Accounting Media and PE Summit with Daniel Hood

Hello and welcome to the Big 4 Transparency podcast. I'm joined today by Dan Hood, the editor-in-chief of Accounting Today. Welcome to the pod, Dan. Thanks for having me. Good to be here. Yeah, my pleasure. So we got the opportunity to chat a little bit at Bridging the Gap and immediately I was like, wow, this guy's, this guy's really cool and it's always a surprise. You know, I shouldn't be surprised anymore, but like when you go to these accounting conferences and it's like people are so fun and like having such a good time. So it's always like an enjoyable way to get to know people. Yep. Yep. Yeah. And it's not what you, well, as an outside of the profession, it's always, it was surprising for a long time to me how much, what a good time it was going to these, going to the shows, talking to accountants, how interesting it could be and how much, how much passion they bring to everything they're doing. So. Yeah. Yeah. There's a couple of people who really blew my mind. Like Chase Berkey, I'd had him on the pod and he was very like serious and somber kind of, and he was talking about like his, you know, his struggles and all that. And then I see him there in an all gold jumpsuit and a disco ball hat and I was like, oh, okay. There's a lot more dimension to this guy than I, than I knew about. So to start us off here, I would think a lot of people who are listening to my podcast probably already have an idea about you. But for those who maybe don't, this is probably a good starting point to chat. You've had quite a long career in media. Just in general, not like a CPA background, but then you ended up very focused in the accounting field. So I believe you've been with accounting today for like over 12 years, right? Yeah. It's actually, I've been editor in chief for over 12 years. I've been with accounting today, actually more like 26, 27 years as I started as managing editor a long, long time ago. Wow. That's incredible. So why the, like why the accounting field? Is it kind of one of those things you just ended up there or is there something about it for you? It's purely random accident, which actually is the, the, the would be the title of my autobiography because that's like my getting into journalism in the first place or into media was random and by accident, sort of, I needed a job after college and someone got me a job and it was in media and I ended up staying there and liking it. And then at some point I'd been in Europe for a little while, came back, needed a job here, was looking around and the first one that became available that made sense for me happened to be production and design for what was then called accounting technology and it's since been folded into accounting today after five or six different iterations. So I sort of fell into that and again, though, as a production and design, and then there was a time when production and design came very close together because of desktop publishing, came very close with editorial because of desktop publishing, I should say. And they were like, well, you can do all the production and design stuff and you can spell so you can be managing editor. And then at some point the two things diverged, production design and editing, and I ended up somehow on the other side, staying with editing. So purely random, no background in accounting, no education in accounting, though I kind of figured now at this point, I know more about accounting than anybody who isn't an accountant should, just from having covered the space for 25 odd years. Yeah. And a lot more than a lot of people who are in accounting and should know, you know, I think a lot of people are kind of siloed and they just see what their firm sort of gives them in terms of resources and whatnot. And I've been on this big campaign of like, hey, like, go see the world and, you know, see what's going on in the industry. It's actually really cool. And so, yeah, you obviously have like an incredible view of that. I'm curious if you think like, are other industries, is there's as much like drama and intrigue going on in like other industries as a whole as accounting, because like I have friends in engineering and sales from my previous job that are like glued to our accounting Reddit because they're like, this is a soap opera. This is, this is crazy. I think the difference there, our company, the company that owns Accounting Today owns five or six other B2B publications, mostly in the sort of finance and corporate operations spaces. And I would say there's probably, we can't say drama, there's as much exciting things going on. They're all facing the same sort of changes. AI is a big challenge and staffing is big. They have all these big challenges. What they don't have, I don't think they have the drama in part because they don't have the passion that accountants bring to their job, right? This really matters to accountants. They are passionate about their profession. They're passionate about the work they do. So when you go on, when they go on to Reddit, right, they're, they're, they're angry or they're happy or they're excited or wherever they are, but they're that at high volume because this profession really matters to them. And that's a, that's a pleasure to cover, right? As a journalist, it's exciting to cover something that people are excited about and angry about and passionate about. And so that's why, you know, when you see those things on, on Reddit or ongoing concern or any of the posting boards, the passion is there because they care about it. And you don't see that to the same degree in, in a lot of other industries. So I think you're right. From the outside, that's got to look like drama and, and a bit of a, you know, a real housewives of accounting kind of, kind of feel. But what it all stems from, I think, is, is that deep passion for the profession