The Overlooked Advantages of Independence

Art Kuesel President, Kuesel Consulting
Moving Your Firm Forward

Many certified public accounting (CPA) firm leaders today feel like they’re missing out if they don’t merge up, take a private equity (PE) investment, or join a PE platform. Others, however, are rejecting that path and declaring their intention to stay independent.

There’s no question that merger and PE mania has swept through the profession. In the last five years alone, we can count hundreds of these types of transactions swallowing up big firms and making them even bigger, all with the goal of funding rapid growth, geographic expansion, and a breadth of capabilities.

But the strategic question for firm leaders isn’t simply whether consolidation is happening— it’s what independence still offers. While PE brings capital and larger firms bring scale, independence offers something harder to quantify—advantages for leadership, staff, and clients that are less obvious and often overlooked.

IT’S ALL ABOUT RELATIONSHIPS

One of the biggest advantages of independence emerges in the area where accounting firms have traditionally built their value: relationships. The roots of a local firm generally run deep with considerable ties to clients and a solid connection to the business community in which they serve. With that comes longevity, depth, and a strong reputation.

A typical “main street” business doesn’t set out to work with a top 100 firm in the country— they’re looking for one they know, like, and trust. Also, clients typically don’t like surprises. Clients appreciate knowing their service team will remain consistent.

That relationship-driven expectation can look different inside larger firms that may focus less on the relationship and more on compliance, process, and risk management. For instance, a firm built to serve a large company like Boeing is far different than one serving the small local boba tea cafe. Independent firms have the freedom to choose which clients they serve and what services they offer, giving them the control to preserve the client-focused approach valued by their clients.

A MORE MANAGEABLE PACE

Independence shapes how firms serve clients and how quickly they feel pressured to change. The rate of change is often slower inside independent firms compared to PEbacked ones, which are more focused on the accelerated use of technology and rapid growth to meet strategic targets or investor expectations.

Metrics are also likely different within PE-backed firms, possibly with an increased emphasis on performance (e.g., billable hours), top-line growth, profitability, or requirements to leverage offshore resources. These priorities may not be attractive to professionals accustomed to the operational routine at smaller firms.

Beyond client relationships and pace, independence can produce these additional advantages inside the firm itself:

• A closer proximity to leaders: Professionals who are closer to decision makers often enjoy stronger mentorship, broader skill development, and a quicker path to advancement. The larger the firm, the more steps there are between the high performers and leadership.
• A demonstrated difference in focus that can attract talent: Independent firms often offer professionals less volatility and a deeper focus on client relationships. As a result, this can pull in talented professionals who aren’t suited for a larger environment with clients they’re unaccustomed to serving. Additionally, independence can provide differentiation when many larger firms appear similar.
• A commitment to culture that sparks loyalty: Remaining independent means the culture you built is the culture you alone preserve and refine. With their own leadership styles and commitments to service, independent firms can engender a loyal following among staff and clients alike. They can also position themselves as stable, partner-led, and relationship-centric firms.
• Agility through a simpler ownership structure: Being nimble is easier when ownership and control sit in the same room. For example, smaller firms can restructure leadership or rethink compensation within the partner group, while larger firms often introduce boards, reporting requirements, or performance metrics tied to investor oversight. Independence allows governance to be redesigned around the firm’s strategic needs instead of its capital structure.

INDEPENDENCE DOESN’T MEAN STATUS QUO

Of course, independence isn’t automatically an advantage. Firms that choose independence should do so intentionally, understanding that it comes with its own challenges. It’s not the free and easy path—and there will still be the need for change. In fact, to compete in this evolving landscape, independent firms must update their governance structures, pressure-test succession plans, invest in new technology, and ensure an attractive buy-in and buy-out for their partners exists.

Importantly, independence isn’t inherently superior. Poorly governed independent firms can struggle just as much as poorly integrated larger ones. But what may be the greatest—and most overlooked—advantage of independence is the permission to preserve structural simplicity, economic sovereignty, and cultural continuity. By remaining independent, firms retain the freedom to define their own success, and that autonomy may be the greatest strategic advantage of all.