Facing a shortage of qualified accountants, an increasing number of CPA firms in New Jersey and elsewhere are staring at a potential succession crisis as their leadership ages out. Many have looked to mergers as a way out. But some started planning for the next-generation leadership decades ago and managed to avoid the demographic time bomb.

In January 2024 – some 40 years after co-founding East Brunswick-based WilkinGuttenplan – Ed Guttenplan stepped down as managing shareholder. Dan Fiorentino, who was born around the time that the firm launched, was named as the new managing shareholder and CEO.

The symbolism isn’t lost on Guttenplan, 70, who will remain active in the firm. “Soon after Ed Wilkin – who is around 70 and also still active in the firm – and I launched the firm, we recognized the need to create sustainable continuity beyond the two of us,” Guttenplan noted. “We wanted to thread the needle between having a mandatory retirement age for shareholders [70 at the time of retiring their shares], as a way to create opportunities at all levels, while giving experienced firm members the opportunity to stay active if they chose to do so. We now have a total of 150 people, with 28 partners — and the first person that Ed Wilkin and I hired, Annette Murray, is still with us as an active shareholder, so I’d say the approach was successful. In fact, there are a long list of individuals who have been with us for decades.”

Fiorentino noted that this “collaborative culture of transition means there are no roadblocks. It creates incentives for people like me to remain with the firm and continue our own growth as we share in the firm’s growth.”

Guttenplan, who calls himself “passionate” about filling the gap in next-generation CPAs, sits on accounting advisory boards at Rutgers University and Rowan University, and mentors students at both institutions. Within his firm, Guttenplan has worked diligently to help ease his successor into his new role.

“One of the goals has always been to help ease someone else into this role,” he said. “Because Dan has been with WilkinGuttenplan so long, our clients are already comfortable working with him, and they know that the decision to name him as new managing shareholder was not made just by me — it was a decision made by the entire firm leadership.”

Speaking with Fiorentino about his path to managing shareholder, it becomes clear that his ascension was the result of deliberation — with each step of his journey leading to a goal. “In 2005, the summer before my final year at The College of New Jersey, I did a six-week summer internship at WilkinGuttenplan, and I was fortunate enough to have a job offer from the firm in-hand before starting my senior year,” he said. “So, I never had any question about where I wanted to go.”

Besides passing a difficult exam, accountants generally must put in at least one year at a CPA firm to qualify as a certified public accountant — and firms are notorious for losing people once they put their time in. But Fiorentino said the “team-based approach” at WilkinGuttenplan was an anchor for him.

“When I began as an entry-level accountant, I started in auditing, but I was encouraged to explore my options,” he recalled. “I rotated to the tax area and found this multifaceted exposure kept things fresh for me. Deb Norwicke, a shareholder who joined the firm in 1988 and serves as COO, kindly provided me with a lot of guidance in my early days, and still does to this day.”

Fiorentino went on to join several administrative committees at WilkinGuttenplan, including strategic planning, leadership and operations committees, where he got a “behind-the-scenes” view at what goes into running a CPA firm. It was evident that Fiorentino wanted to balance his accounting, client relationship and administrative capabilities.

“Dan also took the initiative in launching a Client Accounting Services niche in 2018, providing outsourced bookkeeping, accounting, and CFO services to our clients,” Guttenplan recalled. “Dan said ‘I think we can do this,’ and we supported him. He also participated in our Future Council, where partners and managers ask staff for their thoughts on what the firm should look like, how things should be run, what their vision for the future was, and how they would like it to be. We recognized that the practice does not necessarily have to conform to a Baby Boomer’s viewpoint, and we were responsive to moving the firm forward in a way that their interests were also served.”

As managing shareholder, Fiorentino said he hopes to continue the firm’s path of “strategic growth,” while accelerating a dive into technology that the two founders previously spearheaded. “Like everything else we do, it’s a collaborative effort,” Fiorentino explained. “We’ve got a strategic planning committee that continually scouts out new areas. For example, we’re continuously expanding our commercial real estate practice as well as our CIRA niche (Common Interest Realty Associations) such as condominiums, co-ops, townhomes, and timeshares; in addition to our life sciences/technology companies, tax consulting including estate and trusts, and international services.”

Attracting more people into the profession is another goal, and Fiorentino sees it as one more thread tying the firm’s previous leaders to its current ones. “Our culture is our strategy,” he said. “We’re getting the word out about it. Ed and Ed started this by treating people the way they wanted to be treated; doing things like accommodating working moms by offering flexible hours 40 years ago, before other firms took it up. Everyone steps in to help the firm, and each other, move forward, and I’m proud to be part of this.”

