Opportunities and Challenges: Accounting’s Evolving Landscape with Allan Fisher

Allan Fisher is the founder of Premier Financial Search, an accounting talent recruitment firm he established in Southern California in 2001. PFS works with local, Regional and National CPA Firms and Family Office Groups in California, Washington, New York, Florida, Texas and The Midwest. A leader in the placement of public accounting professionals, the mission of PFS is to be the point of connection between exceptional accounting and finance talent and elite organizations. PFS works to understand and identify short-term and long-term objectives, allowing its specialists to provide strategically planned opportunities that maximize outcomes.

Transcript:

Thanks for tuning in to CPA Life where we now rejoin John Randolph for part two of his conversation with Allan Fisher of Premier Financial Search. Their continuing discussion on the winds of change within the accounting profession—from a recruiter’s point of view—is one you don’t want to miss. Welcome to CPA Life.

You know, as an example, if you’re in Dallas, you’re not just going up against firms in Dallas, which philosophically may be exactly the same as you. Well, now you’re going up against firms in California and New York and Atlanta and Chicago that philosophically are very different in terms of the ways they treat people. So lazy sticks out. And with that one opportunity to make a first impression, it’s unlikely the candidate’s going to want that second interview.

I like how you put that, Allan—lazy absolutely does stick out. That doesn’t mean that you have to put forth exceptional, over-the-top effort. If you probably just do the effort, that’s going to stand out versus a lot of other people in the marketplace. And you bring up a really good point—I want to kind of steer down that path a little bit, you know—the fact that you’re now competing as a firm owner. As a firm leader, you’re competing against firms literally all over the country. And again, pre-Covid, you were probably dealing with stereotypical, traditional firms that were going to provide a little bit of all the services to a little bit of all the industries.

Today, there is an opportunity that this guy who’s sitting at a Top 100 firm, where 50% of his book that he may be working on in the tax space or audit space is in real estate, and man, he really loves the real estate piece of the business. There’s a chance that he’s interviewing with a couple of Top 100 firms in his marketplace, but he’s probably also interviewing with three or four firms that are spread out throughout the country, who are 100% real estate, boutique, niche firms. They’re granular in what they do and they can sell something different to that guy. Tell me what you’ve seen from the difference in boutique firms versus, let’s just say, a Top 100 firm. Why would someone pick that versus the other?

There are a lot of stereotypes out there, and we hear it all the time from candidates: “If I go to a smaller firm, I’m going to be giving something up.” Maybe it’s technical complexity. Maybe it’s access to resources. Maybe they can’t pay the same. And maybe that’s true of some small firms, but if we’re really talking about boutique firms, most of the ones I work with compete with the nationals and in some cases with the Big Four in terms of the sophistication of things that they come up with.

If we were to look at some of the industry-wide metrics and we were to say, the average firm is $250,000 of revenue per employee, there are boutique firms that we work with where it’s double that. They’re unbelievably profitable. And within their space, which could be real estate, it could be high net worth and ultra-high net worth individuals, they’ve got a dream list of clients that they work with. And the work that they do, it’s interesting. The clients are interesting. The types of transactions that you’re going to see, you’re not going to see anywhere else, and they’re very successful.

So I really think what we’re dealing with, or what we’re up against, is just the preconceived notions candidates have. With a lot of the firms we work with, we’ve been working with them for two decades, and so we really have the ability to become, for them, the storyteller. If you’re a boutique firm of 30 employees, you can tell your story to your clients, but the world doesn’t know who you are. And that’s where the recruiter comes in, is we advocate for you, we tell the story, we know you’ve got something special to offer. We know how you rank versus all the other firms we work with, and those who don’t. We can shout it from the rooftops and get a candidate to understand it. You know, the amount of placements that we’ve made of clients that have no website—they are leaders in what they do, and they don’t care about who in the world knows who they are. You’re up against firms that have no website, they don’t give you a job description, but you know that they’re doing something spectacular. So that’s where, in my opinion, the boutique firms, they’ve got something extraordinary to offer and many want to stay independent. In a market where consolidation is happening at a breathtaking pace, knowing who you are is also really important.

