This article is based on an interview with Bill Hagaman, Withum’s Managing Partner, CEO from 2010 to 2022, conducted by Martins Jukna-Parsons, senior accountant at Withum. The interview was conducted after Hagaman completed his term as Withum’s CEO. Hagaman became Global Chairman of HLB International in 2023. Hagaman joined Withum in 1980, became a partner in 1985 (at age 27) and managing partner in 2010. During Hagaman’s term as managing partner, Withum’s revenues grew from $70 million to $500 million.

Martins Jukna-Parsons: How did you find your way into public accounting? Did you ever consider any other field?

Bill Hagaman: When I was in high school, the one thing I could do halfway decently was math, and I remember talking to somebody who said, “Accounting might be a good path for you.” When I applied to college, I figured, “let’s try this accounting thing out.” Much to my surprise, I did very well. I found that the strength I have is a logical mind, and I always have been able to understand the logic of accounting and tax. All the professors told me to go to public accounting, start there—“that’s where all the bright kids go!”

I went to Stockton State College, which is now Stockton University [Galloway, N.J.], and it was a brand-new school, so it was not highly rated. None of the big accounting firms came to interview there, but I was able to get an internship in the town where I was living, and that led to a full-time job.

Jukna-Parsons: You are a first-generation college student, and you had to pay for school and work to raise money for your family. How did that shape your life?

Hagaman: I’m the oldest of six. My parents always struggled to make ends meet, and when I turned 16, the deal was I had to get a job and contribute to the household. I did that, but I always had the goal in my head to go to college. At the time, when you got student loans, they literally sent you a check for the entire year. My dad and I had the same name, and when the check came in the mail, he cashed it. He thought he was doing me a favor, and he went and bought me an old junker so I could get to school easier because we lived an hour away. And then he gave me the money for the first semester’s tuition and said, “Don’t worry, the rest of the money will be there.” But when January came around, the money wasn’t there.

At Stockton, we had professors who were preceptors that are basically mentors. I really liked my mentor, Chick Yeager. One day, I went to him and said, “Sorry, but I’m not going to be able to come back.” I thought that was the end of it, and I figured I’d shake his hand and probably never see him again. Well, when we got back to his office, he said he had one more solution: He took out his checkbook and wrote me a check to pay the tuition. That’s what kept me in school.

How did that shape me? In a big way. If Chick hadn’t written that check, I would have been on a completely different path. Perhaps I would have been successful doing something else, but not a CPA with the great career and experiences I had. The fact that he wrote that check, which led to me getting a degree, which led to me getting a job in accounting, which led me to Withum, which led me to be a partner and CEO—it is just monumental.

It made me grateful and became a driving force, almost a passion, in making me try to influence younger folks. How do we bring up the Next Gen? Because at the end of the day, accumulating things just doesn’t matter; it’s whom you helped that makes a difference. The memories we leave behind, the growth of our family and our giving back to the community is what really matters. And everything I’ve accomplished is because Chick wrote that check. That made me hyper-focused on how I can give back, and I work hard at that every day.

Jukna-Parsons: How did you find your way to Withum?

Hagaman: I was interning with a sole proprietor throughout college. He hired me full time when I graduated and then right after that, he merged with two other gentlemen. I was in a 20-25 person CPA firm with three partners and was doing bookkeeping. Doing that for a year was not very inspiring. I was able to find a job at Withum in Milltown, N.J. Withum at the time was about the same size as the firm I left, but it had a lot of younger people. I thought there was more of a trajectory upwards, and the three founders said they were investing in people, in growth, and in their communities. I figured, let me try it for five years. But ever since walking in the door on October 20, 1980, they have always kept me inspired, always kept me challenged, and I hung around.

Jukna-Parsons: And in five years, you made partner.

Hagaman: In 1985, I became partner at age 27. A lot of the guys at the firm before me were partners around that same age. One of the things I loved about Fred Withum was that he loved to take chances on young people.

In 1983, we moved our Milltown office to New Brunswick; Ivan Brown was the partner in charge and I was his right-hand person. He moved to open up an office in Red Bank, simultaneously making me partner, leaving me alone with five staff. I remember sitting at my desk thinking that I had no idea what’s next. I had enough technical knowledge to handle the clients, but I had no idea about billing or collections, hiring staff, or getting clients. I had to become an entrepreneur. I reached out to Len Smith, because Len had opened up a thriving office in Princeton when he was young. He said, “You need to get to know the movers and shakers in town,” and then over lunch, he gave me a road map on how to build a practice. There were a lot of bumps in the road, and we made a lot of mistakes, but over time we wound up figuring it out.

Jukna-Parsons: Fast forward to 2010—you become the managing partner of Withum. Was that always a goal of yours?

Hagaman: I had interim goals. When I came to Withum, I had a five-year plan to try this thing out and to become a CPA—and then it was to become a partner. And then it was be the most profitable office at Withum. Then it became doing M&A (mergers and acquisitions) and other advisory work with clients. At some point, my goal shifted to maybe becoming the managing partner when Ivan Brown was ready to retire. My goals grew on each other as I attained each hurdle. But I needed the goals to direct my big picture activities.

