Crain’s is calling it for accounting firms in Chicago. After a seven-year SOX funded rager, everyone is sobering up. You’re all familiar with some of the usual suspects. But even smaller firms, who have often benefited from lower fee structures are feeling the pain:
Jeffrey DeYoung, regional managing partner at Baker Tilly Virchow Krause LLP (formerly Virchow Krause & Co. LLP) in Chicago, says that up to 20% of the firm’s clients have asked for fee reductions…The firm cut staff by 5% to 7% and hired 30% to 40% fewer employees this year, a trend it will continue next year.
The story at BTVK sounds all too familiar but at least one firm, Crowe Horwath, has claimed that it’s doing everything possible to avoid layoffs:
The firm has kept its workforce of 2,400 intact by shifting employees from hard-hit units such as construction and manufacturing into four main areas: financial institutions, health care, private equity and government. In addition, 30% to 40% of employees have used alternative work arrangements in the past year, including sabbaticals, reduced work schedules and paid time off during slow seasons, to help defray costs. “Our strategy is to keep as many people as possible,” [CEO, Chuck] Allen says.
However, firms like BDO are done whining about the past and looking for growth in the coming year even if it won’t be as good as in year’s past:
Stephen Ferrara, partner and regional business line leader at BDO Seidman LLP in Chicago, predicts an increase for 2010 as companies begin investing in business and infrastructure. “Companies who are riding out the storm and running lean and mean will be poised to make investments again sometime in 2010,” he says. “We don’t expect it to get back to the level of six years ago, but we do expect growth.”
We like the optimism but is legit? Crain’s seems to think that this accounting racket is in for some tough times from partners comp to more competition among hiring of new recruits.
If you work at a smaller firm in the Chicago area let us know what you think Crain’s assessment about the situation. Feel free to opine on your firm’s prospects and the outlook in the Windy City.
Accounting’s day of reckoning [Chicago Business]