If you don’t like the merger & acquisition landscape in accounting, wait a little while — it will change.

“It’s constantly changing, constantly evolving,” Doug Lewis, a managing director at M&A advisors The Visionary Group, told attendees of a session at the BDO Alliance’s 2025 Evolve Conference, being held in Las Vegas this week. “In just a couple of weeks there could be an entirely new option.”

From the multiple flavors of private equity deal and traditional M&A deals, to employee stock ownership plans and even initial public offerings, accounting firms have never had so many options to choose from — but that means firms have to make hugely consequential choices at a time when the rules are in constant flux.

“There are a lot of things happening out there in the marketplace — it’s not just PE,” he said, noting that of 22 deals his company worked on over the past year, nine involved PE, but 13 were more traditional accounting firm mergers. “There’s no one right path for a firm.”

While PE isn’t right for every firm, it has had an enormous impact on the market, driving up prices and creating inflated expectations, changing deal structures, accelerating the pace of deal-making, and much more, more or less completely upending the traditional world of accounting firm M&A.

With all that in mind Doug Lewis and Bob Lewis, the founder of The Visionary Group, shared a number of rules for success in accounting M&A — for both buyers and sellers.

Rules for the target market

The first step for every potential acquire is to decide if they want to be acquired. Many don’t – but that’s a choice that should be made after careful deliberation.

“If you do want to remain independent, stress-test your succession plan — and if you don’t have one, that’s where you need to start,” explained Bob Lewis.

Remaining independent is perfectly possible, but comes with its own struggles; firms that decide that a deal is a better bet for them should keep the following rules in mind:

1.  Manage your expectations. Stories of private equity firms paying exorbitant amounts of money have filled accounting firm partners’ heads with unrealistic ideas.

“Stop listening to the multiples from other deals,” said Bob Lewis. “It’s unique to each deal. Everyone says, ‘I want a multiple of 10 or 12 because I heard someone else got one.’ The only multiple you know for sure is CBIZ [because it’s a publicly traded stock]. The rest is all scuttlebutt from the rumor mill.”

The final multiple in any deal will involve so many different factors that no other firm’s multiple can be a useful guide.

2. Look for your hidden value. Acquiring firms are often looking for opportunities to quickly grow an acquired practice, so that what at first might seem deficiencies can actually be attractive.

“If you’re exploring selling or merging, knowing the hidden value of your firm is valuable,” said Doug Lewis, before laying out a number of these, including a lack of advisory services or a wealth management practice; having weak client pricing; not taking advantage of outsourcing; or coming from a less expensive area with lower-cost professionals.

3. Stick to the facts. The financial and operational data firms share should be accurate and honest. “Some firms try to get very creative with what their true value really is, only to find out that these large acquirers are really good at math,” said Doug Lewis. “More often than not, the BS will get sniffed out.”

4. Pay attention to the right stats. “Revenue per head is the benchmarking metric that most acquirers are looking at,” explained Doug Lewis. “$200,000 is a healthy level; we’ve seen as high as $500,000, but $200,000 and above and you’re doing OK.”

Other valuable metrics include revenue per equity partner, and realized dollar per hour.

5.  Clean up your act. Both Lewises agreed that these characteristics would make firms less attractive as an acquisition target: a high volume of 1040s; high billable hours at the partner level; an unintegrated firm with an eat-what-you-kill approach; a lack of standardized processes; lots of very small clients; and not tracking hours. (The last item isn’t about billing, Bob Lewis said; it’s about not knowing how your firm operates.)

New rules for acquirers, too

It isn’t just PE firms that are going out to make deals; more and more accounting firms are adding M&A to their growth strategies. But they may find themselves losing out to their many competitors if they don’t pay attention to the following rules:

1. Move faster. Traditional accounting firm deals used to be able to unfold at a stately pace, but no longer. “Time kills all deals,” Doug Lewis warned. “There are some really bad acquirers out there who will drag a deal on for two, three or four years. There are phenomenal acquires who can do it in just a few months. The lack of speed kills deals.”

“If it takes you three months to get back to a target, what message do you think that sends to them?” asked Bob Lewis.

2. Bring cash. Private equity has accustomed firms to the idea that they’ll get cash right away — something that didn’t used to happen in traditional firm M&A, but is increasingly common now. “We’ve seen the cash component skyrocket in just the last three to six months,” said Doug Lewis. “We’re seeing much more cash in the deal. It’s rare to see less than 30% of cash, and we’re seeing as much as 50-60%.”

3. Don’t try to unbundle a firm. Telling a target firm that you’re only interested in one part of their practice won’t work. “You’ve got to buy the whole thing,” said Bob Lewis. “You can’t go in and try to buy 60% and leave them with the worst clients.”

(Listen: “The new deal: The evolving landscape of M&A and PE.“)

4. Don’t start by being picky. With cultural and personal fit being so important, heavy scrutiny of the books can wait a bit. “Ripping apart the numbers of a firm before you even start to put a deal together is often the kiss of death,” said Doug Lewis, who added a story about a $20 million deal that was derailed in its second meeting when the would-be acquirer came in asking questions about a $6,000 discrepancy in the target’s financials.

