalcy.”
  • Upping the value game—CPAs played a critical role in helping their small business clients survive and, in many cases, thrive during these challenging times. The successful firms will build upon this and create more advisory and consulting services to complement the compliance and transactional offerings upon which they have built their firms.
Jennifer Wilson
Convergence Coaching
  • CPA and consulting firms found high demand for their advice and support throughout the pandemic. From the early days of crisis management, through the opportunities for funding, tax credits and more, public accounting firms saw a significant rise in demand for access to their brightest minds.
  • This led to overwhelm, because the brightest minds were already pretty busy with their “normal” work and also short-staffed coming into the pandemic. So, today’s profession is filled with people who are struggling with burnout, feeling overwhelmed, and even the potential for hopelessness as demand for help remains high, and the labor resources to fulfill those services remains low.
  • The pandemic has caused almost everyone, regardless of profession, to contemplate the meaning of our work against the backdrop of so much illness and death and continued uncertainty. This has led to a phenomenon called the Great Resignation across all industries, and labor is shifting in record numbers. This is a nightmare for the already resource-strapped accounting profession, and firms are now scrambling to retain their team members with stay bonuses, record raises, promotions, and other perks.
To participate in the 2022 Rosenberg Survey, please visit between January 1, 2022, and July 15, 2022. To purchase a complete copy of the 2021 survey results, visit at any time.