Hello, and welcome to the Unique CPA. I’m your host, Randy Crabtree. The goal of our show is to keep you at the forefront of the changing face of public accounting by having conversations with fascinating leaders and bringing you their stories, insights and advice. The Unique CPA podcast is brought to you by Tri-Merit, the specialty tax professionals. Today, our guest is Jackie Cardello. Jackie is president and managing partner of GRF CPAs & Advisors, which is, is it Maryland, Jackie? Where are you at?

Maryland. We’re headquartered in Maryland. That’s correct.

Maryland. All right, I got that right. Jackie is also the recently named appointed Chair of CPA America’s board. CPA America is the National Association of CPA firms. And just about a year and a half ago, Jackie was named to Accounting Today’s Managing Partner Elite list, which is pretty impressive. Congratulations on that.

Thank you.

There are other lists. There are other awards out there. I’m going to skip those for now. Just welcome Jackie, Jackie, welcome to Unique CPA.

Thank you so much. Thank you for having me, Randy. It’s my privilege to be here.

Well, we’ll see if it’s a privilege or not. We’ll see once we get into this. It’s funny. We’ve been doing this for two and a half years now. And I had put you down on my original list of guests to reach out to, and I hadn’t done it forever. Finally, there was a LinkedIn Post recently where Dana from our office tagged you or messaged you and said, “Hey, you should be on the Unique CPA.” So I’m glad you did that. For two years, I’ve been looking forward to this and just hadn’t sent the invite. So appreciate you getting on.

Good. Well, thank you.

Before we get into it, because we’re going to talk about — we’ll see where this goes — but we’ll talk about being managing partner and the challenges you have, managing the firm, and it’s a nice sized firm. But before that give us a little background of you and GRF and how long you’ve been there, how long you’re in this role. Just a little background.

Absolutely. I’ve actually been with the firm since 1997, so just a few years. I came over from another public accounting firm as a senior auditor, and I never left. I’ve been here ever since and have worked my way up and became a partner in 2010 and became managing partner effective July 1, 2013.

Pretty soon after.

It was a pretty quick movement into that role, which was interesting. So it’s been challenging, exciting, rewarding, all of those things. From the time I started, way back when, in public accounting things were very, very, very different. And I sort of feel like I’m a little bit of the sandwich generation. I’m in between my senior partner peers who are getting ready to retire and the younger generation that came after me, the millennials, that have a very different way of doing things.

You’re in a unique situation.

Yeah. And I think I tried my best to understand both perspectives. And it makes it very, very interesting and exciting.

Yep. Well, nice. And now, you as a firm, you have a specialty niche that you concentrate on. Correct?

Correct. Nonprofits. Yeah, we’ve been known for having expertise in nonprofits. That was the three founding partners that started that. They had a big belief in giving back to the community and being very involved in the community. And they walk the walk and talk the talk. Because they were so passionate about it, they were able to build a very successful practice serving the nonprofit community. So, over the years that’s evolved to become quite a specialty for us. We serve clients all over the world. We’ve done a lot of traveling. We have clients that have federal funds from USA ID and various different countries, different governmental funds and awards. So there’s a need for us to go to field offices and see what’s going on out there and audit. Basically, that’s part of our practice of what we do. And not only is it a plus for clients, but it’s also a benefit to staff. We have a lot of staff that really enjoy the traveling. Of course, during COVID that all took a backseat, but we’re starting to slowly get back into that.

Alright, yeah, that’s good. That’s good. I could probably talk to you for an hour just on that niche practice. I love talking niche practices. Obviously, that’s what we are as well, a niche practice. And I don’t know if we’ll get into this today, but you and I discussed before the show, you are not changing that. That’s always your niche, but on the growth end of things you are going to — what was it? Government work, you’re expanding that?

