Writer: Max Crampton-Thomas
2 min read June 2021 — LBMC is the largest professional services solutions provider in Tennessee. In an interview with Invest:, Jeff Drummonds, managing partner and CEO, discusses the firm’s current health, the advantages of being located in the Nashville region, the stretched talent market and the opportunity going forward to make significant improvements within organizations based on the lessons learned during the pandemic.
What differentiates LBMC from other professional services firms in the Nashville area?
There are two main things that differentiate us. One is that we’re the largest, locally controlled, locally led professional services firm in our space. I think that brings a unique perspective and advantage to how we do business. Second, there are very few, if any, professional services firms in our space that started out as a traditional CPA firm and have the wide range of services we provide. On top of traditional CPA services, we provide IT security, healthcare consulting, technology, staffing and HR. We touch a lot of businesses and a lot of people within those businesses.
What makes Nashville a great location for your headquarters?
One of the things that truly struck me is that you would see executives come to Nashville as part of a PE transaction or something of that nature, and it was amazing how hard they tried to stay here with their families when typically they would move on to the next gig in another major market. This is a great place to live. Second, this is a very welcoming community from a business perspective. You can call almost any executive in Nashville. Many of them answer their own phone and are willing to discuss business or make introductions. It’s an extremely friendly business environment, both from a state and personal level. People are very engaged and accommodating to helping others be successful, and that’s a unique environment.
How does demand for your services compare to 2019?
I don’t believe there’s an area of our business that hasn’t grown since 2019. The demand we’ve received over the past year and how strong business has been is somewhat counterintuitive in light of a global pandemic. Healthcare has remained extremely active. Information security has taken on even greater importance. All things talent related are at an all-time high. Our tax practice has also been robust with the PPP and uncertainty regarding the new administration. Our transactions team has never been busier than during these past 12 months, supporting buy-side and sell-side diligence, merger integration, and so forth. I would say 2Q21 is shaping up to be the busiest quarter we’ve ever had in the history of the firm.
What is the main challenge LBMC is facing?
Talent is both our biggest strength and our biggest limitation right now. Frankly, there are more opportunities than there are people to serve that demand. This appears to be the case in nearly every professional services firm I talk to, whether through our formal networks and alliances or informally. The talent market is very stretched right now, particularly in Nashville, and in some ways, I see it continuing to stretch over the coming years with increasing corporate relocations and growth of existing companies.
How has the pandemic affected business strategies?
When you go through something like the last year, it puts a spotlight on a lot of things, one being people. Some CEOs are rethinking their succession plans. The last 12 months have shown who has the ability to adapt and manage through uncertainty. It has put a spotlight on the difference between managing and leadership.
On a global basis, technology was a challenge for many businesses. Many were not at all ready to operate in a remote environment, either from a hardware or software perspective. Supply chain management has also been a big issue, resulting in much more visibility for and focus on inefficiencies within supply chains than ever before.
How has the pandemic affected your work environment?
Most professional services firms were extremely dependent upon being in the office. Within the matter of a week, the office-centric operating model was turned on its head. What we learned was that being in the office isn’t necessary to continue to do business and serve clients well. We’re more confident now than ever in doing business anywhere, in any place. Based on surveys, our internal communication in many ways actually improved because we were more intentional about our communication.
The last year has pushed us forward perhaps five or 10 years. Our goal is to take the best of what we’ve learned over the past year and combine it with the best of the previous years. We’ll come out the other side better, but it will take some time to figure out what exactly is the best operating model. Our goal is to have a defined work model plan by Labor Day, which will most certainly be a hybrid model. Right now, anywhere from 25% to a third of our people are in the office on any given day.
What is your near-term outlook for LBMC?
We’ve never been more excited. We see the next year as a once-in-a-lifetime opportunity to reset how we work, how we interact with each other, how we interact with our clients, our core values, and expectations for one another. This is an opportunity from a leadership perspective to reflect and make substantive changes across the organization.
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