Cherry, Bekaert & Holland, Llp

Executive Summary

Cherry, Bekaert & Holland, LLP (CB&H) is the 26th largest CPA firm in the United States with offices throughout the southeast. During the past two years the firm’s Richmond Practice has undergone attrition problems, specifically in the functional area of Audit and Assurance. These have included several senior managers and one partner. Reasons cited for the departures have been a lack of work life balances, burnout and management responsiveness to concerns.

The political environment is very territorial with individual partners guarding areas of expertise, staff and clients. Senior managers and manager are encouraged to take ownership of client interactions and use their best judgment to make decisions as if they were a partner. However, these decisions have a habit of being countermanded when in conflict with a partner or partner’s personal preference, even when the decision was made in the best interest of the firm.

The attrition problems in A&A have been primarily caused by several gaps in the practice’s management. While there is a partner in charge of the functional area he is often left in the shadow of the Partner in Charge of the Practice (PIC). This situation has destroyed the credibility of the functional head’s authority. This gap became even worse when the PIC was elevated to a regional position in charge of all state offices. This situation has left a lack of coordination, ability of the functional area to resolve conflict and make effective decisions, which has resulted in disgruntled employees.

I would recommend that the role of the practice PIC be filled. Once installed the PIC and A&A functional head should hold several sessions with the staff gain feedback and should be followed up with several programs built to improve morale based on the staff’s concerns. Furthermore, the PIC and functional area head should work with the partner group to ensure the correct alignment and adherence to corporate empowerment techniques.

Overview of Selected Organization

Cherry, Bekaert & Holland, LLP (CB&H) was founded in 1947. Its key services are broken into two primary functional areas, Audit and Assurance (A&A) and Tax. Key services encompassed in A&A include audit, attest, accounting, internal audit and outsourcing. The functional area of tax includes services such as planning, compliance, cost segregation, state and local, estate and succession.

CB&H began as small CPA firm located in Wilmington, NC and later relocated to Charlotte, NC in 1958. Over the next 30 years CB&H continued to expand mainly through mergers and acquisitions. In 1988, the firm moved its headquarters to Richmond, VA following the acquisition of Dalton Pannell. Over the next 15 years, the firm expanded its presence throughout the southeast becoming the 26th largest CPA firm in the United States. In 1993, the firm established an international presence by joining the Baker Tilley International alliance.

The primary design emphasis for the organization strives to strike a balance between efficiency and control and learning and flexibility. Due to the nature of the work performed by the firm, efficiency and control are primary concerns. This is especially true during the tax season when cross functional workloads are at their peak. On the other hand, in order to recruit and maintain talent, the firm’s structure must balance the equation with learning and flexibility. This is a difficult balancing act that the firm performs fairly well; however, there are offices where the firm has difficulty maintaining its effectiveness. Overall, the firm is considered to be effective when measured against models of effectiveness.

Mission, Goals, and Strategy

CB&H’s strategy is to provide a level of service consistent with that of the larger multinational firms, while at the same time providing local high touch customer service that would not typically be found in larger firms. “…CB&H offers the extensive service opportunities normally associated with national firms, coupled with the personal relationship, value-based fee structure and service continuity of a local firm.” (www.cbh.com) The firm anchors this strategy by providing solutions based on client needs, strength of character and in depth resources.

Problem Definition

The subject of this analysis is an issue that has plagued the Richmond practice over the past 24 months. During this time the practice has lost several of its top performers in the audit and assurance (A&A) functional area of the practice. These losses have primarily been at the discretion of the associate and have included staff, managers, as well as one partner. The reasons that have been