4 min read April 2023 — In an interview with Invest:, Neal Rotenberg, Saddle Brook Office Managing Partner of national accounting and advisory firm Marcum LLP, which is headquartered in New York City, talked about the firm’s recent acquisitions of RotenbergMeril and Friedman LLP, which have allowed the firm to expand its reach across the state as well as globally. Rotenberg also discussed the challenge of labor shortages and talked about how important technology is in his line of work.
What have been some major highlights from the 12 months?
We have grown tremendously. We started 2022 with the acquisition of RotenbergMeril, a 70-person accounting firm in northern New Jersey. Then we acquired Friedman LLP, a large regional firm, in the fall. We have now increased our footprint in northern New Jersey from about 40 people to over 340 people. We have gone from one small office in Roseland to five New Jersey offices now, so we have increased our presence quite a bit. We have done a number of acquisitions in recent years but Friedman was the largest and most significant. Overall, worldwide we are projecting to be over $1.1 billion in billings over the next 12 months.
There are some growing pains that come along with growth like this but we have been very strategic in our acquisitions and have been looking for firms that are already strong in their own markets and share our core culture.
We are integrating the practices that we have acquired and to continue growth in the state. We have had great succession hiring even through the pandemic. Not only have we been able to hire and retain employees, we expect more hiring this year as we continue to grow our client portfolio in New Jersey.
How has demand for your services shifted in the past year?
Most of our clients have required more and more state and local taxation help. State and local governments now are taxing companies all over the country, based on where revenues are sourced from. Our New Jersey clients are now operating in every state, so they need help with other state’s tax laws. Because of our size, we can help them get through those issues. Having multiple offices throughout the country has also helped us from an audit standpoint.
Has the profile of your clients shifted?
When Marcum acquires other firms, we are looking for firms where the company and their clients mesh with our overall philosophy. We want to continue that growth and provide more services so it has been a win-win for the firms and the clients.
What have been some opportunities and challenges presented by the current economic conditions?
For our clients, the biggest struggle has been the workforce. Marcum has a large outsourcing group, and we are able to help fill in gaps with clients that can’t find employees, both temporary and permanent. We are able to act as their CFO and accounting partner, so that has been quite a big help.
What have you been doing to recruit and retain talent?
We have great HR professionals and they really understand what our associates want. We are trying to be very team-centric here and not fight new ideas that come along. Whether it is remote, hybrid or full-time work in the office, we are giving associates all the options. We understand that work-life balance is important, but we also combine that with generous compensation packages. Because we are growing so steadily, we are providing our associates the opportunity to grow with Marcum.
What is some key advice that you have been giving to clients to help them stay afloat?
Most of our clients have been good about keeping afloat on their own, but we have had to advise many to not take on more sales than they have employees to cover. When you take on too much work with not enough employees, the employees and the customers both become unhappy.
What makes New Jersey a great place to do business?
There is a great workforce in New Jersey, and there is a tremendous amount of industry in the state. Pharma, chemical and healthcare are all growing here. People are not running from the state, and companies are growing and expanding. The infrastructure also helps to keep people here and draws more companies to New Jersey.
Are there any pieces of legislation you are keeping an eye on?
We are always watching out for changes in regulation and how it affects our clients. On a local level, something we have noticed is the state is getting friendlier when it comes to the business environment. It was a little challenging in prior years, but it looks like New Jersey has realized it has to do everything it can to make us a business-friendly state. We are seeing the tone in Trenton changing. They can certainly get better at it, but the trend is moving in the right direction.
Do you find that talent is being educated appropriately to have the skills needed for your industry?
Unfortunately, the accounting industry needs more talent than the educational pipeline can currently provide. With a 3.5% unemployment rate, there are just not enough people. Skill was an issue in past economies and that is still somewhat of a problem, but there just aren’t enough people in the workforce.
How is technology changing the accounting sector?
Accounting has always been a leader in technology, and we have always embraced it but it has gone to another level. We are using AI right now to help us do our audits and perform data analytics so that our employees can focus on analysis work. From our tax side, we are getting more and more of our tax returns coming into our firm through portals that download key information for us. At Marcum, we have made a huge investment in our IT group, which is developing solutions that not only support our own business but that we are also offering to our clients and to other accounting firms.
What is your outlook for the sector and for Marcum over the next five years?
I see strength. We see the strong business infrastructure in NJ. The idea that people were running out of New Jersey to Florida and Texas isn’t entirely true. A large portion of the people who have left were people close to the ends of their careers. Businesses are still forming and growing. Young people are staying, so I see only positives here. It is a beautiful state and there is a lot to do here. I think when people leave, many realize how great a state New Jersey really is.
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