Managing Partner
Ernst & Young LLP
The Big Four, and many of the smaller firms on the San Diego Business Journal’s Accounting Firms list, are getting bigger locally.
Ernst & Young LLP is No. 1 on the 33-firm list, ranked by the number of local professionals as of Nov. 1, with 211 — an increase of 24 people from the same date in 2010.
“We hired professionals across all fronts, tax, IT, advisory,” said Mark Stephens, managing partner. “If I flash back to 2008, I’m far happier now.”
The Big Four — Ernst & Young, Deloitte LLP, KPMG LLP and PricewaterhouseCoopers LLP — as a group increased its local professional staff by 87 people, or 13 percent, from 2010 to 2011. The total increase in local professionals by all 33 firms represented on the list grew during the same period by 116 people, or 8.2 percent.
Local professionals are defined as client-facing staff such as partners, CPAs and staff accountants, excluding paraprofessionals, bookkeepers and support staff.
Adding six local professionals, ninth-ranked Considine & Considine is the oldest San Diego-based firm on the list. It was founded in 1946.
“Part of the increase is due to timing, there was a little bit of a fluctuation in personnel over the course of the year in staffing,” said Perry Wright, partner. “We probably staffed up for tax season a little earlier this year than last; the new people were all accountants.”
Developing a New Strategy
Wright said it is his sense that the economy is still in trouble. As a result, fewer new businesses are forming, which prompted the firm to develop a strategy to target businesses that are growing.
“Real estate is down, among other things, so we’re doing a lot more pension work and estate planning,” Wright said.
Lavine Lofgren Morris & Engelberg LLP lost two professionals from 2010 to 2011. LLME is one of the largest locally based accounting firms. Founded in 1985, it ranks eighth on the list.
“The interesting thing about accounting firms is that when a recession hits, we’re the last to go in and the last to come out,” said Bob Lofgren, partner. “The reason for this is that in the beginning, companies are still around and need services, and it’s only toward the end of the downturn that we begin to feel the effects of the cutbacks.”
Lofgren said that financing is still very tight, but that he is cautiously optimistic that things are improving. Many of his clients, across a broad range of industries, are doing well.
“They have cut back to a safe point and now they are prudently moving forward from that base. If financing loosens up, they could move faster,” Lofgren said.
CBIZ/Mayer Hoffman McCann P.C., No. 5 on the list, had a decline of eight local professionals.
“The decline is due to the general decline in demand,” said Paul Nation, CBIZ partner. “The difficult economy has resulted in reduced demand for services, primarily in the audit area.”
Nation agreed that financing is tight. His clients have generally had trouble obtaining capital for expansion and development of products.
Signs of Life
Grant Thornton LLP, No. 14 on the list, added three professionals in 2011.
“The reason for hiring was the growth in our tax practice. We hired tax professionals and experienced hires on the managerial level,” said Don Williams, Grant Thornton managing partner. “We have plans to hire six more audit professionals and three on the tax side in 2012.”
Williams sees signs of life in the economy, although it continues to be volatile.
“Activity is picking up on the venture side, private equity is starting to invest in new opportunities, and there are more mergers and acquisitions,” Williams said.
