David vs. Goliath: The Opportunity in Accounting Industry Consolidation

The accounting industry is undergoing a seismic shift as private equity (PE) firms aggressively acquire CPA firms across the country. These consolidations promise increased efficiency, access to capital, and scaled services—but they also raise concerns about culture shifts, client intimacy, and the future of independent firms.

While headlines focus on the giants, there's an emerging underdog story worth telling: the rise of nimble, independent accounting firms that are turning disruption into opportunity.

The Consolidation Wave

Private equity firms see CPA firms as attractive investments. They bring in recurring revenue, high client retention, and opportunities to cross-sell advisory and consulting services. Large firms like EisnerAmper, Citrin Cooperman, and Cherry Bekaert have already sold stakes to PE, and the trend shows no sign of slowing down.

These deals often focus on scaling up through mergers, improving margins with tech-driven solutions, and expanding service lines. But with scale comes bureaucracy, diluted personal service, higher pricing and potentially higher staff turnover as firm cultures evolve under new ownership.

At the same time, many small accounting firms are exiting the industry with retirement.  Over the last twenty years, we have heard that enough young blood was not entering the industry but we never anticipated private equity firms would feast on large fish (e.g., Eisner, Citrin, Cherry, etc.).  

Cracks in the Armor

As the “Goliaths” of accounting grow, they also become slower and more complex. Clients of these mega-firms may begin to feel like small fish in an ever-growing pond. Long wait times, generic service models, higher fees and lack of personalized attention can become the norm. For smaller clients, especially those in niche industries or local markets, this shift opens the door for a more intimate, customized approach.

Additionally, many seasoned CPAs within PE-backed firms may start feeling disillusioned with the changing ethos and look for ways to exit or start their own ventures.  We've all seen doctors and dentists sell their practice and then cycle back into the market after their non-competes expire.  

The David Advantage

Here’s where “David” comes in: small accounting firms with deep community ties and high-touch client service.

These firms can:

• Differentiate with Specialization: While big firms aim for breadth and dollars (EBITDA flip in 2-4 years), smaller firms can go deep—offering niche expertise in areas like dental accounting, cannabis, cyptocurrency and international tax.

• Maintain Agility: Decisions don’t need to go through layers of management. Smaller firms can pivot faster, implement new tools, and adapt pricing models quickly.

• Provide Personal Service: Clients still want trusted advisors—not just compliance services. A smaller firm can build long-term, relationship-driven advisory models that mega-firms struggle to replicate at scale.

• Attract Talent Seeking Meaning: Not every accountant dreams of corporate ladders and equity packages with 4-6 years down the road. Some want autonomy, purpose, and balance—values smaller firms can champion to attract disenchanted talent from larger shops.

Seizing the Moment

To truly capitalize, smaller firms must be strategic. That means:

• Investing in Branding: Position the firm as a premium boutique, not a budget alternative. Lean into storytelling about personalized service and niche mastery.

• Leveraging Technology Smartly: Automation, client portals, and cloud accounting can level the playing field without needing a PE bankroll.

• Forming Alliances: Collaborate with other niche providers outside the accounting industry for shared resources, referral networks.

• Recruiting Strategically: Look for experienced CPAs leaving big firms post-acquisition—many are looking for a fresh start with values that align.

The Future is Fragmented

Consolidation isn’t inherently bad. It’s reshaping the landscape, creating new giants and new windows of opportunity. But it’s not a winner-take-all game.

In every industry disrupted by capital and consolidation, those who understand their clients, specialize deeply, and move swiftly carve out valuable and profitable spaces. For small accounting firms, this is not a time to shrink back—it’s a time to lean in.

Just ask David.

Learn - What are the Most Attractive Niches for Small Accounting Firms