Strategic Optionality: Preserving Choice for the Future of CPA Firms

Brian Blaha, CPA Managing Director, Winding River Consulting
Strategic Insights for Today’s Firm Leaders

One thing is unmistakable to today’s certified public accounting (CPA) firm leaders: The ground beneath the accounting profession is shifting. Private equity (PE) capital is accelerating into the industry; firm valuations are being discussed in ways that were unthinkable a decade ago; and all at once, technology, talent shortages, regulatory pressures, and rising client expectations are colliding.

For many firm leaders, the conversation feels increasingly binary—sell or don’t sell, take capital or stay independent, modernize or risk falling behind.

But framing the future as a forced choice misses a more fundamental issue. The real question firm leaders should be asking isn’t which path to take but whether they’re intentionally building the ability to choose a path at all. That question sits at the heart of what I’ve come to call “strategic optionality.”

WHAT STRATEGIC OPTIONALITY REALLY MEANS

Strategic optionality isn’t a buzzword or an argument against PE. At its core, strategic optionality is a firm’s ability to maintain meaningful choices about its future—choices aligned with its strategy, values, and long-term vision. Firms with strategic optionality can choose whether to remain independent, pursue a merger, accept minority investment, or accept PE capital.

Firms without strategic optionality often feel forced into decisions by circumstances they no longer control: unfunded retirements, underinvested technology platforms, leadership gaps, or an inability to compete for talent.

Over the past several years, I’ve paired this concept with an enterprise value lens when working with firms that have declared—clearly and sincerely—that they want to stay independent. However, in our profession now, independence can no longer be a passive state. It has to be designed, funded, and governed with intention.

THE SHIFT FROM INCOME TO ENTERPRISE

The influx of PE investments in professional services firms has fundamentally altered how firms think about themselves. Historically, most CPA firms operated as cash-flow businesses, with profits distributed annually, deferred compensation plans providing modest retirement security, and ownership primarily about income over appreciation.

PE has introduced a different paradigm: Firms are now operating as multifaceted financial services enterprises built to maximize enterprise value. While this shift has understandably created anxiety, I view it as largely positive. Running our firms as businesses—real businesses—shouldn’t be controversial. In many ways, it’s overdue.

This evolution has also exposed an uncomfortable tension. As firms chase enterprise value, questions arise about who that value is ultimately created for—and at what cost. In some models, shareholder value becomes the primary objective, while clients, people, and even the profession itself risk becoming secondary considerations.

This then leads to a harder, but necessary, question: Is the accounting profession still a profession?

BLURRING THE LINES

It’s no secret that the accounting profession feels under pressure from multiple directions. Some argue we’re no longer a profession at all—we’ve simply become another segment of the broader financial services industry.

By regulation, a licensed CPA firm is required only for attest work. Advisory, consulting, technology, and many other services increasingly operate outside the traditional CPA firm structure. As alternative practice structures proliferate, the distinction between “the firm” and “the profession” continues to blur.

Even the concept of “partner” is evolving. The partnership model has long served as both an ownership mechanism and a motivator, but in many modern structures—particularly those involving PE— partners have effectively become shareholders. Partnerships will persist, but “making partner” no longer carries the same meaning it once did in many firms as ownership, control, and long-term economics vary widely depending on structure, governance, and capital strategy.

THE MYTHS WE TELL OURSELVES ABOUT THE NEXT GENERATION

One of the most fascinating (and troubling) patterns I see in boardrooms is how much speculation exists about what next-generation firm leaders want despite how rarely those assumptions are tested.

There’s no shortage of commentary about this group: their work ethic, desire for balance, or appetite for ownership. Yet, when leadership teams are asked, “Have you asked them?” the answer is often no.

Well, my consulting team did ask this question at one firm we worked with, and the answers were revealing. For many emerging leaders, the desire to be an owner hasn’t disappeared. What’s changed is the context: They want transparency, a clearer line of sight to value creation, and ownership economics that don’t require waiting decades to realize the benefits.

THE ‘ONE-TIME UNLOCK OF VALUE’ PROBLEM

At Accounting Today’s Private Equity Summit in November 2025, I heard two CEOs of recently PE-backed firms describe their transactions as a “one-time unlock of value.” This phrase has stuck with me. It’s accurate—and that’s precisely the issue.

For current senior partners, that “one-time unlock” can be transformative. But it also concentrates the majority of value realization at a single point in time. Has anyone truly modeled what the second bite of the apple looks like for the next generation? If a firm sells a majority stake, future value creation largely accrues to the PE sponsor. Yet, the firm still depends on its next generation of leaders to grow, innovate, and execute the strategy required to deliver the sponsor’s returns.

Without the traditional partnership “carrot,” firms must rethink what ownership actually means.

THE MATH—AND THE RISK—BEHIND THE PROMISE

Consider a well-run firm with $50 million in revenue and a 15% earnings before interest, taxes, depreciation, and amortization (EBITDA) margin that sells a 70% stake to a PE firm. To deliver an attractive return—often four to five times invested capital over five years—the firm must materially grow EBITDA. In an industry growing at roughly 6-8% annually, that requires consistent outperformance, meaningful margin expansion, and often inorganic growth.

Yet, the pool of attractive acquisition targets is shrinking as firms with and without PE backing compete aggressively for growth. The math becomes tight, execution risk increases, and the burden of delivering that growth falls disproportionately on the next generation of leaders.

We haven’t yet seen many second exits in this industry, but when we do, they’ll offer important lessons—for better or worse.

INTENTIONAL DESIGN PRESERVES CHOICE

For partnership groups evaluating their future, the goal should be preserving choice rather than avoiding change.

Strategic optionality requires understanding where each partner sits in their career and balancing individual financial realities with collective fiduciary responsibility. It demands honest conversations about capital retention, governance, ownership pathways, and the firm’s role in upholding public trust.

Firms that intentionally design enterprise value—by separating compensation from ownership, reinvesting strategically, modernizing governance, and creating real ownership pathways for future leaders—expand their options rather than constrain them. Independence becomes a choice supported by discipline, not nostalgia. External capital becomes a strategic option, not a last resort.

To me, strategic optionality is how firms stay in control of their destiny in a profession that’s changing whether we like it or not.