Tax services were a large source of growth for the 2012 Top 100 Firms, with both international and state and local taxes making big gains to top the list of the fastest
growing niche service areas. International
tax services ranked first, making one of
the biggest leaps, of nearly 11 percentage
points and five spots from last year, with 77
percent of firms reporting growth.
State and local taxes were close behind, with 75 percent of firms reporting an
increase, catapulting the niche up six spots
this year to second on the list.
Business valuation, though overtaken
from 2011’s top spot, remained steady and
down only one percentage point, with 74
percent of firms tracking expansion. Attest
services made a big climb of nine percentage points to 2012’s No. 4 spot, but with 15
percent more firms reporting growth than
in 2011, this year’s biggest climber was
cash-flow forecasting and management
— up eight spots to 43 percent.
Gary Milligan, managing partner of
tax at Crowe Horwath, attributed the firm’s
double-digit growth in international tax
for the past three years to greater legal
implementation and more businesses op-
erating overseas: “The primary driver of
our growth has been in the transfer pricing
area. We are seeing a lot of heightened
enforcement of tax laws in this area, and
the clients are being scrutinized more. As
clients and businesses grow and begin to
have operations in other countries, this is
when transfer pricing comes into play.”
When William Mueldener, national
director of state and local tax for Denver-
based Hein & Associates, joined the firm
from the Big Four five years ago, he helped
establish the practice, which has since seen
30 percent annual increases. According to
him, the growth that mid-market firms are
now experiencing in this niche reflects the
increases experienced by the Big Four 20
years ago. “States are hurting for revenue
and there’s an emphasis on the state side
for how to increase revenue — states have
gotten more aggressive in asserting what
laws are out there and have revisited gray
areas in tax law,” he explained. “Another
scenario is the changing technology; so
much is changing in the way services are
delivered and how companies operate
general business and day-to-day functions
that doesn’t fit in to the tax codes written in
the 1930s and 1940s.”
There are also more than a few rea-
sons for the continued strength of busi-
ness valuation, according to Jay Gibson,
shareholder in business valuation at
Southeast firm Elliott Davis, which re-
corded 39 percent growth in the area for
the fiscal year ending in June, and is pro-
jecting at least a 25 percent increase in the
next. “Part of it is the regulatory issues out
there, and the uncertainty of the political
situation — what’s going to happen in the
election and where estate and gift tax are
going to fall out with rates,” he said. “The
other piece in valuation is that valuations
related to litigation — corporate divorce,
Top niche services
Percentage of firms increasing their business in these areas
(of 82 firms responding)
International tax
State and local taxes
Business valuations
Attest services
Litigation support
Nonprofit organizations
Industry specializations
M&A
Biz mgmt. for wealthy individuals
Retirement plans
Employee benefits
Strategic planning/business plans
Succession planning/family office
Cash flow forecasting/mgmt.
Investment advice/services
Cost segregation
Technology consulting
Personal financial planning
SOX compliance/risk mgmt.
Bankruptcy/insolvency
Biz mgmt. services for small biz
CFO/project staffing services
Business recovery/recession advice
Employment search
IFRS consulting
Financing arrangements
Export/import
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