Over the past 20 years, accounting firm leaders have been challenged by a rapidly evolving technological landscape that promises greater productivity and efficiency – keys to modern successful firms – to those who are able to evaluate and implement the solutions that best optimize client service and firm management. In the wake of the pandemic, they’ve also had to reimagine the dynamics of their staffing and workflow, as many firms adopted remote or hybrid workforce models, often necessary to compete in attracting a shrinking availability of talent.

These factors have also dramatically affected firm culture, a broad set of tangible and less concrete factors that impact how firms are perceived by those within and by those on the outside of the practice — from management styles to client relations, and acceptance or promotion of a variety of behavioral norms.

This summer, more than two dozen accounting profession thought leaders participated in the latest Accounting Meta Influencers roundtable event, focusing their discussions on a) what firm culture is, b) what constitutes a positive firm culture and how firms can foster that culture, and c) how culture affects staff, clients and firm leaders, and impact on the ability to attract and retain qualified professionals.

The Accounting Meta Influencers discussion is held quarterly, and is hosted by Avalara, engaging thought leaders in a discussion of significant trends and issues facing the profession. Previous topics have included:

The discussion started off with an exploration of how successful firms design, communicate, and nurture their unique culture, with special guests helping to identify the needs and expectations of the next generation of accounting professionals. The panelists were challenged with digging into the various definitions of culture – what it is and isn’t – as well as the distinct attributes of culture within the profession, and identifying and documenting how culture reverberates through a firm. Finally, the discussion addressed how firms can ensure that their distinct culture is instilled and adopted throughout the organization, and how it affects three primary groups:

Staff (and recruitment of potential staff)
Clients (and client attraction)
Leadership (firm partners/managers)

As well as others in the professional community.

How a Successful Firm Defines Culture

Daniel Hood, the editor-in-chief of Accounting Today, moderated the discussion, starting with an introduction of new group member Kane Polakoff, a principal with CohnReznick. Hood reminded participants that the goal of the Meta Influencers Roundtable discussions is to “provide actionable insights to firms, including practical steps and useful information, as well as to answer questions that professionals may have.”

Hood introduced special guest Richard Kopelman, the CEO of Aprio to provide insight into how his firm has adopted a firm culture that has been widely praised as a model for successful firms. Aprio is currently ranked in the top 30 among U.S. firms by Accounting Today.

“Aprio is famous for having a very well defined and well thought out, very extensive culture that they live very strongly,” Hood noted. “Richard is here to give us a sense of what that culture looks like, how it’s defined and how firms actually build a culture.”

Kopelman then explained the root of the Aprio name, which in Latin means head and heart, which is core to the basis of their culture.

Under Kopelman’s leadership, the firm has developed the “Aprio Way”, which consists of 31 Fundamentals of Behavior. These are quite basic, he notes, including things like: act with integrity, look forward, be proactive, speak straight, deliver results, value differences, be kind, work smart, and pay attention to details.

The firm highlights a different fundamental each week in its communications with staff and clients, including pocket-sized cards that include the firm’s definition of each one of these traits. During firm meetings each week, participants include a discussion of that week’s fundamental, which Kopelman says is essential. “We’re very intentional and focused on maintaining these principles.” He noted the firm is now on its 9^th cycle through the fundamentals.

All of these traits, when practiced regularly by staff, influence how clients, team members, and managers view the firm and their experiences with it, which is what becomes the culture of your firm.

Challenges to Adoption of a Healthy Culture

Remote team members were not unusual prior to the pandemic, but the profession has much more widely adopted the practice and hybrid models in the year since. Kopelman and Hood noted that instilling core practice culture can be more challenging as a result of staff not being in-office, but that an intentional and defined approach does work.

Amy Vetter, CPA, noted that the emergence of private equity investment in firms has also affected how firm cultures develop and evolve, and asked how firms can protect their culture despite the change in business models.

“We’ve walked away from some opportunities when we did not see a cultural alignment.” ~ Richard Kopelman.

With Aprio having just closed a transaction with a PE firm, Kopelman noted that it’s critical to include discussion of firm culture with the funding source in order to ensure that their cultures are in sync. Likewise, when bringing on partners and staff, the firm shares the core beliefs with interview subjects immediately.

