In Brief

The eighth annual 2022 NYSSCPA-Rosenberg Survey identifies trends from the national 24th 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, for a second year, has transformed the workplace unlike anything else in professionals’ memory. The survey data reflects trends and performance from 2021. The second part of the survey presents current analysis and conclusions from leading national experts and practice management consultants on how accounting firms have adapted to the acute and continuing challenges of COVID-19. As Marc Rosenberg of the Rosenberg Survey remarked, “Working remotely and its wide-ranging challenges may be the biggest game-changer to the CPA industry since 1978 when the CPAs were allowed to solicit business. Remote work can no longer be described as a trend because it’s here to stay.” 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 24th Annual NYSSCPA-Rosenberg Practice Management Survey provided many key takeaways for CPAs in public practice during the continuing coronavirus (COVID-19) pandemic:

  • Economic growth. According to the survey, the accounting profession had a banner year! During this time, revenue was up 9.5%, the largest increase since 2007, and income per partner was up 12.0%. There is no doubt that 2021 was an incredible year from an economic standpoint; however, the challenges of running a CPA firm—keeping up with technology, hiring qualified candidates, retaining star team members, and serving clients—continue to grow.
  • Alternative workforce. This is the term that Charles Hylan of the Rosenberg Survey uses to describe firms that are outsourcing, onshoring, and offshoring. More CPA firms than ever this year either increased their usage of an alternative workforce or said they are getting serious about going down this path.
  • Compliance to advisory. Firms have been easing down this path for a while, but they are now picking up the pace. Clients are demanding more than traditional accounting services and the fees for traditional services are getting more and more competitive. Furthermore, it is easier to hire people in certain advisory areas. Finally, the shift to advisory is one of the biggest reasons why private equity is entering the accounting profession.
  • Non-traditional hires. According to Rosenberg, firms increasingly are hiring “solid team members” who do not necessarily have accounting degrees nor any desire to pursue a CPA license. For example, as client accounting services (CAS) continues to grow, firms are hiring smart, detailed-oriented people who can use technology.
  • Average age of partners. The percentage of partners over the age of 60 increased from 24% to 25% (see Exhibit 4). In other words, one-quarter of accounting firm partners are near or past many retirement age or a mandatory retirement requirement. According to a recent NPR podcast, Going Concern’s Adrienne Gonzalez said that a staggering 75% of AICPA members became eligible for retirement in 2020 (referring to this AICPA exposure draft,
  • Gender mix and percentage of female partners. There continues to be an upward trend in the percentage of female equity partners, across firms of all sizes, as well as a steady increase from 2011 and 2021 in the number of women in leadership positions. The staff mix this year of 54% female and 46% male, however, still remains distant from the 21% female partners in all size firms. The greatest growth in female partners, at 39%, is found within firms between $2 million and $5 million in size.
  • Private equity. As reported by Marc Rosenberg of the Rosenberg Survey, the entrance of private equity is certainly the biggest new trend in the profession. Initially, it was geared to mega-firms, but private equity’s influence starting to trickle down to large firms below the mega-firms.

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 24th Annual Survey, conducted in 2022, based on firm results for the calendar year 2021. The overall results are shown in Exhibit 1Results at a Glance. The second part provides opinions from the experts on the impact of COVID-19, its aftermath, and how so many firms embraced change in services to their clients and the public.

