For an upbeat financial story in a down economy, look no further than the shiny office building on East Morehead Street that houses accounting firm Elliott Davis, a regional powerhouse that specializes in closely held business clients.
The Charlotte office of the firm which is based in Greenville, S.C., has more than doubled its revenue in the 2.5 years that it has been part of Elliott Davis.
“We’ve ramped up,” says Dan Warren, managing shareholder of the Charlotte office. “We’re focused on middle market companies and seizing new opportunities every day.”
He’s happy to have merged his former firm with Elliott Davis because it brought more resources to concentrate on those targeted companies, many owned by families or in other closely held arrangements.
Warren and partner Bo Elliot ran a coincidentally named outfit—Elliot & Warren—that they started in 1997. They’d built it to 23 employees. Now, as the Charlotte office of Elliott Davis, it boasts 60 associates and is the fastest growing and third largest of the 10 Elliott Davis offices strung out from Augusta, Ga., to Galax, Va.
Warren points out that while the appeal and opportunity in Charlotte lured several shareholders from the firm’s Greenville and Columbia offices, the other additions are hires made by the Charlotte office.
He notes that Elliott Davis takes great pride in hiring top caliber talent, and many of the firm’s professionals have backgrounds as CFOs or controllers within key industries, like construction and manufacturing.
“We think of ourselves as industry insiders. We speak our clients’ language; get to know them personally; and anticipate their needs,” says Rick Davis, managing shareholder, who runs the regional empire from his downtown Greenville office.
“We have developed a fully engaged team with the resources to take care of virtually all needs of a privately held, closely held business,” Davis adds as he explains the formula for success.
Elliott Davis has enjoyed impressive success.
“We’ve had good growth during the last four or five years,” Davis says. For 2009, it’s about a 10 percent rate, he adds, but previously it was in the 15 percent to 17 percent annual range.
With about 400 employees firm-wide, Elliott Davis is the largest Certified Public Accountant firm headquartered in South Carolina. It ranks among the top 60 CPA firms nationally. And it is one of the five largest servicing Securities and Exchange Commission registrants in the Southeast, excluding the Big 4 international accounting outfits.
Elliott Davis is a member of the Leading Edge Alliance, an association of similar-sized accounting firms from across the country and around the world. The members hold periodic get-togethers for leadership development, training and industry updates.
Branching Out Into Charlotte
Davis, 48, a native of Bishopville, S.C., joined Elliott Davis straight out of Clemson University in 1984. He is as delighted to be in Charlotte as Warren is to have him.
“We see Charlotte as the major market to be in as a Southeastern accounting firm,” Davis says. “We are very comfortable and proud that we made that decision because we see vast opportunity here today and for many years to come.”
The firm picked Warren’s legacy accounting outfit because the culture seemed similar. “We always look for the fit,” Davis explains. “We want everyone to be a part of the team. That’s why the right attitude toward teamwork is important, as is the commitment to taking care of our clients.”
Davis met Warren and Elliot, who remains with the firm, and felt the fit was there, he said.
“The niche of closely held businesses appeals to the firm because,” Davis says, “we find that closely held businesses and middle market companies provide lots of challenges and lots of opportunities. They tend to be entrepreneurial and that creates a fun working environment for them and for us.”
But the firm is serious about helping those it serves. “We’re going to talk to potential clients only when they’re the type of client that we can take care of,” Davis adds.
In Charlotte, Warren professes to enjoy business pleasures similar to those of Davis.
“Every day is a little different,” he says. “I might meet with a restaurant owner this morning and a construction owner this afternoon—and a banker tomorrow. I like variety.”
Sweet spots for the Charlotte office are audit, accounting, consulting and taxes, which are Warren’s specialty. He feels the Elliott Davis affiliation has especially helped him better serve clients in the tax area.
More Strength for Charlotte
By example, he mentions a client who is starting a $40 million business that will operate in 20 states. Warren connected him with a Charlotte office specialist in state and local taxes—a SALT person—who can apprise him of numerous potential pitfalls regarding income taxes, franchise taxes, local taxes, city taxes and state credits.
It’s something Elliott Davis can do that Elliot & Warren couldn’t do,” he says. “We’ve got the strength now. We can compete with the Big 4. We give the same service at a competitive price.”
In fact, the Big 4 is where many of Elliott Davis’ professionals got their starts.
“We’re proud to be a personal firm that takes care of its employees,” says Davis, we attract solid people. In addition to hiring seasoned professionals, the firm hires graduates straight off campuses such as UNC Charlotte, Appalachian State, the University of South Carolina, Clemson University, and the University of Georgia.
“We want people who are technically sound,” Davis says, “but we also want people who are very good in terms of communication capabilities. We like to see people with leadership experience too.”