Ivan Brown was my mentor. He was my go-to guy for advice. He kind of shaped me. I was partner #7, and when you’re a firm that small, you’re involved with every management decision. Our full partner meetings were about what color should our letterhead be, and what kind of copier should we get? It was really that granular. I guess the founders saw something in me, and we continued to build the firm and strengthen our management structure. I was always part of the inner circle. And along the way, I think all of them were coaching me and mentoring me without there being any formality to it.

Jukna-Parsons: When you became the managing partner, did you have a vision that you wanted to accomplish? Looking back, do you think that it worked out? Did you have any push-back from other partners?

Hagaman: When I became managing partner, the agenda was to continue to grow. And then I remember talking to a consultant because we were toying with going to market by industries, and she said, “What’s your vision?” I kind of gulped—but that made me begin to think about it. I felt strongly from my conversations with other CEOs that our go-to market strategy needed to be industry-focused. We hired that particular consultant, Gale Crosley, and she coached us through a program to go from office-centric to industry-specific segments.

We came up with a process, a formal strategic plan. We developed that strategic plan through input from the entire partner group, and it became very apparent that what was holding us back from growth was our office-centric way of managing our practice, and what we needed was to move more towards a one-firm management style—something that centered around our industry segments. We completely restructured our financials, redid our internal reporting, reorganized partner compensation and evaluation, rethought everything you do when running a business you want to grow, and moved from an office structure to an industry structure.

I got a lot of pushback, because that was a major change for a lot of the partners and senior staff. But that was an inflection point for the firm because, looking back, when COVID hit, having such deep industry expertise is what carried us to the next level.

Our whole profession, as well as most businesses, wound up being disrupted. This was something no one could prepare for. Some of our client groups got hit really hard, such as theater. But we had many other industries that weren’t hit so hard, like financial services and tech. Then we knew we could wait out whatever was going to happen in theater because we knew it was coming back. Our client base ended up being like a balanced portfolio. There would be years where theater or our auto group is going gangbusters and financial service is going to be flat or when manufacturing or hospitality would carry not-for-profit and vice versa.

Our focusing on niches and industries was intentional, but the balanced portfolio results were unintended. This could not have occurred if we had maintained the office-centric structure. This proved there is a lot of value in being diversified, and I think that took the firm from where it was to the next level.

Jukna-Parsons: Some of the growth was due to merging firms in. Do you have a sense of what percentage of growth is attributable to mergers?

Hagaman: We have done considerable analysis on this: 40% to 45% of the growth has been through mergers. We like to target it to being 50/50 every year—50% organic growth, 50% M&A growth. During my tenure, prior to me being managing partner, there have been about 30 to 36 deals. We’ve always looked at mergers to foster controlled growth.

The biggest element for mergers was culture: Do we think the partners coming in will be folks that we would enjoy going to dinner with? How are they going to fit in? We always looked at the strategic purpose, so the theater practice of Fried & Kowgios was a home run because its strategic purpose was to build a new industry which we didn’t currently have. The other one that comes to mind is the DC merger with the firm formerly known as Bond Beebe. It brought a completely different industry that was complementary to everything else that we were doing. If we can build deeper niches, bring in some great young talent, that type of merger becomes a home run.

What we have done is kind of distinguished ourselves in the marketplace as a unique firm from a culture perspective, but we have also been aggressive in our marketing and as a tech-forward firm.

We’ve also done mergers because we wanted to get into new geographies. When we did our strategic plan in 2015, there was a realization that we needed to be on the West Coast. I dragged my heels on that because I thought there was plenty of opportunity for growth on the East Coast, but our financial services and technology leaders were saying that our growth would be muted if we did not have a West Coast presence. Those mergers became more about geography and less about industry.

Jukna-Parsons: Twenty years ago, Withum had about 200 people and was the 27th largest CPA firm in the U.S. Today, with 2,200 people, you are the 22nd largest. What do you attribute this slight rise in the rankings to?

Hagaman: It is the growth of the profession and our competitors. Many firms have had a really strong M&A strategy. But if you were to look at the Top 25 list in 2003 and compare it to today, you would see that probably 40–50% of the names are different. I like to think about the fact that we’ve been a survivor and we have clearly grown faster than most. And I attribute that to having a planned growth strategy and sticking to our vision and executing on it. I think that is where most firms fall off because everybody wants to grow, and everybody has got a great culture. But at the end of the day, they don’t execute on the plan. We’ve always been hyper-focused and really good at coming up with a plan and then executing it in a way that exceeds expectations.

Jukna-Parsons: What role did marketing and social media play in in this growth?

Hagaman: We were actually one of the first firms to hire a full-time marketing professional, probably in 1986 or ’87. I’ve looked back and I’ve evaluated this; we spend about 1% of revenue more than our peer group on marketing. And the same with technology. What we have done is kind of distinguished ourselves in the marketplace as a unique firm from a culture perspective, but we have also been aggressive in our marketing and as a tech-forward firm. It’s really helped us grow organically quicker than our competition.

