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A luminated office in Canary Wharf | AccountingWEB | Baker Tilly's CEO discusses record $5.2bn revenue

Baker Tilly CEO says size matters


As Baker Tilly International breaks $5.2bn revenue, the organisation’s CEO Francesca Lagerberg sits down with AccountingWEB to discuss the network’s record growth, the prospect of more mergers and acquisitions, and navigating the AI revolution.

19th Feb 2024
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Baker Tilly International announced last week global revenues of US$5.2bn for the financial year ended 31 December 2023, an increase of 11% on the previous year. 

The network’s growth was primarily organic, with all the major service lines seeing double-digit upticks in growth. Advisory saw the biggest growth of 12.3%, followed by tax at 12% and then accounting and assurance at 10%. 

Speaking to AccountingWEB, Francesca Lagerberg (pictured below), the CEO of Baker Tilly International, called the double-digit, like-for-like revenue growth “an incredible achievement”, especially with it happening in a volatile market. 

“Breaking through the US$5bn barrier only four years after achieving US$4bn in revenues demonstrates that this is a network with real ambition and drive.”

Lagerberg said she was excited to see all the regions growing strongly, but noted that “we have got ambitious plans for the future”. 

Part of achieving those plans in the year ahead is through mergers and acquisitions, but also it means navigating the volatility in the markets of an election year for half the world’s population and the rapid advancement of artificial intelligence. 

Francesca Lagerberg
Baker Tilly International

Mergers and acquisitions

While Baker Tilly International attributes the success to organic growth, the network has set its sights on growth through mergers and acquisitions. 

Baker Tilly in the US, the biggest firm in the network, has recently done a deal with a private equity house. The firm is already knocking on the door of US$2bn revenue, but Lagerberg expects the private equity deal to “fuel their growth”. 

The private equity investment is for the US firm only, however, UK members of Baker Tilly International are turning to mergers and acquisitions (M&A) to spearhead their expansion plans, too. MHA confirmed last week a merger with Edinburgh-based accountancy firm Geoghegans. The move propels MHA into the Edinburgh market and further into Scotland, while Geoghegans benefits from retaining its personal local service alongside accessing an enhanced range of specialists nationally and internationally. 

“Size does matter,” said Lagerberg about the network’s recent M&A activity, saying that “in order to serve clients the way they want to be served, you are going to have to grow”. 

Future strategy

Lagerberg confirmed that mergers are going to continue to be part of the network’s future strategy, with the intent that it’s not “just a geographical spread for the sake of it, but where our clients need us.” 

There is a lot of M&A activity happening across the accountancy sector, but Lagerberg explained that she doesn’t want to do a merger at any cost. “When you do a merger, you’ve got to make sure you’ve got the right fit,” she said. 

“You’ve got the expense of doing it, the legal fees and you’ve probably got property to deal with, and most importantly, cultural fit. Doing a bad merger is really draining in an organisation. So you’re not going to do it at any cost, you’re only going to do it if you think it’s going to really have a good chance of success.”

She said that the old consolidation model didn’t work because all that meant was there were a couple of organisations where all the good people went, picked up the money and then ran away. “In our field it’s all about the people. If you can get the fit right, you can then make those synergies [between firms].” 

She added: “The biggest failure of mergers: cultural fit.”  

Global economic turmoil

Baker Tilly International’s record growth comes as massive political shifts across the globe, alongside rapid technology disruption, is causing volatility in the market. Lagerberg points out that half the world is going into an election this year, which is going to impact economies worldwide. In addition, economies are still dealing with the fallout post-Covid. 

Many countries are grappling with inflation, with some governments handling it better than others. “The economy in North America is going gangbusters at the moment, regardless of politics, while Europe has had a difficult time of late but that’s beginning to improve. But there are massive variations elsewhere, with China slowing down, while other parts of Asia are doing really well.” 

This is of course an opportunity for accounting firms across the globe because dealing with change is part of what accountants do. “You tend to find accounting firms do very well in times of change, because that’s when people need the help,” said Lagerberg. 

Artificial intelligence

Meanwhile, one of the biggest upheavals over the past year has been the rapid rise of artificial intelligence (AI). 

Lagerberg expects the development of AI over the next few years to be the biggest sea change in her professional career. She jokingly recalled the excitement in the 80s when accounting offices plugged in their first fax machine and started using big brick mobile telephones, but said the advancement in sophisticated automation is “going to knock those moments out”. 

“Sophisticated automation will become not just a nice to have, but will become a necessity. And that doesn’t necessarily mean that [accounting firms] will have to do something that’s cutting edge [with the technology]; this is about just being smart about where you spend your time, what you get your people doing and how you bring their human piece that you can’t replicate and marry it alongside the automation, she said. “I think in the accounting world, we’re about to see the automation we’ve been talking about for two decades.”

This is not the only trend that’s on the mind of a CEO of a billion-dollar organisation. Since the world reopened after the Covid lockdowns, accountancy firms have wrestled with the right approach to hybrid working. 

Hybrid working and selling the profession

The Baker Tilly International CEO weighed in on the debate, saying there is no right way of doing it.   

“Are you going to check up on people as they come through the door? Are you going to trust them to be sensible?” she said, noting that Baker Tilly International has gone with the latter category. 

However, she admitted that no one has got it completely right yet, but firms are getting more comfortable with the concept. 

“Gone are the days where presenteeism is really a proxy for whether you’re doing a job. I think that has shifted, and it’s a very positive thing. I think you’ll also begin to see an expectation from incoming people to offer a work-life situation that is more meaningful and is an attractive place to work. That’s not just about the money, but it’s about many other things as well, such as great learning and development and a workplace that gives opportunities in the future.”  

This discussion is part of a larger global one around how you sell the profession full stop, and it’s looming large in Largerberg’s mind, too. “I think there’s a job for us all to do to show that there are still amazing skills, extraordinary opportunities and a really good career that is still in that accounting sphere.”

The conversation about the funnel of people coming into the profession naturally led to Lagerberg reflecting on her own career. From being a past chair of the tax faculty to now CEO of an international firm, she recognised that she would never have had the chance to do this job without going down the accounting route. 

“Accountancy has given me amazing experiences throughout my whole career that I don’t think I would have had in another profession – the chance to move around and the chance to move both laterally and up [in an organisation]. And there aren’t many professions that offer all of that. So I think we should be really proud of being accountants.”

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