IPA Profile: Mike McCarthy, MP, Hancock Askew & Co.

Congratulations on being named a 2024 IPA Best of the Best firm. To what do you owe your success?

Success is hard to pin down to a single reason. Two things I attribute success to are that I am consistent and persistent. Integrity and focus always pay off in the end. Our growth period started when we defined our values, focused on our culture and created a strategic plan to achieve our vision. We picked markets and niches we wanted to be in then set out to hire good people and got out of their way. As long as everyone is working in line with the strategy, give them the tools, set some goals and success will follow.

I also believe whom you work with is more important than how hard you work. I am thankful for our strong partner group. We are not afraid to challenge one another, problem-solve, and come up with solutions that are the best for our people and clients. We have a “you first” culture, meaning we always try to do what’s best for “you,” with you being others – our people, our clients and our community. Focusing on culture requires work and intentional efforts, but culture is important for avoiding stress and conflict. Further, because we have a shared strategy and vision, we pick and work with good clients. Life is too short to work with clients who don’t respect you or who treat your staff poorly. Working with great clients and being able to choose with whom you work and where you spend your time is a great success indicator.

Lastly, I try to spend as much or more time working “ON” the firm as “IN” the firm. I have had to give up many of my client responsibilities, and we have had to build a governance model of service leaders and office leaders, hire support staff, create decision processes, build an executive committee, and hire a COO, CFO, HR and marketing team. All of these talented people in positions that are not “billable” enable the partners and staff on the client service teams to focus on their highest and best use: serve clients well, train and mentor younger staff, and bring in new client projects.

What is the single biggest challenge facing your firm now? 

Staying relevant and changing with the times as it relates to two huge issues – people and clients.

Regarding people, we have to convince new generations to major in accounting, enter the profession and stay with it. To do that we have to provide a rewarding career with interesting work that results in our people feeling valued, trusted and empowered. We must do that with a changing demographic who don’t see work the same way older generations did, whether that is in terms of location, hours, dress, work style, etc.

Regarding our clients – everyone is talking about AI and with good reason. There are so many new technology products or tools coming out every year, and of course, outsourced operations in lower-cost global and remote labor markets can do the bookkeeping and compliance work that used to keep many accountants busy. If we don’t embrace these tools and tech, other firms that do invest in these things will find that combination of people and tools and leave us behind. We must embrace and use AI and tech tools to deliver better service to our clients. We must stay relevant and provide services that make us valuable to our clients and that generate trust. And we have to find that golden spot – the “trusted advisor” role that our clients really want and are willing to pay for.

Another very important complementary issue is firm governance and capital in this new world where PE investments are changing the way firms are structured and the way firms work. We have to morph our model. We have to provide the right level of investment in tech and tools and support systems, or those future talented employees may choose to work for a different capital structure.  Does the partnership model I grew up on still work in the future? Does our firm need to consider a different model? A capital partner like PE or ESOP or other creative structures? We must be prepared to compete with these new, well-capitalized PE-backed players in our space.

Where do you expect to be focusing most of your attention in the next two to three years? 

Building out strategic niches yet maintaining a “one-firm” culture. Like most firms, we were partner- and office-based where the individual partner controlled all decisions and their client book of business. That model has to change. Because of the growth of the firm, remote work desired by employees and specialization necessary to stay relevant to clients, we must move to being industry- or service line-based. We have built out niches like SOC, EBP and cyber security audits; we have built tax specialization practices like corporation, international, partnership and SALT services; and in our CAAS practice, we have specialized into franchise, fractional CFO and dental practice accounting services. We must continue to build out these services. We need expertise to support these niches and a pipeline of young talent to mentor and train in these niches.

What is the biggest and sometimes often-missed opportunity for the profession? 

People get lost in getting the project done by the deadline and forget to focus on the higher value-added items like a transaction or a planning need for our clients. We must take time to be consultants and advisors and bring value instead of getting caught up in compliance.  When AI gets better and takes over the compliance, we will be forced into this anyway, so we’d better get good at it.

We need to be creative with how we offer services and who can provide those services. A CPA is incredibly valuable and integral to our services, but we provide a breadth of services and not all need a CPA designation or even an accounting degree. We are now hiring finance people, data analysts, app developers, etc. We have to think of our business differently or in non-traditional ways.

What was the best advice you received as a young up-and-comer in the profession? 

Stay with good companies and good managers – don’t chase money or stock options or whatever – find good managers and work for them; find good companies and work for them or with them.

What motivates you most as a leader? 

Promoting young people, especially those who started as interns and rose up with our firm. I love seeing someone reach their goals and giving them rewards for hard work. We promoted nine partners this year, our biggest class of new younger executives. I smiled for weeks and am still happy and proud about that.

Where do you see the accounting profession in five years? How do you see it changing/developing, and/or how would you like it to change?  

We will see more non-CPAs and non-traditional hires in the profession. We will see more entrants to the profession. There are accounting firms today being started by Silicon Valley tech people, not by accountants. Pilot tax and accounting raised over $150 million in financing from Sequoia, Index Ventures, Stripe, Whale Rock and Bezos Expeditions (Jeff Bezos’ investment company).  A mid-size firm like mine does not have $150 million to invest. What will companies like that do to our profession?

Accounting is perceived as dry and boring, and we need to change that. It really is exciting and interesting. It’s challenging, and it is becoming truly global. We have to make accounting cool (well, maybe not “cool and hip,” but at least interesting and challenging and not boring) and attract younger talent.

What business books do you recommend to other leaders? 

Trillion Dollar Coach: The Leadership Playbook of Silicon Valley’s Bill Campbell by Eric Schmidt, Jonathan Rosenberg and Alan Eagle

The Almanack of Naval Ravikant: A Guide to Wealth and Happiness by Eric Jorgenson

Perfectly Confident: How to Calibrate Your Decisions Wisely by Don Moore

What is your proudest professional achievement?  

Building a firm where I can take a 15-day vacation and not bring my laptop and not worry about a thing (except maybe my wife and kids!!). I went on a high adventure backpacking trip with the Boy Scouts to Philmont Scout Ranch and I was totally off the grid, not even cell service. My team did not miss a beat. I love that I had a hand in building something sustainable.

I have some more tangible achievements: My partners elected me as managing partner and then re-elected me four times; Forbes named me one of the top 200 CPAs in America; HAC was named Best Accounting Firm to Work For; HAC ranked as a top accounting firm in every business journal market we’re in. Our firm received a net promoter score from our clients of over 70 when the industry average is 39.

I am always proud when a client writes a thank you note to me in reference to one of our staff or one of my partners doing something amazing for them, bringing value and making a difference in that company. It makes my week!

The IPA community wants to get to know you better! If you’d like to share your thoughts and insights in a future edition of the IPA Profile, let us know at [email protected].

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