Exhibit 1

The 2022 Rosenberg Survey Based on 2021 Data Results at a Glance

Multi-Partner Firms Over $20M in Net Fees (53 Firms); $10-20M in Net Fees (70 Firms); $5-10M in Net Fees (98 Firms); $2-5M in Net Fees (56 Firms); Under $2M in Net Fees (16 Firms) Income per equity partner; 770,346; 611,659; 528,123; 469,978; 303,807 Fee growth: 2021 – including mergers; 12.0%; 9.5%; 9.5%; 7.0%; -0.3% Fee growth: 2021 – excluding mergers; 9.9%; 8.5%; 7.7%; 5.4%; -0.3% Fee growth projected for 2022; 7.1%; 7.4%; 7.4%; 5.5%; 2.3% Fees per equity partner; 2,677,590; 2,169,778; 1,690,572; 1,401,751; 828,345 Fees per professional; 260,147; 243,284; 235,839; 241,166; 218,521 Fees per person; 213,021; 201,348; 195,504; 197,923; 187,864 Realization; 86.9%; 86.3%; 90.1%; 90.4%; 94.6% Average equity partner billing rate; 409; 377; 342; 313; 289 Overall net firm billing rate; 187.27; 160.90; 163.42; 160,89; 162.14 Average equity partner charge hours; 1,046; 1,137; 1,162; 1,193; 1,323; Average staff charge hours; 1,474; 1,460; 1,463; 1,473; 1,449 Staff to equity partner ratio; 9.5; 8.1; 6.3; 4.9; 2.8 Admin to total headcount percentage; 17.5%; 17.0%; 16.9%; 17.1%; 14.7% Professional staff turnover; 17.9%; 19.1%; 17.3%; 20.8%; 20.5% Utilization %; 52.5%; 53.5%; 53.5%; 54.1%; 52.6% Months of A/R + WIP; 2.5; 2.7; 2.7; 2.3; 2.9 Staff salaries/benefits as % of fees; 48.2%; 47.4%; 44.9%; 40.1%; 37.4% Overhead expenses per person; 41,152; 42,528; 39,668; 44,807; 45,734 Assurance services as % of total fees; 33.0%; 27.8%; 25.5%; 24.1%; 20.8% Average fee per 1040 return; 1,549; 1,413; 1,112; 962; 1,205 % of firms offering investment advisory; 52.8%; 37.1%; 18.4%; 25.0%; 25.0% Formal written marketing plans; 86.8%; 51.4%; 32.7%; 21.8%; 18.8% Offer virtual (remote) work; 98.1%; 100%; 98.0%; 96.4%; 81.3% Typical new partner buy-in; 189,730; 175,844; 207,689; 207,474; 58,150 Non-equity partner position at firms; 86.8%; 77.1%; 57.1%; 35.7%; 31.3% Male/Female professional staff breakdown; 46%/54%; 42%/58%; 42%/58%; 36%/64%; 28%/72% % female partners; 20.8%; 23.5%; 25.2%; 38.8%; 25.9% Expected acquisition in 3 years; 73.1%; 52.9%; 38.9%; 23.5%; 33.3% Average age of partners; 53.5; 53.2; 52.4; 52.7; 58.6 % of partners over age 50/60; 63%/24%; 61%/26%; 58%/23%; 58%/26%; 58%/42% Comp committee for allocating ptr income; 81.1%; 46.4%; 26.3%; 9.8%; 0.0% Formula used for allocating partner income; 11.3%; 29.0%; 32.6%; 37.3%; 33.3% Closed compensation system – % usage; 59.6%; 44.3%; 24.2%; 6.1%; 0% Buyout method – multiple of compensation; 62.7%; 55.6%; 45.3%; 40.5%; n/a Average valuation of goodwill; 77.3%; 74.8%; 76.3%; 83.7%; n/a % of firms making partner buyout payments; 84.9%; 79.7%; 61.2%; 60.7%; 43.8%

Revenue and Profits

Annual revenue growth nationally was 9.5%, the largest increase since 2007, and up from 5.7% from the previous year as shown in Exhibits 23, and 8. Profits, as measured by net income per equity partner, was up 12.0%. In New York State, equity per income partner was around $642,000 and fee growth was 9.9%, exceeding the national average.

Exhibit 2

Annual Growth: 2012 to 2021 (Firms Over $2 Million)

Exhibit 3

Annual Revenue Growth, by Firm Size

2021; 2020; 2019; 2018; 2017 Over $20M; 12.0%; 7.4%; 9.1%; 9.9%; 9.8% $10-20M; 9.5%; 5.9%; 7.7%; 9.7%; 8.1% $5-10M; 9.5%; 6.0%; 5.1%; 7.0%; 7.8% $2-5M; 7.0%; 2.7%; 5.1%; 4.8%; 5.0% All firms over $2M; 9.5%; 5.7%; 6.4%; 7.7%; 7.0% Deeper Dive Annual Revenue Growth, by Size of Market 2021 Over 2 million; 10.4% 1–2 million; 6.6% 250,000–1 million; 7.3% Less than 250,000; 6.9%

