Strategic Shifts Redefining Accounting

RS: Talk a little bit about the model for governing accounting firms and how you see that evolving.

AB: I think the partnership model has a tremendous amount of benefits.

It is so collaborative and that's a wonderful environment, but there are some negatives to it. It moves slowly. Where we've really shifted to is more of a corporate model where the partners still have great input on where things are going, but where you have a smaller team and a board that can make quick decisions and move much faster.

I think what that's playing into is the ability to grow, invest, and make decisions faster for the organization.

RS: How has the partnership adapted to that?

AB: The partnership in general has done very well with that. Change is hard and things are going to be constantly be moving. I think that's the hardest thing for accountants who have been in the profession for a long time.

Accelerating Skill Development for the Next Generation of Accountants

RS: Let’s discuss skill development in younger people.

AB: When you think about skill development, I think it's even harder today than it was when I came out of school a long time ago. Young people are really expected to accelerate much faster in their knowledge.

On top of accelerating their technical knowledge, they must learn consulting skills at the same time. We're embedding that consultative training even from day one with our people now. If you think about it from the support that they need, if AI starts to put numbers in boxes for you, then they have to start on the first level, review these young people instead of starting the preparation. I think that's okay if they go into it with the mindset that they're going to learn differently and at an accelerated pace than prior generations.

Technical skills, meeting the accounting pronouncements with the IRS; these weren't changing as rapidly as they're changing today. Young professionals today have to invest a lot more time in themselves to stay ahead. But I think the benefits far outweigh what we could have ever gotten to do.

RS: Do you think you need to hire fewer junior people?

AB: I think the model is going to change and migrate from that pyramid, which is what the industry has always been — more of a linear up and down model supporting a partner.

Young people have a different opportunity; their upward mobility can be much faster than it was before. The fact that we have more accountants that are getting to retirement age than people coming into the industry does give them the ability to move much faster than they could have ever moved before.

Integrating Global Talent with AI for Optimal Resources

RS: A couple of years ago, everyone was talking about global sourcing of labor. How do you view that in your company and how AI might impact that?

AB: If you step back and you look at what most companies are talking about, what you're seeing is the assumption that AI is going to displace some of the offshore work that's being done. I don't look at it that way for our business.

Citrin Cooperman has two offices in India with 1,000 professionals. And what those teams are doing is not just putting numbers in boxes; they're delivering quality work to the clients.

They’re stacked from entry level all the way up through managing director inside our firm. They're really good at their profession and by training them to be more consultative in nature, we're giving them an opportunity, just like everybody in the U.S., to move in that same direction of being more of an advisor to our clients.

They are fully engaged. I don't look at India and AI as competing. I think they're mutually exclusive. I think the best people in this industry, no matter where you're located, are going to be able to be successful.

Navigating Pricing Challenges and Value Creation with AI

RS: Let's spend a little time on pricing and how the environment, including AI, might affect pricing. How do you view pricing going forward?

AB: If you're solely focused on compliance, I think that AI is going to have a negative impact on your pricing. You get the work done faster, and maybe even more with better quality, more accurately. Most firms and CEOs that I talk to are building a focus on increasing value to their clients.

How do we use AI not just as a potential cost saver, but as an enhancement to provide that value to the clients?

What that takes is our people starting to think differently than they do today. It can't just be about getting the work done. We have to get a better understanding of what our clients want and then bring them solutions before they even ask for them.

That’s where we look at the technology, AI and otherwise, and if we invest right and build that correctly, we'll be able to drive growth.

RS: Let’s get back to pricing and how you think about it. Let’s say you have a client that's a $100M business, and you do their taxes, and maybe there's some consulting that you do along the way and charge $250k a year. How do you view that playing out when the client calls and says that they think they should pay less because AI was involved?

AB: The partners ask me that question all the time. I answer the question this way: There are going to be clients that are approached by other competitors, and they're going to say that another firm is willing to do the work for $200k instead of $250k.

Now the client has a decision to make. If the client's motivated by just the savings of that $50k, you're going to have to make a business decision as to whether you accept that decrease or not. If you're truly that trusted advisor to the client and they're getting more out of the relationship than just the compliance work, they probably would have never picked up the telephone from another accounting firm.

RS: Where I struggle with this, and it's in my business too, is what value am I not giving now that I could possibly give? If some of the lower-level work is cut out, there's a leverage model going on.

You're decreasing your leverage. So, you've got lower-level work being cut out and being taken over by AI. If we're going to give you more value; what more value is there to give? Maybe it's just so amorphous you can't.

AB: As an owner of the business, there are so many things going on that I have insights to. Remember, I'm connected to your systems. I'm connected to all of your financial data as your accountant. If I spend time understanding what's going on inside your business, I can actually provide incredible insight. The problem is that it's very time consuming today to do all the lower-level work to get through all those insights and to learn on a deeper level about a business.

Citrin Cooperman handles 500 law firms. I can look on an anonymized basis at all your peers inside Citrin Cooperman, which nobody else has there. None of them are publicly traded and I can start to give you insights not only on an anonymized basis. I can start to give you insights not only about your own firm, but how you're doing versus your competition. That's true value at the end of the day that we can deliver.

