In an interview with Invest:, John Geraci, managing partner at LGA, LLP, shared strategies to prioritize work-life balance to prevent burnout, how there is a trend of repurposing commercial real estate for mixed-use purposes, and reiterated their commitment to maintaining their independence amidst industry consolidation trends. “In Boston, where a strong sense of local identity prevails, there is a distinct preference for doing business with fellow Bostonians. This sentiment presents a unique opportunity for us as a firmly established middle market player,” he said.
What are some of the key successes or highlights for LGA in the Greater Boston region over the past 12 months?
In 2023, our industry faced significant challenges, particularly in regard to the scarcity of talent and human capital. Despite this, our firm remained steadfast in prioritizing culture and people. Our success was evident in our ability to recruit and retain top talent, which fueled a remarkable revenue growth. Achieving a remarkable 133% revenue growth in 2023 was a testament to our commitment to nurturing our team and internal culture. As we move into 2024, we remain focused on sustaining this momentum in both human capital development and revenue expansion.
Moreover, our advisory services have been instrumental not only in ensuring compliance for our clients but also in proactively enhancing their strategic positioning and operational efficiency.
How are you addressing labor constraints, particularly in accounting, and what strategies are being implemented to foster a culture that tackles these challenges?
In terms of maintaining our culture, our focus is squarely on prioritizing our team. We are spearheading a shift within the industry, which is traditionally known for leading people to be burnt out. While the norm often entails exhausting workloads, we are striving to align our expectations more closely with industry standards. For instance, in 2024, we are aiming for our team to work 2,150 hours, just 70 hours more than the typical 40-hour workweek spread over 52 weeks. This approach contrasts starkly with the 3,000 hours some individuals endured in 2023 before joining us from a national firm. By emphasizing work-life balance, we are nurturing an environment where professionals can thrive without feeling compelled to exit the industry for equilibrium.
Our commitment to our people remains unwavering, prioritizing their well-being over immediate business gains. This approach has not only bolstered our appeal to prospective talent but also fostered a sense of loyalty among our current team members.
Regarding technology deployment, we are leveraging automation and exploring the potentials of artificial intelligence to streamline operations and do away with tedious tasks. This shift is transforming the role of our associates, elevating their contributions from day one and reducing the need for extensive hours to accomplish tasks.
What are some unique business strategies that LGA is using?
We are advancing towards an outsourcing model, recognizing the interconnectedness of the global economy. Amidst serving clients spanning various industries, we have embraced the notion of a truly global workforce. While many CPA firms have historically operated within national boundaries, LGA has expanded its horizons by establishing a joint venture with a chartered accounting firm in India.
As part of this venture, we welcomed five team members from India to our offices in the U.S. Rather than dispatching our staff overseas for training, we opted to immerse our Indian colleagues in our culture and practices firsthand. This decision reflects our commitment to fostering cultural integration and prioritizing our unique approach to business.
We are particularly excited about the potential this collaboration holds for building a cohesive team in India. Beyond merely executing tasks, these individuals have embraced our ethos of placing people above all else.
This endeavor not only speaks to our pride in our culture but also highlights the universal appeal of our approach. As these team members prepare to return to India, they carry with them not only newfound skills but also are looking to reshape their own organizations.
Do you have specific partnerships with universities, colleges, or other entities for recruiting purposes?
In our recruitment strategy, we prioritize engaging with colleges and universities, typically targeting approximately eight institutions. Our primary partnership is with the University of Massachusetts Lowell, where we have strong ties. So much so that Marty, the leader of the entire University of Massachusetts system, was at our table at the Invest: event in Boston event last year.
While UMass Lowell remains our key recruiting ground, we are also actively involved with Merrimack College, as well as University of New Hampshire, Stonehill, Bentley, Northeastern, and several others. Our commitment to these institutions underscores our dedication to sourcing top talent and fostering lasting relationships within our recruitment network.
What industries exhibit the highest demand in the region, and are there any notable trends or shifts within these industries seeking your services?
We are deeply involved in the real estate, construction, and trades sectors, where we have observed a significant impact stemming from the broader economic landscape, particularly within the commercial real estate domain. The anticipated return to office spaces in Boston has been slower than expected, prompting a reevaluation of how these spaces are utilized. Discussions from last year as well highlighted a trend towards repurposing commercial real estate for mixed-use purposes, including residential conversions. This shift not only affects the construction trade but also fuels it, as companies are kept busy retrofitting spaces for alternative uses.
