It’s no secret that our profession is going through a challenging time. Stress and workloads have never been higher. Regs and provisions keep changing. Boomer partners are retiring in droves and try as we may, we just can’t seem to attract enough talented young people to the accounting world — and convince them to stay once we do.
For answers, I’ve found it helpful to look outside the profession, or to influencers who didn’t follow the traditional path to our business. That’s where Blake Oliver, CPA, comes in. Founder of Earmark CPE and co-host of the popular Cloud Accounting podcast, Oliver is on Accounting Today‘s Top 100 Most Influential list, among others. Not bad for a college music major, who’s changed jobs more times than he can remember and who literally fell into the profession as a result of seeing his dream of creating music for Hollywood films disrupted by technology.
“Studying performance in college, I didn’t learn anything practical in terms of career preparation,” recalled Oliver, “but I learned something more valuable — grit. It’s just like playing sports at a high level. You learn skills that make you a successful leader and manager the rest of your life,” Oliver related, on a recent podcast we did together.
To make ends meet, Oliver became an SAT tutor. When his firm’s bookkeeper quit abruptly, Oliver talked his way into taking over the job, since bookkeeping looked to be more stable than tutoring. So, he taught himself everything he could possibly learn about QuickBooks, eventually becoming a QuickBooks ProAdvisor and realized he could make a lot more money helping people with their accounting. After passing the CPA exam, Oliver started Cloudsourced Accounting, a cloud-based bookkeeping company that he eventually sold, and which is now part of Aprio’s cloud computing group.
While contemplating what to do next, FloQast recruited him to be a product marketer, which required him to host numerous webinars as part of his job. Product marketing allowed Oliver to blend his accounting and creative skills, to create compelling CPE content that would resonate with CPAs. Oliver enjoyed the work but felt limited because he could only talk about topics that were relevant to the company’s apps and he had to be “pretty salesy,” instead of keeping the content purely educational.
So, Oliver left FloQast to start his own firm, Earmark CPE, which allows him to create CPE for accountants from all kinds of educational sources, including listening to engaging podcasts, and even helping them create their own CPE content. “You create amazing content, every time you release an episode. People should get CPE for that,” remarked Oliver.As a young person so deeply entrenched in technology, you’d think Oliver would be leading the charge to automate everything in our profession that’s not bolted down. But he told me most software companies don’t realize one very fundamental limitation to accounting technology — you can’t automate the relationship side of the business — the people. And Oliver realized that’s where virtual firms come in; they leverage technology to give the best available people the freedom to do their best work, whenever they want to work, wherever they want to work.
Virtual firms
Oliver cited virtual firms such as Lance CPA Group as those that are figuring out how to do outsourcing, but in a much better way. “Once you’ve set up your team to work whenever they want, wherever they want, you can have people all over the world,” noted Oliver. “No longer are you managing people in person 9-to-5, peering over their shoulder to see what they’re working on. You have to manage now on a remote project management platform,” asserted Oliver. “But if you set it up right, you can rest assured the work is getting done.”
Private equity and the dinosaur partnership model
As I wrote in Accounting Today, no matter how much tech we bring into the equation, a CPA firm is first and foremost a “people business.” That’s where smaller firms that don’t attract PE investment can stay ahead — by providing that personal touch to clients and their teams. Oliver said the private equity discussion helped him realize that the accounting firm partnership model “is no longer a good way of governing in a fast-paced business like ours.” That’s because “partnerships are by nature conservative, and they are difficult to change,” related Oliver. “You have all these partners five years from retirement and their mindset is: ‘I don’t want to change anything; that’s going to disrupt my plan to exit.'”
Kristen Rampe, managing partner of Rosenberg Associates, explained on a recent episode of my podcast, how the holistic corporate model is taking over the partnership model at more and more accounting firms. Oliver agreed that the fastest-growing firms he knows no longer use a partnership compensation model. Instead, they use a unified corporate model. “Let’s say you have your own firm of less than ten people, and you get a buyout,” said Oliver. “Now you’re an employee. But if you’re at a certain point in your career, being an employee may actually be worth it. You don’t have the stress that comes with being an equity holder in the firm. You get a good salary. Let’s face it. When you’re an equity partner in an accounting firm, you don’t really own anything. You just have a deferred compensation plan when you retire. It’s not like you can cash out at any time. It’s more like a pension.”
Personally, I’ve found that when partners are getting bought out by PE, they’re just becoming employees with very little ownership. So why not just get rid of that partnership structure and give partners their buyout money upfront since they could be working for 20 more years without a big payout at the end? Oliver agreed that most partner retirement plans are just “unfunded liabilities” and that we’ll be a lot more firms “upside down” because they don’t have enough young CPAs coming in to assume senior leadership and fund the outgoing partners.
Sadly, Oliver said too many accounting firm partners feel closer to their colleagues than they do to their spouses. This can’t continue and like Oliver, I think we’ll see corporate models take over at accounting firms and all employees will have equity in the form of stock options. As more and more firms do away with deferred compensation entirely, we’ll see partners with generous salaries and also some type of bonus that takes into account how much equity they’ve brought into the firm. But it likely won’t be deferred compensation per se.
Separation between partners and staff
“Partner versus team member was an artificial barrier we created long ago,” observed Oliver. “Above this line, you have a voice. Below this line you work. It reminds me of the old factory model of production (management vs. workers). We’re in a knowledge economy now. Young people want input on how things are run. They don’t want to just do what you tell them, as the partnership model dictates.” And that’s why Oliver agrees with me that more and more firms are looking into ways to give equity and stock options to all the staff at the firm, not just to the partners.
Recruiting and retention
As Oliver observed, everyone in our profession is wondering why we can’t attract new members to the profession and/or convince them to stay. The explanation he often hears is that we’re not focusing enough on technology. “But it has nothing to do with technology,” asserted Oliver. “It has to do with the fact that the hours are long, the pay is bad, and you don’t have any control over your life. Worst of all, you don’t feel like you have purpose. Who wants to work in that kind of environment?” Oliver asked.
John Garrett, author of “What’s Your ‘And'” told me on a recent episode of my podcast that you’re not defined by your title at the office. You’re defined by who you are and what your passions are. I don’t think enough firms realize that. Oliver agreed. “The fact that Garret’s show even has to exist is a signal that something is wrong with our profession when people don’t feel like they can be themselves at work. If you want people to feel happy and stay at your firm? Let them be themselves,” observed Oliver.
I told Oliver about my recent meeting with the head of an accounting firm that’s structured as an ESOP (employee stock ownership plan). Everyone has a stake in the company, and everyone has a voice. “That’s brilliant,” remarked Oliver. “People just want to be heard. They want to know that they make a difference. It’s not that the partnership model is broken per se, but everyone needs to be a partner. If everyone had a vote, trust me, a lot of things would change —for the better.”