5. Have a process. A surprising number of firms take a more or less ad hoc to M&A. “You have to run a process if you’re going to be competitive in this marketplace,” said Doug Lewis. “So many firms have pushed these down to people who’ve never done a deal in their lives.”

6. Have a single go-to guy. Like many things, M&A deals shouldn’t be run by committees. “Have one leader run point on all the meetings,” said Bob Lewis. “We’ve had calls with seven partners on the call, and they’ll start asking questions. And your lead needs M&A experience or some coaching.”

(Read more from Evolve: “Accounting’s challenge: Making it out of the canyon.”)

Artificial intelligence isn’t here to take accounting jobs — but it can already do big chunks of them, and accountants can’t afford to be complacent in the face of that, according to AI expert Radhika Dirks.

With AI increasingly capable of performing many of the basic tasks of compliance work like tax, accounting and other core offerings of the profession, accountants need to evolve, she told attendees at the BDO Evolve 2025 Conference, being held this week in Las Vegas.

“The harsh truth is that the value of 80% of your skills have just dropped to zero,” said Dirks, an AI consultant who has started three separate successful AI companies. “The good news is that the value of the remaining 20% has skyrocketed. This is the expertise that you picked up by being out there in your profession that AI can duplicate. This is your intuition. This is your ability to see that something is wrong, even if you can’t explain why, and to know where to look.”

Accountants can’t afford to rest on all those laurels, however; according to Dirks, they need to ask themselves, “If AI can do everything I can do, how can I amplify myself?”

To start, both firms and accountants need to get up to speed — learning about the technology, updating their skills, and creating thoughtful approaches to integrating AI into their practices — and then keep up to speed, as AI rapidly changes.

“The pace of this technology has been incredible – so you need to continually update your strategy and your team’s skills,” she said. “This is the time to thoughtfully transform your business — but also yourself.”

This is all the more important because AI has taken the modern world by storm, and none of the normal guardrails have had a chance to adapt.

“Our laws haven’t been updated, our institutions haven’t been updated, and most important, our minds haven’t been updated,” she explained. “Every powerful technology has the potential for catastrophe. We have to treat AI with the same care as, say, nuclear technology.”

Besides making sure that individual accountants are upskilled in AI, accounting firms also need to start thinking about potential investments in the technology.

And while no one expects the average firm to invest a billion dollars in AI the way PwC did, Dirks suggested that they can learn from the Big Four firm’s approach.

“They’re empowering processes, teams and customers with AI,” she explained; the firm’s top internal uses cases are in IT, finance and marketing, where their gains range from 20-50% improvement. As an example, she cited a project PwC undertook to revamp Southwest Airline’s crew management system; thanks to AI, they were able to complete a project that would normally have taken anywhere from six months to a year in just five weeks.

Speaking later in the same session, BDO USA CEO Wayne Berson highlighted the Top 10 Firm’s own benefits from artificial intelligence.

“Today, AI is proving to be a powerful addition to our culture of innovation and a valuable addition to our approach to client service,” he said. “Since we launched ChatBDO, this tool has saved 1,200 users 600,000 hours on everyday tasks over two years. Regular users have increased their billable hours, without significantly increasing their hours spent — saving countless hours spent on administrative tasks.”

“Everyone here has an opportunity to use AI to enhance your service capabilities and to improve your businesses,” he told the attendees.

(Read more from Evolve: “Accounting’s challenge: Making it out of the canyon.”)

Tax Court judges; like-kind slip-ups; estate planning and digital assets; and other highlights from our favorite tax bloggers.

Start to finish

• Eide Bailly (https://www.eidebailly.com/taxblog): How Congress is behaving like a lazy teenager in the face of monumental tax decisions.
• Institute on Taxation and Economic Policy (https://itep.org/category/blog/): Rampant uncertainty this year extends beyond the national economy and federal policy. Many state legislatures are declaring their tax and budget debates finished and just getting started, sometimes in the same breath.
• The Wandering Tax Pro (http://wanderingtaxpro.blogspot.com/) Fifty years of professionally filing can be yours in “The Joy of Preparing Taxes.”

Benchmarks

• TaxProf Blog (http://taxprof.typepad.com/taxprof_blog/): Favorite opening of the week: “Tax practice is like comedy. Timing is critical.” Of all the corners citizens must round squarely when interacting with government, the timing requirements in the Internal Revenue Code contain some of the squarest and sharpest. Did the Supreme Court’s decision in Boechler v. Commissioner sand down some of those corners?
• HBK (https://hbkcpa.com/insights/): The Tax Court’s recent decision in Kaleb J. Pierce v. Commissioner provides guidance for valuing closely held business interests in the context of gift tax planning — and IRS scrutiny.
• Taxnotes (https://www.taxnotes.com/procedurally-taxing): To remedy an “asymmetric information gap,” this series provides a guide to each Tax Court judge. First is Judge Patrick J. Urda, and reader input is sought for future profiles. No pejorative comments, please, but there is great interest in comments about specific practices.

In action

Three questions