CliftonLarsonAllen LLP is poised to eclipse $2 billion in revenue this year as the eighth-largest CPA firm in the US looks to expand its reach by serving its traditional customer base of small- and medium-sized companies through a new global alliance and an infusion of artificial intelligence.
Unlike its larger competitors, CLA has long focused on Main Street businesses from pizza shops to pre-revenue start-ups, along with non-profits and local governments.
Jen Leary, who became the firm’s CEO in 2021, aims to help those clients make the most out of artificial intelligence and to digitize their data, even their operations. It’s just one of several projects the firm has in the works as CLA aims to grow its reach and impact.
“Just because you have a certain level of revenues doesn’t mean that you deserve any less service than a larger company. So let’s figure out how to utilize the tools we have and get them in the hands of as many people as we possibly can,” Leary said in an interview with Bloomberg Tax last week at the firm’s plush new office in midtown New York.
Just a decade ago, CLA was formed through a merger between two US regional firms. Combined, they brought in $500 million in revenue with a staff of 4,000 people. Since then, the firm has quadrupled its revenue and grown to nearly 9,000 staffers.
At the top of Leary’s agenda to build on this growth are filling out CLA’s global presence, building training centers and leveraging a $500 million technology investment.
Over the past year, CLA launched a global network, inking agreements with firms in the UK, Germany and the Czech Republic. Accounting firms in India and Mexico are slated to join the growing overseas network next.
Unlike the Big Four accounting firms, which operate in more than 100 countries, CLA expects to eventually form alliances with firms in 50 countries based on services that its growing roster of privately held clients require.
The firm’s US footprint is also growing through a series of acquisitions including four with small firms so far this year. Those featured an Ohio firm that works with construction, manufacturing and healthcare companies.
With no new acquisitions on the horizon, Leary said she is focused on improving the value of the enterprise for the next generation of CLA owners. Partnering with private equity, as other firms have done, isn’t in the cards. “We don’t need outside capital,” she said.
Investing in AI, Talent
Instead, CLA partners have committed $500 million to update the firm’s own technology with artificial intelligence built in—like a scheduling app the firm is piloting. Automating certain tax processes is also on the to-do list.
“We’re going to eliminate data entry at CLA. Just eliminate it completely. And that is something that I think will bring a lot of joy to our people,” Leary said. “They do not get a lot of joy out of manually keying a 30-page tax return no matter how cool the client is.”
Like many companies, CLA is taking a cautious approach to generative AI while still exploring the opportunities and risks that come with the nascent technology behind tools like ChatGPT. “To ensure the safety of data, that is job one,” she said.
Investments in AI— like cutting edge audit tools—will change how CLA accountants work. And the firm plans to build three new training centers to address that potential skills gap, she said.
The firm is also committed to widening its recruitment pool to fill hard-to-staff accounting jobs along with back-office roles like payroll and human resources. A certification program to reskill workers with at least some college education to take on those roles is set to launch next year.
Leary, who is based out of the firm’s Charlotte office, has been a major proponent of expanding pathways to accounting careers, and backs Minnesota legislation that would grant licenses to accountants who earn 120 college credit hours with an extra year of work experience—less than the currently required 150 hours.
She questioned the value of those extra college courses compared to time that could be spent on the job, working with clients alongside more experienced accountants.
“We’re going to do all we can to support people to become accountants,” she said. “To increase diversity in accounting should be a priority of every firm, of every leader. And if you look back at our progress over the last 20, 30 years, it’s pretty easy to say we haven’t done what we needed to do.”