IGAF Firm Interview with Don Linzer and Karl Kunkle of Schneider Downs
This is one article in a series of interviews with firms that are members of the International Group of Accounting Firms (IGAF).
It started as a concept, and just kept growing. Schneider Downs was the brainchild of two men with a shared vision, James Schneider and Paul Downs. They recognized a need among clients for insightful, innovative solutions, and high-quality, attentive care. That's why they opened their office in downtown Pittsburgh in 1956. Nearly three decades later both founders retired, passing the mantle of leadership to Raymond Buehler and Kenneth Rowles.
Among other changes, Buehler and Rowles moved the headquarters to a historic building in the famous Strip District edge, in Pittsburgh. To accommodate their Midwestern clients, Schneider Downs opened a second office in Columbus, Ohio. Keeping the vision of the founders, as the needs of their client base grew, the company expanded its reach into other areas of specialization, including:
- The Business Advisory and Technology practices were formed, providing litigation support, business valuations, due diligence, software selection guidance, and project management.
- Schneider Downs became affiliated with Creative Financial Staffing, the world's largest privately owned financial staffing company.
- Schneider Downs Corporate Finance LP added advisory services for mergers and acquisitions, divestiture, and private placement of debt and equity.
- And Schneider Downs Wealth Management Advisors was formed to offer guidance in retirement plans, employee benefit plans, and investment management for high net worth individuals.
The Corporate Finance Side of Schneider Downs
Today Don Linzer is the President and CEO of the Schneider Downs Corporate Finance and Tax Specialty Group as well as the Co-Chairman of the firm's Real Estate Services Industry Group. Linzer is an attorney with a wide range of expertise including mergers and acquisitions, tax advisory services, estate and business succession planning, tax planning for closely held corporations and S corporations, partnership taxation, compensation planning and venture capital.
According to Linzer, the Corporate Finance practice focuses on buying and selling businesses, with a sweet spot at $10 million to $200 million in enterprise value.
"Right now, the market for buying businesses is understandably soft, but we're still busy," says Linzer. The firm is in the middle of two buy-side deals representing companies looking to make purchases - one involving the frozen foods industry and the other, flooring adhesives. On the flip side, they've got three companies looking to sell and relying on the investment bankers at Schneider Downs Corporate Finance to find the right deal.
With the cooling real estate market, others who were looking to sell are pulling back, unwilling to sell for reduced prices. For now, says Linzer, would-be sellers are inclined to hold onto their assets until the downward trend reverses.
Wealth Management Advisors
Wealth Management Advisors is a federally registered investment and advisory practice, governed by the SEC. These professionals provide a wide variety of investment management services, focused on fiduciary protection for plan sponsors, plan management, and servicing plans from the bottom up at the participant level.
The difference between Schneider Downs and many other wealth management firms is that they are advisory based, not fee based, says Karl Kunkle, a specialty shareholder in charge of the firm's employee benefits practice and co-manager of Wealth Management Advisors. Kunkle is a CPA and an attorney who joined Schneider Downs back in 1984. His areas of specialization include, among other things, all phases of employee benefit programs, estate, retirement, personal financial planning, executive compensation, and ESOPs.
Wealth Management Advisors, says Kunkle, offers an open-architecture 401k platform for high net worth clients, as well as tax planning, financial planning, and investment planning. Like the Corporate Finance side, he says, people are nervous and so they are less willing to commit their assets to investments. Still, the firm is busy because people are looking for second opinions about the advice they've been given elsewhere.
"Clients and participants have re-examined what their true investment risk tolerance is in light of economic conditions." It's true, says Kunkle, that there are fewer assets under management since the market has lost value, but the downturn has also created opportunities for the Wealth Management Advisors to provide reassurance to plan sponsors. "They are looking around for help and service in a difficult time when they don't have the guidance they need." That's why they are turning to the professionals at Schneider Downs.
Like most businesses, both the Corporate Finance and the Wealth Management Advisor practices within Schneider Downs are feeling the effects of the slow economy. Fortunately, while there isn't a lot of buying and selling going on and fewer assets to manage, consulting services have picked up. The firm's reputation for quality service and personal care has caused investors and plan sponsors to turn to them during these confusing times. Instead of facilitating new deals, Kunkle and Linzer and their colleagues are busy helping companies figure out strategic alternatives to help them protect their assets.
For 2009... Kunkle and Linzer predict that the market is still likely to be soft. As professionals who work in an industry that is subject to volatility, they know that investments, and therefore revenues, aren't always strong. Next year may not be much different than 2008, but still, they predict that Schneider Downs will continue to grow. "The business is out there," says Kunkle. "We're just going to have to work harder to get it." In the end, that's the kind of attitude that will determine which businesses survive and grow stronger while others close their doors forever.