How Forvis Mazars Built a Global Network

When in June 2024 FORVIS, a top U.S. accounting and advisory firm, combined with Mazars, an international professional services firm, the firms created a unique global network and marked one of the many innovative structural changes accounting firms are implementing to evolve with a changing market. Scott Linch, partner with Forvis Mazars, and Bob Dunn, managing director of GF Data, an ACG company, join the podcast to talk about this deal, the unique moment that makes a global network so attractive, trends in the professional services sector and more.

This episode is brought to you by Forvis Mazars, a leading global professional services network. Read a transcript of the podcast below.

Middle Market Growth: Welcome to the Middle Market Growth Conversations podcast, I’m Katie Maloney, vice president of media for ACG. Today, I’m joined by Scott Linch, partner with Forvis Mazars, and Bob Dunn, managing director of GF Data, an ACG company. We’re going to dive into the creation of the new Forvis Mazars global network and Forvis’ acquisition of Mazars in the United States as part of that move. We’ll also look at what’s ahead for the accounting and finance sector more broadly. Scott and Bob, welcome to the podcast.

Bob Dunn: Thanks for having us.

Scott Linch: Thank you. 

MMG: So first of all, Scott, I want to congratulate you and your firm on the recent launch of your global network. What was Forvis looking for when you first started seeking out a global solution for your clients and how did Mazars fit into that vision?

SL: If you go back in time, a couple of years ago we merged two firms—that was BKD and DHG—to form Forvis. That made us a national firm, a top 10 firm in the United States. That was a big deal for us to become national, to be able to serve our clients across the United States, but we always said that that was a gateway to global. We felt like we needed more to really serve our clients the way we wanted to do it. And so really we were already in an alliance with Mazars across the world, so that was a natural place to look when we started thinking about how we were going to solve that global problem. And once we formed Forvis, it became apparent that having this network in place between these two firms would be a really nice fit in helping serve our clients. Our clients are dealing with global complex situations every day that we’re having to try to solve for. That really did fit into our decision there. And part of that, what you mentioned, is Mazars USA did become part of our partnership in the United States.

A lot of people don’t know how networks and then accounting firms are set up, but a lot of them are set up where each country has its own member of the network, and so, if you think of some of the Big Four, maybe there’s a hundred plus members of the network, just using round numbers. This is a pretty unique situation in the fact that Mazars was a global partnership, so they were treating all countries kind of as one partnership. And with the U.S. being a partnership as well for us, we’re actually a two-member network, so that’s pretty unique. It really does allow us to be more agile in the way we’re serving our clients across the world, having that sort of one partnership there we’re going to outside the United States as part of our network, we are a common brand across the world and we do have a network headquarters that helps us with some of the services and marketing type things that we have from a coordination standpoint. But we are one brand and we serve clients the same way across the world now, which is pretty exciting.

MMG: You touched on ways that this network is unique. Are there other aspects of it that you would say differentiate it from others?

SL: I would say that that’s a really unique piece of it, the focus just on a lot of different types of clients. We’re definitely strong in the midmarket—[we call it the] middle market in the U.S., but if you look outside they often say midmarket, so it’s fun to see those distinctions in just the little words when you start doing business internationally. And then, you know, I think that Mazars has historically had a very strong audit practice with some public-type companies. In certain countries, two auditors are required and so they had a very strong practice in that. We have a strong practice as well. And so bringing those two together will make us definitely a stronger auditing firm and be able to audit these multinational companies, whether they’re public or private, having the ability to serve them in different countries. You know, oftentimes there’s your financial audit as well as a statutory audit that certain countries require, so having those capabilities to touch all those different countries. We’re in over a hundred countries now, [and] being able to have people on the ground to understand not only audit but then the tax and local regulations that might be facing those companies is definitely an advantage we have.

MMG: And on that topic of coming together, as you move forward with integrating the two firms in the U.S., what are some of the initial areas of focus for you? 