“Our fundamentals are front and center in our interview process, and it comes up in the first 15 minutes of a meeting,” Kopelman said. “We hand them a fundamental card and ask if they can see themselves as being part of our culture. We’ve walked away from some opportunities [with mergers and partner hiring] when we did not see a cultural alignment.” The culture has to be embedded in the everyday work and structure of the firm, and in each of the divisions.

Measuring Firm Culture Success

Polakoff, a principal at CohnReznick, then asked how Kopelman defines a successful culture, and how they measure that success. Kopelman noted that Aprio uses some technology, including pulse surveys that measure the overall satisfaction of their team and participation levels.

“We can look at the results by region, by office, by team, by segment, so we can see it in a lot of different ways and understand what’s happening in the organization.” The firm now has more than five years of data that gives them a predictive analysis of what happens when they merge firms in, and how to manage that cultural shift.

Hood suggested that the fundamentals allow team members to identify bad behavior and bring it to the attention of not following those principles. “We follow ‘The No Asshole Rule,’” said Kopelman, noting that is the title of a book that has been valuable in helping firms develop successful workplace cultures. (https://www.amazon.com/Asshole-Rule-Civilized-Workplace-Surviving/dp/0446698202)

Hood stressed that these top-down efforts and consistent measurements and assessments are what differentiates a truly intentional and healthy firm culture versus one that is merely boilerplate messaging.

“So many firms have a culture that they don’t live,” said Hood. “That’s just a paper document on a sign on a wall. But what firms like Aprio are doing with measuring engagement, turnover, retention and other factors, you can see the effects and success of the culture on the firm.”

“Culture will eat strategy for lunch every day, if you get the culture right.” ~ Richard Kopelman.

“Culture will eat strategy for lunch every day, if you get the culture right,” said Kopelman, referring to the effect on business ROI. “And if you respect and reward people appropriately, which is part of the culture, then you’ll get the outcomes you need because people will go above and beyond and execute at a higher level.”

A firm has to keep refining its culture though, he added. “We have to stay on top of it and keep a focus on it. There’s no finish line from a cultural perspective; it has to be constantly fine-tuned. How do we do it better?”

Practical and Broader Views on Firm Culture

Hood redirected the discussion toward developing a more concrete definition of firm culture. “What is it? What isn’t culture? Is it casual Fridays? Remote work-life balance? Snacks during tax season? Is it a sense of family? Every firm has a culture, but usually it is just the one that happens because of the personalities of the managers and staff and how they interact. It’s not a deliberately chosen or constructed framework for behavior or business activities.”

“So, what do you want in a really successful firm culture?” Hood asked Jess Schatko, a member of the CAS practice at CohnReznick, and one of the younger members of the roundtable discussion.

“I want to be friends with the people that I work with. I want to know that they have my back when it comes to a client deadline. That’s a culture of people who respect each other.” ~ Jess Schatko.

“To me, firm culture is organic. You can’t really define it,” she said. “I know we can all look at the dictionary definition … but it really comes from the top down of how you work together, one-on-one on a daily basis, and how the partners and the C-suite really set their day and interact with each and every person that they do. There are memes online of, if you go to a company and they say, ‘We are a family,’ run and hide.”

“I want to be friends with the people that I work with. I want to know that they have my back when it comes to a client deadline and that even on a Friday night at 6 pm, if we have to get a deadline out, we’re all going to come together. That’s a culture of people who respect each other.”

Irfan Dossani, head of the CAAS team at Whitleypenn, agreed with Schatko, saying, “Your ability to get along with the team is essential. Your ability to collaborate, to be fearless and have conversations and communicate is necessary for a firm’s culture.”

However, there can be competing ideas of what a firm’s culture is, according to Blake Oliver, CPA, the co-host of The Accounting Podcast. “There’s what the firm says is its culture, which is one thing. And there’s what the people who work there do, and those are often not the same,” he said.

“To me, the culture is the unwritten rules of what people do and how they behave.” ~ Blake Oliver.

“And all too often, that is not what is on the firm’s website. It’s not what the pillars are of the firm,” Oliver said. “Ultimately, it comes down to how people do, how they behave, and how they treat each other.”

Firm culture is not just setting a dress code for certain days of the week and giving summer Fridays off or a half day, added Hood. It needs to be more of a discussion of how staff work together, how they handle and prioritize client needs and demands, and how they make decisions.

“Behavior that flies in the face of what we espouse as a firm is a joke. The key is in holding ourselves accountable.” ~ Michelle River.