I think that’s a great point. It’s one of the things we talk to our clients about all the time: The more you can put that stake in the ground and know who you are and who you’re not, the easier it is to tell that story and paint that picture for that person that we’re talking to. And I think that you’re completely on point there, Allan—a decade ago there was probably some validity to the complexity of the work, the compensation, the challenge of what I’m going to be doing, the opportunity for growth—there was probably a decade ago where some of that, I won’t say all of it, I won’t say all the time, but there was a large part that probably had a lot of truth to it. But in this post-Covid world in 2025, we’re dealing with, like you, we’re seeing less issues between, like you said, the complexity of the work, the compensation that you’re dealing with. There’s a lot of parity in that space now in Top 100 firms, national firms, and that local firm. And I think it is because when those people niche down so far and granular, like I’m talking about, there’s a price point that their customers are willing to pay for the value they bring to the table, and they can afford to pay people what somebody’s going to be making at a Top 100 firm doing work that maybe isn’t as complex.

One of the things I want to ask you about as it pertains to compensation and what you’re seeing in the marketplace, and again, just seeing what you’re getting from your clients, there’s still the perception in the marketplace, I think to a certain degree that if we offer an amazing culture, if we offer a better work-life balance, people are willing to take less money than what is competitive in the marketplace. What are you seeing around that type of a mindset with some firms, and the candidates they’re looking at?

So there’s always going to be a disconnect between what firms feel is fair and what employees feel is fair. So let’s accept that—there’s always going to be a little bit of disappointment. But I think what you’re asking is, is there a certain contingent of candidates who will leave money on the table in exchange for other things: quality of life, the right opportunities, sophistication, shorter commute, all the other things? Yes. There is going to be a certain contingent. It’s not a big contingent. Salary is the scorecard for employees. I imagine a conversation around the Thanksgiving table where somebody says, “I just got a new job.” “Oh, how much do you make? How much more money did you make for accepting the job?” “I actually took less, but hear me out! I’ve got a shorter commute.” Everyone stopped listening at that point.

But we’re also in a market where there is a free agent premium. We’re in the type of market where accepting a pure lateral is just not the market condition. There’s always a free agent premium to make a move. The only time that free agent premium is zero is in a recession, where there’s stability, so staying put is the risk—they’re moving for stability. In any other market, there’s always going to be an amount that somebody should get just for making a move. It’s the risk premium: “I’m going somewhere new. It’s a new relationship. I’ve gotta make a little bit more.” So, you know, for firms to think that there shouldn’t be that implied risk premium, that definitely is not the case.

On the subject of salary, we do something really valuable as a service to the industry here in California, and we do this in conjunction with the Cal Society of CPAs—so we produce an annual salary survey. And it started about a dozen years ago when the finished product was a page. Last year, the finished product was 84 pages. To me, I consider it the bible of every metric for CPA firms in California, and we had 50-plus firms participate. And so, you know, when it comes to what should somebody make? How many billable hours should, on average, are people working? How many overtime hours? What are the billing rates? We have the data and so we understand. And when I say “we,” I mean recruiters in general. Because we’re asking what are your expectations, and we know what the market is. But having your finger on the pulse of what is going on with salaries, but also all the other things. “Yeah, you’re making x, but in exchange for how many chargeable hours and how many overtime hours and what would it be like at another firm?” So it’s really become the industry standard for salary reviews and increases, and we put the finished product together in June, and we have a lot of firms that say, “We’re not going to go through our reviews until July because we want to see what the data is. We want to get a sense of what the market’s saying.”

