A Pandemic Survival Guide

 

Several years ago, I was consulting with an accounting firm located in New York’s financial district. It fielded an aging and intractable ownership group and no one on its bench who even remotely resembled the key to a succession plan.

Therefore, the logical strategy for a firm in that situation was to seek an upstream merger. As I explained what was needed to the managing partner, I noticed that something was missing on his desk that normally is there. It took a moment before I realized that the absent staple in question was a computer.

Now I had to think about that for a second – the owner of the firm did not use a computer. I had never before encountered an owner or even a staff member in a CPA practice who didn’t. His aversion to technology was hardly an outlier within the practice, however. There were towering stacks of files piled up against several walls that would have earned a citation from any local fire inspector.

I thought about that practice and how long it would have remained in existence during the COVID-19 pandemic, when for thousands of firms around the country remote technology has evolved from a luxury to a Swiss Army knife for survival.

But back to the present.

One question that I now get asked incessantly is do I think there will be a surge in firm owners looking to exit when the pandemic eventually ebbs? My short answer is yes, because the tandem of the protracted quarantine and the annual pressures of tax season among other filing deadlines will prompt many firms who were previously on the fence about a merger to take that plunge for both succession and in many cases, survival.

In the midst of the pandemic one managing partner asked me what steps I think he should take to maintain his practice during the COVID crisis. He had assumed the reins of the practice from his father and was not interested in a merger, a strategy I could not understand because not only was he short staffed, but he also had a talent drought in terms of potential new partners.

I told him this was no longer his father’s practice. The virtual firm concept is here and he either had to accept it or fall hopelessly behind the more aggressive firms in terms of IT. I suggested he also focus the firm’s collective marketing energies on their higher end advisory services since automation of commoditized services was not some far-fetched theory but an encroaching reality courtesy of AI and machine learning.

But I advised he still would be wise to consider an upstream affiliation.

He still hasn’t and probably won’t but on the plus side he does have a computer on his desk with three oversized screens.