Spotlight On: Robert Miller, Managing Partner, Stone & Co.

Spotlight On: Robert Miller, Managing Partner, Stone & Co.

2023-03-02T12:27:21-05:00March 2nd, 2023|Boston, Economy, Professional Services, Spotlight On|

3 min read March 2023Stone & Co. is the largest minority-owned accounting firm in Massachusetts. Invest: spoke with Robert Miller, managing partner, about the company’s recent merger with CAS which will help it to meet market challenges and the industry’s approach to tapping talent in the market amid the challenges. “As you look at these challenges, the right mindset is to consider it as an opportunity to step back, make some changes and think about how you can adapt.” Miller said.

What prompted the merger with CAS and how is it adding value for clients? 

Through our strategic merger with Cree, Alessandri & Strauss (CAS), we added seven professionals, including five CPAs with decades of experience. We’re now at 21 professionals, and our team is larger and stronger, with more firepower and increased capabilities. It is all part of an overall strategy that was carefully thought out, and it ties into some of the dynamics that we were seeing in the market, where we have increasingly seen a significant talent shortage. Over the past couple of years or so, we were seeing that we would continually miss out on talent, losing qualified candidates to the larger firms with deeper pockets. We have lost a half-dozen or more candidates because the larger firms can pay significantly more than smaller firms can afford. We stepped back and tried to think more strategically about our strengths, what we could offer, and how we might overcome this challenge. One strategy was to highlight and offer some of the things that we could do better than a larger firm but the other was to acquire that talent through a merger and to bring in the kind of talent we needed. We’ve been consistently turning away work for the past two years or so. Clients and prospective clients constantly request our services but, in many cases, we needed more professionals and talent to meet these needs. This merger was a strategic move that I had been thinking about well over a year ago, and then I started to work on it in mid-2022, completing the transaction before the end of 2022. 

How do you see the landscape for M&A evolving in the near term?

I expect that we will continue to see more mergers and acquisitions. The dynamics are such that smaller firms are becoming more challenged with the burden of complying with increasingly complex standards. As a result, many are exiting the audit and assurance services space that would mandate a peer review inspection. In our profession, CPA firms can generally provide non-attest services, such as tax and advisory services, quite profitably and avoid the requirement to undergo peer review inspections. But once you start to do audits and assurance work, those inspections are mandated by the AICPA. For many smaller firms, it’s a real struggle to keep up with the changing and increasingly complex standards. Some of these firms are looking closely at certain attestation engagements with lower margins, the cost/benefit, and the overall exposure that comes with the extra outside scrutiny, and many are making the decision to no longer perform audits, and we have seen that happening fairly consistently, and it continues to happen. 

The other dynamic is that not all smaller firms have a succession plan. We have seen some smaller firms with an average age of the firm’s professionals in the 60-70 range and there aren’t any mid-career people who are ready to take the mantle. As a result, they have to find a way to be acquired or have some exit strategy. That is a dynamic that keeps showing up fairly regularly as well. 

What is your perspective on the greater Boston market and what would you say makes the area a great place to live and do business?

I’ve been in the area since the early ‘80s and have come to love the city and the surrounding towns. I’ve also worked in many other cities during my travel years as an auditor. It’s a unique community in that there’s a certain amount of camaraderie in the business community, like a family or a club. Once you connect with people in Boston, there is a welcoming vibe and energy. The way people interact with each other almost always has  a very supportive feel. People are interested in taking care of one another, so it’s a nice place to do business and interact with the business community. 

There’s also a certain amount of diversity in the Boston market that makes it quite unique. Yes, while there’s still more progress to be made, in almost any meeting you’re in, whether conducting business or throughout your professional network, you’ll generally see this diversity on display. I continually see all kinds of unique perspectives that can only come from a very diverse group and a good mix of people, whether it’s gender, age, background or something else. For example, when I’m in a Zoom meeting with, say six, 10 or more people and I think about who’s generally in that meeting, it is typically a dynamic mix of folks, including professionals who are early career, mid-career, women, minorities and/or some deeply  experienced people who are more advanced in their careers bringing decades of experience to the conversation. We might also see others who have a variety of different backgrounds. More often than not, it’s a nice mix and with all kinds of different personalities and perspectives. I love that about doing business here. 

What is your perspective on any specific challenge that comes to mind that the region should collectively be addressing? 

The talent shortage, often described as “the pipeline issue,” is the most significant problem that cuts across all industries. We hear it all the time from our clients and our colleagues in the finance and accounting space as well as professional services overall. Another challenge is the post-covid work environment and how each sector should be managing those work arrangements. Hybrid and remote work arrangements are here to stay. As you look at these challenges, the right mindset is to consider it as an opportunity to step back and think about how you can adapt. “Adapt and thrive” is a phrase I heard at a national association meeting a while back and this has always stuck with me. The point is, if you fail to adapt as the environment changes, you are almost certain to eventually wither away. So, it’s important to look at the challenges that need to be managed and think of them as an opportunity to adapt and make the changes necessary to succeed. 

Everyone seems to be short-staffed these days. With this new economic dynamic of demand for services generally exceeding the supply and overall capacity of professional services firms, perhaps there is an opportunity for some firms to consider whether fees are too low. The other item we’ve thought about in this environment of too much work and not enough people is to look at ways to reduce stress on our team members. We have also looked at being more selective with prospective clients. We’re also continually examining ways to enhance our hybrid work environment, which, as I mentioned, is here to stay. Are there some other ways to keep the team working together as one cohesive unit? How can we keep them more engaged with each other to maintain the firm culture? The right approach in my view is to regularly consider whether adjustments need to be made, be open to change when necessary, and to always maintain a mindset of continuous improvement. 

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