And when you have that data, you can make much better-informed decisions for your customers, allowing them to make better decisions for their employees, that kind of thing. One of the things that I think is moving the needle a little bit with compensation as well as hiring and retention in general—which we’re talking about globally here—is the elephant in the room kind of thing right now in public accounting, that is the insertion of private equity. From your lens, from your perspective on the west coast looking back this way, what are you seeing the impact of private equity impacting hiring, retention, in the marketplace?

It’s more of a negative than a positive. Full disclosure: I have two clients that are directly owned by private equity, and I’ve got another two clients that there’s what we call a platform between them and the actual private equity firm. So I do work with firms that have received PE money. There’s some resentment in the market. The feeling that the selling shareholders did very well at what cost to everybody else who’s here? Does partnership still look the same as it did pre-private equity? And it’s not just private equity—BDO is now an ESOP. Grossi in New York is now an ESOP. There are other firms that I know are considering going this way. Markham was acquired or merged with CBIZ. CBIZ is publicly held. So we have brand new ownership structures. And I think the question from the employee’s mind is, “How does this benefit me?” And without the firm being able to clearly articulate how it benefits them, people are going to develop their own stories. And most of those stories don’t compute well for the firm. We’ve placed a considerable number of people out of firms that have recently, in the last couple of years, taken private equity money. There’s discontent. Grant Thornton, Baker Tilly. Again, the list of firms that are going this direction continues to increase. It’ll be interesting what develops over the next couple of years.

So I started recruiting in the earlier iteration of this, which was American Express, which came into the market in a big way by acquiring firms that were primarily tax practices, or in Los Angeles, entertainment practices, and the hope was they would be able to sell financial services to their clients. It ended up being great for the firms that sold, because after those agreements expired, they were able to just go on business as usual, plus they got their payment. It’ll be interesting to see the evolution of this. But I would say the number of people that we’ve placed out of private equity dwarfs the number of people we placed into firms that are owned by private equity.

I would have to concur with that. And I will tell you, there’s a couple of firms that we work with that have taken on private equity infusions over the last year; there’s a couple that we don’t work with, but we know the leadership there. Tell me if you’re seeing the same thing: Where we see it working, and I’m like you—I lived through the days of private equity moving into the staffing space, which is very similar to the public accounting space, it’s a knowledge-based industry. When you start cutting, which is one of the things they do, you don’t have plants, you don’t have equipment, you don’t have raw materials, you’ve got people. That’s it. I make no bones about it: I’m not a big fan of private equity. But there’s a handful of firms that I’ve seen that are doing something really well, and it touches on what you said, and that is amazing transparency, and very open communication with line staff. The firms that are doing well are doing that exceptionally well.

There aren’t a lot of them, but you’re right. It’s where there’s transparency, where it’s very clear what everybody gained through the transaction, what some of the pain points might be. Interestingly, I’ve had a couple of clients that have gone down the road. They’ve explored it, and maybe they’ve been turned off and they’ve said, “We’re going to double down on the fact that we’re independent,” and I think having gone down that road, explored it, flirting with the idea and saying no, makes them even a stronger employer of choice than somebody who isn’t quite sure or somebody that may be susceptible to FOMO—and there’s a lot of that right now. There’s, you know, I think most private equity firms want to have a CPA firm in their portfolio, and most owners have good friends, former partners, people that they golf with that have gone down that road, and it’s easy to be seduced.

Yep. We’ve got a client here in the marketplace and probably over the last five years, six years? You know, even before private equity came in where there was just a consolidation of Top 100 firms moving into markets where they didn’t have a footprint, Baker Tilly, Moss Adams, Carr Riggs, buying up local firms, these guys doubled down and made the decision “We’re not going to sell. We like who we are. We know who we are. We don’t feel like we need to be anybody different.” Private equity started coming in. They explored it, they decided that’s not the path we want to go on. “We know who we are. We like who we are. We’re going to stay on this path.”

