The ability to invest in the future has never been more important in our profession. The emergence of artificial intelligence, the need to rebuild our talent pipeline and create value for future generations is top of mind across the industry.
In fact, in the Accounting Today Top 100 Firms of 2024 report, investment in technology and retaining and upskilling talent were among the many reasons for firm growth in the last year. The correlation is obvious. But we are also seeing growth in other areas, from outside investment to mergers and acquisitions. The pace of change is undeniable.
The landscape of the accounting and professional services sector is undergoing significant transformation, in part, driven by the influx of outside investment and mergers. The American Institute of CPAs announced it will revise its "independence rule amid the wave of private equity investments in accounting firms." The volume of investment in professional services is shining a light on the fact that this is an exciting and vibrant time for the industry. The ability to be forward leaning and realize the investments that are needed to keep pace is essential to our ability to evolve.
The pace of change can be challenging for any firm, large or small. As firms evaluate their strategic options, it's imperative to recognize there are varied paths to achieving growth and innovation. One size doesn't necessarily fit all. At CLA, we are watching how outside investment is impacting the industry. For some firms, outside investment has been successful and led to immediate growth. In other cases, we have observed that quick growth results in a lack of autonomy. This has furthered our belief in the independent model that is the foundation of our firm.
Independence enables flexibility
The independent model lends itself to making decisions at a local level. When a firm is independent, there's flexibility and a cogent desire to invest in the future. This allows organizations to be on the forefront of cutting-edge AI and digital technology solutions with a long-term vision. When firms invest in these technologies, they can consider the long-term value it will deliver to their clients instead of only considering the monetary return on investment.
CLA's commitment to investment extends beyond technology to workforce development and industry innovation. We recognize that size and scale matter when it comes to AI and digital transformation. As a top 10 firm, we invested in technology and talent far before the influx of outside investment began transforming the industry. During the pandemic, for example, we pursued advances where others hesitated.
The CLA Academy and engagement with non-CPA professionals reflect our dedication to evolving talent alongside industry needs. We continue to invest in workforce solutions to address the accounting shortage in addition to supporting initiatives like SkillsUSA to cultivate talent in sectors we operate in and deeply understand. By maintaining our independence, we ensure our investments align with our long-term vision while keeping jobs local and serving the heartbeat of the economy.
Independence also enhances the ability to invest in your people and your clients. At CLA, we seek out talent who embody the "ownership mindset," who are looking to grow their careers alongside the firm. The career stability and longevity in the independent model has brought the industry to this day. We believe it can and will continue.
Right now, in this environment, the partnership model that we believe in seems to be the different approach, whereas in the past, it was perhaps the only approach. Because of our independence, the flexibility it provides, and our willingness to invest in our future, we will be on the forefront of cutting-edge AI and digital technology solutions. It enhances our ability to invest in our people and in clients. At CLA, we firmly believe that our unique position within the market and our growth trajectory over the years validates such an approach.
Independence propels growth
The partnership model is particularly appealing for firms at a crossroads — those that are strong, profitable and successful, yet uncertain about their future in a labor-constrained, tech-driven environment. Over the past several years, firms like ours have grown not only organically, but also by joining forces with firms eager to leverage our extensive resources and industry expertise, benefiting from our unwavering commitment to independence.
Agility and responsiveness are key differentiators in our industry. They enable an organization to swiftly adapt to market changes and client needs. A commitment to innovation and resilience can provide a robust platform for growth, allowing partners to thrive within the partnership framework.
As we consider our growth options, not only are we bringing in new clients and expanding our services, but we are also inviting regional and national accounting and professional services firms to join our path forward. Because of our partnership model, CLA offers many of the same benefits as outside investment, while ensuring that decision-making remains at a local level, prioritizing the best interests of our clients, our people and the communities we serve.
Just as we advise clients, firms need to reflect on the optimal path forward. We like to think that while we're independent, we have plenty of room to expand our partnership model. We are eager to share how that independence is a differentiator in the market, as we evolve our industry, elevate client service, and create uncommon but robust results.
As firms evaluate their strategic options, it's imperative to recognize there are varied paths to achieving growth and innovation. Our independence allows us to make strategic investments that work toward long-term goals over short-term gains. Whether through AI and digital transformation, workforce development, or expanding our partnership model, we remain focused on delivering value to our clients and the communities in which they call home.
The accounting profession is experiencing a transformation, and firms across the industry must carefully evaluate their path forward. While outside investment has accelerated change, we believe our partnership is the only way forward for CLA. It fosters agility, innovation, and a true sense of ownership. By staying independent, we can continue shaping the future of our industry on our own terms.
