Will Andronico, Managing Principal, New England, Baker Tilly

In an interview with Invest:, Will Andronico, managing principal of Baker Tilly’s New England unit, discussed the firm’s growth last year and the strategic investment from Hellman & Friedman and Valeas Capital Partners. He highlighted the focus on technology, life sciences, and private equity sectors, as well as efforts to address talent acquisition challenges.

How has Baker Tilly navigated the economic climate this past year? 

In Boston, our business unit achieved over 20% growth compared to the prior year, all organic with no acquisitions. This growth highlights Baker Tilly’s growing presence and recognition in the Boston ecosystem. Baker Tilly New England was born out of its acquisition of The MFA Companies in December 2021. Before that, Baker Tilly had clients in Boston but no actual presence. Nationally, Baker Tilly is recognized as the 10th largest accounting firm in the country, which has opened numerous new opportunities for us in Boston. While many firms are experiencing strong growth, our local growth has been exceptional. We aim to continue this trend into the new year.

What sectors are seeking your services, and what industries are experiencing growth in the region?

We focus on key industries, such as technology, life sciences, private equity, franchise, and real estate. In Boston, with its numerous laboratories, schools, colleges, and hospitals, new companies in technology and life sciences emerge daily.

For more mature companies, we see opportunities with private equity-backed firms looking to further professionalize and prepare for future exits. This creates opportunities for us to assist them in achieving their growth goals and excelling in financial and technology operations during this process.

How has the firm bolstered its market position and maintained a competitive edge?

In Boston and our firm overall, we compete for two main things: clients and talent. Recently, Hellman & Friedman and Valeas Capital Partners, two blue-chip private equity firms, made a strategic investment in Baker Tilly, closing the deal at the beginning of June. This investment will help us accelerate growth and achieve our goal of becoming the preeminent midmarket firm in the nation. It enables us to invest in technology, systems, and transformation, enhancing the experiences of our team members and clients.

With this backing, we can expand our offerings and continue demonstrating strong organic growth. Over the past five or six years, we’ve also completed nearly 20 successful acquisitions, and with the additional capital, we’ll continue this journey in strategic areas. We plan to double down in geographies where we are already present, explore new key regions, and build on existing competencies. Our latest acquisition, a few weeks ago, was Seiler, a large Bay Area firm focusing on ultra-high-net-worth families, businesses, and nonprofits.

What innovative tools or technologies is Baker Tilly implementing?

We’re implementing several innovative tools and methodologies across different areas. In tax, we’re developing technology to transform and streamline the process of handling complex tax data. On the audit side, we’re adopting methodologies that enhance efficiency and quality, allowing us to test up to entire data populations to gain comprehensive insights.

Additionally, we’re providing technology tools to our clients, especially in the tech and software industries. These tools help extract key metrics, enabling companies to compare their performance against competitors and guide future decisions. By moving beyond traditional financial statements and focusing on metrics, we help our clients become more competitive in their fields.

We are also exploring how best to leverage AI technologies across the firm. These tools provide additional resources and benefits to our clients and enhance the experience of our team members by alleviating some of the more repetitive tasks, allowing our professionals to focus on more challenging and value-added work. 

What are the most pressing challenges confronting Baker Tilly and the accounting sector?

The biggest challenge we face industry-wide is a slowing pipeline of new accountants. Finding qualified candidates is difficult, and increasing diversity within the industry is even harder. Competition for talent is fierce, and this spans across all experience levels, from new graduates to seasoned professionals.

We also embrace remote talent. If we find someone exceptionally talented, there’s no reason not to hire them, even if they’re not local. Our advanced office technologies allow us to integrate remote and local teams seamlessly.

At the college level, the pipeline issue is significant. Becoming a CPA requires 150 credits, or five years of college, making the profession less attractive compared to other fields like finance. Some states are considering reversing this fifth-year requirement, but this could affect CPA mobility across states. We’ve collaborated with a nearby university to pilot a mentorship program aimed at juniors who have chosen accounting as their major. This program pairs students with mentors to support and encourage them through their challenging junior year, helping them stick with the major, particularly those from underrepresented backgrounds.

Our mentors focus on three key areas: providing support and encouragement to help students through difficult coursework and promoting the benefits of a career in accounting; raising industry awareness by highlighting various sub-professions within public accounting and demonstrating the fulfillment and opportunities available; and offering guidance with practical advice, such as interview preparation and navigating academic challenges. This pilot program aims to address the pipeline issue by supporting students and encouraging them to continue their pursuit of a career in accounting, taking a step towards solving a long-standing challenge in our industry.

Are there any specific regulations you’re looking out for?

From a tax perspective, new regulations add complexity and require us to stay updated. With the upcoming election, there’s significant uncertainty. For example, Joe Biden plans to increase corporate tax rates significantly, while Donald Trump aims to lower them, leading to stagnation as businesses take a “wait and see” approach. Our tax strategists help our clients assess and prepare for certain actions based on varying outcomes of proposed tax legislation. In our industry, the PCAOB (Public Company Accounting Oversight Board) oversees audits of public companies. They have been stringent on quality, and all firms, including the Big Four, are heavily investing in maintaining the highest standards for audit quality, and we are no different.

What is your vision for the accounting industry for the next five years?

One of the biggest trends is the influx of private equity investment in CPA firms, transforming the traditional structure where partners owned the firm without valuing it as an asset. Now, with private equity involvement, firms are valued based on market principles. Partners and non-partners can now participate in a firm’s growth in market value, with the ability to take money off the table with each private equity cycle. This makes firms more competitive within and outside the industry.

Over the next five years, this trend will lead to significant changes in how CPA firms are structured and operate. The capital influx provides opportunities for partners to realize their firm’s market value today and continue benefiting from future growth. We also see consolidation in the industry, with smaller firms being acquired by larger entities, creating a more competitive landscape and more opportunities for growth and expansion.

What is your outlook for Boston, and how is it influencing your growth strategy?

We love the business environment in Boston and New England. Despite challenges such as tight capital and funding in the life sciences sector, the ecosystem remains strong. M&A activity had slowed due to high interest rates, but signs of a resurgence are evident. If the Federal Reserve begins cutting interest rates, it could significantly boost transaction activity even further. We support our clients closely in all aspects of transactions, so we are very in tune with what’s happening with capital markets. Boston’s low unemployment rate, high GDP, and exceptional institutions in education, healthcare, and technology make it a vibrant market. We are well positioned to continue growing here as part of Baker Tilly’s broader strategy and we’re excited about the future.