And they’ve built an entire business model around going after potential clients that have been serviced by local firms that were acquired by a Top 100, or firms that were being serviced by a firm that was acquired through PE or had PE money come in and now staff has started to leave. Their sales proposal to, you know, Bill, who’s a CEO of a $25 million manufacturing firm is, “How do you feel now being a little fish in a really big pond? How do you feel that the partner you worked with for the last 18 years retired? And since then, you’ve had three partners and two managers on your job?” And they just continue to grow and grow from 18 people four years ago to 47 people this year, projected to be 60 by the end of the year.

Yeah, and solidly independent, and they can tell the story with conviction to prospective clients and employees: “We know who we are and that’s going to be who we are as your career progresses.”

Yep. I want to talk to you about the perceived—and again, get your opinion on it; I just had a conversation today with a candidate about this—the talent shortage in public accounting. You know, obviously the pipeline, the 150-hour, all of that has been a big discussion through the last two to three years. Give me your thoughts on what you’re seeing, again, from your perspective at PFS.

We could probably have a separate podcast just on this subject, so I’ll try and make it concise. There is a shortage, so we’ll start with that. There is a shortage. However, there are a lot of interesting and maybe even conflicting things going on. So we’ll go back to, a lot of firms are right-sized, but is it the right people? So this year, for the first time since pre-Covid, we’re going to see layoffs. Now, we’ve seen layoffs in the last couple of years from the Big Four and a couple of the nationals. This year we’re going to see it in greater frequency, and we’re going to see it from firms that are smaller, that they finally say, if somebody truly is a low performer, it’s time for us to open up that spot and let’s upgrade. But if we look at demographics, just the number of people that are going into accounting—although there was a recent data point, the number going up—it may be going up, but not enough to replace the baby boomers who are retiring, and then the next group of people, which are going to be the older Gen Xs. There is not a one-to-one ratio of people going into the profession to retire them.

One thing that no one’s talking about is the threat to the industry of people in their 40s and 50s who decide to either retire or take time off because they receive significant checks as part of a private equity buyout. So what’s going to happen to the industry when people say, “I’ve had enough. I’ve been beaten up for the last five years straight with Covid and Consulting on PPP and ERC, and here in California in Los Angeles, we just had tax seasons extended for the fourth out of the last six years. So we’ve got complex tax rules, the new administration, obviously there is going to be even new tax guidance. The tax deadlines are changing. It seems like we can never get a break. Oh, here is money treated as capital gains, not ordinary income that I never thought I’d get—maybe I’ll just take a couple of years off.”

The other issue with demographics is, so my youngest son is almost 14, so he was born in 2011. He was one of the few born during the recession. So when we look at demographics of years coming up, there are less people, there are just less births from 2000 to 2008 than there were in the period before. But now you get to 2009, ’10, ’11, ’12, the number is even worse. It’s probably 15% lower than it was pre-recession. So we’ve got this next wave of not enough people, forget about who’s going into accounting. It’s just a pure birth perspective. And then on the heels of that, you’ve got Covid, and how the birth rate dropped during Covid. So there will be less supply. How the industry is making up for this—part of it is offshoring, which it’s a Band-Aid. I mean, I think there’s a place for it, but how are you going to get a really good senior, a really good manager to review work when they’ve never prepared it? And there are a lot of firms where the model is all the preparation happens offshore. It’s a Band-Aid. It’s not going to solve a lot of the issue of having people who can do the work, people who can confidently interact with clients, interact with people in the team.

Then we’ve got the CPA issue. I’m confident that at some point soon all the states are going to get behind moving from 150 hours to 120 hours, which removes one obstacle, which is the master’s or those extra units of education. We still have poor CPA exam pass rates. We need to get all the stakeholders on the same page. And so the stakeholders are the states, all the state societies, the AICPA, but we need the universities on board. When I went to school, and even though I wasn’t an accounting graduate, I knew a lot of accounting students and back then the exam was twice a year—it was in May and November—and it was understood, you’re going to take the exam. The same month you graduate college and the expectation is you’re going to pass all four parts. And I came from a small school in Northern California, we had about a 50% pass rate, just pretty awesome. But you knew that was the expectation. So we need to get the professors and the schools on board.

