As managing partner of Hein & Associates LLP, a major regional accounting firm with four offices in three time zones, Larry Unruh has developed a special admiration for the stamina of "road warriors," the people who travel throughout the country and the globe for their companies. Even a trip to the Houston or Dallas offices from Hein's Denver headquarters means two hours in the air for Unruh plus more time spent traveling on the ground.
But Hein's geographical diversification and strength in four or five niches will sustain the firm in the tough economy. Business is still good in Houston and Dallas where Hein, an acknowledged leader in the industry, provides services to oil and gas companies, while the economy in Southern California, where another Hein office is located, is more challenging.
Unruh first joined Hein after spending eight years with Big 8 firms, but left public accounting for private industry as CFO and then CEO at an oil and gas producer and drilling company. When oil prices plummeted in the early 80s Hein wanted him back and he is still there.
But the year and a half he spent on the other side has been so important in his career, Unruh says, and has made the difference between providing good and great client service. "I can see so clearly the difference between what the corporate clients want and what in some cases they actually receive." Today he is eager to hire people with experience in private industry for just this reason. "They have the full package," he says and when associates leave for private industry, Hein personnel stay in touch, so that they can bring them back on board whenever possible.
Hein & Associates is outstanding among regional firms for their 32 years of experience providing services to the energy industry, to oil and gas and alternative energy companies, and for their outstanding SEC capability, Unruh says. Hein audits between 70 and 80 public companies and Hein partners serve on major local and regional SEC committees. In addition to their energy industry specialization, the firm has practices in manufacturing, information and communication and real estate.
Upsides and Downsides in the Economic Turmoil
Unruh expects the economic climate to be difficult for a few years, and that will have upsides and downsides for the business of accounting. "In general the accounting profession will not be immune to the downturn," he says. "There will be heavy competition and pricing squeeze on proposals. As pricing pressure increases, volume may have to offset price. Margins will be squeezed."
On the upside, greater regulation may mean more work as it did after the Sarbanes-Oxley Act was passed. With IFRS coming, and the needs of business making the conversion, there will be more consulting opportunities. "But with the downgrading of the economy and the inevitable bankruptcies, stock price volatility, workouts, etc., there will be a greater risk of litigation for the accounting profession. Client acceptance and retention policies should be reviewed and strictly followed to avoid potential problems," Unruh says.
Hein's profit plan for 2009 projects revenue growth of 5-10 percent, with two-thirds of the revenue coming from private companies -- from private equity venture investments and owner-managed firms.
Layoffs may occur at the larger firms but because they may be across the board layoffs, this could present an opportunity for firms like Hein to pick up exceptional talent.
Another potential upside for regional firms like Hein is the opportunity to move up market as companies look to keep their prices under control. "Over the next two to five year period, clients will be demanding greater return from CPAs, Unruh says. "You have to ask yourselves, what can you bring to the table, especially to private companies. Clients will be looking for add-on services, business advisory services, a host of products. You need to have a reputation for tremendous client service and you will need to be firmly niched." Membership in IGAF gives Hein & Associates global reach to provide solutions to our clients on a worldwide basis.
Support for Professional Education
Specialized industry training at the university level is an area where Hein has been active, sponsoring an oil and gas program at the University of Colorado which Unruh says has been good for the firm and helped accounting students. Hein also enthusiastically supports the AICPA's program to fund the education of PhD's in accounting through contribution to the major firms group. "There are just not enough people in PhD programs and with the retirement of boomers there won't be enough teachers for the next generation of accountants," he says.
An accounting career offers the individual the opportunity to make important decisions and to make a huge difference in the success of a client's business, Unruh says, but there other areas of satisfaction. "It is a great feeling to be surrounded by very intelligent people, clients and colleagues, and it is a rarity when I'm in a situation where there isn't at least a new twist to an issue. It's a perfect job."
For the next year or two, it might be a little harder for graduates to find the right job, but in the long run, as Baby Boomers retire, enormous opportunities will open up. Hein conducts succession planning on an annual basis and Unruh says that partners are amazed at the number of slots that will need to be filled in their own firm over the next five years. He recently told a new partner that in nine years, "You will need to be me." The time span for people to develop to fill those roles is going to be very short.
Accounting is changing and the pace of change is increasing, Unruh says, from IFRS, to timely reporting, transparency, and worldwide standardized systems, all of which will generate growth. The short term pain from the current financial crisis will be erased fairly quickly.
Communication with Clients
Relationships are key in every economic climate but will be particularly important in the coming months. When making decisions, clients will want to turn to a professional who has an understanding of what is behind their financial statements. "You need to be in constant communication -- at least on a monthly basis with your clients." And firms need to be truly niched; you need to be experts, Unruh says. "Clients want to bounce what they are hearing off you, to say, what are you seeing in this area."
Only someone who really knows the client and their industry can give them the advice and service they will need to survive, can have the conversations about survival plans and what-ifs, even worst case scenarios. Without specific knowledge of the company and the industry, and without the relationships, Unruh says, you are just a commodity.