PROFESSIONALS' CHARGE HOURS

These All Stars combine for an average of 1,713.2 charge hours per professional annually, approximately one-third more than the IPA 100 average of 1,290.4. The average for all survey participants was 1,283.9. Partners at these All Star firms charge significantly more hours too: an average of 1,346.1,

while the IPA 100 average is 1,146.5 and the entire survey's is 1,152.9. These professionals work an average of 2,346.6 hours a year total, which makes them 75.8% billable. But high charge hours don't translate into profit: both average NIPP and average partner compensation at these firms are well below the average of all participants in the Annual Analysis of Firms, where average NIPP was $286,786 and average partner compensation was $275,288. One reason is low net fees per charge hour (which average a dismal $109.20, compared to $138 for the IPA 100 and $123.3 for all participants) and subpar leverage at 4.8 professionals per partner (IPA 100 average: 6.4; average for all participants: 5.6). Nevertheless, nobody can sneer at their growth: average fees increased 14.9%, and net income grew 23.7% for this group. Nor is turnover exorbitant: it averages 12.6% for this group. About 35% of the combined revenue at these firms conies from A&A, with 31.4% coming from tax, 8.8% coming from MCS and 24.8% coming from nontraditional services. Note that no IPA 100 firms are in this group: its net fees average $7 million.

IMAGE TABLE 1

INSIDE Public Accounting

ALL-STARS 2004

AVERAGE CHARGE HOURS PER PROFESSIONAL