SL: So, in the U.S., there’s a smaller piece as far as putting that into our U.S. firm. Mazars USA was heavily concentrated in the Northeast and they did have offices down in Florida and California. So they were around the U.S., but definitely the most people in the Northeast, which gives us a much more significant presence in the Northeast, so that’s a big chunk of what’s helping our geographic presence, but it has helped us in other places like California and Florida. If you looked at our map, that was probably where we didn’t have as many offices in some of those places. And so it did help expand us into new geographies, [such as] Philadelphia, Boston, where we didn’t have offices before, now we do. It’s just exciting to have a presence in those markets.

They’re also very focused on midmarket, which we were as well. I think it definitely adds to our private equity practice and ability to serve those clients, especially with some of the advisory services that we have, some of the consulting type services where we focus on helping those private equity-backed businesses after a deal is complete. We think that that’s going to continue to add to that piece of our business. I will touch on a little bit outside of the U.S., not really integration so to speak, given that it’s not an acquisition, but there is integration as far as functioning like a network. And so, we have some industries where we’re focused on becoming global industries and in thinking through how we serve clients globally in those industries, private equity is one that I’ve had for my role in the firm a lot of time with. And so we’ve spent time in the U.S., we’ve spent time overseas working together to build a strategic plan around some of that and just figuring out how do we work together to serve these clients and go to market together. We want to be seen as working together as one brand that people can believe in, and part of that is getting to know each other. While we knew each other at the leader level, we don’t necessarily know each person in different countries so we’ve had different conferences that we’ve gone to internally where we get to visit with people from all over the world which has been fantastic to get to know our colleagues because part of that is really building that trust amongst the different partners so that when you do have a need, you know who you’re going to reach out to and you’ve actually met that person and talked to them. Having that level of comfort is something that we’ve spent a lot of time right out of the gates on because we think it’s super important.

MMG: You’ve mentioned a few times since we’ve been talking how this will affect clients. I was hoping you could speak a little more to the impact that you foresee the launch of the network having on your current clients as well as clients in the future. 

SL: I’ll go to private equity first because that’s what I know the best. But private equity firms, for the most part, a lot of the middle-market firms are buying a platform in the United States. I mean, yes, there are some they’re doing outside of the U.S., but what you do see is the majority of them are starting with a platform in the U.S. and then adding on businesses outside the United States, right? While we had an alliance where we could go tell that private equity firm, hey we can serve you, and Mazars was part of that alliance: We’ll use Mazars in this country, we’ll use Mazars in this country, may use a different firm in this country, you know, putting that together and telling a story around how you’re going to be one firm or one point of contact is a harder story to tell for us. We think having some commonalities about how we serve clients, best practices, and also having that one point of contact of how we’re going to serve our clients and be able to bring in our own brand around the world to serve those, it really does help us be a better fit for those clients. We know that we’re going to have the expertise, we know we’re going to give what we always call our Unmatched Client Experience. We’re going to get that experience from our other countries that we might not have gotten if we weren’t one brand and one branded network across the world, because we do think that’s what brings us together. We learn from each other about how to serve clients. We have that pride together about how we want to make sure we’re providing that client experience. And we have that one point of contact that helps bring it all together. I think that’s really going to help our clients, just the level of expertise. Now that we have so much more depth of industry experience because we have people across the world that understand these industries and how they impact our clients across the world. So having that specialization around taxes, regulatory environment is super important for how we can keep our clients informed and keep them continuing to advance as they grow. The last thing I’d say is our clients are growing, we have to be able to grow with our clients and be able to serve them no matter what size they are. And that’s what I talked about earlier, I mean, we’re serving public companies, we’re serving middle-market companies, we’re serving lower-middle-market companies. We just have a lot more depth of what we can do.

MMG: That’s great. So it sounds like a much more seamless client experience, deep expertise, and scale.

SL: That’s right.

MMG: And then to zoom out a little bit, the Forvis Mazars network launch comes at a time when we’re seeing a lot of accounting firms merging or reevaluating their ownership structures. So, Scott, in your view, what’s driving these changes within the industry? 