Yeah. We were also traditionally very heavy in audit. We do a lot of audits. We still do a lot of audits of financial statements, but we’ve been growing significantly our outsource Accounting and Advisory practice. And as part of that we have the Accounting Technology Services practice that is relatively new. So we’re getting very involved in that. We also have built out a risk advisory services practice. One of our new partners named, effective January 1, heads up that practice. And that includes all sorts of enterprise risk management, cybersecurity, internal auditing, privacy issues, things like that. And we’re also as part of that targeting, and hand-in-hand with our tax practice, growing our for-profit tax practice, it lends itself nicely to bringing in more for-profit clients, and particularly government contractors. There’s a lot of them in the area where we are based in the Bethesda area, right. So it’s a natural fit. We do have some already, and we had quite a few before. And we’re starting to get back into that and building that piece of our practice as well. So we’re still specializing in nonprofits, but now we have designated talent, who will specialize in the for-profit and government contracting piece.

Nice. So let’s get into a little bit of what I said at the beginning, of the challenges that the firms in general face and how you’re addressing that. But one thing before that, you and I talked, I think it was last week or two weeks ago, and correct me if I’m wrong, but I think what you said is you are getting more, and maybe fully involved, and your biggest client is the firm?

That is correct.

Okay, so you’re concentrating on the firm solely? Do you still have any client responsibilities?

I still have some clients, mostly I have kept my employee benefit plan audit clients. That was a niche that I started many, many years ago, and have continued to build that, along with one of my, I want to say newer partners, although she’s been a partner for probably about six years now, Jennifer McCahill. Together we had that practice and continue to build that practice. So that’s something that I’ve stayed involved in. I still have a few nonprofit clients, but essentially, my focus is the firm. The firm is my client.

Okay. And so that takes us to, then, really the main topic, because if that’s your main focus, your main client, which I think is great. Not every firm can do that. I’ve talked to many managing partners of firms. And I’m always impressed when their main client is the firm because people ignore that sometimes. From that standpoint, then, let’s get into the things you’re dealing with. There’s plenty of challenges in our industry. In general, there’s challenges in every industry, I mean, we’re not really unique from that standpoint, but we have unique challenges within the industry. And so let’s talk about that.

Oh my gosh, it’s hard to pick just one, because they’re all significant issues. And as a profession evolves and changes and CPA firms have to evolve and change, I think probably two of the biggest challenges — and it goes in cycles, the staffing goes in cycles — there’s been periods where, there’s massive turnover, and you panic, because you feel like people are getting out of the profession. And then it sort of settles down again, we’re in one of those modes now. It’s a combination of young people going into college and not wanting to put in the five years of CPA, and there’s so many other professions out there that are, I guess, sexier or more interesting. And although I happen to think that my career has been very interesting in public accounting.

I agree completely with that. I think there’s a misconception of what it means to be a CPA somewhat. And I think somehow that needs to be addressed to get more excitement of going into the industry.

Yeah. Our firm, we’re unique in that, once again, we specialize in clients that have offices all over the world, they have field offices and locations. So that’s very attractive to young people who want to travel and see the world. We have a mantra, we say, “join GRF, see the world.”

Nice.

But you know, other than that, it’s evolving even more. One of the things I like about it is if you’re a people person, it’s a great profession. And there’s a misnomer that accountants are dull, boring, green eyeshade wearing, head down, just not sociable. That’s not true.

Well, we’ve been to many conferences where we can tell that that’s not true.

