Outlook Gray For Framingham CPA Firms
Partners say merger helps firm compete for corporate clients
The two firms announced the merger March 3. The combined firm will be known as Gray, Gray & Gray and will have more than 85 employees and 13 partners at offices in Framingham and Westwood.
"The industry has changed a lot in the last three to five years," said Jim Patterson, founder of Patterson & Gerry and now a partner at Gray. Large national and international accounting firms are raiding local firms for talent. At the same time, those large firms, because of the federal Sarbanes Oxley Act, no longer do certain ancillary work for corporate clients. And those clients wouldn't give local, 10-accountant firms the time of day.
Size Equals Scale
But by merging, Gray, Gray & Gray, which was founded in Boston in 1945 and moved to Westwood in 1999, becomes big enough to attract large, corporate clients.
"We've got a 22,000-employee company in metro Boston that's hired us to do tax work for them. We're doing tax returns for several of their executives," Patterson said. Being "a significant operation here in MetroWest" also makes it easier for the firm to hire accountants away from Boston. Patterson founded Patterson & Gerry, the smaller of the two firms, in Framingham in 1982. Gray also has an office in Framingham. Prior to the merger, both firms primarily served businesses.
"In order for us to grow, we have to look for something other than organic growth," said Joe Ciccarello, managing partner at Gray. "If you look at the Massachusetts economy, it's not really growing that much."
Ciccarello said firms like Gray used to count on regular, seasonal layoffs at the "big four" international accounting firms - PriceWaterhouseCoopers, Ernst & Young, Deloitte & Touche and KPMG - for a supply of new, well-trained employees. "The big four would lay off and we'd hire, but that no longer happens."
In recent years, the big four have raided small firms, and "we've lost a lot of employees," he said.
So, along with the merger, Gray has begun an in-house training program that Ciccarello hopes will help the firm retain its accountants.
Theodore J. Flynn, executive director of the Massachusetts Society of CPAs, said mergers like Gray and Patterson's come in cycles. Firms "reach a certain size, and to do the things they want to do, they have to grow. Or if they're wanting to move into specific industries, they merge with a firm that has something in that market."
"Patterson & Gerry is a well-respected firm in the MetroWest area. Gray, Gray & Gray gives them the bandwidth to expand," Flynn said.
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