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May 11, 2010

Financial crisis ‘weeding out’ weak firms

The pressures of the financial crisis have provided a “great weeding out” of weak accounting firms, according to Stephen Mayer, managing partner of US top 50 firm Burr Pilger Mayer.

“For good quality firms [the difficulties are] is temporary,” Mayer said. “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. This is a way of weeding them out and I think the ones that remain will probably be stronger.”

 

Lazy profession

Mayer said the accounting profession at large needs to work out creative ways to add value without raising fees.

“I think that we are a profession on hold,” he said. “Not our firm particularly because we are pretty innovative, but I think the profession on the whole is lazy, is too conservative, is set in their ways, is non-entrepreneurial – all those things.”

Burr Pilger Mayer, a firm based in San Francisco, California, has grown about 20 percent a year for the past 20 years, Mayer added. During the past year the firm grew about 18 percent, of which about 10-11 percent was through a merger.

The firm’s growth came despite “incredible” fee pressure, which Mayer said has been the biggest challenge of his professional career.

“When the pressure is that incredible, people start doing crazy things,” he says. “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.”

 

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