The financial crisis is weeding out weak US accounting firms and the profession needs to be more innovative to cope with fee pressure, a mid-tier firm leader warned.
Burr Pilger Mayer managing partner Stephen Mayer believes the difficulties are only temporary for good-quality firms and trimming the fat will provide longer-term benefits.
“It is a great weeding-out because there are a lot of people who are still in the accounting profession who aren’t that good at what they do,” Mayer said. “This is a way of weeding them out and I think the ones that remain will probably be stronger.”
Mayer said the accounting profession needs to work out creative ways to add value to engagements without savagely lowering fees, because this will only lead to poorer-quality work.
“When the pressure is that incredible, people start doing crazy things,” Mayer continued. “They lower their fees too much, they bid work below cost and it hurts the whole profession because if it takes 100 hours to do something, you can’t stay in business if you are only getting paid for 50 hours and you start cutting corners.
“I think what people are going to find is that the quality and the problems from the last couple of years, which will surface in the next couple of years, are probably going to be pretty incredible.”
Mayer would like the profession to be more progressive and entrepreneurial.
Burr Pilger Mayer, a firm based in San Francisco, has grown about 20%a year for the past 20 years. During the past year, the firm grew 18%, which included organic growth of between 7% to 8%.