‘Band-Aid’ approach

Some other CPAs take a different approach to succession planning. In 1976, Marty Abo left a tax position with a Big Four CPA firm in New York to join a local accounting firm in Cherry Hill. Catching the “entrepreneurial bug,’ two years later he established Abo and Co. LLC from his two-bedroom apartment in Maple Shade.

“Over the years the firm morphed and established relationships with colleagues from large or small firms to complement the resources and expertise we can deliver,” Managing and Founding Member Abo said. “I try to seek out ‘nice’ clients, service the heck out of them, answer questions before they’re even asked, and strive to be proactive, not ‘reactive.'”

At 74, Abo may not have established a specific and formal succession plan but said he has addressed as many contingencies as possible. “I’m healthy, enjoy helping individuals and businesses by dispensing our accounting/consulting expertise. I currently have no specific plans to retire,” he explained, “So, for the time being, I decided to continue working hard so I can play hard while I can. Perhaps it is sort of a ‘Band-Aid’ approach to the issue, but we are continually monitoring our abilities and options.”

As part of that approach, Abo established what he calls an “informal relationship” some years back with another, complementing practice, “to assist in an emergency or just when their resources may better fit a particular client situation,” he said. “I want to ensure that if something unexpectedly happens to me, our clients and employees would not be left in the lurch. I like the flexibility of this approach, since it enables me to retain control of my practice, but at the same time, I want to ensure that my family or estate can extract some future earnout/payout. I have even counseled other professionals about using this concept, and I’ve helped legal, accounting, and medical practices to craft appropriate arrangements for this kind of initiative.”

At the same time, he added, “I also have made sure my wills, living wills, and other documents are up to snuff; and my life and disability insurance are current and up to date. I have also left easy-to-follow descriptions and locations and professionals to reach out to, in case I’m not around.”

Meanwhile, he noted, “I enjoy what I do. I like helping people and dispensing my expertise; and as long as I’m mentally and physically able to deliver quality, credible and unbiased counseling in a productive manner, I’ll keep at it. I’m continually reading, lecturing, attending lectures and growing, and keeping my mind stimulated.”

The CPA firm Levine, Jacobs & Co. LLC was launched in 1952 by Jack Kay — and has gone through several rounds of succession planning. One of Kay’s hires, Steven Levine, later became a name partner. “When Jack was getting ready to retire, Richard Hoffman (now 67) joined the firm,” noted 69-year-old Levine, Jacobs Member Michael Karu. “I had spent 10 years with another firm and two years on my own before merging into their practice, effective on Jan. 1, 1988. While I had a solid client base, I knew that working by myself had limitations, and that by merging, there was strength in numbers.”

The current succession plan at Levine Jacobs “started over 10 years prior to the anticipated retirement of any existing partner,” he added. “We recognized that six of the seven equity partners were within eight years of age (of each other). The seventh equity partner was 10 years younger, so he would be part of the succession plan. The issue was whether existing staff were partner material or if the firm needed to find outside people to join the practice and transition some of the clients to that new person. As the partners got older, the need became more real.”

The firm has promoted from within, “and will continue to look at qualified candidates,” explained Karu. “Timothy Shore (now around 62), who had grown up in our firm, is now one of the managing members. Two others are non-equity partners.”

The firm’s leadership considers “a combination of factors,” when looking for potential successors, he said. “The person has to be able to handle a diverse workload with a high level of expertise, while being able to generate new business. And any transition must be done slowly and carefully. We have personal relationships with our clients and very few accept change easily. It starts with an acknowledgement by the soon-to-be retiring partner that he or she will be slowing down and continues with assurances that the client will be in good hands and is introduced, sometimes in person, sometimes virtually, sometimes in writing, to the successor.”

But attracting and retaining qualified people “is the $64,000 question,” according to Karu. “As an employer, you need to understand people, what motivates them, and what makes and keeps them happy. Over the past 10 years, there has been a greater focus on quality-of-life issues than career path, so, as an employer, we needed to change our focus. There also must be a reason for a person to make a change. While several may say that enhanced training, compensation and benefits, or ability for advancement is most important, it is the other people in the practice that truly seal the deal. New hires need to be nurtured and made to feel they are important parts of the firm. Most importantly, they need to feel appreciated.”