Yeah, it’s not true. I think it’s a great profession for people who want to not just sit at a desk all day because you’re out at client sites. You’re visiting with clients, you have team members that you’re working with, and the profession is evolving and becoming more interesting. There’s so many more specialties now. When I graduated, it was audit, tax, bookkeeping, basically, or outsourced accounting. Now you’ve got, Accounting and Information Sciences, cybersecurity, forensic accounting and auditing, all different types of specialties. I think one of the things is that there are a lot of choices out there now though. A lot of young people, they want to do something else. And since there’s such a shortage of talent, the big companies are throwing big money at them, especially in industry to come to work for them. And it’s gotten more difficult to get the candidates who want to specialize, get the CPA, and go to work in some type of area of public accounting, serving clients. That, coupled with a competition among firms for that talent pool, which is, again, there’s a shortage everywhere of staff. You know, we hear about the great resignation and the baby boomers are retiring. So, you’ve got a small, a shrinking pool of staff, and the same number, if not more firms, that are competing for those people. Then once you get them, the challenge is keeping them. It’s retention because recruiters are calling daily. The gloves are off, there’s no more professional courtesy. They’re calling them, they’re reaching out to them on LinkedIn. It is very challenging. So that’s one of the big issues we’re facing. And then of course, piggybacking on that, our salaries and benefits. You know, one of the things we’re facing is, with the talent war, the salaries, I mean, you’ve got firms that are just throwing money at people. And that’s a quickly escalating cost. That and technology are the two highest expenses of any CPA firm. And I’m sure that’s true with any company in general. And it’s keeping up, being able to keep up with the market, and being able to pay the salaries and the benefits that are going to attract and keep people. But it’s also culture too, once you get them, part of the retention is the culture.

And so culture is obviously something I know you’re passionate about. To attract and retain, is culture a big part of it? I mean, what are you doing to combat rising salaries and everything else in the industry?

Well, we’ve done multiple things. Years ago now, we formed an Employee Engagement Committee. And we’ve been pretty active with that. No partners attend. It’s our human resources director, and anyone is free to come and attend. It’s essentially a way for staff to get together, it’s a forum for them to talk and come up with ideas about what’s working really well, what’s not working so well. What can we do to keep employees more engaged and happy and want them to stay? We’ve recently talked about implementing what we call stay interviews. That’s actually one of the ideas of our newly appointed Chief DE&I, officer, Trevor Williams, who’s also a partner with our firm. We will be doing stay interviews, because you know, companies are really great at doing exit interviews, they want to know why you’re leaving. By then it’s too late. So we’re going to start talking to people and being very proactive. Why do you like working here? What are we doing right? What can we do better? Especially during COVID, we’ve been doing regular touches, and outreaching, to the employees, with the department leaders, but I think that needs to be more frequent. And again, public accounting has a reputation of high turnover. You burn your people out, you work 50-60 hours plus a week. It used to be you put in two years of public accounting, and then you leave and go somewhere else. Now, even two years is a stretch, people are jumping around from job to job, and they can, it doesn’t matter anymore. If you go somewhere and you have four months on your resume, they want you badly enough, they’re going to take you.

You can do it anywhere with remote work now.

You can do it anywhere. Yeah, so that’s changed too. It’s a combination of culture and being able to keep up with market in terms of salary and benefits to be able to get the people and keep them. And we’re very, very passionate about our culture, which is one of the reasons we are adamant that we want to remain independent as a firm, because we don’t want that culture to change. We think we have a really great thing. And as long as we work together, we can keep that going, and we can continue to grow. Just looking for different ways to make sure that the culture is inviting, people feel included. And that’s why we formed about 3-4 years ago the DE&I. It started out as a diversity and inclusion initiative and then we formed a committee, which is now DE&I diversity, equity and inclusion. And by taking a step to further appoint one of our partners to be in charge of that particular initiative, we feel it’s important enough that it deserves special attention and special focus from someone who is very passionate about that, to ensure that we’re building and maintaining a culture where people feel welcome and included and like they have a voice and they’re valued.

And how do you do that? What is the committee’s role? Is it an interview process with employees? How are we doing? How do we feel?

