By Lauren Vella
Baker Tilly’s new CEO Jeff Ferro says the company will continue its highly acquisitive streak, expanding into new markets in the Southeast and beefing up its presence in major metros after the abrupt departure of its former CEO Alan Whitman in March.
Ferro, who has committed to a two-year term as interim CEO during an executive search, told Bloomberg Tax that Baker Tilly aims to solidify its presence in Florida and Georgia, and “double down” in major metro areas like New York, San Francisco, and Los Angeles. Potential mergers with “four or five” other firms have been discussed with senior leadership, he said. The firm also plans on executing its “break the mold” strategy hatched under Whitman, implementing programs like placing new hires in an innovation lab to cull suggested changes and improvements.
The US firm, which is headquartered in Chicago, has undergone a rapid expansion in the past five years, acquiring 19 firms. Its biggest move came in 2020: a merger with Squar Milner that propelled Baker Tilly into the top 10 largest US accounting firms. The company’s revenue also ballooned to $1.5 billion in that time, putting it just underneath a tier of accounting firms that includes Grant Thornton, LLP, BDO USA, CliftonLarsonAllen, LLP.
Ferro said the firm’s goal is to play ball with the heavy hitters in the second tier after the Big Four accounting firms.
“We want to be in that second tier. We’re nudging up against the bottom of it right now. But we want to be in the same breath—when you think of BDO and Grant, you think of Baker Tilly,” Ferro said.
Whitman resigned from his post as chairman and CEO of Baker Tilly in mid-March, citing differences with the board over the execution of Baker Tilly’s strategy.
At the time, Ferro was named interim CEO. Last week, Ferro confirmed to Bloomberg Tax he would serve in the role for two years while the company undergoes a 12-month succession process.
Ferro has worked for Baker Tilly for 35 years, rising through the ranks to become leader of the firm’s eastern and central regions. He worked closely with Whitman the past seven years during some of the firm’s biggest acquisitions, including the merger with MFA Companies in Boston.
“A lot of people would have said that I was second in command,” Ferro said.
Ferro declined to discuss Whitman’s departure in detail.
“The board had its views on how that strategy should be executed going forward. And Alan had his views on how that strategy should be executed going forward. And there were some differences, and Alan chose to resign,” he said.
Whitman couldn’t be reached for comment.
Baker Tilly’s strategy under Whitman attempted to buck the old ways of financial accounting firms by changing partner compensation; running a pilot program to do away with the traditional “billable hours;” giving employees more time to disconnect around major events throughout the year; and ensuring recent graduates rotate through more roles in the firm.
The accounting industry’s changing environment has forced many firms to reevaluate their policies in an attempt to attract and retain talent. Following the pandemic, employees want the flexibility to work from home, for example, Stephen Berger, shareholder at Vedder Price, said.
“It’s gotten much more competitive in terms of attracting and maintaining clients,” Berger said. “It’s also with remote work, I think you have people who are looking at different work-life balances than they were 20 years ago.”
Ferro said the firm will continue to carry out “break the mold” policies and programs.
He credited a group of younger partners for the innovation.
“There was nobody on the leadership team or nobody on the board of partners that actually did the heavy lifting,” he said. “It was presented to us, the board, and the senior leadership team to approve.”
The new CEO said the firm’s planned “innovation lab” will bring together a group of 60 employees who’ve worked at Baker Tilly for two years to talk about their experience and possible changes.
Ferro said the firm may be focused on growing among second-tier accounting firms, but will still capitalize on moves by the “Big Four.” In particular, Ernst & Young’s plan to split its audit and consulting arms presents an opportunity for Baker Tilly to hire new talent.
“I think that anything that the Big Four does provides opportunity for us,” he said. “When they make a significant change, that’s opportunity for all of us.”
To contact the reporter on this story:
To contact the editors responsible for this story:
To read more articles log in.
