Rosenberg’s Take on Positioning Firms for Success

2022 is just around the corner. If you’re planning key strategic initiatives for next year, here are my responses to the annual Rosenberg Survey Analysis and advice for what will define a successful future for firms.

1. Now that we are more than a year from the start of the pandemic, what do you feel are the long-term ramifications to the accounting industry?

The pandemic will be a seminal event remembered forever, like the assassinations of the 1960s and 9/11 (and, for me, the Chicago Cubs winning the World Series). It most certainly will have a permanent impact on the accounting industry.

• More remote work. Firms are projecting that work done remotely will be more than double the amount done before the pandemic. Firms have been amazed at how effective working remotely can be. Partners who were skeptical naysayers have now become believers.
• More focus on how to truly manage people. Before the pandemic, supervisors evaluated staff based on billable hours and “butts in seats.” With the dramatic increase in remote work, evaluating the quality of work performance and satisfying clients’ needs has become more important.
• The value of in-person contact. With the increase in remote work, firms are experiencing efficiency increases and a broadening of their markets. But the bad news is that many are suffering from Zoom fatigue and, as social animals, we miss face-to-face contact with our fellow humans. The lack of interpersonal contact and mentoring has been particularly harmful to young staff.
• More accountability/more firm-centric partner comp systems. The pandemic scared people into making their firms more efficient and improving partner accountability. One result of the ramping up of accountability is a heightened interest by firms in changing their partner comp systems. Our partner comp practice, always a mainstay for us, has increased dramatically. We attribute this to firms realizing they need a higher and broader team effort from their partners to achieve excellence as a firm.
• Recruiting. Before the pandemic, 99% of local firms never considered recruiting people from across the country. But with remote work becoming a mainstream mode rather than an oddity, more firms are recruiting nationally instead of restricting their focus to the local market.

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2. If you were running an accounting firm today and dealing with the issues your clients are facing, what would you do to best position your firm for future success?

Do all the things that successful and sophisticated firms were doing before the pandemic: strong leadership, good management and firm governance, holding partners accountable for their performance and behavior, treating staff as equally important as clients, committing to aggressive growth tactics, keeping the bar high on promotion to equity partner, focusing on specialization and consulting, and being proactive about succession planning. New skills will be needed post-pandemic such as (a) learning how to manage people remotely from the perspectives of work performance, training, mentoring, and leadership development; and (b) marketing and business development in remote environments.