mine vs. yours vs. ours

15 ways to take an entrepreneurial approach instead.

by domenick j. esposito
8 steps to great

it is a very prevalent view that midsized law firms are not particularly well led and well managed.

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many of their partners operate as silos and refer to clients as “my clients” and “my book of business.” sure, they share space and other overheads but they do not institutionalize clients for the long-term benefit of the firm.

many midsized law firm partners look at themselves as “free agents” and at “their books of business” as “portable.” when these law firm partners are either unhappy at their current firm or if they think they can get a better compensation package from the firm across the street, they pick up and leave. they continue to service their clients with little, if any, disruption to client service and without dealing with the ramifications of covenant not-to-compete provisions contained in partnership agreements. this is one reason why so many law firms are unable to grow and prosper. “my book of business” vs. “firm revenue” are concepts with distinctions and huge differences.

in contrast, it is the prevalent view

that midsized cpa firms strive for strong leadership and tight management,
that their partners look and act as a team and
that their clients become “institutionalized.”

as such, midsized cpa firms work hard at the notion of “firm clients” and not “individual partner clients.” it’s a very visible sign of a well managed firm.

“one-firm firms have a remarkable degree of institutional loyalty and group effort that is clearly a critical ingredient in their success.”

– david maister

while many midsized cpa firms strive to be well managed, many fall short of this ideal state and revert to the loosely managed style at midsized law firms that allows for operating silos.

when i hear a partner at a midsized cpa firm say “my client” or “my book of business,” the hair on the back of my neck stands up because such a reference is code for a partner who operates in a silo. when cpa firm leadership hears one of their partners say these words, they should be very wary. sooner or later, there is a very good chance that such a partner will financially hurt the firm as he/she is holding the firm back from cross-selling the client base and institutionalizing client relationships. eventually the operating silo mentality hurts a firm’s growth and bottom line. and even though cpa firm partnership agreements contain covenant not-to-compete provisions in their partnership agreements, with organic growth so difficult to come by, many midsized cpa firms are more than happy to bring laterals into their partnerships and, if clients follow (and many often do), pay the liquidating damages due the former firm.

so, how does a midsized cpa firm develop a culture that clients are “firm clients” and there is no such thing as “my client” and “my book of business”?

it requires a one-firm, entrepreneurial approach to management that, in turn, leads to a well-managed firm. this is easier said than done but, is in fact achievable by those firms with strong and effective leadership. it requires considerable discipline and a strong commitment to partners, staff, clients and the community.

here are a few examples of a one-firm, entrepreneurial approach to management that creates an environment of “firm clients” and “firm revenues”:

striving for a shared vision about the future and the strategies (with partner accountability) that will help achieve success
reaching for significant firm loyalty and team effort by placing great emphasis on firmwide coordination of decision making, group identity, cooperative teamwork and institutional commitment
emphasizing that long hours and hard work demonstrate high involvement and commitment to the firm
placing an emphasis on continuous education on firm policies, procedures and protocols
insisting on a sound economic model that rewards consistent performance
insisting on sound corporate governance that “walks the talk” when the rubber meets the road
attracting and retaining first-class partners who understand how to build lasting business relationships with clients and contacts
creating a business development culture that includes everyone within their capacity and skill set
making it well known that the firm wants marquee clients that build brand awareness and credentials and not simply volume for volume’s sake
developing partner goals, holding partners accountable for delivering results and rewarding compensation when goals are achieved both individually and collectively
understanding that the firm needs to demonstrate that it is different by bringing value to clients that is measurably better than competitors. this is readily achieved when firms institutionalize their approach to client service (client expectations) by consistently providing byproducts of compliance services such as ebitda and working capital improvements.
going to market by industry-dedicated client service teams
approaching client service with multidisciplinary client service teams of audit, tax and advisory professionals
looking for smart mergers and lateral hires that add to a firm’s strength, improve its weaknesses and expand its footprint
requiring consistent and persistent leadership by senior partners with a no-tolerance view on individual partners who think that they themselves are “stars” and much more important than the firm collectively.