The firms have a vested interest. So whether it’s paying for the coursework, not waiting till somebody passes and reimbursing, let’s front the money. Let’s reward good behavior. Employees, candidates need to know there’s an expectation that when you come in, you’re going to sit for and pass the exam within a certain period of time. You really want to incentivize them, create some bonuses, including stay bonuses, that in order to receive the money, they’ve gotta stay for a certain period of time. And then there’s responsibility on the employees. So all of the stakeholders have a responsibility.

I’ll give a final thought: One of the reasons why so many people leave public accounting—so this is the worst type of attrition, which is they just leave public accounting—is because I don’t think they understand the pot of gold at the end of the rainbow. And it’s not their fault. Firms don’t do a good enough job at letting them know how much they can make. So the Rosenberg Survey, which includes firms all over the country, I think the most recent number I have is 2023, the average partner made north of $600,000. That’s the average partner. Now, that includes high cost of living areas, low cost of living areas, small firms, big firms, Big Four. Do your staff really understand that’s what the average partner makes, and I would argue, you know, it’s even greater now? Let’s do a better job of making sure that our staff understand what partnership is, not just the hours and the responsibility and the potential liability. But what about the good stuff that comes with it?

It’s not an easy path. Let’s don’t kid ourselves. And when I say that, I don’t mean it’s an, it doesn’t have to be harder than we make it. And I think that’s what we do in the industry. I’ve always had a mindset, Allan, when I hire people, I want to hire them to be extremely successful within the confines of who we are and what we do. I want to teach them how to be increasingly successful year over year, over year. I want them to make very good money and if somewhere along the way they decide they want to go do this for themselves and make more money, “Hey, let’s figure out a way to help you make that happen.” I don’t want to lose good people, but that might happen.

And I’ve got people that have said to me for years, well, gosh, you know, you’re basically training your competition. I tell them, no, I’m not. I’m training great employees that if they stay and I didn’t train them to be great, now I’ve got an average to mediocre firm that I’m running, because that’s all I’ve got working for me. But I’ve got exceptional talent that I’ve told that there is a great opportunity in this industry, whether it’s in partnership with my firm or I’m going to teach you how to do this so well, you could go do it on your own—either way, as we talked about when we got on this call, we’re increasing the level of the water across the board, and all of our boats are going to go up because of it.

Completely agree. Loved that you said that.

So I think that if we do that in the industry and we can portray to the kids, the younger people coming into this business, hey, there’s some significant upside here. Yes, there’s some paying of dues, but the beautiful thing is there are a lot of great firms out there that the dues that you had to pay 20 years ago from a time investment aren’t the dues you have to pay today. Doesn’t mean the work isn’t as hard, doesn’t mean that it’s not going to be challenging. It just means there could be a better path for you. Let us help you get there.

Agreed.

One of the last questions I have for you, and I want to get your thoughts on, I had a client about six months ago, they’re now a client. They weren’t a client then he called and had a question for me, and I’ve always thought it was a very interesting question: They ran a good firm. As a firm internally, one of the things that we do is we keep a list of the firms that we can’t recruit people out of—and when I say can’t, I don’t mean they’re a client, we don’t want to, that’s not what I mean. What I mean is it doesn’t matter what we dangle in front of them, people don’t want to leave. We keep a list of who those firms are because those are the firms that we want to do business with. Those are the firms that ultimately, if the opportunity presents itself, we’d love to partner with them.

And so he and I were talking one day, he called me out of the blue and his question was, “Hey John, what can we do to make our firm bulletproof against recruiters like you calling in, trying to take our people?” And I’ve always thought that was an intriguing question. So ifif someone says to you, “Hey, Allan. What can we do to bulletproof our firm so that when people from your firm or other firms call our people, they won’t talk to them, they don’t want to leave, they’re good where they are?” What would you say to firm owners that have that question?

