Growth across the accounting profession has cooled for the second consecutive year, but firms aren’t simply accepting slower performance. The early results from INSIDE Public Accounting’s 2026 Practice Management Survey suggest they are finding other ways to improve the economics of the business.
That’s the larger story emerging from the latest episode of the INSIDE Public Accounting Podcast, which kicks off a new series examining the 2026 Practice Management Report.
The report draws on survey responses from 605 North American accounting firms, spanning firms with less than $5 million in net revenue to some of the profession’s largest organizations. This year, organic growth fell to 7.0% from 7.7%, while total growth, including M&A, slipped from 8.8% to 8.3%.
Profitability moved in the opposite direction.
Net income growth rose to 10.4%, up from 8.1% last year. For IPA Executive Director Chelsea Summers, that divergence is central to understanding what is happening inside firms.
“That’s really what I see as the story of this year’s report,” Summers said. “It’s less about how much firms are growing and more about how they’re converting the growth that they do get into profits.”
Finding Growth in a Slower Market
Traditional compliance work continues to generate most of firms’ revenue growth, but some of the fastest percentage gains are coming from newer and expanding service areas.
Client accounting services grew 16.7% year over year and now accounts for 10.9% of firm revenue on average. Computer and IT consulting grew 32.1%, although it remains a small portion of the typical firm’s business.
At the same time, firms appear to be extracting more revenue from their existing capacity. Revenue per work hour increased to $116 from $110, while revenue per FTE rose 2.6% to approximately $226,000.
That productivity gain comes with an important caveat: Revenue per FTE has failed to keep pace with inflation for five consecutive years. IPA’s longer-term data shows inflation-adjusted and nominal revenue per FTE tracking closely through 2020 before beginning to diverge.
Pricing and M&A Continue to Shift
How firms charge for their work is also changing.
The traditional hours-times-rates model remains dominant, accounting for 63.1% of revenue, but that is down from 67.1% last year. Fixed-fee and value-based pricing increased from 29.3% to 33.7%.
M&A activity, meanwhile, remained relatively steady, with just over 20% of firms completing at least one acquisition during the year. The activity remains heavily concentrated among larger firms: 64% of firms above $75 million completed an acquisition compared with just over 5% of firms below $10 million.
Building the Next Generation
The data also points to continued movement on leadership succession.
Average partner age has declined from 53 in 2020 to 51.4 this year. Participating firms reported 756 new equity partner admissions compared with 373 equity partner retirements. More than half of firms now have a written succession plan for their MP or CEO, rising to 67% among firms above $30 million.
Those changes matter as firms navigate a market where growth may require more work than it did several years ago.
“The profession’s adjusting, not retreating,” Rob Brown said near the end of the episode.
Summers agreed, pointing to the broader response visible throughout the data.
“Growth is harder to come by than it was a year ago, three years ago,” she said. “But firms are responding by reimagining pricing, investing in efficiencies and then building that leadership pipeline that’ll carry them through to the next cycle.”
The episode launches a series examining the 2026 Practice Management Report, with upcoming conversations on firms’ changing operating models, talent strategy, technology and offshoring, new delivery models and the economics driving partner income.
