partners must take a hit to personal incomes to re-invest in their firms. or face obsolescence and slow death.
by rick telberg
the rosenberg national map study
so far, profitability is way up. at the large firms (those with at least $20-million in annual billings), income per partner averages $635,000. the highest earners are pocketing about $1.2 million. even the lowest-paid partners average of $282,000. but how long can that go on?
more from the map survey: 2019: more focused training | 2019: expect more alliances | 2019 trends: client service changes | 2019: shifts in hiring & office space | 2019: firms grapple with change | staff policies improve, but not mentoring
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the always insightful and provocative allan koltin, of koltin consulting, warns: partners must invest in something besides themselves – if they want their firms to survive.
koltin, whose thoughts and observations are included in the rosenberg survey: national study of cpa firm statistics, says that profitability may have to take a hit with the advent of artificial intelligence and ever-increasing pay rates for top talent.
to the extent economics reaches into virtually every aspect of human existence, the changes inevitably circle in on accounting firms.
innovation costs money, and innovation in artificial intelligence costs big money. nobody knows how much money. firms are going to have to spend money just to find out how much they’re going to have to spend.
innovation also requires leadership and collaboration. toward that end, koltin observes, cpa offices are rethinking space requirements and office configurations.
- with more people working at remote locations, offices need less office space.
- with the increasing need for collaboration, cubical walls are getting lower, and there are more common spaces. koltin likens the layout to something akin to starbucks.
- managing the new collaboration requires more leadership, so partner offices are moving from the outside walls to interior positions among their people.
- the need for more training necessitates more dedicated spaces.
- the need for more collaboration and more training necessitates more conference rooms.
koltin also believes that once the big firms have geared up for artificial intelligence, they will need fewer professionals. the big 4 predict a 50 percent drop in campus recruiting. this will be an opportunity for local, regional, and national middle-market firms to hire recent graduates who can then be trained in specialties and new services.
these recruits were weaned on not just starbucks coffee but the common-space coffee-house ambiance. they will be glad to slip into semi-private open-office nooks where they can focus on their work while being within talking distance of their teams. they’re also perfectly willing to take their laptops home and not come in for a week, working entirely online. they don’t need an office, desk, and credenza to call their own.
the new rosenberg map survey touches on the many manifestations of change, among them:
- technology, especially
- artificial intelligence, as it
- expands the potentials of accountancy, which
- changes client expectations, which in turn
- requires new services from accounting firms, which
- calls for a reorganization of staff collaboration strategies and
- more training and
- more kinds of training in the midst of
- shortages of qualified professionals, some of whom might be replaced by
- technology, especially
- artificial intelligence.
the leaders of tomorrow’s office will need to learn how to herd these cats. that should be fun because these are smart cats.
but they’ve got something even better than artificial intelligence. it’s called human intelligence.