overview
Is the glass half full, or half empty?
BY DANIEL HOOD
Given the current dire state storm, a significant majority saw oppor- that grew by that much or more in 2007,
of the world economy, the tunities to sell more services to more and the 14 who achieved that level of
answer to the question clients — from better audits to convince success in 2006. Similarly, seven T100
posed by our cover may timid bankers to lend, to recession firms reported declining revenues in
seem obvious. Indeed, the better ques- advice and consulting on the pending 2008, against three in 2007 — and only
tion might be not whether the glass is one in 2006.
half full or half empty, but whether a STILL HOLDING WATER And when the glass-full types
glass remains at all. point to the opportunities they see
Revenue growth of the Top 100 Firms,
For the accounting profession, in the troubled economy, the glass-
in percent*
however, our cover’s question is well empty crowd can note that fewer
30
worth asking, and many aspects of the firms reported increasing their busi-answer can be found in the facts mar- ness in almost all the client and
25
shaled here in our annual report on niche service categories that we
the Top 100 Firms. asked about. (See Niches & Clients,
Optimists who see the glass as half pages 12-13.)
20
full will find their main argument in a
single headline figure: The Top 100
15 IN MOTION
grew their net revenues in 2008 by 8. 12 However you regard the level in the
percent, and the weakest performance glass, there can be no doubt that its
10
of any segment of the list — that of contents are in motion. This year
firms with over a billion dollars in rev- saw some of the biggest changes in
5
enue, including the Big Four, RSM the Top 100 roster since the consoli-McGladrey/McGladrey & Pullen and dation boom of the late 1990s.
Grant Thornton — was a very respec- At the regional level, the South-
0
‘94 ‘97 ‘01 ‘05 ‘08
table 7.44 percent. (See Databank, east took the lead as the fastest-
*Compiled from individual firm results
page 5.) Firms with between $100 mil- growing part of the country, with
reported at year’s end (includes some estimates)
lion and $1 billion in revenue grew by the New York Metro area holding
9.73 percent, and firms with less than switch to International Financial Re- onto its position in second, but the
$100 million in revenue grew by 12.51 porting Standards. (See Firm Strategies, number of individual firms on the list
percent. page 8.) from each region changed significantly.
Growth like that in a year when the (See Regional Leaders, page 14.)
U.S. economy practically flatlined is no This reflected major changes at the
mean feat — and many individual firms level of the individual Top 100 Firms.
managed to post growth rates signif- Perhaps the most important is the num-icantly above the average, with 10 ex- ber of T100 mainstays who are no longer
panding their revenues by over 25 per- on the list because of mergers and
cent. (See the full list, page 17.) acquisitions. The Schonbraun McCann
What’s more, accounting firms Group, for instance, sold its real estate
themselves are strikingly optimistic consulting practice to a non-accounting
about the future. As part of our study, we firm, leaving behind a much smaller
asked T100 executives whether they saw CPA practice. Similarly, Mahoney Cohen
today’s economic woes as a crisis or an and Tofias don’t appear this year
opportunity, and while some did reply because of late-2008 mergers with
that they were battening down the CBIZ/Mayer Hoffman McCann, and
hatches and preparing to ride out the See FULL/EMPTY on
6
HALF EMPTY?
Pessimists, however, will point out that
growth rates overall and for all three
main revenue bands on the list — those
over $1 billion in revenue, those
between $100 million and $1 billion,
and those below $100 million — were off
at least three percentage points from
last year.
A deeper look at the data may seem
to strengthen the argument that the
glass is half full: While four T100 firms
pulled off growth of over 30 percent in
2008, that’s a far cry from the 11 firms