and they love what they do. So it, it plays out and it's exciting to sort of sit back and watch that. Yeah. No, I like that interpretation. It's cool to hear that it comes from a place of like true caring from people. It's not just that, like, there's so much stuff going on at all times and people are getting whipped back and forth. So that's interesting. I mean, they are, to be fair. Yeah. They are. But they also, like I said, they, I think that, that caring about it, the passion is, is important. It's not always, you know, properly placed. It's not always expressed as well as it might be or in the appropriate forms, but it's, it's real and it's there and it's great. It makes it fun to cover. And then like speaking about like, you know, the impression of people's, you know, passion and how they're, how they're communicating that, what do you think has changed in kind of the state of media and the accounting space since you started, you know, 25, 26 years ago? Well, I mean, as there is for everybody, right, there's a lot more outlets, a lot more places for accountants to talk at all levels, at the, at the entry level, at the mid-level, at, as professionally, sort of as professional communications, you know, everything from the Reddit boards to four or five different places where you can go and complain about, you know, your workplace kind of thing, Glassdoor and that sort of stuff. But then also blogs and video blogs and a hundred million different outlets, it would take us too long to list them all, for people to get the word out about any aspect of the profession that they care about, whether it's how much they hate their job and how little they're paid and how bad work is at a big four firm to technical issues, sharing that kind of stuff with clients or with the rest of the profession, or looking for advice from the rest of the profession. There are a lot more outlets for accountants. And while they're generally pretty cautious about using them, generally, they're a lot less cautious and a lot more open to them than they were 25 years ago, when, you know, when the internet first came around, there were serious questions about how much, you know, accounting firms would allow their, their, their partners and staff to, to be online or to be on Facebook or to be on LinkedIn or to be on Twitter or any of those things. It was a serious concern because, again, they take their, their role very seriously. They take their status as professionals very seriously. So I'd say the big opening up is, is really that accountants are much more willing to communicate and share and talk in those sort of public fora. And then the public forums have sort of exploded as we talked about, like everything from Reddit to to being able to very easily come up with your own podcast or video blog, and we see a lot of managing partners, for instance, have, you know, weekly or monthly video addresses to their firms on all kinds of different topics. And it's just, it's a great management tool and the kind of thing that you could not imagine. Even if they had the technology, you couldn't imagine a managing partner in the 90s, too. Yeah. And do you think all this kind of like discussion going on is, is productive, you know, along the thought pattern of, of sunlight is the best disinfectant, or do you think that we're like kind of creating our own pipeline problems via kind of the venting and all of that? There's definitely, there's, there's an aspect of that, right? There's, there is a bad habit on the part of accountants, right? Of, of, it's not humble bragging, but it's suffering bragging, whatever the thing is. I worked nine million hours in, in, in taxis and I never saw my family and, you know, and we had to do it outside in the freezing snow and et cetera, et cetera. There's a lot of that. And that is, that is a problem that the president needs to get over. They need to stop telling that story because it does, that does scare people away. But I think the general, the, apart from that very specific thing of complaining too much about tax season, I think the general openness about the profession and the willing to talk about the profession is pretty valuable. Less so from the recruiting aspect, but more from the fixing things internally aspect, right? There is in a way that hasn't been true for generations. There is a necessity for the current generation of accounting firm leaders to listen to younger accountants and to accommodate them and to, to take their concerns seriously because there aren't enough of them in the, the older generation needs them more than the younger generation needs them, is the older generation. So I think that that openness gives them a chance if they're willing to take it, to learn what's going on and what they need to, how they need to change and how they can get these people on board. You know, younger accountants are much more willing to speak their mind and if older accountants will listen to them, some of the pipeline problem can be, you know, ameliorated that way. Yeah. And it does seem like it is maybe working to a degree and getting better. So this is not, not published yet, but a number of universities and colleges are using my data for like PhD theses and things like that. And one of them really wanted to just have a broad focus on like where things are at in the industry at large and you know, where things are trending. And it does seem, you know, this is more in-depth analysis than I could do myself because I think there's comparisons to all these other professions and all that. But it does seem like kind of like wage growth, which is obviously one of the huge complaints after it's stagnated for so long, seems to be outpacing a lot of the other professions in the last couple of years, while at the same time, self-reported average hours worked slightly decreasing. And so it is like, oh, like maybe