“I’ve always looked at culture as a lot like a brand,” said Michelle River, founder of Fore, a strategic management firm. “Coca-Cola can proclaim that they make the best soda in the world, but what do their customers think? What do their staff think? For firms, it’s what the employees say about the culture when there’s a disconnect with the official messaging. Behavior that flies in the face of what we espouse as a firm is a joke. The key is in holding ourselves accountable.”

“It’s like herding cats. It’s difficult, but if you’re really intentional about it, it can be done right.” ~ Rob Brown.

Rob Brown, founder of UK-based Accounting Influencers, applauded Aprio’s success, and said he saw the challenge faced by managing partners when it comes to implementing a firm culture.

“It’s almost impossible to manage partners because they’ve all got their own agenda,” he said. “They’re all doing their own thing and think they should be able to run their teams the way they want to.”

This can end up creating a lot of microcultures subsumed under an overarching culture, but hopefully with some alignment. “Within those little mini teams, there can be many individuals with their own values and principles and cultures, so it’s like herding cats, as they say. It’s difficult, but if you’re really intentional about it like Aprio, it can be done right.”

Firm Cultures Will Vary

Hood reminded the group that, of course, one size does not fit all when it comes to firm cultures. It’s okay, he said, if some firms are all about the money and the profit and drive their staff through excruciatingly long work schedules. That kind of culture, rightly or wrongly associated with the Big 4 firms, can result in wonderful pay and benefits for team staff, but they are treated as cogs. That culture may fit the desires of some professionals, at least for a short term, and they can often come out with a great resume.

Conversely, Hood noted that a firm might not compensate nearly as highly, but may offer much better work-life balance, which could likely be more important for a young professional with family priorities. Or a firm may be much more involved in serving, and interacting, and volunteering with nonprofits, or specific mission-oriented organizations. Those kinds of firms are also a good fit for many people.

Firm size can also be a factor when culture is developed, either organically or intentionally, according to Dan Luthi, a partner at Ignite Spot Accounting Services. “Smaller firms generally have the ability to be more flexible than larger ones. Not everyone is going to be a perfect fit for different organizations, depending on the compensation, or time requirements, or the relationship and work style. But there are people out there that want to work in the exact same thing and way you’re doing it.”

“What was good for your firm 10 years ago, may not be the same thing for your firm today.” ~ Dan Luthi.

Firm culture needs to be able to adapt, he added. “It’s constantly changing, not just because people are changing, but because the demands of your staff are changing. As a leader, you have to be aware of that. What was good for your firm 10 years ago, may not be the same thing for your firm today.”

Firms also may need to consider human resources factors, particularly regarding hiring practices and other legal issues, said Gail Perry, a CPA and the editor-in-chief of CPA Practice Advisor.

“Are there HR issues involved in letting someone go because they don’t fit the culture? Maybe they’re a great worker, but they don’t want to learn new things. Or maybe they’re not good at helping others. Or maybe it even degenerates into shared political values or family values that don’t fit with the culture? Has anyone here dealt with those issues?”

Hood suggested that firms do need to be cautious in this area, but need to start by having clear communication, and establishing factors for which a person can be dismissed. He also suggested firms establish a probationary period and explain to the applicant that it’s to ensure they are a good fit for the firm and the employee.

Donny Shimamoto, the founder and managing director at IntrapriseTechKnowlogies LLC, suggested adding adherence to the firm’s culture as grounds for termination in the firm’s employee hiring handbook.

“We’ve had that evaluated by an HR professional and that has been okay in the seven states we operate in but may not be in states that have contracts.

Firms should also be familiar with labor laws in their states. Most states have at-will employment laws that allow for the termination of workers without cause, as long as it is not an issue of race, gender, ethnicity, religion, disability, age and other factors. A variety of free labor hiring resources are available online from sources such as Career Builder and Indeed, or firms may wish to seek outside HR or legal counsel if they have concerns.

Standing Up for Your Firm Culture

Shimamoto added, “Part of joining our firm is an agreement that you believe in our values, and they are embedded throughout our operations from the beginning. And behavior around our values is part of performance evaluations.”

Regarding Blake Oliver’s concerns about hypocrisy in setting values, Yvonne Scott, a CPA and CEO of the consultancy CIO Concierge said that is an issue “that plagues most organizations when they try to espouse a culture. The most important thing is consistency.”