Within our client base, resilience remains a common trait, with few significantly impacted by economic shifts. While rising interest rates have placed strains on businesses, prompting a closer focus on cash flow management, overall, our clients have adapted well. We have proactively addressed rising costs by implementing commensurate price increases across our services, a move largely accepted by our understanding clientele. Despite challenges, our industry remains robust, buoyed by adaptable clients and a proactive approach to market dynamics.
How are you adjusting strategies to address risks in cybersecurity and data compliance?
Our cybersecurity efforts are robust and unwavering, recognizing the inherent risks associated with human involvement in cyberattacks. Internally we are intensifying our focus on fortifying processes and procedures, a mandate reinforced through rigorous penetration testing exercises. These tests allow us to identify and address vulnerabilities within our infrastructure promptly.
Furthermore, we place great emphasis on ongoing training and education initiatives to enhance awareness of cyber risks. By highlighting real-world examples, such as prevalent phishing schemes, we empower our team to remain vigilant and proactive in safeguarding sensitive information. Given our industry’s susceptibility to targeting due to the nature of our clientele, including personal data, diligence is crucial.
In tandem with internal measures, we prioritize collaboration with cutting-edge technology vendors to deploy the latest solutions. This proactive approach ensures we remain at the forefront of cybersecurity, mitigating risks to the best of our ability, notwithstanding the occasional human error.
Are there any specific regulations you are monitoring that could potentially impact the industry?
There is considerable uncertainty stemming from congressional delays in addressing tax regulatory changes. Specifically, we are awaiting clarity on sunset provisions related to tax alterations enacted during the last administration, which could significantly impact clients’ planning strategies. For instance, the current lifetime exemption for estate taxes, exceeding $27 million for married couples, may face a drastic reduction back to $5 plus million. Such shifts necessitate careful reevaluation of wealth accumulation strategies.
Moreover, the fate of the research and development (R&D) credit remains in limbo, posing challenges for organizations heavily invested in innovation. The potential loss of this credit prompts a reassessment of R&D investments, introducing disruptions to longstanding strategies.
Simplification efforts, particularly regarding extension processes, are also on the agenda. Streamlining these procedures would alleviate some of the burdens faced by our industry during tax deadlines, offering a more predictable framework for filing extensions.
When considering the Greater Boston region as a whole, what are some of the unique aspects of doing business there?
Undoubtedly, the presence of robust educational institutions furnishes us with a highly skilled workforce, positioning Boston favorably in competitive industries. This advantage extends not only to the local economy but also on a broader scale. Moreover, the resilience ingrained in Bostonians, exemplified by their collective response to adversities like the Marathon bombing, underpins our ability to navigate challenges effectively.
In times of real estate turbulence, Boston’s entrepreneurs exhibit remarkable resilience, rallying together in the face of adversity. While our city may not always be perceived as the friendliest, there is a palpable unity in confronting challenges. This solidarity contributes to a robust economy, less susceptible to the impacts of economic downturns.
Furthermore, the inherent loyalty of Bostonians significantly influences business relationships in the region. Local businesses and entrepreneurs place a high value on partners who provide a comprehensive range of services. Our firm caters to this preference by offering a full array of business advisory services in addition to our compliance services.
What is your outlook for the next two to three years and your top priorities within this time frame?
For us, the paramount goal is maintaining our independence amidst a landscape marked by significant consolidation trends. Across our industry, we are witnessing a flurry of mergers, with smaller and midsize firms merging into larger national entities. Moreover, the influx of private equity is reshaping the accounting profession, with firms like ours becoming prime acquisition targets.
However, in Boston, where a strong sense of local identity prevails, there is a distinct preference for doing business with fellow Bostonians. This sentiment presents a unique opportunity for us as a firmly established middle market player. We are committed to resisting the allure of mergers and private equity buyouts, opting instead to remain a trusted alternative service provider for local clients.
Our focus on building a stable and autonomous organization is unwavering. This approach affords us the agility and local decision-making authority necessary to meet the evolving needs of our clientele. By staying true to our roots and cultivating a pragmatic approach to client service, we are poised to fill the widening void in the market.
Crucially, our succession planning efforts have positioned us ahead of the curve. Having successfully transitioned leadership twice, we boast a competitive advantage over firms grappling with leadership uncertainties. This stability enables us to maintain our steadfast commitment to serving the middle market clients of Boston, ensuring continuity and excellence for years to come.