this is actually kind of like a better lifestyle coming out of all of this. Yeah. Excellent. Well, I mean, that's highly encouraging. Yeah. You know, there was a sort of a Simpson-esque sort of thing going on there when there were just the current generation of leadership saying, it's terrible, we can't find any new accounts. We've tried nothing and it's not working. Yeah. So maybe if you, if you try the, you know, pay a little more and figure out the hours, maybe things might, might change around a little bit. Yeah. And I think, I think a lot of that comes from just people talking to them and talking at them about it for a while. So some of that, yeah, that open communication is, is got to help a little bit. Yeah. And then having been with like accounting today, you know, through its kind of growth in recognition as like a top voice in this space, like how, how does the decision making happen particularly, I guess, like in your role in terms of, you know, which stories to pick up, which areas of the profession to talk about? Because that seems like a, like a really delicate balance where like to not necessarily step on toes, but not say nothing either. And I find like you've been obviously very good at that where, you know, accounting today is still like a place people want to go to, to know what's going on and they do actually get the reality of it. But it's not, it's not just another voice kind of venting and, you know, throwing complaints out. So like, what's that balance look like in the process to achieve that? Well, it's interesting when one of the things that it's, it's, it's helpful that there are other voices out there doing that. Because there's some of that is, is useful, right? There's a certain amount of bomb throwing that needs to go on in any profession, not just accounting, but in any, you know, and, and it helps us be able to do that, that there are other outlets that will do that, that will take care of that for us so that we don't have to be like, well, why is no one talking about that issue X, whatever it might be. But the other aspect is we have a, we have a pretty specific mission. Our, our twofold mission, one of it is our general goal is to be sort of the publication of record of accounting. If it's important accounting, we should cover it to one degree or another. We don't do a lot of technical stuff, but you should know that a new tax law came out and you should look it up in your research. And that's the extent of our coverage of it. In addition to that, though, making sure that we sort of touch on at some point the major issues of the profession, let people know what they are. We also have a focus more on practice management than on technical issues. So our focus is on making sure that people grow, that the firms have the tools they need, the strategies they need, and the ideas they need to move forward and that the profession as a whole has that. And when you look at it that way, through that lens, the notion is we want to help the profession grow. We want to help firms grow within the profession. We want to help accountants, individual accountants grow within their firms. It makes it easier to make some of those decisions and to decide, do we need to step on people's toes for this? Do we need to make a big uproar? Is that a story that's meaningful to the profession or is it just, is it better discussed in a Reddit forum, you know, on Reddit? So that's useful for us. There are times when we need to, not us per se as accounting today, to step in and say, you know, this is wrong and it needs to stop. One of the great things about, as we said, all that, that opening up of discussion among the profession is that there's often an accountant who will come to us and say, this is really bugging me and we need to talk about this. And we can give them a platform as a member of the profession. And that's worth saying, no one on our staff is a CPA, no one on our staff is an accountant per se, they're all professional journalists. So when we need to know something, we go call an accountant and say, hey, what's this about? So we often, that's one way we do that is by saying, listen, we'll offer a platform for people who want to discuss this. And then we'll say, you know, if people want to talk up the other side of it, come on and write a story for us or we'll do an interview with you. So that helps us sort of stand a little bit apart from some of the big arguments that go on. And then we can sort of frame that as, you know, people are going to argue over here and then we'll cover the discussion over here from a more sort of neutral standpoint. And then for people who are looking to, like, contribute to that and have like a story covered or something, what's your advice to them to, you know, put something together that's compelling, maybe a little bit of inside baseball? Like for me, if I had like some story on wages or whatever that might be, and I was hoping to get that kind of published, like what what does a good submission look like from people? Well, so I would say there's sort of two ways, two ways to submit, right? One, there's a submission of, hey, you should write a story about me or about my data or about my firm or about my, you know, this this weird thing we do at our at our firm that nobody else does. There's that. And that's where we say, oh, that is interesting. We'd like to cover that, that kind of thing. And then there's the literally I want to write a story about this. Those tend to be more opinionated or more technical, though most of our technical coverage when we have it is from somebody at a firm saying, hey, you know, nobody knows enough about qualified opportunity zones and we're experts in that. We want to, you know, we want to demonstrate that we're experts by that in a public place. Can we write a story about it? Or here's a story we've written about it and we look at