Warren is a Charlotte native whose grandfather was C.C. Warren, long-time pastor of First Baptist Church. He earned his bachelor of science in Business Administration at the University of North Carolina at Chapel Hill and returned home.
“I love Charlotte,” he professes.
At 51, he’s built a track record in civic activities and currently is a member of The Leatherheads, a group trying to make such a success of the Atlantic Coast Conference Football Championship game, which will be in Charlotte the next two years, that it won’t leave.
He and The Leatherheads are pushing football tickets, but there is a larger goal. “We’re selling Charlotte,” he says.
It’s logical, then, that he knows lots of business folks, but many of them had needs that were too big for him before the Elliott Davis hookup. Now he can serve them, and he has top notch associates to help out, he says.
Warren tells his story in a conference room with a Chamber-of-Commerce-quality view of the center city skyline. It’s on the top floor of the four-story Elliott Davis building at 700 East Morehead Street. It’s a former Longhorn Steakhouse location that now features pristine offices and a covered parking deck.
Warren along with other investors bought the land before the Elliott Davis merger. The structure was erected last year. The firm occupies the top two floors of the 35,000-square-foot building.
In the Charlotte area, Warren competes mostly against national and regional firms.
Growing a Network
“With me, it’s more of a relationship,” he says. “I want you to be as successful as possible. To be a good accountant, you have to be thinking about all the areas you can help your client. Treat him or her like a friend. Most of my clients, I call them friends.”
Dan Cottingham, principal with Charlotte’s Cottingham Chalk Hayes Realtors, has done business with Warren for 20 years. “Dan has a calmness about him,” Cottingham says. “We find him able to explain very complex things in very simple ways. That’s a wonderful strength.”
Warren tells a tax anecdote. An acquaintance sought his counsel regarding the deduction of a charter boat from his taxes. Typically, vessels are considered entertainment faculties and are hard to write off. Warren stressed to him the importance of setting up the boat as a business, including instituting a charter fee, advertising and keeping books, records and logs.
At a chance meeting recently, the boat owner told Warren the Internal Revenue Service audited his return and sought a six-figure payment regarding the boat.
“I’m thinking, ‘Where are we going here?’” Warren chuckles.
The boat owner learned the IRS sent out 35 similar notices to other boat owners and that 28 recipients returned a check for the amount sought. Six others hired attorneys, but Warren’s acquaintance met with the IRS alone, armed with a shoebox loaded with the proper paper work.
The upshot: the IRS wrote Warren’s acquaintance a check for $1,900. “I just really wanted to thank you,” the boat owner told Warren.
That kind of story keeps Warren in high gear as he works 70-hour weeks heading up to the April 15 tax deadline. It also illustrates what Elliott Davis sets out to do every day.
“We don’t just churn out tax returns or audits. We give individuals and businesses advice and tools to make them smarter, more confident and able to capitalize on the opportunities that a changing world brings,” says Warren.
Further, he looks forward to a vacation he and his wife, a CPA with another Charlotte accounting firm, traditionally take the week of April 16.
Meanwhile, Davis monitors the economy in such Southeast hotspots as Columbia, Charleston and Myrtle Beach, in addition to Charlotte.
“There’s more optimism out there,” Davis says, assessing the business climate. “We’re seeing some things in the professional services area, like architecture. Some of the contractors are getting more looks at work.”
But in real estate development and commercial real estate, he acknowledges, a rebound still hasn’t happened.
Specific to Elliott Davis clients, Davis says most of them have taken steps to weather the financial storm and are getting through the worst times. Some might even be thinking of expansion, but Davis cautions that is a decision that depends largely on individual circumstances.
“Every situation is different,” he says.
For the Charlotte perspective, Warren agrees. “The well-established, well-run companies, they know how to go with the flow,” he says. “A lot of my clients have been successful for years. Their sales are down, their margins are down, but they’re not going broke. They know how to adapt.”
Nurturing the New Growth
Elliott Davis expects more growth, both organically and geographically, in the next two or three years, Davis says. Any additional offices will be in the Southeast, possibly in Raleigh or the Triad.
“We’ve got a really good climate for business in the Southeast,” Davis says. “The people we have on board love living here. That’s a great combination.”
In Charlotte, Warren has observed a shifting of the economy, with lesser reliance on financial institutions and a growing emphasis on energy-related firms and health care providers and allied companies.
Then he offers a surprise. “There seems to be good activity in the manufacturing and distribution sector. I think the fear is fading.
“We’ve got a wonderful work force,” he says. “It’s an extraordinary place to live and work. Companies are seeing that and they want to be here.”
Warren’s vision of the future is as bright as the view out his conference room window.
“I’m very optimistic that things will continue to be great here in Charlotte,” he says. “I’d like us to be the largest office of Elliott Davis.”