I recently saw a social media post from Carla McCall, CPA, CGMA, managing partner at AAFCPAs and the AICPA’s immediate past chairperson, that simply stated, “Not for Sale.” Initially, the post made me laugh out loud (literally). But as I studied the comments on the post, I began to realize that she was making a very bold and public declaration: Her firm had no intention of joining the private equity (PE) gravy train.
In the modern accounting landscape, a powerful narrative has taken hold: PE investment is the essential catalyst for growth, technology adoption, and succession. The headlines are filled with stories of mega deals and PE-backed consolidators, creating an impression that the traditional certified public accounting (CPA) firm and partnership model are endangered species. This has left many firm leaders asking a critical question: Can we still compete?
While it’s true that PE offers a potent and capital-intensive path forward, it’s far from the only road to success, which is why I’d like to add my voice to the choir of those who’ve chosen to remain independent (at least for now) and why I believe it’s still a viable choice.
Why fight to remain independent in a consolidating market? The traditional partnership structure, often maligned as slow or outdated, possesses inherent strengths that PE ownership can dilute.
First and foremost, it offers unquestionable trust. In a world of complex corporate structures, clients and the public rely on an auditor’s unwavering objectivity. A firm free from the influence of a PE owner—whose primary fiduciary duty is to its investors, not the public interest—can offer a level of perceived and actual independence that’s increasingly rare and valuable. This is a powerful differentiator in the marketplace, particularly for attest clients who are under intense regulatory scrutiny.
Second, independent firms offer agility and autonomy. They can make decisions based on what’s best for their clients and their people over the long term without needing approval from a board focused on quarterly returns or a five-year exit strategy. They can pivot quickly to enter a new market, invest in a promising niche, or customize a service offering without the bureaucratic layers that can accompany PE ownership. This entrepreneurial spirit is the lifeblood of many successful local and regional firms.
Competing against firms supercharged with PE capital requires a deliberate, focused strategy. It’s not about matching their spending, but it’s about being smarter, more focused, and more connected to the core values of the profession. Here are four strategies that can help firms independently thrive.
The era of the generalist CPA firm is fading. PE-backed giants aim to be everything to everyone, leveraging their scale to offer a vast menu of services. The most effective counterstrategy for an independent firm isn’t to imitate this, but to do the opposite: become the undisputed expert in a specific niche.
This could mean dominating a specific industry, like life sciences, construction, or government contracting. It could also mean building a powerhouse practice in a complex service line, like international tax; cybersecurity compliance; or environmental, social, and governance reporting. By developing deep domain expertise, a firm transforms itself from a commodity provider into a high-value, premium-priced specialist. Importantly, clients with complex problems don’t seek the biggest firm—they seek the best firm for their specific issue. Niche domination creates higher margins, long-lasting client relationships, and a reputation that attracts top talent.
A common argument for PE is the need for capital to fund technology. However, the cost of powerful technology has plummeted. Cloud computing, artificial intelligence (AI) for process automation, and sophisticated data analytics tools are more accessible than ever. These days, independent firms don’t need a nine-figure investment to build a modern tech stack.
The key is strategic adoption. Instead of buying every shiny new tool, independent firms should focus their investments on technology that directly enhances efficiency and client value. This may include:
The “succession crisis” is often cited as the primary driver for PE, as these deals offer aging partners a lucrative exit. However, this is a short-term solution to a long-term problem. The sustainable solution is to build a firm that the next generation is excited to lead.
Culture is the independent firm’s ultimate weapon in the war for talent. While PE-backed firms may offer high salaries, independent firms can offer a more compelling, holistic package that includes:
Growth still requires capital, but PE isn’t the only source. Independent firms can fund their ambitions through a combination of traditional bank financing, disciplined reinvestments, and partner capital contributions.
They can also achieve scale and expand their reach without merging or selling. By forming strategic alliances and joining networks of other independent firms, they can collaborate on large engagements, share best practices, access specialized expertise, and co-invest in technology. These networks allow firms to retain their autonomy and culture while gaining the benefits of a larger organization.
Ultimately, thriving without PE requires a different definition of success. The PE model defines success as rapid scaling leading to a profitable exit for investors. The independent model can define success as sustainable profitability, deep client trust, an impeccable professional reputation, and a fulfilling workplace for its people.
The choice for CPA firms isn’t between selling out or falling behind; it’s a choice between two distinct futures. One is defined by external capital and shareholder returns, and the other—the independent path—is defined by professional autonomy, strategic focus, and an unwavering commitment to the clients and communities a firm serves. The independent path isn’t easier, but for those who navigate it wisely, it remains a profoundly rewarding and competitive way forward.