it. So, yeah, that's technically technically correct as we can judge. And we'll give you a place for that. And then we get to have that extra content that we're not qualified to produce because, again, we're not accountants and our audience gets it as well. So and then the other one, like it would be sort of opinionated pieces like I think, you know, the question is going down the tubes in this specific way. And I want to write about it and we're open to those. But it has to be there's got to be a certain amount of responsibility to it. You know, the way it's written with those, I would generally say, reach out to us and just say, hey, I'm angry about this and I want to write an article about it. What do you think? And we're happy to tell people, you know, yeah, that's crazy or no, we wouldn't cover that because that's just you hating this one particular person or whatever the case may be. Or yes, that's a really interesting. That is a big issue. We know a lot of accounts are concerned about it. And if you want to write about it, we'd be happy to consider an article. It's one of those things you can't guarantee publication without seeing a draft. Yeah. But we're certainly open to that. It's probably then the jumping off point there was if you want us to write about you, again, just reach out to reach out to us and let us know. Here's why we're interested. Here's why we're different. Here's what's important about us. We cover sort of generally a lot of firm news and personnel news, just very sort of a weekly roundup. We do. We're always open to that. But if it's a little more in-depth coverage, probably the biggest thing there is to make sure we haven't covered something similar to make sure that you really are unique. We get a lot of firms reaching out to us and say we're totally unique because we do X. And it's like I've just spoken to parties. Yeah. I've spoken to 15 firms that throw pizza burgers in the last week or, you know, there's a million of those. We really are a family environment. It's like everybody says they're a family environment. That's great. You need to be different. And I would say that's the big biggest issue we have with any submissions is making sure that we haven't already covered it or done it or talked about a million other firms that do this. And that's that's an issue we have a lot most commonly is them not knowing that, you know, we already did that. We already covered that 17 times. We already covered that a lot last week. So that would be the thing, you know, take a look, see what we've covered already, see what we're doing, see if the story you want to tell is unique and different and then reach out to us. And we're happy to always happy to hear from anybody who's got a story they think makes sense. We'll let them know if it fits with us or not. But I always have to hear from. Yeah. No, interesting. I think a lot of people have this kind of like perception. And I kind of did before, too, of like, oh, my God, like, you know, I don't want to annoy them or whatever. But at the same time, it is like this is this is like flow of news for you guys. Yeah, it's helpful. Yeah, absolutely. I mean, I will say, you know, we absolutely want to hear from we'd rather hear from people, you know, with bad pitches than nobody. Yeah, because a bad pitch, we might be able to fix a bad pitch or we might be able to say, well, no, that won't work. But, you know, here's why. And, you know, try again with something different later. Yeah, no, it's we absolutely need it. It's how we how we find out what's going on. What's the volume of inflow right now? A lot. Well, I mean, you know, on any given day, 30 to 40 pitches, press releases, people reach out and saying, hey, what about this? That sort of thing. So, yeah, anywhere from 30, 40 for me personally, and then a bunch of our other editors also get similar people reach out to them. So a lot. And so we're and I have to say, we're not always able to respond to all of them if it's really way off the mark. A lot of times it's just we just throw it out. But we try to get back to people when we can. But a lot of times it's just such such not a fit that the only thing we it's better that we don't get because what we say might not be blessed. Anyways. Yeah. Yeah. Nobody wants to just get this is bad and not salvageable. Thanks. Right. Why on earth did you send this to us? What were you thinking? Actually, there's a whole lot. I'm not even counting all the ones we get that are for totally different industries or totally different countries or totally irrelevant to again, we have for some reason a lot of engineering press releases. I'm not counting those because we those go straight to the to the bin. But why on earth would you send an accounting magazine and engineering? Interesting. Very odd. Changing gears a little bit, a lot of your kind of like recent posts and stuff. So it's obviously doing some homework before this of like, hey, what's new with Dan since last time I checked in? A lot of kind of recent posts and talk has been about the Accounting Today P.E. Summit. So private equity is obviously, you know, the probably the hottest topic that and or AI in the industry right now. And Accounting Today went ahead and made a conference all about that, which was in October, I think. November. November. OK, so even more recent than I thought. And yeah, I'm curious to hear a little bit more behind like the rationale of why having like its own conference for that, what the showing was like and just sort of like some of the topics that were discussed there that may have been like unique to other conferences. Sure, sure. It really came about because we go to a lot of conferences, members of our staff attend a bunch of those. And one of the things we noticed over the past year or so was that almost every conference we attended to would have a session on P.E. and people