i believe that many small and midsized cpa firms fail to achieve enduring success because their leadership lacks the intestinal fortitude that is required to be regarded as a well managed firm. without strong leadership, operating silos eventually creep into the culture. these operating silos break down the dna or fabric of a firm.

a one-firm, entrepreneurial approach to management is the key to endurance. while it isn’t easy to achieve and/or maintain, it certainly bears considerable fruit.

posted on february 22, 2018

dom esposito

about the author

domenick j. esposito was the ceo of grant thornton, vice-chair of bdo, and national growth director at cohnreznick.

he is the author of "8 steps to great: the eight essential strategies driving success at the world's largest cpa firms. and how to apply the lessons at firms of all sizes," published by 卡塔尔世界杯常规比赛时间.

a life in public accounting

in 2016, esposito, then a former ceo of bdo, moved from a 46-year career in public accounting into the next phase of his professional life – consulting to cpa firms, launching a boutique advisory firm, esposito ceo2ceo, that provides advice to ceos, managing partners and other senior partners of cpa firms focused on the mid-market throughout the u.s.

with the launch, esposito authored “8 steps to great," a guide for ceos, managing partners, and other senior partners on how to move their firm to the next level.

cohnreznick national growth director

esposito was one of the most qualified individuals in the country to advise cpa firms on growth and profitability. through 2015, he was national practice & growth director and an executive board member of cohnreznick, llp, a mid-market sustainable brand and the tenth-largest cpa firm in the united states. he oversaw cohnreznick’s go-to-market industry specialization and consulting and advisory service lines. he was also intimately involved in the firm’s mergers and acquisitions and strategic and tactical activities for its public company and capital markets initiatives. dom joined the predecessor firm of j.h. cohn in 2002 as the chief operating officer and executive board member.

dom was also an independent director of ethan allen interiors inc. for several years (through 2014), dom was a member of the nasdaq listing and qualifications committee to the organization’s board of directors. he formerly served as the leader of the new york state society of cpas committee for large and medium-sized firms practice management. he also was an adjunct accounting professor at c.w. post/long island university.

bdo and grant thornton

through october 2002, dom was vice chairman at bdo, a mid-market sustainable brand and the seventh-largest international accounting and consulting firm in the u.s., with almost 50 offices and 3,400 employees. during his brief time with bdo, he was responsible for the alliance distribution network (at the time consisting of over 80 cpa firms, 10 law firms, and 25 consulting firms). he was also responsible for attracting and servicing a number of clients.

from 1979 through 2001, dom was with grant thornton, another mid-market sustainable brand and the sixth-largest international accounting and consulting firm in the u.s., with over 50 offices and 4,500 employees. he joined grant as an audit manager, became a partner in 1981, led the long island office from 1984 to 1986, became assistant managing partner of the new york office in 1986, and from 1988 to 1999, led the new york office. in 1999, esposito became a regional managing partner and for two years, through 2001, was the firm’s chief executive officer.

cpa, partner, mba, leader, influencer, media celebrity

between 1996 and 1998, and while he was ceo, esposito was on the partner board and was also on the board of grant thornton international – the worldwide umbrella organization. in these capacities, he developed strong experience in strategic thinking and execution, international relationships, corporate governance, partnership matters, branding, expense control, client relationships, and new business development.

as ceo, he took grant thornton to record earnings, consummated the largest line-of-business sale in the firm’s history, developed a major joint venture with axa financial, and made the largest practice acquisition in the firm’s history. from 1969 to 1979, esposito was with price waterhouse (now pwc), servicing ibm when he was promoted to manager in 1976.

dom was a cpa, has been quoted in national and local media, and has appeared on radio and cable tv.

esposito also testified before the securities and exchange commission.

he received his m.b.a. from st. john’s university and his b.s. from ferris state university. accountingtoday, one of the leading trade journals for the accounting profession, named esposito one of the most influential people in the profession for two consecutive years.

he passed away in 2021 at the age of 74.

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