Top-Line Growth
- Growth Strategy
- Firm Growth
- Leadership
- Framework
Every managing partner can tell you what revenue did last year. Far fewer can explain why, clearly enough to know whether it's likely to happen again. That gap is the whole story of top-line growth as a lever. It's the most visible number in the firm and the easiest one to misread, because growth on a P&L and growth in enterprise value are not the same test. A firm can grow revenue every year for a decade and still be worth less than it looks. Whether growth counts as an enterprise value lever comes down to three questions.
Where the growth actually came from.
Start with attribution. If two partners retired tomorrow, would next year's number look roughly the same, or would it fall off a cliff? Firms rarely ask this directly, so they rarely know the answer. Growth that traces back to a handful of individual relationships is real and it counts this year, but it carries a discount, because it disappears the moment those people do. The same honesty applies to tailwinds the firm didn't create. Price increases across the profession have run in the 5 to 10 percent range in recent years, and consolidation has pushed displaced clients toward firms that did nothing to win them. A lot of top lines grew for reasons that had little to do with strategy. This isn't a case against strong rainmakers or against taking a rate increase when the market allows it — it's a case against depending on either as the entire growth strategy. Concentration in a few people, or in market conditions the firm doesn't control, is exactly the kind of risk that gets found and priced in a transaction. Better to find it first, internally.
What kind of revenue it is.
Not all growth has the same texture. A multi-year advisory engagement and a one-time compliance project can add the same dollar to the top line and mean completely different things about the firm. Recurring, embedded work says something durable about the client relationship and the firm's position in it. Episodic project revenue says something about last year, not necessarily this one. Capacity makes the choice sharper: most firms are short on people, not opportunities, so every engagement is time the firm can't spend somewhere else. Work that fills the schedule this quarter but doesn't fit where the firm is headed comes at the expense of work that would have built the base.
Whether the firm can explain it.
Ask most managing partners where growth came from and the honest answer is some version of "a bit of everything" — new clients, a rate increase, a strong renewal season, maybe a small acquisition. All true, none of it specific enough to act on. Firms building enterprise value can break the number apart: this much from new logos, this much from expanding existing relationships, this much from pricing, this much from an acquisition. That clarity is what makes growth repeatable, because a firm that knows which lever produced the result can pull it again on purpose.
None of this depends on a sale. A firm planning to stay independent still needs to know whether its growth is solid enough to keep building on. A firm looking to acquire needs the same clarity, since a strong top line is often what makes a firm an attractive buyer in the first place. And firms that do this work usually discover the best of their growth traces back to a specific kind of client — which becomes the foundation for scaling on purpose instead of by accident. Sell, stay independent, or acquire: the growth rate on the page can look identical either way. What it's made of is what tells the real story.
→ Read the full article: Top-Line Growth: The First Lever
Margin Expansion
- Firm Growth
- Leadership
- Growth Strategy
- Framework
Every managing partner watches revenue. Fewer watch margin with the same discipline, and that's a mistake. Revenue gets attention because it's visible. Margin is quieter, and it determines how much of that revenue actually converts into profit — and ultimately, into enterprise value. Take two firms with identical growth rates. One firm's growth is accretive to margin: high-value, profitable advisory work that builds into something a buyer would pay a premium for. The other firm's growth is dilutive: low-value, transactional work that adds revenue without adding value, and the firm ends the year bigger but no more valuable. Same growth, different businesses. Margin is a positioning outcome first and an accounting outcome only after the fact — earned upstream, in decisions made long before an invoice goes out. Those decisions show up in four places.
How the firm sets price.
Ask most firms how they set rates and you'll hear one of two answers: they benchmark against what competitors charge, often through an association or alliance, or they apply a formula, billing at some multiple of a professional's fully loaded salary. Both feel like discipline. Neither has much to do with value. Firms price the person doing the work, not the value the client gets from it. And scarcity has shifted underneath them — consolidation has pulled PE-backed platforms upmarket and left a vacuum in the middle market, making the trusted-advisor relationship rarer than it was twenty years ago. It's the same product it always was; it's simply scarcer, and still priced like it isn't. The parallel is concierge medicine: expensive because availability became scarce, not because the doctors suddenly got better. The biggest barrier here is firm hesitation, not client resistance. Most of the resistance comes from partners who've never asked.
Scope discipline and value billing.
Two moments show the same habit in real time, and most firms let both slip past. The first is scope creep — the firm agrees to a price, the client doesn't hold up their end, books aren't tied out, schedules aren't ready, and the firm absorbs the extra work at no additional charge. The work grew, the fee didn't, and no one made a decision about it. The second is value billing. An eye surgeon performing a retinal operation might work an hour and bill $25,000, because the value of that hour to the patient is enormous. Firms create moments like this constantly — sourcing capital for a client, delivering an IRS audit with no change, saving an M&A deal — and then price them like routine hours, sharing in none of the upside they created. Engagement letters that allow for change-of-scope and value billing from the outset give you the right to the conversation. Having it, in real time, is what actually captures the margin.