would come out of it being like, that was great. I learned a lot. I wish I could learn a lot more. I came away really with more questions than answers just because it's such a big topic and not a lot of people understand how P.E. is working within accounting and with accounting firms. It's not always exactly the same way they work in other industries and so on. But there was it seemed like there was a lot of sort of crying need for information on just a lot of firms that were interested in it or some partners in a firm were interested and others were totally uninterested. And the partners who were interested wanted something to take back to the uninterested partners, et cetera, et cetera, et cetera. So we sort of said this is an opportunity to educate a big swath of firm leaders who are really interested in it but don't know where to go. I think there's a lot of people making calls, having 15 to 20 minute calls with brokers and P.E. firms and advisors and that sort of stuff saying, what's it all about? What does it mean? I mean, they're getting little bits and pieces of the picture and not the whole thing. And then this is sort of random, but our company owns a lot of other B2B spaces. We do a lot of B2B publications. We do a lot of conferences. They happened to have some, they were supposed to have a conference at a hotel in Chicago in November. That conference got canceled. Somebody said, hey, has anybody gotten ideas for a conference that we could hold in Chicago in November? And I sort of said, you know, it's interesting that there isn't a P.E. conference. There should be. Why isn't there one? We could maybe do that. And I happen to know that some of the most important people in bringing P.E. into accounting happen to be based in Chicago. So it's a little bit a combination of two things, right? One, there's a real need for this. And two, we happen to have an opportunity and some hotel rooms booked. And anybody who's in the conference space will tell you if you're supposed to have a conference at a hotel and then you have to cancel it, you're on the hook for all the rooms. So they're like, we need to fill some rooms. I'm like, well, this would be a good opportunity. And that's a little bit more, probably a little bit more sausage making than anybody needs to know about that. But it just it turned out to be a space we really thought people needed to know more about and there was room for it. And then we discovered that no one was doing it. No one else had one. We'll do our own. And it ended up being pretty much a smash hit. It was much more successful than we thought. We had more people than we thought, probably something like 50 percent more than we expected, which is great. Ended up being about 300 or so people, a lot of accounting firms, a lot of PE firms. And the goal of it was, one, to give sort of an over 10,000 foot view of how PE is impacting accounting, but then also to dive more into the specifics of, you know, what does it look like to work with a PE firm? What kind of reporting are you doing? What kind of data are they asking for you from you on a regular basis? And then we talked to PE firms about what kind of firms are you actually looking for? What kind of resources are you specifically bringing them? Then we talked about, you know, what is your what is your deal structure look like? How do you set that up? How do you convince partners who aren't that interested in PE to come along? We had a whole session on alternatives to private equity. Some firms with someone from BDO came and talked about how they set up their ESOP and how that worked and somebody else from an accounting firm that had been sold to a private equity, not private equity, sorry, a wealth management firm came in and talked about why they did that and what that made sense, why they chose that over a private equity investor. So there were a lot of different things, a lot of different aspects of the topic. And that's what made sense to have it being a day and a half or so to have that all in one place. And then really what it ended up being, I think, you know, that was that was valuable. People like that. What they really liked was having a chance to talk, to have a space dedicated to this conversation. We made sure to have a lot of a lot of networking time and a lot of space for them to do that and meet up with each other. It's one of those things where there's always that you can meet up, you know, set up meetings in the app. We've done that at different conferences. No one ever uses it. Huge numbers of people used it at this, which was amazing because we have to keep that. But it was it was really just a ton of energy, a ton of excitement about the possibility. And I think a lot of firms that came were maybe firms that weren't. We're looking for reasons to not go with B, like, should I really have to? I don't really want to do this. I came away more impressed with it than I think they expected. One of the things I will say, this was not a disappointment, but one of the things that became clear to me, at least, was how early on we are with private equity and accounting. You know, people kept saying, I wish I'd heard more about deals that went south. And I was like, we can't because there haven't been any deals that went south. There have been deals that didn't happen, right, that that they had discussions and firms, accounting firms, were talking to PE firms and they thought they might, you know, make a deal. But they didn't actually sign the deal just for one reason or another. It didn't make sense. But there haven't been deals that happened and then went south and were bad. And, you know, the accounting firm was unhappy because, one, there haven't been that many. And two, they're all fairly, fairly early on in the process. The PE firms are still the top notch PE firms that are excited about this thesis and really want to prove