I can continue to deliver that and help you make good business decisions every day when it comes to the audited financial statement and the tax return. Businesses will pay a little bit more because they’re getting a little bit more value.

Driving Organic Growth Through Expanding Advisory Services

RS: Talk to me about organic growth and utilization rates.

AB: Organic growth was tough in 2025. It was certainly a challenging year for most firms. As you get larger, it becomes the number one driving force of not only creating compensation for everybody but also creating value inside the organization. It’s something that we're hyper focused on at Citrin Cooperman. Last year we created an office of the chief growth officer, and we've put in place a number of different approaches to spur organic growth even more than we're growing today.

As AI takes even more of a hold, it'll put more pressure on the organic growth side of the business, especially to your point if you have fee pressures coming the other way.

RS: How are you managing through various change states?

AB: There's no doubt that we're in this really rare convergence of PE and technology; there's just so much going on inside the industry. It’s an exciting time if you really lean into what's going on.

Private equity has made a huge change inside this industry. From 2024 to 2025, there were at least 100 transactions inside the East space, probably more. Ultimately, it really changes the fundamental approach of how CPA firms are growing.

They're growing faster than they've ever grown before. That next year down is like a rocket ship going up in the air. I looked up some stats from 2024 to 2025, and the top 20 mid-tier firms grew a collective 24%, which is an enormous number.

To add to that, advisory is taking on a larger role inside our profession.

RS: One of the things I hear when I'm talking to firms considering merging or becoming a platform is, “What's this going to do to my culture?”

AB: I'm going to break that question into two pieces because I think it's important. I think there's overall culture of the firm and the way that we integrate firms that are joining Citrin Cooperman.

The first is on the culture of the organization. You have to continue to put people first, and sometimes you hear firms now starting to talk about being a technology-led organization.

At Citrin Cooperman, we want people who are generous with their time and who are willing to stop and help their partners with anything that they need. That really makes up a great place for people to work because they know that they have their partners trying to help them with anything that they can.

The other thing is our 100/100 rule. Whenever we meet with an organization, I always tell them the story about my wife. When we got married, I said to Maria, “We're going to have the best life together. We're going to do everything 50/50.” She stopped me and said, “I don't want to do things 50/50. I want to do it 100. You give 100, I'll give it 100, and we'll have a wonderful life together.”

When we do an integration, we will give 100% to the incoming partners and staff.

Valuations, Acquisitions, and Integration Challenges in Deals

RS: Let’s move on to the deal environment. It's part of the value proposition. What do you think is happening with multiples right now?

AB: Valuations continue to be pretty strong. There’s more competition in the marketplace. We have seen multiples go up over the past 18 to 24 months. They've stabilized a bit after going up probably 2X over the past 24 months or so.

RS: Give me some numbers on a big firm, medium-sized firm, a small firm. What are you paying?

AB: I would tell you it's not based on the size; it's based on the quality of earnings for a reason, because it's really about the quality of the company that you're buying.

There's a lot of different factors that come into play. A firm that can show that they have sustainable growth over a period of time, including 2025 which was not a great growth year, is going to have a better or a bigger valuation multiple. It's a reflection on the firm itself. Those types of attributes help us figure out what we're willing to pay versus another.

The other is what their skills are. We may come across a firm that has great skill in an area that we don't have, and we want to gain that skill. If we can take a firm that has a particular skill and we can spread that to our clients, there is more value in that.

RS: What do you see with deal activity in general?

AB: I think the pipeline continues to be very strong. It’s shifted a little bit though, but it's shifted because there's more people at the table trying to get into those deals. I think we're moving into a different evolution of why deals will get done as opposed to maybe why they've gotten done. Up to today, there was an aging population of firms where maybe the leadership wasn't in place to take over those firms and that drove some of the deal flow.

What we're starting to see is the conversation shifting to the capital and know-how that's required to get into artificial intelligence. That has become a big topic of conversation to the firms that were recently talking to as they can't do it.

RS: When you think about your acquisition strategy, does it include picking up one of these other platforms that might be smaller than yours?

AB: We're really open minded to what fits best. What we don't want to do is to get into something that ultimately impedes the culture or the strategy of the organization.

We are a “one firm” approach, which means that everybody is on the same systems and everybody uses the same procedures. We use staff as broadly as we can by industry with the same approach to everything that we're doing to bring the best results to our clients. This allows us to use the total resources of the firm to create that meaningful outcome for our clients. I would never do a deal that would impede that approach to serving our clients.

RS: One of the things I hear from clients whose firms merge is that the integration has been hard. How do you address those challenges?

AB: It is hard right up front. Think about this. You've been here at your law firm for a long time. If you were here at midnight and all of the lights were out in the office, you would be able to find your way to the kitchen. Now you come into Citrin Cooperman and it's dark and you have no idea where anything is and you almost have to learn how to get the work done again. That's the hardest part about integration. It takes 12 to 18 months before you know how to get down the hall into the kitchen and open up the refrigerator again.

