By ALLISSA KLINE
Business First

A slow economy in 2009 trickled down to the area's accounting firms, which saw some business units slow down while others picked up.

Business First spoke to four local CPAs about the past year's impact on the local accounting industry and what's ahead for 2010.

Business First: How did the recession impact your firm in 2009?

Philip Mann, managing partner of the Buffalo office of The Bonadio Group:

"In a very positive way, it helped us retain and attract quality staff in what was prior to the recession a very difficult market for keeping and attracting people. In 2009 we saw our rate of growth slow from double digits to about 5 percent. This slowdown started in fall 2008 and resulted in less special work, such as mergers and acquisitions and estate planning, than we had seen in the past five to 10 years."

Rocco Surace, managing partner of Gaines Kriner Elliott LLP:

"Our firm held fairly steady during 2009. While we had a normal load of event-driven special projects, we did not have the usual bubble of extra work from our client base for typical additional services such as short-term planning needs and assistance opportunities. The request for these services has been minimal. Most all clients were in a hold mode. Not knowing where the bottom is and with all the uncertainty in financial markets and in all levels of government, wait and see has become the standard order of the day."

Donna Gonser, partner at Lumsden & McCormick LLP:

"For the most part, it was pretty much business as usual in 2009 with operating results in line with budgeted expectations. Of course, we were indirectly impacted by the difficulties experienced by many of our clients, both commercial businesses and nonprofit organizations. The economy created a very cautious environment with clients avoiding risk and maintaining a very subdued outlook. These factors held our firm's growth to a modest level since some of our growth is proportionate to that of our clients. While we saw fewer opportunities for new business and fee pressures from clients who were struggling, we avoided layoffs."

 

Business First: What did your firm learn about doing business during a recession?

Patricia Galley, superivsor of tax advisory group at Dopkins & Co. LLP:

"Since our firm has been in business for over 50 years, this is not the first recession that we have seen. This current recession has been worse than some others that we have seen in the recent past, but the lessons are the same. Clients during this time need more counseling in areas such as how to control their costs, tax planning and financial planning."

Surace: "Not so much learned but reinforced - our business is built largely on long-term relationships. In any relationship, there is going to be ups and downs, good times and not-so-good times. We knew that every one of our clients would be looking at all of their costs and investments. We knew we must hold true to our values and continue to serve their needs and work through this difficult time period with them. From the point of view of our internal operations, we first looked at all of our discretionary expenses. We wanted to make as certain as possible that we would remain in the position of keeping all of the valued members of our team here. From a market point of view, we needed to make certain we kept our focus on continuing to look for ways to be valuable with our services - that is critically important, because going on a period of cost cutting can divert attention from this."

Gonser: "We learned that doing business in a recession requires considerably more hands-on management and a deeper level of management than when the economy is growing. It's much easier to manage an organization when revenues, margins and bottom lines are growing and possibly masking some defects. However, when those same measures are threatened by a recession, management better have a plan to maintain operations, including market share, and seek opportunities even in the midst of an economic threat. Cutting expenses is part of that plan, but great skill is required to be sure an organization doesn't cut expenses crucial to its mission and goals. If the cuts are too deep, an organization might not be able to respond quickly to opportunities when the economy recovers."

 

Business First: What do you see coming up for 2010?

Mann: "We are very positive about 2010 and expect our best year ever. Some of the better performance is driven by being more productive and cost-conscious, but we have seen various areas where we have been able to grow our business and become "the answer" for our clients' problems. Specifically, we see the real estate and construction industries as continuing to struggle, but we see an upswing in business valuations, forensic accounting, IT (information technology) consulting and state and local tax consulting. The most interesting thing going on in the accounting industry is the high number of mergers all over the country that we expect will continue and we expect to see more in Upstate New York."

Galley: "I think that the economy will start slowly recovering in 2010. However, I don't think a full recovery is going to happen anytime soon. There will be more work in the asset-based lending area. This is work that we do for banks whereby we analyze assets pledged against loans and advise the bank whether the value the company is placing on the assets is a reasonable value. Again, there will be more work in the tax and financial-planning areas and management consulting regarding how to control costs."

Surace: "As for the recession continuing, I believe there are a couple of key areas that need to instill confidence. They are the financial markets and employment. In the financial markets, we need to see lenders willing to lend under sound business risk principals. While the current regulations and oversight have appeared to have failed us this past decade, I am fearful that over-regulation will make it much more difficult for lenders, which will have a significant impact on the availability of needed capital. For employment, I have two concerns. The first is that many companies have leaned themselves down to a point where they are comfortable again with the size of their employee base. That was very difficult getting there. These companies are going to be very reluctant to freely add employees until they have an overwhelming need. The second is a more holistic concern, which is, until we get back to normal employment levels for both the unemployed and the underemployed, there will be no real confidence that we are out of the recession, regardless of any of the other statistics."