it out and make it work with accounting firms. They're picking really strong accounting firms to have deals with. The accounting firms are in a pretty good position. the accounting firms that have made deals so far are in a good position because they're early in the process. So they're able to make deals that are good for them. So it's really, the deals that have been made are the ones that are gonna be the strongest that we'll ever have made, right? It's only gonna, I don't wanna say it's only gonna get worse. I mean, just say, you're gonna have PE firms that aren't quite as savvy about the space coming in and you're gonna have accounting firms that aren't quite as strong as the ones that made the first tranche of deals. And so we'll probably hear more deals that get signed and then go south, the relationships don't work, but it's gonna take a while. And for now, the ones that have happened, everyone seems super pleased with. We'll have to see what happens when the first turn happens, right? When the PE firms say, hey, we're gonna start selling our stakes. We haven't seen that yet. That's another part of how early it is. We gotta wait. It's gonna happen soon, I think. People talk about some of the earliest, Citrins and Eisner Ampers and so on, their first turns may be coming up as soon as next year or 2025, I should say. But it's still early enough that no one really knows what it's gonna look like, which is annoying, because they'd like to know the results, but also it's kind of scary. It's like, well, it could still go all wrong and completely flat. I don't think it will. I think it's gonna end up being pretty positive, but. Yeah, so talk about the first turn specifically. Were there conversations that happened there about what does that exit liquidity look like? What's the exit plan for them? Is it just sell to another bigger private equity fund? Because I've heard of a lot of family offices getting involved now, and that makes a lot of sense because they don't necessarily have a fund structure where they're supposed to liquidate. They can just run this for cashflow forever. But then a private equity firm, most of them typically have a fund structure where they're actually supposed to liquidate at a given point. So was there talk on what that first or second turn looks like in terms of liquidity? There was a ton of talk, and I think there is no, probably the first thing to say is there's no expectation that there'll be any problems with it, right? In terms of, there's no expectation that PE firms that are looking to sell won't have an opportunity, won't find a buyer, right? Private equity as a whole has an enormous amount of dry powder, or that's what we keep hearing, right? So other PE firms may say, yeah, no, absolutely want a bit of that. They're looking at accounting firms, that as again, like I said, the firms that are getting bought, the accounting firms that are going to PE now are really strong, really successful firms with strong strategic plans. So it's likely that they will continue to be attractive. So whether they sell to other PE firms, whether they sell, like I said, to a family office, they say, this is great. We would love to, you put it this way, you've got a firm that's now accustomed to being owned by non-CPAs, that's accustomed to the reporting that they would need to do, particularly for a family office, that's accustomed to working with outside partners, we would love to buy a share in that, as you say, for recurring revenue. This is a bond in the sense of, accounting firms routinely return a decent return, right? A good, comfortable rate of return and have enormous potential upside. So it's not just attractive. And again, none of this has happened, so no one really knows, but people talk about, wouldn't CalPERS think about that? Wouldn't a pension fund think about that? That's great. This is a great opportunity to get some steady income that's reliable in bad times and good. And they look at accounting, they're going to go back through the last five recessions, depressions, whatever, and say, oh, accountants routinely do well, even in bad times. So there's talk about that. There's talk about sovereign wealth funds being interested in it. Because again, it fits in this neat space in between, for a lot of, even for private equity firms, it fits in this neat space where usually they buy 10 companies, they expect nine of them to go under, but the 10th will be a home run and that will make up for everything. What if you could have three things in the middle that are just steady, that don't collapse, but don't do great, but they start to even out, right? And they help support your one rockstar company. So I think they're going to find that PE firms are interested in that. One of the things we heard people talk about was that if you're taking small firms and rolling them up, right, you're going to sell to a private equity firm that may be comfortable with a larger acquisition, right? So if you're, you start up your PE firm that's comfortable buying $20 million firms, some point you put together enough firms that a PE firm that's really only interested in $100 million firms or $200 million firms, they start to say, okay, this is now an interesting opportunity for us. You know what I mean? So it sort of may work its way up through the PE ranks. So I think there's, nobody's really uncomfortable about, you know, whether they'll be able to make the turn and whether they'll be able to find buyers, whether they'll be able to find, you know, the liquidity. There were a lot of people, a lot of accountants going in saying, well, what's going to happen? Who will they sell us to? Who will be in charge of us now? And the story we hear from every firm that's done this so far is that they're very comfortable with their level of control over that, over who they'll get sold to and their ability to, I don't