#GotCVA Certified Valuation Analyst® (CVA®) The leader in business valuation helping businesses reach their full potential. The Authority in Matters of Value® www.NACVA.com/CVA notes and methodology Expect the unexpected SPONSORED BY: here is a difference between be- than risk sharing misleading figures. ing revealing and being surpris- Next year, we should be able to resume Ting. While usually the former, publishing that data. this year, our Top 100 Firms/Regional In the meantime, here are a few Leaders report is also the latter. notes on how to read this year’s report: The headline surprise is the slow- The previous year’s rankings in- ing growth demonstrated across the cluded in the Top 100 Firms list are leading firms in the profession; while NOT the same as those published in last their revenues continue to swell, and year’s report. They are a re-ranking of individual firms bucked the trend in the current year’s cohort of T100 Firms a big way, the average firm grew more based on the latest information, and in- slowly in 2017 than in the clude firms that were not four or five years before CONTENTS part of the list last year. that — a significant, and They are only for com- Top 100 Overview 4 unpleasant, surprise. parison purposes, and do The other surprise Firms to Watch 6 not replace the rankings in this year’s report is an published last year. Top 100 Databank 8 absence: Where we usu- Unless otherwise ally report the percent Firm Strategies 10 noted, revenue is net rev- enue. Also, unless noted, change from year to year Top Tax Firms 12 of individual firms’ num- revenues, offices and staff ber of partners, we are Top 100 Rankings 16 are for the U.S. only. going without those par- Niche Services 22 “Total Employees” ticular figures this year. is comprised of partners, Client Categories 24 professionals and all oth- One State St. Plaza, 27th Fl., New York, NY 10004 For several years, E-mail: [email protected] we’ve been fielding ques- Regional Leaders 25 er personnel, including http://www.accountingtoday.com owners. Editor-in-Chief Daniel Hood tions from participating Firm Highlights 35 Managing Editor Danielle Lee firms about whether our Where two firms Senior Editors Roger Russell, Sean McCabe Technology Editor Ranica Arrowsmith partner figures included reported equal revenue, Art Director Neesha Haughton non-equity partners, so this year we the firm with the higher percentage of ADVERTISING AND BUSINESS SERVICES revenue increase received the higher Senior Vice President specified in our survey form that the and Group Publisher Rob Whitaker number we were looking for included ranking. Publisher Jack Lynch (212) 803-8803 Advertising Director Alexandria Alati both equity and non-equity partners. “MAS” stands for “management Ad Sales Coordinator Susan Korcynski When we came to calculating the advisory services” — or consulting, as Material in Accounting Today may not be repro- duced without express written permission. For more percent change, however, it quickly everyone calls it now. information about reprints and licensing content, As always, this report would not please visit www.SourceMediaReprints.com or con- became clear that while firms had re- tact PARS International Corp. (212) 221-9595. ported the requested figures for 2017, a be possible without the dedication of Publishers Copy Protection Clause: Advertisers and significant number hadn’t revised their our editorial staff — without their hard agencies assume liability for all content (including text, representation and illustrations) of advertis- 2016 figures. (To be fair, our instruc- work, we wouldn’t be able to present ments and responsibility for claims arising there from you with this, the 2018 Class of the Top made against the publisher. tions could have been clearer, and will Copyright © 2018 Accounting Today and Source- be next year.) So this year we’re going 100 Firms and Regional Leaders. Enjoy! Media, Inc. All rights reserved. — Dan Hood, Editor-in-Chief SOURCEMEDIA INC. without the percentage change, rather 3 overview Growth rates defy prediction BY DANIEL HOOD e got it wrong. than 20 percent, for instance, versus only buting to bottom-line growth. In this space last year, our five in 2016, and only two firms reporting One major path to growth is doub- Weditors predicted ongoing rev- flat or declining revenues, against five last ling down on a specialization; the Top enue growth around 9 percent for the Top year — but the overall direction was to a 100 reported growth across a wide range 100 Firms, based on trends that had held lower level, with only 25 reporting growth of specialty