Independence at a Crossroads: Should Your Firm Take the Private Equity Path?

As private equity (PE) continues to reshape the accounting profession, certified public accounting (CPA) firm leaders are grappling with a critical question: Can they remain independent and still compete?

PE has moved from the fringes of the accounting profession to center stage. Since 2021, roughly two dozen of the 100 largest accounting firms in the United States have either sold an ownership stake to PE investors or been acquired by a firm that’s done so.

Once wary of external ownership, accounting firms are now actively courting or being courted by investors. The country’s top 30 firms in particular have embraced PE to fund rapid growth, invest in technology, and improve operations.

“My observation is high performers do really well in the PE world,” says Allan Koltin, CPA, CGMA, CEO of Koltin Consulting Group in Chicago and a top advisor to CPA firms. “But the downside to that is low performers don’t do so well.”

Here, firm managing partners and consultants reveal strong arguments for and against taking the PE path.

Investment, Speed, and Scale

PE can solve an immediate problem: The need for capital. Injecting more capital into a firm can accelerate mergers, upgrade technology, and pay for unfunded deferred compensation programs. Bob Lewis, MBA, president of The Visionary Group in Palatine, Ill., estimates 85% of firms are in that category. With valuations being three or even four times greater than before, retiring partners can also exit with sizable payouts.

Another attraction is speed, says Matt Rampe, a partner with consulting firm Rosenberg Associates. PE-backed firms move faster into acquisitions and advisory services than traditional partnerships.

Rob Brown, a U.K.-based host of multiple accounting podcasts and co-founder of the Accounting Influencers network, says PE also brings experienced professional support: “Sometimes accountants aren’t entrepreneurs, so PE brings in a lot of people with operational expertise that have run and scaled businesses.”

A recent PE survey by INSIDE Public Accounting (IPA) shows that PE-backed firms significantly outpace their non-PE counterparts in total growth, posting an impressive 38.4% increase compared to just 11.7%. Even excluding mergers and acquisitions, PE firms still lead with 16% organic growth versus 10.3% for non-PE firms.

Culture Clashes, Lost Control, and Client Concerns

Of course, PE doesn’t come without tradeoffs—and some of them are significant. Brown notes that moving decision making from a partner group to private investors with growth targets is a leap some firms aren’t willing to make: “PE provides fuel, but it also changes who’s driving the organization. Firms need to ask themselves if that direction fits their long-term goals.”

A common structural change is the spin-off of audit functions into separate entities.

Jeffery Mowery, CPA, JD, LLM, CFP, managing partner and co-founder of Mowery & Schoenfeld LLC, a firm that’s maintained its independence from PE, questions whether these spun-off audit practices might be underfunded or pressured to cut corners, potentially undermining public trust.

One of the main deterrents to PE for many firm leaders is the fear of losing a sense of who the firm is (i.e., its culture).

Rampe notes that some PE professionals have significant experience in accounting firms and understand the traditions and cultures that come with those environments. Others, however, have no experience, and Rampe says that can backfire if PE firms are attempting to make rapid change: “I think you’re going to hit very strong resistance if you don’t understand or disregard a firm’s tradition and culture.”

Mowery says he’s already starting to see disgruntled professionals leave PE-backed firms. For example, a partner that he recruited from a PE-backed firm is now starting a new service line. “The A players aren’t going to stay,” he predicts.

And despite what some say, Mowery stresses that clients do very much care about who owns the firm, especially if they’re suddenly receiving services from someone new.

Lessons From Firms That Said No

For Chicago-area firms like Mowery & Schoenfeld and Topel Forman LLC, the answer to PE investors is still no—they know that an influx of capital comes with cultural tradeoffs and questions about long-term control.

Some firms aren’t just resisting PE opportunities and offers—they’re walking away from them. Others have gone through due diligence and backed out before closing. Some, like Mowery, aren’t even taking phone calls.

According to Thomson Reuters’ 2025 State of Tax Professionals Report, 57% of firms said PE isn’t even on their radar, and another 30% said they’re not interested even when approached.

While PE has been touted for the fat paychecks that retiring partners can receive upon closing, not everyone is satisfied. For example, after Grant Thornton sold a 60% stake to New Mountain Capital last year, 350 retired U.S. partners hired lawyers to represent them, arguing that lump-sum payouts understated their earned retirement benefits. They contended that the “discount rate” used was manipulated to favor current partners.

Lewis says he’s not hearing about regrets so much as discomfort over growing pains. PE can be aggressive about making acquisitions and some leaders would prefer to pump the brakes to better integrate firms before moving on to the next batch. Koltin also notes that the administrative work required can be a headache as well.

Strong Differentiators Can Fend Off PE

So, can firms stay independent and still compete? It’s not easy, but some firms are proving it’s possible.

Mowery & Schoenfeld, for example, has a lot going for it—fast growth, a group of young partners, investment capital, top talent, and a reputation for being a great place to work. “The reasons we’re an attractive target for PE firms give us the ability to remain independent,” Mowery says.

