May 2000

ACCOUNTING TODAY'S TOP 100 FIRMS CONTINUE DOUBLE-DIGIT GROWTH

Accounting Today's list of the top 100 firms paints a prosperous picture of the accounting profession: Total revenues of the 100 largest accounting firms increased 16% over the prior year. The Accounting Today analysis breaks out the statistics into the Big Five firms and the other 6­100. The Big Five's revenues increased 16%, down from the prior year's 27% increase. The second 95 firms showed a growth rate of 21%, which includes acquisitions of smaller firms and is strongly influenced by the growth in pure tax firms, such as H&R Block and the consolidators.

Unlike Public Accounting Report, Accounting Today does not require that a firm have an accounting and auditing practice to qualify for its top 100. H&R Block's tax practice is listed at No. 6 and the consolidators--Century Business Services (No. 7), RSM McGladrey (No. 8), and American Express Tax & Business Services (No. 11)--are very much in evidence. The revenues for the consolidators include those of the LLPs from which they acquired the nonattest assets and from which they are technically independent.

In its survey, Accounting Today also analyzes the local firms by region, painting a somewhat less glowing picture. None of the regions overall achieved the 21% growth rate shown by the 6­100 totals. The New York metro group of firms grew at 10%, with some firms showing low single-digit growth. The West and Southwest region showed the highest growth rate at 19%.

The analysis shows the leverage that the Big Five firms benefit from, due to their much higher partner-to-staff ratios. The ratio of professionals per partner in the Big Five increased to 11.4 to 1, producing an average revenue per partner of more than $2.5 million. The 6­100 group had a professional-per-partner ratio of 5.4 to 1 and average per-partner revenue of $931,000. *

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