The New York-based accounting firm Mitchell & Titus recently celebrated its 40th anniversary as one of the oldest and most prominent minority-controlled firms in accounting.
[IMGCAP(1)]In an interview last week, Mitchell & Titus chairman and CEO Anthony Kendall reflected on the history of the firm and where the profession stands in terms of diversity. He has been with the firm for over 23 years.
“We started here in New York in 1974,” said Kendall. “Our two founders were Bert Mitchell and Robert Titus. When they started the firm, it was difficult at that time for people of color to get into public accounting. There weren’t a lot of jobs, and Bert Mitchell had a difficult time finding a job in public accounting when he graduated, even though he graduated close to the top of his class.”
Mitchell, who still works at the firm, felt that he wanted to create an organization where he and other black accountants would have an opportunity to pursue their careers and realize their dreams. When Mitchell and Titus founded their firm four decades ago, they mainly focused on government and not-for-profit work.
“That was the primary practice of the firm, and over time Bert Mitchell and Bob Titus realized that if the firm was going to last beyond 10 or 20 years, you had to migrate to something else,” said Kendall.
In the mid-1980s, they decided to focus on helping large companies with their employee benefit plans. Their first corporate client was the tobacco giant Phillip Morris. The firm also expanded into other advisory and assurance areas, along with tax, and is now a full-service firm with offices in New York, Newark, Philadelphia, Baltimore, Chicago and Washington, D.C.
[IMGCAP(2)]The firm services a wide variety of clients, including real estate businesses, financial institutions, private equity firms, media and entertainment companies, and a few pharmaceutical and manufacturing corporations. M&T also continues to operate a large not-for-profit practice and to work with public sector clients in federal, state and local government.
M&T’s advisory practice includes Marketing Advertising Risk Services, which helps clients better understand how well their media spending is performing in areas such as TV commercials and whether media outlets are adhering to the terms of their contracts with advertisers.
M&T also works on cost segmentation projects to help construction clients who are building a facility plan how their costs should be segmented from a tax point of view. In addition, the firm provides tax and consulting services for high net worth individuals.
“I would say, over those 40 years of the firm’s history, we have done well to continue to grow, to continue to change, to continue to provide people an opportunity to really pursue whatever their dream may be in public accounting,” said Kendall.
Ernst & Young Relationship
M&T has worked with Ernst & Young for three decades. It began a joint venture relationship with EY’s predecessor in the early 1980s and is now a member firm of EY.
“The firm has a history of working with all of what were then the Big Eight firms,” said Kendall. “When it was the Big Eight, Mitchell & Titus were doing joint ventures with almost all of the firms back then, and over time the leadership of the firm said, We’re doing joint ventures with them. We want to do more work with them. How can we have a closer relationship?’”
When EY dissolved its affiliation arrangements in 2000 to adopt a more integrated global structure, M&T began to talk with the firm about working more closely together and becoming a member firm of EY. After about a year of discussions, M&T became a member firm in December 2006.
“As a member firm, we use the same infrastructure as Ernst & Young,” Kendall explained. “Our infrastructure is the same, our technology is the same, our training is the same, and our platform is the same. Our people work on some of their engagements, and some of their people work on some of our engagements. It’s an integrated team.” In 2009, several partners from Ernst & Yong joined M&T.
Mitchell & Titus operates independently of EY, however, and is independently owned by M&T’s own partners. Kendall declined to specify an exact annual revenue figure for his firm but said it’s between $25 million and $50 million.
Diversity in the Profession
Asked about diversity in the accounting profession, Kendall acknowledged there has been progress, but he still sees room for improvement.
“I would have to give credit where credit is due,” he said. “I do believe that the accounting profession as a whole has really tried to have more diversity. I know when I started in the accounting profession back in the ’80s, it wasn’t a diverse profession. I still think today there is a lot of room for more diversity in the profession, but I will say that accounting firms, the AICPA and others have worked diligently to improve diversity.”
From a gender point of view, he sees much more diversity. “I think that’s where the accounting firms have done well,” said Kendall. “If you look around today, there are a lot of women today in leadership positions throughout the accounting profession. I think they have done a great job.”
However, when it comes to ethnic diversity, he feels accounting firm leaders still need to do more.
“I think they are trying, so I don’t want to say anything discouraging, but I do think that part of it is leadership,” said Kendall. “Part of it is demonstrating to diverse candidates that there are people who look like you, people that understand your experience, people who come from similar backgrounds, people who can appreciate the difference in thoughts that you may bring to the table, people who can appreciate some of the cultural differences. I do believe that it is important for organizations to have leaders who reflect that.”
From a client point of view, working with a more diverse firm can also be beneficial.
“I think it’s easy for people to understand and appreciate that I want to work with an organization that reflects what I see,” said Kendall. “If you look at the world today, it’s no longer just the U.S. The world is very, very diverse. If you’re going to be successful in today’s global economy, you have to be diverse. It’s not something that’s a choice anymore. Diversity is absolutely crucial to success.”
Kendall sees diversity first as having diversity of thought around the table, which would then lead naturally to diversity in ethnicity and gender.