SL: Well, talent is a big one. There’s been a war on talent in the accounting firm environment. The number of people in accounting has been challenging, getting people to stay in accounting has been challenging, but also as the profession requires more specialization, you have to be able to acquire different talent that you might not have had to acquire before and you need the capital behind you to do that. So you need capital to continue to have talent. You also, with AI and other technology that’s coming into play, you need capital to do that as well, right? And so a lot of the firms have taken on different ownership structures partially for opportunity to get more capital. They can go acquire businesses with that capital. They can probably acquire people with that capital. And so that probably has driven some of that. Scale as you mentioned earlier, you need scale to be able to serve clients today more than you have because the global piece is important, or just a national piece. I mean, just being able to serve people in different places and having the depth of talent in different areas to provide our clients with that expertise, you kind of have to have scale to do that because there’s so many little different pockets of places that people are investing or running businesses and they expect us to know each of those spots, right? If you don’t have that scale, then you may have to tell your client, ‘I don’t know the answer to that or I have to go somewhere else,’ and you don’t want to do that. You want to be able to have the answers and be able to help your clients solve those problems with what you have in-house, and so I think that’s driving some of it. That’s probably what we’re seeing. We took a different route to get to that scale by forming this network. I think this all goes back to two years ago when BKD and DHG merged, we could have both done something different, taken capital from an outside party, but we put our capital together and came up with a similar answer than we might have otherwise, because we have capital in our firm to be able to do things, all the things that I talked about, but by having that scale, having that size, being a top 10 firm, we’ve kind of created the capital on our own without having to take outside money that would require having influence from people other than our own board and folks internally.

MMG: Bob, I want to bring you in here too. Is there anything that you’d add as far as the market dynamics that are driving some of the structural changes within the world of accounting that we’re seeing? 

BD: I think Scott really hit on it there. All this is unfolding with the backdrop of increased specialization at private equity groups. That kind of broad-focused, relatively vanilla PE group doesn’t really exist, or not too many of them exist anymore. They’re all a particular industry specification. I think diligence on deals has gotten more specialized. There’s just a lot more as I think Scott said pockets you can get into, a lot more that you need to know on this to deal effectively with your clients. Definitely congratulations on the network, I think it’s a great deal, Scott. And I think it’s exactly what you should be doing to stay competitive right now.

MMG: Scott, does the U.S. acquisition or the global network add any new data or technology capabilities that will be shared across Forvis Mazars?

SL: I think both firms had their own technology advances they were doing. We both had kind of innovation groups that are doing different things. So yes, it does provide that. AI is something that we both had been exploring. We are utilizing that in certain capacities, so that is something that having additional capital to continue to figure out and innovate will be something that we definitely expect to be able to capitalize on. There are definitely systems that they were using that we weren’t using or that we were using that they weren’t using that we can kind of look at to figure out best practices. If you just think about little things like using a program where you have the same templates, so getting some common technology so there will be some changes in what we do to be more common how we go to market as well as start thinking about how do we continue to use technology to be more efficient and serve our clients better through portals and everything else that we can get to make sure we are as user-friendly as possible with our clients.

MMG: Bob, are there ways that you’re seeing GF Data’s offerings augment the information and data available to accounting firms?

BD: Yeah, we’re going through a relaunch of our website right now. The main goal of that is to really make our data as accessible and able to work with whatever data that our clients are using as well. So we’re going to be doing API feeds out to clients be able to it into whatever environment you’re working out with our data and then provide much more of a view of that data beyond just deal averages, look at top quartile, bottom quartile, median, etc., be able to isolate top performers versus the rest of the market. It’s all capabilities that we’ve had in our reports on it, but of course the reports just come out once per quarter. This is really going to be a live environment where all of our data is in the hands of our users and they get to explore it and manipulate it and utilize it how they see fit and also get it into their systems so it’s more effective and easier to use.

MMG: I want to return to the topic of challenges. Scott, you talked about this a bit earlier, the war on talent being one prominent challenge right now within the world of accounting. I was hoping you could talk about that and other challenges within the space right now, and maybe the strategies you’re using to overcome some of these hurdles.

SL: Sure. And before I go, back to your last question to Bob, I just want to stay that GF Data is a great source of information and that our firm utilizes that information, especially on our investment banking side. That’s a place that our clients expect to have that kind of data in their hands when we’re trying to evaluate companies, so I just want to give Bob some props on the great work that they did.

