The accounting profession is experiencing an unprecedented transformation driven by two major trends: the surge of private equity (PE) investment and the evolution of compliance technology.
The combination of these trends is creating both challenges and opportunities that will reshape the industry’s competitive landscape in 2025 and beyond. Discover how you can successfully take advantage of PE investment and technology advancements — so your firm can enhance its business model and improve its operational framework to drive growth.
Reshaping firm dynamics though private equity
PE investment has become a mainstream approach for accounting firms seeking accelerated growth and strategic transformation. But what’s driving PE firms to invest in accounting firms in the first place?
The most obvious factor is the fact that accounting firms provide steady revenue, making them safe investments. From 2020 to 2023, the Big Four’s total revenues grew from approximately $157 billion to over $200 billion, while the Top 100 firms’ revenue grew by 12.88% in 2023 — the second-highest rate in a decade.
But PE firms aren’t only investing in accounting firms for financial reasons. According to Allan Koltin, CEO of Koltin Consulting Group, three critical factors are driving PE’s growing involvement in accounting:
- Talent — Firms are struggling to address the shrinking talent pool and aging workforce.
- Technology — Firms require substantial technological investments to keep up with industry and client expectations.
- Transformation — Clients are pressuring firms to diversify service offerings.
These three factors make it difficult for firms with traditional structures to compete effectively. But with PE backing, accounting firms can invest more in talent and technology and begin offering more services — giving them a competitive edge and boosting profits. For example, PE-backed firms like EisnerAmper, Citrin Cooperman, and Cherry Bekaert all significantly increased revenue within just a year or two. In fact, Cherry Bekaert’s revenue nearly doubled from $293 million to $585 million in 2023.
This momentum shows no signs of slowing. In 2024, global PE- and venture capital–backed deals in the accounting sector totaled $6.31 billion. The Financial Times also projects that one-third of the 30 largest U.S. firms could soon be operating with PE backing.
Evaluating private equity opportunities
PE isn’t a simple financial transaction: It’s a strategic partnership that can accelerate growth, enhance technological capabilities, and address talent acquisition challenges. But although the allure of PE investment is compelling, it demands careful strategic consideration.
Firm leaders should conduct a thorough evaluation that extends beyond immediate financial gains and focuses on long-term implications. Here are four steps your firm leaders should follow when assessing PE investment opportunities:
- Evaluate your firm’s trajectory to ensure the investment strategically aligns
Does the PE investment complement your existing growth strategy, or would it force an uncomfortable pivot? Is your firm operationally ready to take on the changes brought on by the investment? And do you have philosophical buy-in from key stakeholders? - Carefully consider the cultural implications of the investment
PE ownership often introduces metrics-driven management approaches that can clash with traditional firm cultures. Can your firm successfully maintain its core values while embracing necessary changes? - Review how the investment will affect your governance model
Partners must understand how PE ownership will reshape everything from compensation structures to promotion paths. This new governance model requires your firm to carefully maintain professional independence while satisfying investor expectations. - Create an exit plan for long-term success
PE firms typically seek exits within 5 to 7 years, making it essential to understand potential outcomes. Will your firm pursue a public offering, seek another PE investor, or explore strategic acquisition? Each path carries distinct implications for partners and staff.
Turning compliance into a catalyst for growth
Traditionally, compliance has been viewed as a passive, defensive function and a necessary burden. However, both technological advancements and shifting market expectations — specifically around service delivery and risk management — have transformed compliance into a strategic impetus for accelerated, scalable business growth.
Modern compliance frameworks remove the need for manual processes and email-based workflows, instead using AI and automation to help firms identify and resolve conflicts quickly and accurately. These sophisticated systems can perform risk analyses and complex conflict searches across corporate trees in minutes — tasks that previously consumed hours of manual review.
AI-driven predictive risk-scoring algorithms also automatically identify potential conflicts across vast databases of client information, and flag high-risk engagements before they become problematic. This reduces the time required for comprehensive compliance reviews and decreases the risk of human error during the conflicts clearance process — allowing firms to provide better, faster service to their clients.
Efficient compliance processes also directly impact a firm’s ability to onboard new clients. With the right compliance management system, your firm can reduce new client intake from weeks to days or even hours, decreasing time-to-revenue for new client relationships.
Having a strong compliance framework is especially critical for PE-backed firms facing increased regulatory scrutiny and complex independence requirements. Modern compliance systems let firms easily manage these enhanced obligations while maintaining growth momentum. Plus, by investing in advanced compliance technology, your firm can demonstrate its commitment to meeting client expectations — leading to an increase in client trust and return business.
As your firm increases efficiency, improves the client experience, and drives growth through its new compliance system, it will also likely see an increase in profit. Firms using modern compliance technology can potentially save hundreds of thousands of dollars annually — making it a necessary investment for those that wish to remain a competitive force in the accounting industry.
Looking ahead at the future of accounting
As we move into 2025, private equity investment and modern compliance technology will continue to reshape the accounting landscape — not as separate trends but as complementary forces. Accounting firms will need to effectively leverage PE partnerships while building robust, technology-enabled compliance frameworks that meet their needs. The future belongs to firms that can balance aggressive growth with operational excellence, turning traditional challenges into strategic advantages.
Learn more about Intapp solutions for accounting firms, or contact Tom Koehler or Jey Purushotham for a personalized consultation.