“Diversity leads to innovation and creativity,” he said. “You look around at the companies that are successful today. They’re global entities that are taking knowledge from all over the world, from different places. They understand that you really do need to have diversity in your workforce if you’re going to be creative, innovative and lead in today’s global economy.”
Minority Recruitment Efforts
To recruit young accountants, M&T visits local colleges and universities, as other firms do, but also works with organizations such as the National Association of Black Accountants, the Association of Latino Professionals in Finance and Accounting, and Ascend, a group for Asian and Indian business professionals.
“We try to build a relationship with certain organizations and universities that we believe can feed us a diverse candidate pool,” said Kendall. “Even though we are a minority-controlled entity, if you came in today and walked around our floor, you would see real diversity. I’m not talking about just people of color. I’m talking about everything, whether or not they’re Asian, Latino, African American, African or European. You walk around our organization, that’s what you’re going to see. We have an organization where I think people from all backgrounds can feel comfortable because they realize that we are all different, yet we’re all so similar. We really do try to recruit with that in mind, saying we want the best candidate, but we also understand that having diverse candidates leads to a very inclusive work environment, and we also believe it leads to an innovative work environment.”
By working closely with organizations such as NABA, ALPFA and Ascend, M&T hopes to increase diversity in public accounting and the financial industry as a whole.
“We work closely from a mentoring point of view, and we work closely by supporting them,” said Kendall. “We also give them access to the leaders of the firm as part of our giveback to our community.”
Kendall would like to see more colleges and universities make the cost of higher education more affordable to bring a more diverse talent pool into the profession.
“A lot of people of color are first-generation college students in America, and a lot of them can’t afford to go to a four-year institution, so you’ll see them at junior colleges,” he pointed out. “I think what has to happen is that young people of color in America have to have access to a college education. As we all know, one of the drawbacks is the financial burden. It’s very difficult when you don’t have the financial means, and the government is not providing the type of support that it did many years ago.”
He believes universities and colleges can do a better job of opening their doors to give people of color more access to higher education. “A lot of that may be through support through scholarships and grants,” said Kendall. “Some of it may be through mentorship programs. Some of them may be getting more engaged in the communities in which they serve. I do see that a lot of universities are now beginning to have bilingual people in their admissions office to make sure they are catering to all the demographics of people applying to colleges today. But I do think there is more to be done. We have made some progress, but in general in the U.S. we have to make college more affordable to everyone. If you do that, it would then give people of color and others more access to a business degree or accounting degree or whatever their desire may be.”
The high cost of a college education may be discouraging many students from entering college and pursuing a degree in accounting along with other subjects.
“A lot of people have the dream of going to college,” said Kendall. “It’s not that they’re not capable. A lot of it’s just the financial burden. That’s something we all have to look at. How do we make the financial burden less for all people who are qualified, who want to have higher education, who have the desire to get that degree. We have to find a way to make that happen in this country. I think that’s where as a country we are falling behind, in comparison to other countries, with giving their citizens access to higher education.”
The accounting profession can be an attractive one for many students, especially these days when they need a job with enough of a starting salary to help them pay off their student loans.
“I think the accounting profession is a great profession that one can go into, for a couple of reasons,” said Kendall. "There’s absolutely a high demand for talented people coming out of colleges and universities with accounting degrees. Two, you can probably always find a job with an accounting degree because you have options. It’s not just public accounting. It’s not just private accounting, working for a corporation. But you’ve got government, you’ve got not-for-profit, you’ve got education you can go into. If someone has an accounting degree, they have a lot of options. And generally, coming out of college, in particular today, when most people come out with a five-year degree in accounting, I think the starting salary is a decent salary. So it does give people the opportunity to help pay back some of that debt.”
Kendall pointed out that the accounting profession can open doors to other careers as well.
“When you have an accounting degree, I think it’s unlimited what you can achieve because you can start off in public accounting and go somewhere else,” he said. “You can start off somewhere else and come back to public accounting. I just think there are so many things a person can do when they have an accounting degree.”
The profession needs to make sure when it recruits diverse candidates that it also gives them a reason to stay in the profession. A
“Bert Mitchell did a study in the ’60s and ’70s when he talked about blacks in public accounting and CPAs,” said Kendall. “I think that study has been updated a couple of times, and that percentage has not moved significantly from where it was back then. The firms are doing a better job of recruiting diverse candidates, but I don’t know if the diverse candidates are staying as long as non-diverse candidates. I think some of that has to do with the mentoring. Some of that has to do with the nurturing. It’s one thing to just bring someone into your organization, but it’s another thing to invest in them and nurture them and develop them, for them to see role models that they believe are similar to them.
"I do believe that’s where the profession probably has not done as good a job," Kendall added. "It’s bringing more people in, but not finding ways to retain them longer, to develop them so that they can eventually become part of leadership. That’s where I think there’s a void that they still need to work hard at, somehow closing that gap between how many you bring in and how many you have seven or eight years later. It’s not just diverse candidates. A lot of people come in public accounting and leave. That’s just the way it works, but the question is what percentage of the diverse candidates that are coming in are leaving before a year, five, seven, eight, or 10 years? That’s the question and how do you address that? That’s where more effort needs to be spent.”