services and individual client true for the previous six years. above 10 percent, versus 37 last year. And niches. (See Niches and Clients, starting on Instead, in 2017 the T100 reported an no firms made any significant jumps up page 22.) Many of the traditional niches average growth rate of 6.33 percent — off the list, though two new ones did join it and service areas continue to serve a large two-and-a-half percentage points from the this year: Florida’s Schellman & Co., at No. number of firms well, but a growing num- 8.8 percent in last year’s report. While ber are seeing rewards in a range of perfectly respectable in itself, 6.33 per- technology services, most commonly cent is the lowest growth rate the T100 Dropping off involving cybersecurity. have seen in a non-recession in the Revenue growth of the Top 100 Firms, in percent* It’s important to remember that past 20 years. even slower-than-previous growth is The Top 7 firms (those with over still growth: The threshold for the Top a billion dollars in revenue, including 30 100 rose $2.6 million, from $37.7 milli- the Big Four) have an undue influ- on last year to $40.30 million this year. 25 ence here, given the vast size of their Similarly, we had a strong crop of Firms books of business, and the drop in their 20 to Watch (see page 6), with a number of growth rate, from 8.6 percent in last firms poised to join the Top 100 next year’s report to 5.94 percent in this 15 year — if they can find a spot. One of the few open spots this year was crea- year’s, certainly explains a lot of the 10 relatively smaller number — but not ted by the merger of Colorado’s Hein all. The 37 firms with revenues bet- 5 & Associates into West Coast regional ween $100 millon and $1 billion also leader Moss Adams. More combinati- 0 reported a two-percentage-point drop 94 96 98 00 02 04 06 08 12 14 16 17 ons like that may be needed to change 10 in growth rate (to 8.32 percent), while -5 the ranks; that would only require that the 56 Top 100 Firms with revenues un- the T100 continue their current high * Compiled from individual firm results as reported der $100 million were off by over half a at year’s end; includes some estimates rate of M&A, with the group reporting percentage point, at 7.21 percent. (See 120 individual combinations over the Databank, page 8.) past year. Revenues weren’t the only things 89, and Virginia’s PBMares, at No. 100. grow ing at a reduced rate: Staff figures It goes without saying that growth is AROUND THE COUNTRY for all three tiers of the Top 100 expanded never far from the minds of those who run Slower growth rates affected the firms in more slowly. Among the Top 7, the num- the Top 100, but it would also be safe to say our Regional Leaders list, too. Seven out ber of total employees grew at less than that this year it was more top of mind than of the 10 regions reported average firm half the rate reported last year, and it was usual, with a central position on their list growth rates that were lower than last year off by between two and three percentage of priorities that had been taken by staffing (though generally with larger total reve- points in the other two tranches. (For tech- challenges in the previous five or so years. nues). (See Regional Leaders, page 25.) nical reasons, we did not calculate growth (See Strategies, page 10.) Recruiting and On a more positive note, average firm rates for partner figures this year; see page retention remain a preoccupation, natu- growth rates in seven of the regions were 3 for an explanation.) rally, and adaptation to, and the best use above the average for the Top 100, and se- There were certainly individual firms of, technology are also important parts veral of the lists gained new members this that bucked the trend — eight firms repor- of their strategies for 2018, but all with a year, proving that growth remains possible ted growing their 2017 revenues by more much sharper focus on how they’re contri- — you just have to look for it. AT 4 overview BEYOND THE TOP 100: FIRMS TO WATCH Once again, a record crop of firms made this year’s “Firms to Watch” list, with almost 20 firms within striking distance of next year’s list. (Note that the roster includes only firms with positive growth rates; firms in the revenue range with negative growth rates are excluded.) Rev % Firm Headquarters Managing partner Year-end ($ mn.) chg. Offices Partners Employees RGL Forensics* Denver Angela McPhee Dec 39.40 4.51 18 32 175 Clark Nuber Bellevue, Wash. Robert Wheeler Dec 38.60 6.63 1 22 201 Gursey | Schneider Los Angeles Stephan Wasserman Dec 38.11 4.53 6 16 182 Sax Clifton, N.J.