The Quiet Consolidation Reshaping Regional Accounting
A pattern is playing out across mid-sized cities from the Southeast to the Pacific Northwest: accounting firms that have operated independently for decades are signing over their practices to CohnReznick, one of the country’s larger national advisory and accounting networks. The deals rarely generate headlines. There are no press conferences, no splashy announcements on local business journals. One quarter a firm is locally owned; the next, its letterhead reads differently and its partners are reporting to a national structure.
CohnReznick, which positions itself as a top-15 national public accounting and advisory firm, has been methodically building out its geographic footprint through what the industry broadly calls “merger-in” transactions. These are not hostile acquisitions. They are, by most accounts, negotiated arrangements where regional firm owners – often facing succession problems, rising technology costs, or simply an aging partner base – find a structured exit that keeps staff employed and clients served. The dynamics behind each deal vary, but the outcome is consistent: another independent firm disappears into a larger orbit.
Why Regional Firms Are Looking for an Exit
Running an independent accounting firm in 2024 is considerably more expensive and operationally demanding than it was fifteen years ago. Compliance requirements have multiplied. Audit technology infrastructure – the software, cybersecurity protocols, quality control systems – requires capital investment that small and mid-sized firms struggle to justify when partner ranks are thinning. Recruiting is also a persistent problem. Younger CPAs have more options, and many gravitate toward larger firms where career paths and compensation structures are clearer.
The succession question is the most immediate pressure point. A firm with five to eight partners faces a mathematical problem when two or three partners approach retirement within the same five-year window. Internally grooming replacements takes time and capital. Selling to a national network solves the succession gap cleanly: existing partners get a defined exit, junior staff get a promotion pathway, and clients get continuity. For CohnReznick, the acquisition brings established client relationships, local market knowledge, and a regional team that already knows the territory.
Technology costs compound the pressure. Cloud-based audit platforms, AI-assisted tax preparation tools, and regulatory compliance software now require ongoing licensing and training investments that national firms spread across hundreds of professionals. A 20-person regional shop absorbs those same fixed costs across a much narrower base, which erodes profitability and makes organic growth harder to sustain. The math of scale eventually becomes difficult to argue against.
How CohnReznick Structures These Deals
The merger-in model that CohnReznick uses is common across the top tier of national accounting networks. Rather than a traditional acquisition with a purchase price paid upfront, the structure typically involves retiring partners receiving compensation over a multi-year period, often tied to client retention. Incoming partners are folded into the national firm’s partnership structure, and staff are absorbed at comparable or improved compensation. This arrangement reduces the immediate financial burden on the acquiring firm while giving selling partners a reason to ensure a smooth transition rather than simply cashing out.
Client retention is the central variable these deals are built around. Accounting relationships are personal – a business owner who has worked with the same CPA for a decade is not automatically going to remain a client because a national firm now signs the engagement letters. CohnReznick’s model depends on keeping those practitioners in place, at least through the transition window. That is why the deals are structured to retain staff rather than replace them, and why they tend to move slowly and deliberately rather than triggering abrupt operational changes.
What This Means for Local Business Clients
For the small and mid-sized businesses that rely on regional accounting firms, the practical effects of these consolidations are mixed. On one hand, their day-to-day contact – the CPA who knows their industry, their seasonality, their specific tax situation – typically stays in place. Service continuity is a selling point CohnReznick actively promotes in these transitions, and it is a genuine one, at least in the short term.
Over time, however, clients do notice changes. Billing rates at national firms tend to run higher than at independent regional shops. Standardized service packages replace the more flexible, relationship-driven arrangements that smaller firms offer. Some clients find that their account, once handled personally by a named partner, gets routed to a team structure where accountability feels more diffuse. These are not complaints unique to CohnReznick – they show up wherever consolidation happens in professional services, from security staffing to legal services to healthcare practices.
The geographic distribution of these deals is worth watching. CohnReznick has historically concentrated its presence in major metro markets, but the recent merger activity suggests a deliberate push into secondary cities and suburban markets where competition from other national firms is lower and independent firms are more numerous. A mid-sized accounting firm in a market like Raleigh, Richmond, or Albuquerque represents a more accessible target than a firm in New York or Chicago, where competition from the Big Four and other national networks is intense.
Whether clients ultimately benefit depends heavily on what they needed from their accounting firm in the first place. A growing company that wants access to specialized advisory services – international tax, M&A transaction support, complex audit work – may find that the national platform delivers capabilities their regional firm never could. A family-owned business with straightforward annual tax needs and a long relationship with a local partner may find the transition more disorienting than beneficial. CohnReznick’s national infrastructure is only as useful as a client’s actual requirements for it, and those requirements vary sharply across the range of businesses that regional accounting firms have historically served.
The firms choosing to sell are not in crisis. Many are profitable and well-regarded. The decision to merge in is less about distress and more about partners making a calculated judgment that the next decade of independent operation will be harder than the last – and that the exit terms on offer today may not be as favorable five years from now, when there will be more sellers and fewer buyers with appetite for firms their size.
Frequently Asked Questions
Why are regional accounting firms selling to CohnReznick?
Most are driven by succession gaps, rising technology costs, and difficulty recruiting younger CPAs – factors that make independent operation increasingly costly over time.
What happens to clients when their accounting firm merges into CohnReznick?
Day-to-day service continuity is typically maintained, but clients often see higher billing rates and more standardized service structures replace the flexible arrangements smaller firms offer.