Essentially, yeah. It’s basically an open forum, people can always approach any of us — our HR director, any of the partners, any of the directors of the administrative team — to say, hey, I have an idea, if it’s forwarding an article, or we do surveys, regularly anonymous surveys. We send out employee surveys on various different topics. And then we address those at a staff meeting, or at the Employee Engagement Committee level, and say, here’s what came up during a survey, let’s talk about this. We’re trying to give people, again, a way to voice their likes, their dislikes, their concerns, their approval, without putting a spotlight on someone, making them feel uncomfortable, but we encourage people to talk openly. That’s why we don’t allow partners at these meetings, because we want people to be able to talk amongst themselves. And then HR director brings those ideas to the partner group, to me first, and we talk about it and say, okay, here’s some ideas that came up. Here’s some things we need to work on. Here’s some ideas we have for things that staff might want to do to feel a little bit more included, particularly in a remote environment.

And then when you’re looking at DE&I, is this built into the hiring process, as well, somehow? How does that work?

It is. We have that as one of our pillars in our recruiting. We are particularly looking for increasing diversity and realizing again, one of the issues that we’ve identified is that there’s not always a diverse candidate pool coming out of college.

Right.

Not going into college to study accounting and finance, and that particular area. So it’s causing us to focus to say, okay, why not? Why aren’t these people of different diverse backgrounds, people of color, different genders, religion, all the diversity, all the diverse population, what is preventing them from wanting to pursue a career in accounting, or finance, or marketing? In this particular example, we’re talking about accounting. So we’re kind of looking at that, and examining that and trying to figure out going into the college level, going into even the high school level to start talking to kids, going to job fairs, presenting to them and trying to do some outreach in the community, to get folks more interested in this as a profession.

Yep. I think that’s great. I guess one aspect to that, that I’ve seen over the last two years as I’ve been doing the podcast, I’ve done a little research, very little research, but little research here and there, wondering why there’s not more women managing partners in public accounting. You are a minority with that. I looked this morning, and I think I saw, and this was from two or three years ago, AICPA, and I may have my numbers wrong, but I think they said 23% of the managing partners were women. And I know, I’ve seen this somewhere before that, in general, in public accounting, there’s more women than men. I think I’ve seen that as accurate. So I don’t know if you know why, but you, I know, have a passion for that. And somehow, you’re trying to promote that as well, to make this a key topic to get women involved in leadership and in the industry. Give us a little on that.

Absolutely. And not just women, again, minorities from different populations are seeing the same thing. What it is, is you don’t see people who look like you at the top, so you don’t think that it’s attainable. And when I came into the profession, that is true that there were more women than men graduating from college and going into the profession, but very few of those women were making it to the partner table and much less to CEO, board, managing partner level. A lot of that has to do with mentoring. You need some really strong mentors, a robust mentoring program. Again, it’s getting the message out. Our goal is not just within our firm, but within the profession in general, that you can have a successful career, no matter what background you come from.

Right.

You can have it. For me, one of the big obstacles at first was I wanted to have a family. I had two children. And when I first had my children, there were some roadblocks. Fortunately, I had some really good mentors, and I never took no for an answer. You need that. You need someone to say, listen, don’t let anyone tell you can’t. Just because there’s only 23% managing partners that are women, whatever the metrics are for different demographics, it doesn’t mean that you can’t, because you can, and you need to have a good mentor, and a vision. We’re changing that, we’re slowly changing that in the profession to be more intentional about looking at talent that is not your traditional talent.

Yeah, I go to a lot of conferences a year, and it’s very apparent that we need more diversity in the industry, at least from what I’ve seen. I applaud you for what you, as a firm and you personally, are doing to that aspect, I think it’s great.

Thank you.

Alright, so we’ve done a lot on staffing and equity and inclusion. There were other issues that we wanted to discuss that you’re having to deal with. Is there one that we don’t want to skip before we wrap up here?

Sure, sure. Well, technology and cybersecurity are another big one.

Perfect.

Huge. It’s not a matter of if you get a breach, it’s when.

Right.

We’re having to spend, again, that’s probably our second largest expense, may quickly become our largest expense, is keeping up with technology, not only technology from our side, the user experience and tools that we have to provide services to clients, but then it’s also the technology we’re providing to clients themselves. Then it’s the protection, and the privacy issues, and the cybersecurity and security of all of that, which is really incredibly scary. If you hear the experts speak on these topics, it is really scary. I was at a conference recently where we saw a gentleman speak. Basically, he’s a hacker who has turned it into a career of showing how it’s done.