“Michelle, Donny, Diane (Yetter) and a number of other people have alluded to this in different ways,” said Jennifer Wilson, a partner at ConvergenceCoaching LLC. “Part of the behavioral shift is removing ‘but’ from our sentences when we say, ‘You know, he’s really demeaning or diminishing, but he’s also a huge business developer, and he’s been here a long time.’”

Wilson noted that firm members need to be comfortable with raising concerns when there are negative experiences with staff, clients, vendors or others. And this has to include partners and rainmakers. Even if the problem is with “one of the biggest, baddest, most awesome performers, if their behavior is counterculture, it needs to be corrected or they need to be removed.” She says this will also reinforce the commitment the organization has to their cultural ethic.

Jess Schatko shared an experience where a client was “incredibly disrespectful” with comments and behavior toward some of the staff at her firm. A firm partner confronted the client, she said. “He told the client, ‘This is unacceptable, and we will no longer be providing service for you.’ I think that lays the foundation of what is acceptable and that we know we can report these things.”

A Small Firm Perspective on Culture

“Over the past few years, we’ve gone through metamorphoses and significant changes as we have grown,” said Diane Yetter, founder of the Sales Tax Institute. “We’re now reviewing our values every two years, because we’ve added people who weren’t involved in creating the original values.” She said that, as a result, they’ve changed some of the definitions and added some.

“As a small firm, every new person we bring on can have such a positive or negative impact on the culture. So, we involve a lot of people in the interview process. Our values are one of the most important things, and we ask candidates what their values are as a part of the initial application process.”

Sometimes, Yetter says, they have had to disqualify applicants based on what their stated expectations were, and occasionally they’ve had to coach some staff or dismiss them. She still regrets holding on to one staff member who was “sabotaging the culture,” because she possessed skillsets they didn’t have replicated. The person had shown just enough glimmer of hope, but ultimately was polluting the workplace. “We probably waited too long,” she said, but if it is hurting relationships within the firm or with clients, then the pain of replacing the person is worth it.

“The concept of firm culture can be difficult, for firms of all sizes. Everybody has a different definition of it, and it varies depending on the size of a firm, by member, by office, and even by sub-practices within an office,” said Sona Akmakjian, a CPA and head of global accounting partnerships at Avalara. If a firm has a bad partner, but does nothing to remedy their behavior because they have strong revenue, it can tank the morale and culture, she noted.

Akmakjian asked the roundtable participants, “Are there any tools or guidelines for smaller firms that can help them define what they want their culture to be? I think they all struggle with measuring how their culture aligns to what they think it is. And how can they measure it? How can they build it into recruiting?”

Moderator Dan Hood suggested the previously mentioned book, ‘The No Asshole Rule,’ is a good start, and that adding in survey tools that can allow staff to anonymously give their real assessment of morale, work-life, productivity, hours, and other staff.

Rob Brown also noted the surveys that Aprio uses that lets the firm know “where people are at with the culture, even quizzing them on what the parts of the culture, or values are.”

“If you start seeing low numbers of staff participating in the surveys, or not in certain areas of the practice, then that’s telling in and of itself,” said Yvonne Scott . “If you have a great participation rate, they feel comfortable giving feedback and expect a reaction.” Conversely, she said that low feedback rates can point to a specific problem or a lack of previous action by the management team to prior survey results.

Scott added, “Don’t survey your staff if you don’t plan on doing anything with what you’re told through the survey.”

Living Your Firm’s Culture

As part of his consulting to a 200-person firm in North Carolina, Rob Brown noted that he queries workers at all levels.

“If you want to know what the culture is of a firm, the best thing you can do is ask. As an outsider, I ask partners, interns and everyone in between, ‘What makes your firm a great place to work, why did you join, why have you stayed?’ And they have above-average retention rates, so this is valuable.”

Brown said that he gets their various personal accounts, and hears about work-life balance, and examples of how it has actually made a difference in their lives, or how the firm has enabled them to grow professionally. He said the firm also puts similar interviews up as videos on their YouTube channel, which “shows that it isn’t just a set of values or a corporate statement. They are real values, and here is what our coworkers say. It helps differentiate them in the talent marketplace.”

Hood agreed. “Culture is the stories we tell others in the firm, and our friends and family about the firm. If the stories people are hearing about your firm are what you would want to hear, that’s achieving your goal, right? And that’s a good way to measure your ROI.”

Does your firm’s culture reflect what you want to hear? What are you doing to ensure your culture stays true to your intent?