Exhibit 4

Age of Partners

Average Age of Partners; % of Partners Over Age 50 2021; 2020; 2019; 2009; 2021; 2020; 2019; 2009 Over $20M; 54; 53; 53; 51; 63%; 59%; 60%; 53% $10-20M; 53; 53; 53; 51; 61%; 59%; 62%; 54% $5-10M; 52; 53; 53; 51; 58%; 61%; 61%; 61% $2-5M; 53; 53; 53; 51; 58%; 60%; 62%; 58% Under $2M; 59; 58; 55; 53; 59%; 75%; 72%; 59% All firms >$2M; 53; 53; 53; 51; 61%; 60%; 61%; 56% % of Partners Over Age 60 2021; 2020 Over $20M; 24%; 22% $10-20M; 26%; 24% $5-10M; 23%; 25% $2-5M; 26%; 25% Under $2M; 42%; 43% All firms >$2M; 25%; 24%

Fee growth for New York State CPA firms for 2022 was projected to grow by a little less aggressive 7.3%. New York State ranked third in projected fee growth rate among the states broken down by the Rosenberg Survey.

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, adhering to a strong set of core values, and developing a strategic and business plan. As in past years, an increased share of non-tax and non-attest clients also tends to increase profitability. Larger firms tend to offer a higher proportion of consulting and advisory services. Also, the size of a firm’s market has an effect on partner billing rates (Exhibit 6).


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. Greater leverage also allows a firm to have their talent working in areas that are the highest and best use of their skill sets.

Tax Season Impact

Average staff billable hours during the tax season were 1,467 hours. Typically, firms with the highest percentage of hours worked during the busy season have the lowest income per partner. This was no different this year, as the average income per partner (IPP) was $515,000, down from $525,000 last year; furthermore, it was significantly lower than the IPP outside of tax season. This continues the trend from previous years. According to Hylan, all firms understand the benefit of spreading billable hours over the year. As the accounting profession moves from compliance-related services to advisory-led relationships, the expectation is that the percentage of annual hours worked during tax season will decrease.

Mergers and Acquisitions

Last year, 2021 saw a noticeable increase in merger-fueled growth among larger firms, consistent with data from past years. But merger growth as a percentage of total growth (in all firms over $2 million in net fees) has decreased since 2015. Many firms, including those in the Top 100, are turning to mergers to address succession issues and lack of leadership, as well as to join forces with a larger firm that has the capital to help the firm make the transition from compliance services to advisory services.

Financial Advisory Services

Larger firms are significantly more likely to offer financial services than smaller firms. Nearly half of larger firms offer financial services. The reason for offering financial services is that CPAs are trusted advisors.

Firms that offer financial services are more profitable. For example, IPP for firms that offer financial services is $638,000, whereas IPP for firms that don’t offer financial services is $539,000. The Rosenberg Survey also reports an increase in firms greater than $20 million that are “very likely” to offer financial services in the next 12 months.

Audit Work

For the seventh consecutive year, the firms in the lowest quartile in terms of providing assurance services (representing an average 8.2% of total fees) significantly outperformed firms in all other categories as measured by IPP (Exhibit 5). In addition, many of the consultants who contributed to the Rosenberg Survey commented that the move from compliance services to advisory services yields many opportunities. There are several challenges in maintaining profitability when offering assurance services. These include pressure on fees, the inability to attract and retain qualified staff, increased regulation, and lower profitability within audit practice.

Exhibit 5

Audit Practice Impact on Key Metrics

Ranking by % of assurance services work done compared to total fees; Percentage of total fees represented by assurance services; Annual Net Fees; 2021 IPP; 2020 IPP; 2019 IPP; 2018 IPP Highest 25%; 50.5%; 15,177,000; 580,544; 473,938; 469,315; 482,637 Middle 50%; 25.0%; 14,528,000; 534,297; 488,555; 472,590; 428,628 Lowest 25%; 8.2%; 10,695,000; 686,875; 634,262; 575,860; 526,043 All reporting firms over $2M; 27.2%; 13,735,000; 583,824; 521,490; 497,417; 466,347 IPP = income per partner

Exhibit 6

Billing Rates of Partners (within Same Population Market)

Upper 25%; Middle 50%; Lower 25% Population Range; Average Partner Billing Rate; IPP; Average Partner Billing Rate; IPP; Average Partner Billing Rate; IPP Over 2M; 496; 896,000; 367; 582,000; 282; 397,000 1–2M; 439; 814,000; 343; 455,000; 260; 398,000 250,000–1M; 420; 609,000; 317; 444,000; 258; 411,000 Under; 250,000; 367; 811,000; 290; 388,000; 219; 325,000

New Partners

As noted by Hylan, for the first time in five years, the average amount of a new partner buy-in has increased in every category of firm. The number of firms that have buy-ins greater than $400,000 has also increased over the past four years; for example, there were 27 firms in 2021 that met the criteria, vs. 22 in 2020, 20 in 2019, and 17 in 2018. The increase in the number of firms with large partner buy-ins is consistent with the overall increase in all firms greater than $2 million in fees.

