All in the Family
Like many businesses across the country, small and family-owned CPA practices are facing mounting challenges when it comes to passing the torch to a second generation.
Steven Remy, CPA, is extremely proud of his seven children,
most of whom are grown and enjoying successful careers in
finance, education, administration, and veterinary medicine. But not
one of Remy’s offspring wanted to be an accountant, leaving
him in a predicament as a managing member of RVG Partners LLC
in Oak Brook.
“It used to be that family members would come in and follow in your
footsteps and then eventually take over the business,” he says. “It’s
not like that anymore.”
In fact, one of Remy’s sons was straight up about why he didn’t want
to become a CPA. “Look Dad, I don’t want to sit in an office like you
do; I’m not looking forward to working that hard,” Remy’s son told
him. “I just don’t want to be in a business where everything is based
on how many hours you can work.”
There’s more to this story than just trying to avoid working long
hours. After all, veterinarians, teachers, and finance professionals
are all known for putting a lot of time and sweat equity into their
educations and careers. The fact is, being a CPA just doesn’t seem
to have the same allure that it once did.
“Accounting isn’t a glamorous profession,” concedes Remy, who
has spent more than 30 years in public accounting. “Young people
are more drawn to techy, engineering, and finance-type positions
these days.” These realities not only impact small firms like RVG
Partners, where Remy’s niece is the only family member in the
business, but also the broader profession.
“I DON’T WANT TO DO TAXES”
The fact that small CPA firms are having a hard time getting family
members interested in the business is a major issue in a profession
where everything from the “aging out” of baby boomers and lure
of sexier careers, to clients increasingly looking online for
accounting and finance advice, is making it more difficult for firms
to stay in business.
Kathleen Orlando, CPA—who has no family members interested in
joining and/or taking over her suburban Palos Heights firm,
Kathleen Orlando & Associates Inc.—lives with these going
“One of my friend’s daughters just graduated from Saint Xavier
University with an accounting degree. When I approached her about bringing her into my business, her response was, ‘I don’t want
to do taxes.’ In fact, she’s not even sure she’s going to sit for the
CPA exam because it’s really not required outside of public
accounting,” Orlando says.
She also sees online tax preparation software and the Internet as
two big competitors. “Intuit came in and saturated the market with
its software to the point where people no longer think they need a
CPA to do their taxes or payroll,” Orlando says. “And a lot of clients
just don’t see us as a business partner anymore. They buy a piece
of software and think it can run their business.”
And while succession planning for small and family firms is getting
more difficult as family members choose to explore career
opportunities outside of the accounting realm, these challenges
aren’t isolated to the accounting field. According to PwC’s 2019 U.S.
Family Business Survey, just 33 percent of companies last beyond
their founder’s generation and only 12 percent survive to a third
generation of ownership.
“In making the transition from first generation to second, family
businesses face the transformation from start-up entrepreneur to a
more structured, complex organization,” PwC reports. “This is the
most difficult transition for family businesses; not all will succeed.”
This fact creates another challenge for firms: how do they sustain
their family businesses when the family businesses they serve
aren’t sustaining themselves?
“WE DON’T WANT THAT KIND OF LIFE”
As the owner of six-person CPA firm Holland & Company CPAs in
Naperville, Dean R. Holland, CPA, runs his company alongside an
investment advisory firm owned by his brother. The brothers have
been working from the same office for 25 years, but both are now
facing serious succession planning issues. “We’re in the same boat
in that none of our kids wanted to get into the business,” Holland says.
“When my two kids got older and were talking about college, I
asked, ‘Well, do either of you want to go to school for accounting
and maybe take over your dad’s business or get involved in it?’”
Holland recalls. Their answer was straightforward: “When we were
growing up, we saw the long hours that you worked. You weren’t
around from January through April; we don’t want that kind of life.”
At that point, a disappointed—but not overly surprised—Holland
realized that his firm probably would never see a second
generation of family ownership. “It was enough to scare them away,
but that’s just part of being a CPA in public accounting,” he says.
“Your life is pretty much put on hold from January through April. I've
been doing this for more than 30 years now—it does get a little old.”
TESTING THE WATERS
Knowing that they’re not alone in their struggles to bring a new
generation of leadership onboard, the Illinois CPA Society members
interviewed for this article suggested there are some things that
firms can do to help right the ship.
For example, Holland sees value in internship programs, which
could be directed either at family members or outside candidates
who want to test the waters. He says the experience can give
young people “a really good, inside look at what the industry is
really like.” This is particularly true for small firms, where an intern
can be cross trained on various responsibilities (versus a larger firm,
where he or she may be placed in, say, the audit department).
“In a small firm setting, you wear a lot of hats,” Holland says, “so
small firms can offer interns many different hands-on experiences.
One week we may be working on payroll returns and the next week
we’re doing write-up work.”
Remy suggests it takes a reversal of perception to get new people
interested in accounting. Getting people to understand its value
sometimes means impressing the point that it’s a very stable,
consistent profession that offers very low levels of career risk.
“A lot of young people are grabbing for the brass ring and wanting
to make millions of dollars,” Remy says. “I've created a very good
career for myself, as have a lot of others in this business. We need
to be sharing that message and using it to attract new talent.”
Going forward, all three CPAs say they’re concerned about the
small, family-run firm’s future. In a world where accounting goes
head-to-head with engineering and IT in recruiting analytically
minded students and young professionals, Remy says the onus is
on the profession to start doing more to win the war for talent.
“We’re all competing for that same mind,” Remy says, “and let’s face
it, it’s a lot more fun to make something than it is to report on it.”