Moving onto your question on accounting talent, I think I’ve seen some facts about people turning 18 today versus 10 years ago—there’s less of them. There’s obviously less people going into a lot of different professions, but I don’t know, at some point in time, accounting got a little comfortable with how they recruited people. They just had this churn of students that were always available, and once the amount of people who were available became less, and also if you look at the growth of all the firms in the same time period, the need for accounting students is at an all-time high, and the amount of accounting students is probably lower than normal. I’m actually on an accounting advisory board at Wake Forest, and so I see some of the data from that school as well where I went to school. It grew for a long period of time, and it has plateaued a little bit and there are probably less students than there used to be across all universities. I think that’s well-documented. We have to figure out a way to be more proactive earlier on in working with students and really talking about the profession and how important it is to the whole economic world and what we do. It’s a staple, it’s the backbone behind a lot of business, and really starting to tell that story.  And it does create rewarding careers for a lot of people, and it should be just as cool as being a doctor or architect or something else. How do we get back to that? I do think it requires you to think differently and think more diversely than maybe the profession has historically and where are the people that haven’t gone into accounting historically and why are we not recruiting those types of people? I think about some high school programs that we are involved with as a firm and with some diverse candidates and how we educate them early on to understand what accounting is so when they go to college they want to be an accountant, or start as an accountant and do something else, but how do you get more people into the profession? I do think as accounting has expanded into consulting services that are beyond being an accountant, that is another place where you see huge growth in accounting firms right now is the consulting side. And so some of those folks are not necessarily going to be CPAs, right? They’re business, finance majors. So there’s a place in accounting firms also for those types of degrees. I mean, even thinking through our firm with an investment bank in-house—that’s a whole totally different piece of the business. We have a wealth advisor group as well that has significant assets under management. So having different places in these firms where you can play, that’s another way to recruit talent into accounting firms and I think that’s another reason why firms have changed how they think about the traditional accounting firm we talk about earlier, the scale does a lot of different things, creates opportunities for people in different spots within your firm. The global piece also creates opportunities for them to do things globally, to do secondments, so creating a more vibrant workplace. I would also say accounting is a pretty flexible career, there’s ways to be part-time in it, there’s ways to have flexible work arrangements. So it does work for a lot of different people by having that flexibility.

MMG: Bob, anything you would add there as far as either the workforce challenges within accounting or other challenges that you’re seeing within the sector?

BD: This is where accounting is so important. If you look at the market for the last two years coming out of COVID, you really needed the accounting firms to kind of lead the way, verify earnings, revenue growth, etc. And we’re actually starting to see some of those challenges come to roost now. In terms of the first half of the year, we’ve rebounded in terms of deal volume, about 180 deals in the first half. But in looking at it, a lot of these businesses have challenges to them—they grew strongly during COVID, but then weren’t able to maintain that. We were seeing companies with drops in revenue growth and declining EBITDA and I’d say that some of these companies are in need of some TLC and some of them have unique challenges that are specific to this period of time right now. So I think your accountant is your resource to be able to go through and manage those situations. There’s a lot of them in the market right now, despite it being an improved market.

And again, as firms have gotten more specialized, we’ve touched on that earlier with private equity sponsors, they need everyone that they’re working with to be able to keep up with their level of specialization on it. I think you’re going to see increasingly across all professions going into private equity, increased specialization, increased scalability, as Scott was talking about with the network. It’s an exciting period to be in. The challenge of people, when you find the good people that can handle those challenges and manage the growth, because as Scott noted, it’s increasingly tough to get good accountants out there. But I think that the moves that they’re making and others, it shows a bright future for the industry and one that’s definitely needed.

SL: Katie, when my kids were in kindergarten and they write those sheets, “What does your dad do for a living?” One of my sons brought his home and it said, “My dad counts beans for a living.” The further we can get away from people thinking that we’re bean counters and thinking that we’re cool consultants and helping people solve problems, the better off we’re going to be for the profession.

MMG: So maybe getting to the high school students is too late—we’ve got to start at kindergarten. 

SL: That’s true. My kids were already doomed early on.