Mandatory Partner Retirement

This year’s survey reports a slight decrease in mandatory retirement provisions across all revenue bands except for firms with $2-5 million in fees. According to Hylan, mandatory retirement does not mean it is mandatory to stop working; it means that partners must relinquish their equity, and begin the capital and goodwill payment process. A well-structured succession strategy allows for a partner to continue working—so long as it’s a win-win between the individual and the firm.

Rosenberg reports that more than 90% of firms with greater than $5 million in net fees have a documented retirement system. There continues to be, however, a decrease in the number of firms under $2 million that have a formal retirement system. According to Hylan, many smaller firms simply do not want to deal with creating a formal retirement system because they are unaware of the various valuation methods, do not want to invest the time in creating one, cannot get all of the partners to agree on a system, or want to avoid the potential conflicts that could arise in creating a retirement system.

Client Retention for Retiring Partners

This year’s survey, backed up by the experience of the consultants at Rosenberg indicated there is a 91–95% client retention rate when partners leave a firm. Hylan offers some best practices in retaining clients: having partner agreement provisions require partners to give at least two years’ notice; creating formal client transition plan that includes dates and responsibilities; offering client service training for managers and senior managers; and giving staff and managers ownership for certain client relationships early in their careers, so that 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 in prior years, the multiple of compensation method is the gold standard, particularly at firms with five or more partners. As noted over the past few years, firms of all sizes are struggling with partner retirement. As such, firms are struggling with client transition, responsibility transition, and oftentimes leadership transition (i.e., who is the next managing partner?). Historically, for partner buyouts and CPA firm sales, the rule of thumb has been to value a firm’s goodwill at one time annual net fees. According to Rosenberg, for many years, internal partner retirement payments settled around the 80% mark. This figure has dropped just a bit, however, and has settled around 77% for the past few years (Exhibit 7).

Exhibit 7

Partner Buyout Systems

2–4 Partners; 5–7 Partners; 8–12 Partners; 13+ Partners; 2021 Total; 2020 Total; 2019 Total Multiple of compensation; 43%; 51%; 60%; 56%; 51%; 51%; 47% Book of business; 12%; 9%; 4%; 3%; 8%; 7%; 9% Ownership percentage; 29%; 16%; 9%; 6%; 18%; 15%; 15% AAV; 9%; 15%; 17%; 22%; 15%; 15%; 17% Fixed; 7%; 8%; 9%; 13%; 8%; 10%; 10% Equal; 0%; 0%; 0%; 0%; 0%; 2%; 2% Firms with no retirement provision; 18%; 6%; 4%; 6%; 10%; 12%; 14% AAV =average annual value

Exhibit 8

Overall Revenue Increase

2021 Overall Revenue Increase Firm Size; Total; Organic; From Mergers; Merger Growth as % of Total Growth 2021; 2020; 2019 Over $20M; 12.0%; 9.9%; 2.1%; 18%; 9%; 14% $10-20M; 9.5%; 8.5%; 1.0%; 11%; 20%; 21% $5-10M; 9.5%; 7.7%; 1.8%; 19%; 17%; 12% $2-5M 7.0%; 5.4%; 1.6%; 23%; 67%; 14% 2021: All firms >$2M; 9.5%; 7.9%; 1.6%; 17% 2020; 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%

The Chaos Continues

As the world emerges from the COVID-19 pandemic, 2022 has been another chaotic year. Challenges include: frustration in dealing with the IRS, including the Practitioner Priority Service; significant tax code changes (the fourth such significant set of tax changes since 2017); installing and upgrading IT to remain functioning via a remote workforce; the impact of private equity-backed CPA firms, using their newly available capital to drastically alter the way they structure their acquisitions; staffing struggles; an aging workforce; and pipeline shortages of new entrants to the profession.

The results of this year’s Rosenberg Survey augur that CPAs will weather the storm of change well, as they always have before. If there is a dip in the market due to a recession or a tighter labor force, it may give the profession a chance to catch its breath and prepare for the next wave.


