IGAF Firm Interview With Three Members of Watkins, Meegan & Drury
In addition to the team they've put together, their strategic relationship with the International Group of Accounting Firms (IGAF) has added the strength and capabilities of a large worldwide organization with diverse technical skills and geographic representation. Here's an overview of some of their key niches.
Construction and Real Estate
Eric Rafail is one the Group Leaders for Watkins Meegan's Construction and Real Estate Group. He is married and has recently added a new member to his family, a five month old son. Rafail has spent his entire career at Watkins Meegan, with twelve of his thirteen years in public accounting dedicated to construction. This means he has had a thorough baptism in the peculiarities of his niche. He oversees the daily operations of the construction segment of the group which consists of approximately twenty staff members. Unlike a lot of firms that have construction niches, the professionals in Rafail's group have exposure to both audit and taxes, for privately held companies engaged in commercial construction. Their client list includes general contractors, subcontractors, suppliers, homebuilders, real estate owners and developers, federal and state governments... anything to do with construction companies and their owners, ranging in annual revenue from a few million to several hundreds of millions of dollars.
According to Rafail, the success of Watkins Meegan can be explained at least in part by one word... balance. "One of the strengths of this firm is that the leadership understands the need for balance between work life and personal life." People want to work for and with a firm that values their staff and clients instead of just viewing them as tools and revenue sources. "We have low employee turnover. And most of our client growth has been through referrals," he said. That demonstrates the commitment the firm has to quality in their services and their staff.
It's no secret that construction and real estate have been hit hard by the economic downturn. Rafail has seen an increase in the number of resumes he's getting from accountants and consultants who have been laid off by other firms. "We're picking up clients from firms that don't specialize in construction," he said. Those clients recognize that Watkins Meegan is well-respected for their knowledge of construction and real estate, and as the economy sways, they realize they have to rely on those in the best position to help them stay afloat. At the same time, explained Rafail, some of their existing clients are pulling back a little, trying to minimize their overhead and bringing some of their functions in-house rather than outsourcing those tasks to Watkins Meegan.
Another significant niche for this firm is that of Not-for-Profits, headed by Daniel O'Shea. A graduate of Virginia Tech back in '86, this married father of four young children has been in public accounting for over two decades. After gaining significant expertise in two areas, hospitality and not-for-profits, in 1992, O'Shea brought his not-for-profit experience to one of Washington D.C.'s leaders in this important sector, Watkins Meegan.
The not-for-profit group is made up of 22 people, dedicated to this work and serving approximately 150 clients, mostly associations and charitable organization. They provide the traditional services of audit, tax, accounting, and consulting. O'Shea's group also teams up with the firm's IT professionals on financial management and collaborative work solutions for not-for-profits. Using technology, they are able to help organizations disseminate financial and operational data to stakeholders in an efficient and timely manner.
Usually the accounting for this industry has been fairly static, O'Shea explained. But recently the not-for-profit environment is experiencing a lot of change from a regulatory standpoint. For example, the Form 990 has seen major revisions beginning with 2008. That means that, in spite of the economic downturn, O'Shea and his team are busy helping clients identify the potential effects of the changes and comply with new requirements.
Washington D.C. is one of the top three national areas for not-for-profits, so this is a huge industry that needs professional guidance. These organizations have felt the economic pinch in the form of lower donations. That means they have to make some difficult choices, and O'Shea and his team are glad to provide them the support they need to know where they can cut expenses and still fulfill their missions.
Louise Peabody heads the Risk Services Group at Watkins Meegan. Married with three children and a yellow lab, she comes from a background of private industry and also worked as a sole proprietor providing accounting and consulting services to small businesses. Working alone, Peabody found that she didn't always have the resources she needed when it came to complex areas of accounting or tax interpretation. That's why she made the change to Watkins Meegan, which combined good working relationships across the firm with a depth of experience, clients of all sizes and industries, with a variety of entrepreneurial and leadership styles.
Peabody's focus in risk services is broad, from compliance to Sarbanes-Oxley to corporate governance issues. But, says Peabody, a big part of her job involves helping companies with business improvement, like IT security and internal controls. "We found that a lot of what we are doing in terms of compliance gets down to how your business processes work. Improve business processes to reduce risk, and you find you are more efficient and save money."
At Watkins Meegan, the Risk Services Group consists of ten people, but the beauty of this firm, says Peabody, is that they can draw on the expertise and manpower available in other departments as well. "Still," she said, "people get tired of compliance for compliance sake. You have to add value." In her group, that may mean pulling in employees from around the firm to help provide industry or technical expertise. Those layers of diverse experience and perspective enrich the services clients of Watkins Meegan receive. "That's the value that our firm brings. We have a specialty around risk management, but it doesn't operate in a silo. It draws in expertise from across the firm, as needed.
"We bring good people to the job and many of those people have been with Watkins Meegan for a long time. Our continuity is strong.
"The economy brings challenges for everybody, of course," said Peabody. She's noticed that her clients are more conservative in their spending and with their plans going forward, but she's also noticed a lot of opportunity. Many companies in the news which got into trouble were taking inappropriate risks, so there is now new appreciation for stepping back, thinking through what could get in the way of success, and putting processes in place to manage risk. If a company cuts back staff, their risk may go up since there are fewer people doing important jobs. That increases the need for risk management services, to ensure things are being done right, says Peabody. "Many of our clients are insulated by the relatively strong Washington D.C. economy. They are now being cautious but don't seem to be affected dramatically.
"We try to help them to find cost savings and to work smarter." When things are flush, people aren't always careful with spending. A tough economy makes people reexamine and tighten up... "that's a good thing to do in these economic times," said Peabody.
This economy presents challenges for some and opportunities for others. For Watkins Meegan, the diversity of services they offer has made the economic downturn easier. They focus on a handful of niches so, though they are not too widely spread, they haven't put all their eggs in too few baskets. They cover the key industries that are prominent in the D.C. area, which has made it possible for the firm to do well in good times and bad, and to be there for their clients who need help getting through rough waters.