While remote partners bring many benefits to accounting firms, those that have them will need to expend a little extra effort to make sure the arrangement runs smoothly.
Randy Johnston, executive vice president at K2 Enterprises, an accounting-centered IT consulting firm, said one possible issue is that, with the partner far from the firm's main sphere of influence, clients may be more connected with those partners than to the firm that employs them. This is exacerbated by the fact that, if these partners are the only toehold a firm has in that market, it can become overly reliant on them.
"You have to have enough collateral services that you build a relationship with the firm, so the risk is not building that relationship with the clients and letting it become too partner-centric," said Johnston.
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Another issue is making sure the remote partners feel connected to the firm and its culture. They need to feel like the word "remote" simply describes their working arrangement versus their relationship with onsite partners. Larry Sheftel, chief human resources officer for Aprio, said the Top 100 Firm is well aware of this challenge and actively works to make sure remote partners feel just as much a sense of belonging as those in the Atlanta headquarters.
"At Aprio, we believe that ensuring that our remote partners are fully ingrained in our culture is essential for collaboration, productivity, continued growth and overall success," he added. "We focus on effective communication — maintaining open lines of communication, encouraging active listening, setting clear expectations and scheduling regular check-ins. We prioritize learning and development for all team members at Aprio and ensure that our remote partners have access to training programs and workshops, often leveraging best-in-class virtual learning platforms and deploying the latest technologies."
Avani Desai, CEO of Top 50 firm Schellman, similarly conceded that maintaining a consistent firm culture when everyone is so spread out does take a more proactive approach, but the challenge is far from insurmountable. Annual retreats, regional gatherings, employee resource groups and virtual events all form a vital part of maintaining cultural continuity at the firm. Desai recently gave a demonstration over Zoom on how to make chicken makhani (a.k.a. butter chicken) to over 120 people.
"We believe you don't need to be in person to create bonds," she said.
Firms also must be wary of bureaucratic and regulatory issues. While not impossible to overcome, taking on remote partners from far-off geographies means taking care that every I is dotted and every T is crossed when it comes to setting someone up there. Jennifer Wilson, co-founder of ConvergenceCoaching, a leadership and management coaching and consulting firm, noted that payroll alone can be a persistent headache, especially for smaller firms.
She recalled her own experiences as the leader of a virtual firm with people in multiple states. "I run a multistate business, so I have multistate taxes," she said. "When we employ someone in a new state, we have to learn all their [regulations] and everything about that state's employment rules because we are governed by them for that one employee. It's a nightmare — honestly, it is one of the most complex parts of multistate — but we've done it for 24 years because we want to hire the very best people to do the work."
Rules and regs
Adding to these tax challenges is the need to account for all the state-level rules and regulations for CPAs.
"We have to pay attention when we are practicing accounting in multiple states," said Wilson. "We have to pay attention to state board regulations in the states we practice in, and those state board regulations include CPE requirements but they also include licensing requirements."
Many states have reciprocity agreements that recognize substantial similarity in licensure requirements between jurisdictions, which significantly cuts down on the potential for trouble. CPAs can practice across state lines without needing a new license and paying more fees. However, Wilson noted that a number of states — such as
"If I'm a small firm, it gets really expensive to license people and figure it out in all these different states. If mobility winds up getting lost, then we can have some real costs and it might make it prohibitive even," she said.
Even for a larger firm like Schellman, dealing with so many rules and regulations in so many states generates a lot of administrative overhead, starting with making sure the firm is approved to operate in every state it works in. Desai noted that some have reciprocity, some require licenses and some require permits. The firm appoints a designated certificate holder in each state who signs off on reports. Certificate holders must be certified in both the state they live in as well as the state the client is in. Desai noted that it's not uncommon for partners to be certified in multiple states, with some who have large clients holding licenses in seven or eight different jurisdictions.
"There is definitely administrative overhead, because you need to be properly licensed in every state, to do renewals in every state," she said. There are also ethics requirements and CPE requirements that need to be tracked. "We have a centralized licensing group, a lawyer and a paralegal, who arranges all that for us," said Desai.
Johnston, from K2, agreed that mobility and reciprocity address a lot of issues, and changing from 150 to 120 hours could threaten this, but one advantage of remote partners is they're probably more familiar with the rules in their home jurisdiction than the far-away firm, not just for their clients but themselves.
"If you just hired a remote partner from a remote geography, they know the regulations in their environment as well," he said. "Suddenly, it reduces your firm's risk of entering a new market because you have a partner whose expertise is in the market you're in."
Despite potential issues, Johnston is mostly bullish on remote partners. Firms are starting to wake up to the strategic advantages a remote partner can bring amid talent shortages, and the major opportunities for accounting leaders.
"The opportunity for firms to benefit from employing remote partners is great, and I think it may be even greater than outsourcing," he said.
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