The State of the Profession: Trends and Challenges 2022

Opinions from the Experts

Mark Rosenberg

The Rosenberg Associates
  • Remote work can no longer be described as a trend because it’s here to stay. You can’t give a perk (if we can call the privilege of working remotely a perk) to people and then take it away. These days, firms are dealing with a wide range of remote work issues. It may take years before firms are able to flourish with it. To their credit, they are adapting, but there are many challenges still to be resolved. Yes, figuring out everyone’s work schedule is difficult. But even more challenging are training/mentoring of staff, espe cially younger ones, building a firm culture, business development, nurturing of client relationships, supervising work, and evaluating staff’s work based on results instead of “butts in seats.”
  • Firms are continuing to find a disturbing number of partner-worthy managers declining partnership offers. For two reasons: (a) Staff see partners “working all the time” and are not willing to make the sacrifices they feel will be required of them … and (b) Partners continue to suck at mentoring staff on what a great job they have.
  • The M&A market continues to be robust. Buyers are pickier than ever before, resulting in sellers realizing they have fewer options to find buyers and a diminishing ability to negotiate the price. …
  • Private equity. Certainly, the biggest new trend in the CPA firm industry. Initially, it was geared to mega-firms, but it’s starting to trickle down to large firms below the mega firms. …
  • Cybersecurity. If you want to get scared, attend a cybersecurity presentation. You’ll most assuredly leave with a heightened sense of anxiety and fear over the exponential growth of cybersecurity issues and incidents. The adoption of remote work as a norm has amped up the concern in cyber.
  • The aging of baby boomer partners has caused two ripple effects. First, as stated above, the M&A market is hot with no end in sight; the only exit strategy for most retirement minded owners is to merge up. Second, there is an avalanche of small firms who are fortunate to have young managers willing and able to become partners. But a huge challenge is before them: How to bring these managers in as partners? Small firms have very little or no experience bringing in new partners and they are at sea as to how to do it.

Allan Koltin

Koltin Consulting
  • The good news is that many firms finally got “religion” and have doubled (or significantly raised) their rates and shed many of their ‘C’ or low margin clients. While it took the war on talent to force the (long-awaited) move, firm leaders came to realize that burning out a limited supply of talent was a really stupid strategy. … The harsh reality has set in – the younger generation wants challenging work and if you can’t give it to them, they will take their talents elsewhere …
  • Private Equity [PE] has officially entered the profession with three Top 100 CPA firms and a year later, the inaugural class of EisnerAmper; Citrin Cooperman; and Schellman have been doing very well in their alternative practice structures. These PE-owned CPA firms have also turned the pricing of M&A deals “upside down” and forced many traditional Top 25 CPA firms to reengineer their deal structures and valuations. Firms have also been making [environmental, social, and governance] ESG and [diversity, equity, and inclusion] DEI a meaningful part of their strategic planning efforts and, more importantly, budgeting ‘real’ money to transform their firms in these areas.
  • I would be remiss if I didn’t comment on remote and back to office strategies. While every market and every size firm have examples of their workforce coming back to the office, the vast majority have moved to remote and occasional visits to the office.

Carrie Steffen

The Whetstone Group

The pipeline of accounting [graduates] isn’t as flush as it once was and it’s getting more difficult to compete with the salaries and lifestyle offered by private industry at the more experienced, non-partner level. My sense is that firms and practitioners have reached their limit, and that’s fueling one of the biggest trends I see in accounting which is talking more openly about mental health. Never in my 25+ years in the public accounting space have I seen so many articles, conference sessions, and webinar events focused on the health and well-being of professionals.

Art Kuesel

Kuesel Consulting

Once an annual exercise undertaken with planning, precision and restraint, wage increases, and compensation adjustments became an ongoing activity. Across the board fee increases of 10, 15, 20% or more lead to uncomfortable conversations with clients, yet few client departures. Firms created their list of clients to exit the firm and cut deeper into the roster than ever before. … And how could we forget the IRS situation—which challenged the smallest firms the most? This level of change, disruption, and, at times, chaos was the furthest from “business as usual” as some managing partners could imagine.

Jennifer Wilson

Convergence Coaching

Client demand for services has never been greater and firms have many opportunities to sell new services to both new and existing clients. High client demand and short staffing led to most firms killing it financially and partner earnings coming in at an all-time high. In a recent NPR podcast, Going Concern’s Adrienne Gonzalez shared that a staggering 75% of AICPA members became eligible for retirement in 2020. This was referring to an AICPA exposure draft that cited this statistic. Whoa! Firms also experienced record levels of turnover as their people sought better paying jobs at more progressive or flexible firms or companies.