Wow.

This is how it’s done. This is what you can do to try and prevent it. And it is very scary. So, we’re having to spend a lot of resources on that making sure we have a secure network. We have specific protocol that we’re following. The remote workforce makes it even riskier because you’ve got folks working at home. They may be working on their own home computer; they may be working on a laptop, or a computer issued from the employer. If they’re using it for both work and personal purposes, that increases the risk that they could get hacked, or get infected, have a ransomware attack, have a breach, any number of things. We’re spending a lot of money on training in that area. And I know that’s one thing that a lot of smaller firms have difficulty with keeping up because it is a big expense and a big investment. And that’s one that fortunately, we’re able to spend a lot of money in that area. That’s one of the things that we take very seriously.

Yeah, and I can see that. I actually had Randy Johnston on the show recently. I ought to say I was scared, when you say it’s scary, I was like, I left that with my mouth just wide open. Yeah, I’m so glad I’m not dealing with that. I know as a firm we are. But then, to transition from that, I think you mentioned at the beginning, not only are you dealing with that internally, this is a service you’re offering now as well.

Yeah, we’re starting to do more accounting technology and IT services for clients. It’s something that a lot of people can’t afford to have in-house, an expert in-house. We’ve seen you really do need to have a team, and then you also have to have some consultants and experts that you can consult regularly on the outside because it’s become such an important area. It’s one area that we definitely do not skimp on. It’s an area where we invest heavily. So we are providing it, and it’s accounting technology, it’s IT service, and again, it’s enterprise risk management, cybersecurity audits, kind of all of those. I just touched on a lot of different areas there.

That’s great. So, one last thing I do want to talk about is the social media climate and how that’s an issue you’re dealing with. What’s that all about?

I look at that as kind of a security issue as well because everyone is on social media. Everyone, to some degree, especially the younger generations more than others. Unless you don’t watch the news or see the headlines at all you know that one misstep in social media can wreak havoc on an individual, on a person’s career, on an organization. So that’s just another issue that we have to manage carefully and make sure that people are following that, make sure that we’re monitoring it. Because, again, you put it out there in cyberspace, and it’s out there.

Right. It’s not only the firm, it’s everybody within your firm now that you have to be worried about. I didn’t even think about that.

Yeah, absolutely. So we have policies and procedures with respect to that as well. That’s a really good thing about it. Social media is really good in a lot of ways. It’s helped us recruit. It’s a great recruiting tool, it’s a great outreach tool, but again, a great networking tool, you have to be careful, because sometimes you might just be posting an opinion — something that back in the day, you have conversation at a cocktail party, and you exchange an opinion, and it stops there. Now, you post it on social media, and it’s there for the world to see.

Forever.

Forever.

Right, no, that’s crazy. We have a marketing department within the firm, and we have one person within that department that’s just in charge of social media. I mean, it’s a full-time job now.

It is.

It does make me a little nervous because I am apparently the face of the company. Some of the stuff we’re putting out there is me saying it, and I do get all nervous, like everything that you said today, I don’t understand how you cannot. A managing partner almost has to have the firm as their number one client, there’s just too much. If you’re not big enough to do that, I get concerned about how you can compete, especially now with private equity investing in public accounting, and all the money they’re going to throw at technology, and how they’re going to be more competitive that way. And you’re a nice sized firm, but you’re not going to be able to spend what they’re spending. A five-person firm, they’re never going to get close to how you’re going to do it. So yeah, there’s a lot of issues out there that firms in general are facing.

And speaking of which, the mergers. The merger mania. I mean, every time you open Accounting Today, or you go on your social media, there’s another merger going on, another acquisition going on.

Yeah, there was a big one last week that created a Top 10 firm. Yep.