think anyone's ever actually explicitly said to, you know, to Ixnay a potential buyer, but they're all very comfortable that they'll have enough say in who they get sold to that they're going to be comfortable, that they're not worried about it, or at least that's their official story. That was a long answer to that question, sorry. Yeah, no, we were talking about clips earlier and that's a tough length of clip, but super interesting topic though. And you don't hear a lot of people who are like privy to, yeah, what does the other side of this look like, or who've had those conversations yet? Because like you said, we're so early that I think people are just starting to be like, oh wait, hang on, like we're, you know, this is approaching maybe year four, typically this is like a five to seven year horizon maybe, like something's going to happen like very, very soon. And I think it'll be incredibly interesting to see, yeah, like what did those returns look like on some of those early buyers? Yeah, and everybody's going to be watching it, right there, they're all. Yeah, yeah, that could really heat things up or dampen them depending on how things kind of have gone, which is interesting because I mean, obviously not all the plays are the same. So I recently just did like a three newsletter series on like private equity in accounting firms, like within the scope of my data. Because again, if you go on Reddit and stuff, people are like, ah, this firm's doing, you know, a private equity deal, like let's walk out or like something like that. And they assume like the absolute worst. And I looked at the data and it was like, okay, well salary increases at like this batch of firms who did private equity has actually like slightly outpaced non-private equity. Bonuses in the year following a deal are, I think it was 16.5% higher on average than the year before versus maybe like a seven or 8% increase on like the average population. And then, you know, senior managers, because yes, they've maybe like lost that like equity partner track. Their bonuses were like 43.5% or something like that, higher than the year prior on average as well with those firms. And then the job satisfaction in the average hours worked. On average, like the private equity-backed firms, this is self-reported hours worked, were like one hour more than the non-private equity-backed firms. Whereas like the assumption is like they're gonna squeeze the ever-living juice out of everyone. But like, if it's like, you know, on average is one hour work, like extra per week. Like that's not nothing, but it's not overly significant either. For a 43% increase in your bonus, right? That's- Yeah, well, that's in the year of the deal. So like, I think there's a little bit more cash going around. That was kind of like to see of like, listen, like if you are adamantly against this, like maybe wait it out and see, and like collect that big check and then make up your mind. But yeah, no, it was really, really interesting to see. And then in terms of the job satisfaction reporting, it was really like there was, the average data was, it was pretty mild. Like the job satisfaction decreased a tiny bit on average, but like it was made up of like these huge swings where like some of them were actually completely flat or slightly positive. And then there was a couple of firms that did big PE deals where like, yeah, the reported satisfaction was way, way lower. And you're like, oh, okay. Like this may be as one of the bad ones or, you know, really rubbed a class of employees the wrong way. But yeah, it was really, really interesting to dive into the data. And I even went out and, you know, earmark sponsored it. Cause I was like, I need to get a sponsor who's not going to be put in a hard place if this is actually really, really negative. So like that tells you where my head was at. I thought it was going to be like, you know, three newsletter edition of saying, oh my God, this is really bad. And then I actually got into the data and I was like, eh, it's all right. Well, there's that expectation though, right? That people just assume, you know, what does PE do? Well, they come in and they acid strip you and they fire people and they, you know, close factories. And it's like everything we hear from them. I mean, let's be clear, right? It would not be surprising if at some point you see PE firms saying to accounting firms, you got to control your costs. You got to do X, you got to do Y, you got to tighten your belts. But now what all we hear from them is you got to make sure you take care of your people. You know, that we hear what we, the story we hear is PE firms going to partner groups and saying, here's a bunch of money. You must make sure some of that goes to your younger partners. You know, literally requiring it because the partners are like, woo, cash, big pot of cash for us. And the PE firms say, eh, not just you. We're not just buying you in your retirement. We're buying the long-term success of this firm, which means you've got to give some of that to your younger leadership. And generally speaking, they're just, they seem to be up on, at least they talk a very good game about being up on how important people are to accounting. You know, how much this is a people business and how it's, you're never going to be able to, you know, cut a bunch of staff and be successful. Yeah, well, that's a little bit the difference of like private equity and accounting versus some other field where it's like, well, the only asset that like actually really matters is like the people in their, the relationships that they have, right? Like, whereas in a lot of other things it's like, well, you know, these people are all a cost center, whereas like in accounting, there's not necessarily that many people who are a cost center. And if firms get merged together, then the cost centers of those