Social media is part of marketing, and you must have that presence. I don’t think we would have grown as much as we did without it, but we find it hard to pinpoint the exact results. I could tell you one area that it helped immensely in is recruiting and staff retention. Our annual “State of the Firm” culture videos, which we have been doing since 2011, have made us a “cool” firm for many graduating students. Likewise, it is a big culture strengthener for our present staff.

All of our marketing, even the specific industry and client focused marketing and advertising, probably leads more to an overall brand recognition and a good culture feeling for our teams as opposed to a client seeing us on social media or CNBC and hiring us. But the advertising we do on CNBC, the brand building, and the social media all present and support who we are. We continuously evaluate the results and what we are doing seems to be working. However, if the marketing was the only thing we did, we wouldn’t be successful. Just as an example, our 180 partners serve on 312 charitable boards. We are out there, we participate, and we serve the community.

Jukna-Parsons: Where do you see growth coming from in the future for Withum?

Hagaman: I think we have a lot of really great, bright young partners and a lot of bright people coming up in the pipeline. At the end of the day, we are in a people business, and if you’ve got great people, you’re going to figure out how to grow. I think our desire to continue to be independent, to not be owned by a private equity firm is going to distinguish us in the marketplace when it comes to attracting great talent. The growth is going to come from our people and our continuing to build on our industry focus and our service offerings.

The way I like to measure how we do is our organic growth—are we one or two percentage points better than our peer group? Inside Public Accounting puts out an analysis every year, and our organic growth has typically been in the Top Five year after year, and that’s what we’re most proud of. The M&A stuff happens, but it’s opportunistic.

Back to your earlier question as to how other firms have grown: They have been a lot more aggressive in their M&A style. We like to make sure when we merge a firm in, it is no more than 15% of our current revenue. EisnerAmper was created because they took two $120 million firms and put them together. That is how CohnReznick was created. We’ve always stayed away from that because we felt that we might lose control of what we think is our unique culture. We think we care about our people more than most and you can’t control that when you’re doing those big deals.

Jukna-Parsons: Can you talk more about private equity acquiring ownership in some accounting practices, and how you feel about that?

Hagaman: There are firms that are at a certain part of their life cycle where it is the right option—and it is disruptive, because they are putting a lot of money into the market. But they also come with other issues. I believe partners have to become much more focused on profitability. We have always felt that if we were growing organically better than our competition and if we had good leadership succession, we would grow quite well and not need to bring in investors or merge upstream. And that continues to be our focus.

Jukna-Parsons: You recently transitioned to emeritus partner and took on the global chairman position at HLB. Why did you increase Withum’s involvement with HLB over the years as the managing partner? How did that benefit Withum and other members of HLB?

Hagaman: We always felt that HLB was important to our most important clients. We wanted to deal with the top-tier clients, and many of those clients do business internationally. We always felt that having a good strong network was important as our clients expanded globally. As a result, it became important to lend leadership talent to HLB. We are involved with leading the HLB tax committee and a partner leading the advisory committee. Rhonda Maraziti, our chief marketing officer, is involved with the marketing team; Bill Bradshaw, our director of inclusion and diversity, heads their D&I function. I joined the executive committee 10 years ago, so it became a natural evolution for me to move to chairman.

We have always felt that if we were growing organically better than our competition and if we had good leadership succession, we would grow quite well and not need to bring in investors or merge upstream.

Jukna-Parsons: What advice would you give your younger self?

Hagaman: Always keep learning. Always have that five-year plan. You should be intentional about where you are going. It does not mean you can’t pivot, but you have to have a goal. If you just sit back and you go to work every day, you go home every day, and you let life happen to you, then who knows where you wind up? I would instruct my younger self to stay intentional about goals and executing on whatever your life plan is—and that is both personal and professional.

Jukna-Parsons: Any advice you would give young people entering the accounting profession today?

Hagaman: Take this with a grain of salt because I’m a Baby Boomer talking to Gen Z. But part of a concern that I have for the typical Gen Z person is that they need to have grit. They need to have ambition. Life won’t just come to them. I think many of them, because of the way they’ve been brought up and because they’ve lived in a digital society, don’t quite understand that. I think that they need to overcome what I would call the scourge of social media, where it appears that everybody’s life is perfect. Then you realize your life is not. And that is because nobody’s life is perfect. I think that is one of the reasons why we have such a huge issue with anxiety and depression for this generation. I think they need to figure out that community matters, that relationships matter, and that relationships are not just digitally formed. Those that have ambition, those that have grit, those that can develop personal relationships are going to be huge winners, primarily because there is a high percentage of those that will not be able to do that. Again, that’s a Baby Boomer’s perspective; I will admit that I definitely have a bias in giving that advice.

Edward Mendlowitz, CPA, is emeritus partner at Withum and adjunct lecturer at Baruch College, New York, N.Y.
Martins Jukna-Parsons, MSA, MFA, is senior accountant in Withum’s theatre and entertainment group.