What happens when delivery costs fall.
Outsourcing taught the profession this lesson once already: firms that put the model to work captured real margin from the wage gap. AI is the same test arriving faster. It creates opportunity in lower delivery cost and faster turnaround, but it doesn't create margin on its own. When cost drops and price drops with it out of habit, margin stays exactly where it started. Whether that opportunity becomes margin is a pricing decision, not a technology decision. There's a second question too: what happens to the capacity efficiency frees up? Efficiency captured as margin protects the business. Efficiency reinvested in deeper client relationships, advisory conversations, and the business development most firms never have capacity for is what grows it.
Service mix.
The lever Gary has lived most directly. When he ran his own firm, they built a significant advisory practice alongside the core CPA work — wealth management, payroll, retirement plan design, HR consulting — held in a separate entity, with a share of profits flowing back to the CPA firm each year as pure profit. When they sold, the buyer didn't want the advisory pieces, so they sold separately. That's when the surprise surfaced: the CPA firm, the largest business they owned by revenue, was the least profitable business they owned. Growth that lands in the wrong mix makes a firm bigger without making it more valuable. New service lines can be built, bought, or — for smaller firms — shared through a referral relationship structured for a commission. The direction is the same regardless: advisory work carries margins compliance work rarely matches.
All four flow from one question: does the firm price its costs, or its value? Revenue can be acquired. Margin has to be designed.
→ Read the full article: Margin Expansion: The Second Lever
Margin Expansion
- AI
- Technology
- Firm Growth
- Framework
Every firm is buying technology. Adoption is nearly universal — roughly 95% of firms use some form of automation, and 73% have adopted AI in some capacity. Yet if technology created enterprise value on its own, the profession would be worth far more than it was three years ago. For most firms, that hasn't happened. The tools have arrived; the value has been slower to follow. After more than twenty years running technology inside accounting and law firms, Jerry's conclusion is direct: enterprise value comes from a firm's capability to put technology to work, and that capability is far more organizational than technical. The firms generating real value align their data, processes, and organization to absorb what they buy.
Start with the right goal: become AI-infused, not AI-native.
There's significant pressure to become an "AI-native" firm. But AI-native firms are built around AI from the ground up, and most are startups with no legacy systems to carry. Established firms are playing a different game. The practical goal is to become AI-infused — systematically weaving AI and automation into an evolving operating model. Value emerges when strategy comes first and technology second. Firms struggle when they treat AI as the target itself. Start with where the firm is trying to go, select the technology that helps it get there, validate it in short order, and don't be afraid to shift.
AI and automation: the technology is the easy part.
AI is effective at routine work, which is where most firms have started — data entry, reconciliations, standard returns. The results are real: faster invoice processing, more seamless client information, shorter close cycles. But automating a task frees capacity, and what that capacity becomes is a separate decision from whether the team adopts the new way of working at all. Technology projects succeed or fail on change management — the organizational structure, workflows, and people surrounding the tool. A firm that automates the work, then validates and adapts, captures the value. A firm that buys the tool and waits for behavior to change on its own keeps waiting.
Delivery accelerators: redesign the work around the tool.
The second place technology creates value is in delivery — the platforms and workflows that compress cycle times. Standardized processes, workflow automation, and right-shored delivery can dramatically reduce turnaround on routine engagements, with some firms seeing 50% to 70% reductions on standard returns. AI didn't create those gains; it accelerated them. A fast tool bolted onto a slow process produces a slightly faster slow process. Firms also scale in steps rather than smoothly: roughly every 200 to 300 people, the operating model has to be rebuilt, and delivery technology that ignores the organizational structure beneath it will stall at those inflection points.
Data and analytics: the prerequisite everyone skips.
The third and most frequently overlooked source of value is the foundation the other two depend on. You cannot infuse AI into a firm that can't trust its own data. Before analytics or AI deliver meaningful results, the data has to be clean, consistent, and governed. Firms sit on years of valuable information — client profitability, realization, pipeline, cross-sell patterns — and when it's messy, every tool built on it inherits the mess. Get it right and data becomes the connective tissue of the whole model: top-line growth gets more disciplined when you can see where growth truly comes from, and margins improve when you can see which work is actually profitable. Get it wrong and the AI layer inherits the problem.
The right strategy depends on the firm's size, operating model, resources, and appetite for change — a smaller firm needs tactical wins, a larger firm needs governance and structure. But the advantage never lives in the tools. It lives in the disciplines surrounding them: clean data, aligned workflows, effective change management, and communication up, down, and across. Real technology change happens inside the firm, not inside IT. A firm that treats technology as a purchase ends up with a larger software bill and the same business.
→ Read the full article: Technology Enablement: The Third Lever