I would tell all firms that whether it's Citrin Cooperman or any other firm, you have to give it a little time. You can't assume everything's going to run the way it did the day before. It goes back to my 100/100 story. I'm going to give 100%, but you have to give 100% too. You have to come in understanding that things are going to change in terms of the way you were doing them before. The most successful integrations are those that actually give that 100%.

Exploring Fixed Fees and Subscription Models for Services

RS: Let's go back to rates for a minute. I think that lawyers like me will just of bill our rate. I think accountants tend to figure out what the rate is, multiply it by how much time they're going to think, and then give the client a price. What sort of rate change are you factoring in?

AB: We raise rates every single year, and I'm sure every firm does. What we're really trying to do is get away from the time and materials all together and get to a fixed fee, a value fee. We did a survey of our clients, and they came back to us and said that they would sign up for the fixed fee all day long.

I think where the challenge is going to be is some of the special work where you would have just charged your standard hourly rate. Now the problem is that you delivered the same value but because of AI, it took less time to produce it. That's where we're all going to have a huge issue, because how do you value that at the end of the day? We have to start to think about fixed fees and where we go from here.

Do we go to a subscription model where you can call me anytime within the set of boundaries, within a scope, and you're going to be charged at a fixed rate for the year? I'm not sure the market is there yet to really know what we're going to be allowed to do, but that's how we're starting to think and I'm sure others are starting to think the same.

Delivering Premier Value: Citrin Cooperman's Client-Centric Strategy

RS: How do you view your strategy?

AB: Our strategy is not new. We love serving this marketplace. The reality is that business owners, CEOs, and CFOs hire us as a fractional financial advisor to help them do everything. That's a great position to be in for a couple of reasons. Number one: it's a relationship that goes deep and number two: it's fun.

We want to be able to accomplish taking this further across our country. We can continue to grow the organization and deliver that value consistently to our clients in the future and current.

We are that low leveraged firm today. Citrin Cooperman is leveraged at about a five-to-one ratio, so about five staff for every partner. For our market and for our clients, it dovetails perfectly into how we serve them. Our partners are engaged in every facet of the account that they serve. I think that's really important, and it's going to be even more important in the new age of AI.

RS: How do you distinguish yourself as a firm?

AB: We aim to be a premier provider. We want to be an advisor that sits alongside our clients, takes care of them, understands the challenges that they're having in their business, understands the challenges that they're having in their personal lives, and brings valuable solutions to them.

I was talking to a client this morning who had a cybersecurity incident. We're going to be able to help them through part of the remediation that needs to happen. There's only three types of businesses out there. There's those that are being attacked, under attack, or will be attacked. If we can understand from their perspective and have empathy and bring that empathy to the table along with our comprehensive professional services, it goes a long way. That’s just a tiny example of what I think makes our firm very special.

Exciting Opportunities and Wealth Building for New Accountants

RS: Is there anything that we didn't cover that you'd like to touch on?

AB: I think we should talk quickly about young people. Is there a place for young people in this profession? The answer is categorically 100% yes. In fact, I think in many ways younger professionals are going to have a more successful career than even people from my generation. Number one, they’re going to have a lot more interesting work. I spent years and years learning by putting numbers in boxes here. They’re going to learn by digging deeper and quicker into how things actually work.

Number two is that the value that they bring to their clients is going to be 10 times more than the value that we could bring in the past, because the tools that we're going to have are going to allow us to bring that value. Number three is that PE is going to continue to invest and maybe there's IPOs and other opportunities down the road. The capital investment into this industry is going to continue to grow, and they need young people to excel through the industry.

The next chapter for accounting firms is already beginning. Stay tuned as Citrin Cooperman continues to explore how private equity, artificial intelligence, and other transformative technologies are reshaping the profession and what firm leaders can do to stay ahead. For more information, reach out to info@citrincooperman.com.

Explore specific points of the conversation between Alan and Russell using the links below:

• How Citrin Cooperman is progressing through the generational transformation driven by AI

• How accounting firms assess and select capital structures that align with their strategic goals

• How private equity investment has changed the industry for the better

• The optimal model for governing accounting firms, and shifting from a partnership model to a corporate model

• How the impact of AI on the industry will affect the next generation of talent and global sourcing of labor

• How AI will impact pricing in the accounting industry, and how it can create new value for clients that wasn’t possible before

• How Citrin Cooperman is approaching organic growth as a strategic objective

• Growth statistics and the fastest-growing service lines for mid-tier firms

• How to keep the culture human-oriented in the presence of PE and new technology

• The state of the deal environment and what is happening with multiples

• Citrin Cooperman’s acquisition strategy and its “one firm” brand and approach

• How to address the challenges around integration following an asset acquisition

• The challenges of structuring fixed fees and value-based fees given the impact of AI

• Citrin Cooperman’s overall strategy

• How Citrin Cooperman distinguishes itself from its peers

• What an accounting career will look like for young accountants starting out today

Listen to the full episode on Spotify.