Case Study: How Experience and Need for Diversity Grew a Vibrant CPA Firm
The absence of minority-owned CPA firms in Boston prompted the recent creation of a new practice, an emerging firm that also aims to be a haven to help African Americans become accountants.
After working more than 25 years for Daniel Dennis & Company LLP (DD&Co.), previously the largest-full-service minority-owned CPA firm in Boston, Randall Davis became his own boss. Prompted by the passing in 2010 of founder and managing partner Daniel Dennis, which resulted in the loss of the firm's minority-owned business enterprise status, Davis decided to fill the gap.
Two years ago, he launched Randall S. Davis & Company LLP, making it the latest and newest full-service public accounting firm in Boston owned by an African-American.
In July 2016, Davis' firm became known as DavisKelly LLP after partnering with Nancy Kelly, owner of NE Kelly & Associates LLC, a women-owned CPA firm with locations in Boston and New York. Below is Davis’ story how his firm came to be and where it is today.
While working at DD&Co., Davis and Dennis were the only minorities out of seven partners. The firm provided opportunities for many potential black candidates that majority-owned accounting firms would not hire. The firm’s efforts led to many black CPAs today enjoying successful careers in and out of public accounting.
Now Davis wants to offer blacks a chance to earn their CPA license and achieve ownership status like Dennis did for him. Although Boston is a majority-minority city, most of the business community is white and minorities make up less than one percent of CPA firm ownership, according to Davis.
Davis says becoming a CPA can pull minorities out of poverty, at least it did for him. "I want to give minority candidates a chance to get their CPA license by hiring and providing them the necessary experience to meet the license qualifications."
Reasons for Starting
The absence of a black-owned full-service CPA firm in Boston created new opportunities for Davis. He has found a niche working with clients and large CPA firms who are committed to diversity and inclusion.
Unlike many new ventures, Davis started his practice with a lot of activity. His firm is certified by the Commonwealth of Massachusetts Executive Office for Administration and Finance Operational Services Divisions Supplier Diversity Office as a minority-owned business enterprise (MBE) and a disadvantaged business enterprise (DBE). The designations are significant because they help Davis' firm attract clients committed to diversity and inclusion in their supplier network.
Managing partners Davis and Kelly along with seven other employees, provide advisory, assurance, tax and auditing services to nonprofit, real estate, charter school, small business, governmental and affordable housing clients.
The Building Process
Since Davis started his career in 1988, increasing diversity has been a challenge for CPA firms. He has been passionate about changing that by making it a priority to provide opportunities for minorities pursuing accounting careers. Plus, he has focused on helping non-minority customers understand that it makes good business sense to work with diverse suppliers instead of doing so just to meet government mandates.
Davis' memberships include current chair of the Massachusetts Board of Public Accountancy, American Institute of Certified Public Accountants and National Association of Black Accountants.
Davis admits managing can be thorny, particularly when it comes to managing administrative duties and production when starting up. He says forming policies and creating systems to manage staff are vital for a thriving firm.
However, he added that production is key because that’s what clients expect and what pays the bills. Since accessing working capital is sometimes difficult, it’s a delicate balance.
The Firm Today
DavisKelly currently serves more than 50 clients. The strategy going forward is to create a strong brand and culture that makes the firm attractive to clients and a good workplace for employees.
Davis says the merger made the new firm more formidable because Kelly and he have more than 50 years of combined experience. The new firm now has more intellectual capital, can offer clients additional resources, and provide more opportunities for minorities and women to become leaders in the profession.
The recent merger will also help to boost sales with Davis projecting revenues this year to rise 15 to 20 percent over 2015 as the new firm provides more services to existing clients, along with the addition of new ones.
The next step in the firm's development is to develop a strong core of senior level staff. "Growth is not possible without talent and having experienced staff is a critical ingredient for success", Davis says. He plans to leverage technology to attract and retain staff.. A paperless office, cloud-based applications, reduced commuting and flexible hours are some of the benefits that Davis says his firm offers experienced new employees.
Helping produce more accountants of color will be an ongoing goal for Davis. "We plan to grow the number of minority leaders in the CPA industry through high quality services to clients, along with help from our valued partners", he says.
Editor's Note: We hope this case study was useful to you and as ever we welcome your feedback. We post studies like this when we find unique stories of how new firms form and the challenges and benefits they bring. We believe these stories will help serve as a roadmap or offer useful insight to any accounting professional looking to expand their careers or try to make it on their own.