MMG: I want to go back to the challenge that you raised, Bob—the macro one that’s impacting all firms that intersect with M&A, which is the slowdown in deal volume that we’ve been experiencing the last couple of years. Scott, I’m curious what you’re seeing as far as activity and whether you’re seeing that start to pick up, and from there, how you’re preparing for the hopefully very soon uptick in deal volume.

SL: I would say that we started to see things pick up in April, May, and the summer has been a lot busier than I think any of us expected. Not sure what the macro stock market environment is going to do to things here, but I just see the number of deals that are getting ready to be in the market. I would say our investment bank’s very busy right now for instance, and those are all more founder-owned businesses than private equity-owned. We work with mainly only owner-operator-founder-owned businesses. I think that exits from private equity are still a little slow. We’re seeing these smaller deals and I think that’s what’s been keeping the wheel running, the smaller deals and add-on transactions that we’re seeing. There is definitely an appetite for more platforms. The private equity funds have been sitting on the sidelines of selling their businesses. It has created more of these continuation funds we’ve talked about before on some of these broadcasts. And that is something we continue to see. We see some of our clients doing that, it gives them this chance to get liquidity to their LPs. But I do see our transaction advisory team, for instance, super busy right now. So we see a definite pickup with deals trying to get done by the end of the year. As Bob mentioned earlier, I think the data says that it’s increasing and who knows what the election will do as we approach that. And a lot of times elections will drive deal flow based on what people say around taxes, so depending on what the script is on some of the capital gains and stuff, as we get closer to the election timeframe, people start getting nervous and wanting to think through it, especially the founder-owned businesses.

MMG: And Bob, like Scott said, you showed your hand earlier, but can you tell us a little bit more about what you’re seeing in the first half of the year data?

BD: It’s definitely been a rebound from 2023 in the first half of the year, and I wouldn’t say it’s been an avalanche of deals, but I think we’re up about 25% compared to the first half of 2023, which is good. You know, on the con side of it, a lot of add-on activity—I don’t know if that’s necessarily a con, but you aren’t see as much with platforms; about 44% of the deals we tracked last quarter were add-on investments. It makes sense given the overall, up until recently, increasing interest rate environment. I think there was a lot of fear of risk involved with the economy and what if rates keep going up or what if the recession does come home to roost. So I think that kept people cautious, kept them focused on their own portfolio companies and building them up, but that has led to some additional deal flow. I also think talking about the last couple of years, we’re starting to get out of the sort of long tail of COVID. I think it’s easier to get a handle on what a business is worth and where its revenues are going to be in two years. It’s a more normal environment so that should push some deal flow. And then last one, I think Scott hit precisely on it: They haven’t really come back to the market yet, but private equity is going to have to exit some of its deals. I think if you see an interest rate cut, that might open up that supply of deal flow. And I definitely think from everything I’m seeing now, the second half of the year we’ll see even more deals than in the first half. So I think we’re in the right direction. Bottom was probably third quarter of 2023 in terms of deal volume and I think deal value. But yeah, still some additional challenges but heading in the right direction.

MMG: And continuing with the theme of looking ahead, Scott, what are your plans for growth moving forward? Are you expecting more acquisitions from your organization or are you focusing more on organic growth?

SL: I would say that we will definitely still do M&A. It’s not necessarily the only way we think we’re going to grow. We’re probably going to grow heavier based on organic growth, global opportunities. We see this network, we wouldn’t have done it had we not seen it as an opportunity for growth. We think that it’s really going to cement us an ability to get some opportunities that we wouldn’t have had otherwise. And so we see real growth, we call it real client growth that we think we’ll create. I think our firm came out to say that we’re right around $2.2 billion in revenue this past year, and so continue to advance that number. And that’s just the U.S. side that we have a chance to continue to have nice growth, to continue to advance our firm and to serve our clients the way we want. We’re excited about the future and there’s a lot to do. We’re in an amazing position to serve our clients as a result.

MMG: Well, Scott and Bob, it’s always a pleasure. Thank you for joining me on the podcast. 

BD: Thanks for having me.

SL: Thank you, Katie.

The Middle Market Growth Conversations podcast is produced by the Association for Corporate Growth. To hear more interviews with middle-market influencers, subscribe to the Middle Market Growth Conversations podcast on Apple Podcasts, Spotify and Soundcloud.