It probably doesn’t exist. So we can get as close to bulletproof as possible, but the things that are going to make you close to bulletproof might scare some of your employees, because now what you’re going to have is you’re going to have a high-performance team, very likely a team or a firm that’s very profitable, and then comes in the philosophy. So two things that firms can do with profits: Distribute them to partners as compensation or bonus, or reinvest them somehow, which could be higher salaries, better benefits, better technology, and a lot of firms take those as profits. So the firms that are making themselves virtually bulletproof are saying, “We don’t need to make every last dollar. We’re going to take some of that, we’re going to reinvest it. We’re going to make sure that our people are in the top 10 percentile of salary across the board. We’re going to have the best benefits. We’re going to have all of these things.” But that could scare some of your people. Not everybody is built to be a high-performing employee. But in that case, those people are going to self-select out.

So I’ll tell you about one firm that I work with. So if you were to say, is there one firm that comes to mind that really does this? There are a couple—but there’s one I’ll talk about, they’re here in Los Angeles. The tax partner in charge probably bills 300 hours a year. The industry average for a partner is probably 1,000, maybe 1,100, and he says, “My billing rate is exceptionally high. I know that I could produce a lot of revenue by billing a thousand hours a year. However, my time is better spent on creating my next generation of leaders.” And one of the things he said is, “It would be irresponsible of me to not create my succession plan. Not just mine, but theirs.”

And so instead of billing another 7 or 800 hours a year, he spends that time with his team. First interview is with him, and he spends an hour getting to know somebody. And what he shares is his vision. And his vision is unlike anybody else’s I’ve ever spoken with. 95% of candidates that interview there and interview elsewhere say, “I don’t want to interview anywhere else. This is where I want to be.” So the 5% that say it’s not for me are saying I’m mediocre, you know? I am not elite. And that’s okay, because there is absolutely a place for people that aren’t in the top 5 or 10%. And so you could design something where people aren’t going to get poached out, but when you create that type of environment, there are going to be people that say, “I don’t belong.” And so either they’ll leave on their own or they will be susceptible to that.

And they absolutely come. Doesn’t matter who the firm is. Well, Allan, I’m very impressed with a lot of the things that you’re talking about, a lot of the things that you’re obviously doing with your team and the business that you’ve built over 20 plus years—two decades doing this is something to be commended for. It is amazing what you guys continue to do in your firm and the impact that you’re making in the CPA firm space. So if there are firm leaders that want to get in touch with you about helping with their recruiting processes or have questions about what you are seeing in the industry, or if there’s even possible candidates that are considering a job move sometime in the near future, what is the best way for people to reach out and get on your calendar?

Email, text. I’ve got a Calendly link on LinkedIn and I love speaking with partners about the market, about some of the things you and I talked about. So even if it’s just sharing information. John, I think I’m like you—passionate about the industry, even a little nerdy as it relates to public accounting and why it’s such an amazing profession. So I welcome the opportunities to talk with partners and leaders in public accounting.

We’ll make sure that in the show notes that we put your email address, a link to your LinkedIn profile, and also a link to your Calendly link. So if anybody wants to grab some time on your calendar, they can do that. So, Allan, I want to thank you for carving out a little bit of time and spending that with us today because you’ve given a lot of insight into what you’re seeing in the industry. So thank you very much.

John, thank you for the opportunity. And more importantly, thanks for all you’re doing to elevate the industry of recruiting, and elevate and amplify awareness in public accounting.

I appreciate that—that means a lot, Allan. I want to thank you again. And for those of you that invested a little bit of your time today listening to Allan and I talk, we appreciate that. If you like what you heard, please leave us a comment down below, subscribe on the platform of your choice, because the last thing that you want to do is miss any of the episodes that we have coming up with some pretty amazing guests as we spend a little bit more time talking about this thing that we call CPA Life. Until next time.

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Opportunities and Challenges: Accounting’s Evolving Landscape with Allan Fisher

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