Yeah, I saw that. Sure did. Yeah. If you want to remain independent, it’s becoming a little more difficult. Although at the same time, I think it presents a unique opportunity for us because it makes us more of a boutique firm, and that’s essentially what we view ourselves as.

A lot of firms are merging because of succession planning, lack of it, how are you addressing that?

 Well, we’re actually in a good spot with respect to that. And it’s because we started listening to the consultants and the facilitators years ago that said promote earlier, promote younger partners, take a leap of faith. It’s not one size fits one. It’s no longer, here’s what the partner looks like. You have to kind of step outside of the box and look at people’s strengths and their gifts. And we’ve been able to do that. We’re 160 people now. We’re not small, but we’re small enough that we’re in charge of our own destiny. It’s very easy for us, we’re very nimble, we can shift gears quickly, we can make decisions quickly. So it’s easy enough for us to have a conversation and arrive at a decision about the next level of partners. And that is so important to plan early. Because, again, there’s a lot of partners retiring and you just don’t have the people coming up the ranks who either are qualified or want to be partners. So there’s two things you have to look at, you have to find qualified individuals, you have to identify them very early on in their career, create a path to partnership, which is what we’ve done, we have a formal document, a formal program, start grooming them, and identify. We’ve also created avenues for folks who say they don’t want to be a partner right now, that’s not my vision. That’s fine. We have a different career path for you. But identify those that are going to plan to be the future leaders of the firm in terms of being a partner, and then grooming them and preparing years in advance to promote them and be ready for the succession. I think that’s one thing we’ve done really, really well is promoting partners, new partners early.

I know a lot of times it seems like people coming in, they don’t even know what it means to be a partner. Is this something you educate them on then?

Yes, yes. And there’s a lot of that and that’s very common in this profession. They come in, and they have no idea. What does it mean? How do I know I want to be a partner? What does that mean to me? What does it look like? So we’ve created this document and this program, this path that we share with anyone who wants to see it. Here’s what it looks like, here’s how you become a partner. Here are the criteria. We have a goals-based compensation system, these are the types of goals we’re looking at. Every partner doesn’t have the same goals, we all have different goals based on what our initiatives are, and what our strengths are. And we start giving goals to our managers and our senior managers to get them in the practice of hearing your goals. You’ll be measured at the end of the year, here’s where we need improvement, here’s what you knocked out of the ballpark, and get them used to that idea of thinking I need to have goals in place, and I need to perform in order for me to further the future of the firm.

Right. Well, that’s great. Well, we touched on so many topics but that just shows all the issues you’re dealing with as a firm and you personally as a managing partner.

Yeah.

And I’m not even going to list them now. But if anybody wants to reach out to you, you’re dealing with this, if they have a question that they want to run past you, how can people reach out to you or look you up?

On our website. I have my email on our website, just ping me there. LinkedIn, I’m on LinkedIn, you can check me out on LinkedIn. Happy to talk about it. I think the future is exciting. I think it’s going to change very quickly. Each year, there’s been discussion about the fact that it’s no longer a five-year strategic plan. It’s more like six months to a year because the profession is changing so rapidly. And I think it’s exciting. I think there’s a lot of opportunity. It’s an exciting time and I’m happy to share. And that’s one thing I believe strongly in, is leaning on your peers and sharing with your peers your experiences and helping out others.

I’m a big advocate for sharing your knowledge. I agree completely.

Me too.

Well, Jackie, thank you very much for being part of this today. Like I said, it’s been two years in the making for me, and I’m very excited that we got this done today.

I am too. Thank you, Randy.

Thank you. And I want to thank everybody for listening today. Thank you for joining us today. And you can find all the links and show notes for today’s episode as well as more about Tri-Merit at the uniquecpa.com. Remember to subscribe and join us for our next episode where we’ll be going beyond compliance into forging new pathways of delivering value to clients, diversifying your revenue streams, and leading-edge management techniques and styles.