firms being, you know, operations staff, HR staff, and whatever, probably not a great day to be in those functions, but you're a profit center as an accountant. So why would they get rid of you necessarily, right? And that's true, you know, that profit center versus cost center and who's cost centers in accounting firms. That's true of regular accounting firm M&A as well. Yeah. You know, if you're an admin or HR or, you may be as concerned about a regular accounting firm deal as you are about a PE deal. Yeah. And then some of those conversations that were happening there, like, was there a lot of distinction in the impressions between what makes for a good versus like a bad private equity deal? Like, was there a lot of kind of talk on like, here are like best practices or do those not really exist yet? There was more talk about what needs, what accounting firm, what a good accounting firm for a PE deal would look like, right? There was a certain amount of rigor needs to be brought to your books, rigor needs to be brought to your profitability, to your plans for the future, what you plan to do in the future. That I think, you know, for a lot of accounting firms, we're a little surprised to hear how much, how stringently PE firms were sort of vetting their processes. They were very surprised to hear, and this apparently is very common. I was a little surprised to hear this myself, was that it's not uncommon for PE firms to talk about a deal, get the structure of a deal sort of roughly laid out to the point where an accounting firm would say, okay, we're doing a deal. You know, if they were talking to another accounting firm, they'd say, yeah, this is it, we're doing another deal. And then there's a late stage due diligence round for private equity firms, which is not part of the standard accounting firm M&A process where they really dive deep into the numbers and go, oh yeah, no, this isn't working. And apparently that's happened enough. Like I said, it's before the deal gets signed. It's not, you know, so you can describe it as a deal gone bad, but it's really for PE firms, they're like, this is the last step where we go through it. And apparently a number of accounting firms have been sort of surprised by that to discover that when the PE firms really ran their books through the ringer, the PE firms came back and said, yeah, we're not seeing it. And that's apparently was, like I said, a little more common than you might expect, but it's sort of a warning for accounting firms to say, listen, you need to come to the table with strong profitability, strong potential for this. I would say, like I said, there hasn't been enough clue of what a bad completed deal would look like. There's definitely warnings about you, and you want to make sure about your representation on your board. And a lot of talk about firms that were surprised at the degree of reporting they were going to have to do, you know, how much they literally every month be reporting to and the numbers they'd be expected to deliver because they'd never had to, right? No one's ever had anyone to report to. And they're like, well, we're all accountants here. We don't need to report to ourselves. Yeah, no, it's a lot. Like my last job was in FP&A for like a, you know, once very hot VC backed tech company. And it was like, yeah, it's a lot. And, you know, they come up with all their own like language and metrics. And I'm almost very, like, I'm very curious to see what that's going to be like for accounting firms, right? Like what's the, you know, LTV to CAC rule of 40, you know, Bessemer efficiency score, blah, blah, blah, going to be in accounting firms. And like, are there going to be like accounting firm, FP&A departments and things like that, you know, like I'm very curious to see where that goes because it is like, it's this whole new liquidity pool. It's this whole new kind of like marketplace and like in tech that became its like own discipline, right? And you ended up with all these new SaaS metrics that honestly, I think were very helpful in guiding the decision-making at, you know, at a tech company. So we might end up with like a whole new set of like operating metrics and whatnot in accounting firms, which is kind of interesting for sure. Yeah, that would be fascinating to see it exported to the rest of, you know, to the non-PE related accounting universe. Because there's a degree to which, I don't think I'm saying anything that people aren't aware of. There's a degree to which accounting firms are not run as, I don't want to say run as well as they should be, but they're not run as professionally as they should be in the sense that there is not a lot of data analysis going on of, you know, how really successful are we? How profitable are we? How efficient are we? There's a lot of even very, very basic stuff that accounting firms aren't doing to sort of track themselves. And it gets worse the smaller you get, I think. And so, yeah, having those benchmarks or new measures, that I think would be, you know, for the firms to be willing to pick it up, super valuable. Yeah, and there's a lot of like non-standardization, right? Where it's like, oh, my firm has like a 55% profit margin, but it's like, okay, but you're super top heavy with equity partners who don't pull a salary. And it's like, okay, well, you know, what are we really talking about now? Because they're doing all the client work. So no, I'm super curious to see that. And yeah, I might have to make sure that I attend the next kind of PE summit, because it sounds incredibly interesting. So I'm gonna make sure that I link that in the podcast episode notes for anyone interested. I think a lot of people might be. And yeah, thank you so much for coming on, Dan. I really appreciate you taking the time for this discussion. Thanks for having me, it was great to talk. Awesome, thank you. Thank you.