Large Local And Regional Firms Unite To Form New Association; The Global Alliance Aims For 'Low...

Seven IPA 100 accounting firms are joining forces to form a new association, The Global Alliance. The group hopes to have limited membership, low dues and high participation among members for the purposes of leveraging their resources, sharing best practices and offering clients access to international

Members of The Global Alliance include Armanino McKenna of San Ramon, Calif. (FY03 net revenue: $19.1 million, 17 partners, 111 total staff, two offices); Goodman & Co. of Norfolk, Va. (FY04 net revenue: $58.3 million, 63 partners, 348 total staff, 10 offices); Holthouse Carlin & Van Trigt of Los Angeles (FY03 net revenue: $18.6 million, 13 partners, 108 total staff, three offices), Honkamp Krueger & Co. of Dubuque, Iowa (FY03 net revenue: $19.4 million, 14 partners, 189 total staff, seven offices); Mahoney Cohen & Co. of New York (FY04 net revenue: $35.2 million, 215 total staff, 37 partners, three offices); Rea & Associates of New Philadelphia, Ohio (FY04 net revenue: $20 million, 33 partners, 167 total staff, 10 offices); and Wipfli of Wausau, Wis. (FY04 net revenue: $76 million, 94 partners, 597 total staff, 19 offices).

Ultimately, TGA is aiming for about 15 members. Two to three more firms are expected to join the group within the next 90 days, giving the association members estimated combined revenue of $400 million.

The group was formed after several clients of Chicago-based PDI Global contacted its president, Allan Koltin, to inquire about association memberships. "I realized that we had several firms with no association to join, or they're so much bigger than the other firms in an association that it's no longer a fit for them," Koltin tells IPA. Wipfli left Moores Rowland International prior to joining TGA. Mahoney Cohen left BKR International to join the group, and Rea & Associates left Jeffreys Henry International. The other member firms didn't belong to associations.

Mark Garten, CEO at Mahoney Cohen & Co. (See related stories, pages 1 and 5.), tells IPA that his firm's decision to leave BKR, where the average member has annual net revenue of approximately $6 million, was amicable. "We're one of the original firms of BKR, and we hope to continue our relationship with its members. But we had different needs as we grew. The Global Alliance offered us the opportunity to associate with firms of the same size as ours. In joining The Global Alliance, we're hoping to learn about best practices with firms our size, work with firms that are doing more SOX and Section 404 work, and to learn from firms that have experience with bankruptcy work."

The first two goals of the association are to find a full-time executive director and an international alliance. Once an executive director is hired, Koltin will bow out of his direct involvement with the group, he told IPA. Koltin anticipates quarterly meetings in Chicago, "where not just MPs get together, but practice leaders do too, for example, the heads of not-for-profit, construction and business valuation practices. In addition, we anticipate meetings for key operations people at member firms, such as the heads of human resources, technology, marketing and administration. We want to provide a place for them to all get together with peers in noncompeting markets to share ideas with," Koltin says.

The members and their goals appear to be much like those of The Leading Edge Alliance, another Chicago-based association that was founded by Gary Shamis, managing director of Cleveland-based SS&G Financial Services and Koltin's partner in The Advisory Board, a group of five consultants who hold an annual conference and quarterly audio-conferences. But there's no competition between the two associations, Koltin says.

"The Leading Edge Alliance has been sharing a lot of stuff to help launch this association," he explains. "It's not like one group takes business away from another group." But because of his consulting relationship with LEA, TGA won't accept LEA members for the time being. The same is true for other associations with whom Koltin has consulting relationships, including the BDO Alliance, CPAmerica, CPA Associates International, DFK North America, Moore Stephens North America, and RSM McGladrey Network.