The firm’s key differentiators are an entrepreneurial mindset, family-like relationships with clients, a strong emphasis on professional development, and career growth with staying power. In fact, seven of 18 partners began their careers with the firm. “I couldn’t sell this firm out from under those people. I couldn’t and wouldn’t do that—I couldn’t face them,” Mowery explains. “We have people who’ve worked in this firm for 20 years. It’s the only job they’ve ever had, and they’re phenomenal at it.”

Additionally, Topel Forman has doubled in growth over the last five years from $20 million to about $40 million—all without PE.

Managing partner David Levine, CPA, JD, says one of the firm’s key differentiators is the flexible culture, where not one of its 150-person staff are required to work from the office. Also, Topel Forman’s small-firm mentality means the partners truly have a say in controlling their destiny. And more importantly, its clients and staff prefer the firm to stay independent.

“We’ve been trying to reimagine what an accounting firm should be. We’ve ‘over-hired’ to lower our busy season hours,” Levine says. “We’re trying to make this more of a regular profession without killing our people a couple times a year during deadlines.”

In May 2025, Topel Forman’s partners fully examined the PE issue over a two-hour meeting and decided against it. “This is where we want to be right now,” Levine explains.

Getting Your Firm Ready to Compete With PE

Not every firm that wants to stay independent has the foundation that firms like Mowery & Schoenfeld and Topel Forman enjoy—but with deliberate work, they can build it.

Rampe advises that firms first think about why they started their firm, and what’s their differentiator? If you’re a plain vanilla firm, with the same mission statement you can find on any other firm’s website, Rampe says it’s likely time to go back to the drawing board.

Firms should also think about their culture and their clients, asking themselves what they want to preserve about their culture. Rampe advises firms to get a strong understanding of what their clients need and their pain points, their firm’s most valuable service, and how clients want to buy services from them.

Brown suggests that firms who want to remain independent but also compete with PE-backed firms take these actions:

• Raise prices and exit unprofitable client relationships to release trapped margins.
• Focus on niche sectors to command higher fees and build deeper client relationships.
• Use Small Business Administration loans, bank lending, or employee stock ownership plans for funding instead of giving up equity to an external entity.
• Redesign succession and equity structures to retain and reward emerging leaders.
• Use offshore support and automation to scale without expanding headcount.
• Merge with like-minded independent firms to gain scale without sacrificing ownership.
• Build a strong internal culture that appeals to professionals who want purpose as well as pay—not just a paycheck.

In this environment, Levine notes that firms must run more efficiently, hold partners accountable, and be willing to invest in talent and technology: “If you’re not going to take this potentially lucrative offer from PE, then you can’t also tuck your checkbook in your back pocket and not invest in your business—you’ll get left behind.”

Raising Capital Without PE

To preserve ownership, some firms are also exploring multiple alternatives to fund their futures:

• Going public: Andersen Tax has taken a major step toward going public, filing for an initial public offering that would make it only the second publicly traded accounting firm after CBIZ.
• Minority investments: Bain Capital’s stake in Naperville, Ill.-based Sikich, a top 25 firm, is providing needed capital while allowing current leadership to remain in control.
• Family offices and sovereign wealth funds: These investors are increasingly pursuing minority positions in accounting firms to gain access to estate, tax, and philanthropic planning expertise.
• Selling non-core assets: Spinning off wealth management or consulting units can generate capital without selling the firm.

Is PE Good for the Profession?

According to IPA’s PE survey, 39% of respondents—most of whom were CPA firm partners or managing partners—believe PE is raising the competitive bar, 39% believe it’s too soon to tell, and the remainder consider it a negative force. What’s more, 55% of managing partners believe PE is a short-term phenomenon or aren’t sure.

Lewis believes PE is vital for the profession, which can be undisciplined about making needed investments: “The profession was literally dying without PE.”

Koltin echoed this sentiment: “In this business, if you don’t grow, you die a slow death.”

Overall, Rampe believes it comes down to execution: “Do PE firms bring in high-quality and happy team members, great client experience, better technology, and better profit for everyone? If so, I think they could elevate the industry, especially at this moment when the profession could use some overhaul.”

Despite the positives that PE can bring to the profession, consulting experts stress that accepting a PE investment isn’t right for everyone—and firms that want to resist PE must be proactive.

“Independence isn’t a default anymore,” Brown says. “It’s a strategy you have to fight for. It’s got to be resourced, priced, and protected—otherwise you’re putting your head in the sand if you think PE isn’t coming for you.”

Whether firms are leaning toward a PE deal or committed to staying independent, the most important action for them now is to make an intentional decision—aligning their values, culture, and future.

Related Content:

• One Last Busy Season: Prepping Your Firm for a Successful Sale: Preparing for the sale of an accounting firm requires a lot of careful planning. Here’s what firms need to consider before selling, merging, or taking on a private equity investment.
• IN PLAY: Allan Koltin, CPA, CGMA: As one of the nation’s top accounting consulting experts, longtime Illinois CPA Society member Allan Koltin, CPA, CGMA, shares his advice for firms exploring growth via private equity.