In 2002, the Carolinas practice of the global public accounting firm Grant Thornton was just getting underway with the acquisition of a local Charlotte accounting firm. Ten years later, the Carolinas practice has become the firm’s third largest practice, trailing only New York and Chicago.
Over that same time period, it has flourished under its core leadership group of Brad Gabosch, managing partner of the Carolinas Practice, Randolph Smith, national managing partner for the transportation and trucking industry, and Mike McGuire, recently named national managing partner of markets, industry, people and culture.
Grant Thornton’s rapid growth in the Carolinas was fueled by the May 2002 arrival of hundreds of associates from the Carolinas practice of Arthur Andersen.
Grant Thornton offered Andersen’s Carolinas team the opportunity to move as a unit, while immediately giving Grant Thornton the critical mass they needed to become a key player in the public accounting business in Charlotte and the entire region.
The association has been a classic win-win, as a number of veterans of the Carolinas practice have become part of Grant Thornton’s national management team, and the Carolinas practice has emerged as a major force for innovation and talent development for the entire organization. The Grant Thornton name also now occupies a prominent place in the Charlotte skyline atop their offices in the Charlotte Plaza building.
Grant Thornton has a storied history, tracing its roots back to Alexander Richardson Grant, founder of Chicago’s Alexander Grant & Co. in 1924. Grant had been a senior accountant with Ernst & Ernst, but chose to leave to pursue his plan for public accounting. Grant was committed to providing services to mid-sized companies, a commitment the firm still holds today.
Despite Grant’s untimely death in 1938, Alexander Grant & Co. grew nationally over the ensuing decades, and expanded internationally in 1969 joining with firms from Australia, Canada and the U.K.
By 1980, Alexander Grant & Co. had joined with 49 other accounting firms, including Thornton Baker in the U.K., to form the global organization Grant Thornton International.
Following its merger with Denver-based Fox & Co. in 1985, Alexander Grant & Co. became the ninth largest accounting firm in the U.S. behind that era’s cadre of “Big Eight” firms. In 1986, both it and Thornton Baker in the U.K. changed their names to Grant Thornton, reflecting their affiliation.
Today, Grant Thornton LLP ranks fifth largest of U.S. public accounting firms, and is the U.S. member firm of Grant Thornton International Ltd., one of six global accounting, tax and advisory organizations. With 56 offices in the United States and nearly 600 offices in over 100 countries, the firm offers personalized attention and the highest quality audit, tax and advisory services to public and private clients all over the world.
Rebranding for Success
For over 20 years Mike McGuire and Brad Gabosch had worked together in Arthur Andersen’s Carolinas practice. But by March of 2002, as Andersen crumbled around them, McGuire, Gabosch and the other partners could see they would need to find a new home. Instead of scattering to multiple firms, as had many other Andersen offices, the Carolinas partners made a commitment to keep their team together, and joined forces with Grant Thornton.
“It was a lot of change for our team in a very short period of time,” remembers Tom Shepherd, one of the partners in Gleiberman Spears Shepherd & Menaker, Grant Thornton’s original acquisition in the Carolinas.
“First we changed to Grant Thornton, and then five months later we had the influx of around 250 Andersen folks. We had to blend three different cultures,” he explains. “Fortunately, when you have quality people working together, they work through the minor cultural differences. We all meshed very well.”
“When joining Grant Thornton, we felt like we were immediately part of the team, and I never felt like the new kid,” adds McGuire. “I give a lot of credit to Tom, who welcomed us with open arms, and put his own interests behind the interests of the firm.”
While the team moved as a unit, their clients had to be converted one by one, with competing firms working hard to lure them away. Further complicating their efforts, the Grant Thornton name was virtually unknown in the Carolinas. But within two months, a significant number of the Andersen clients were successfully transitioned to Grant Thornton, and the firm was well on its way to a successful launch.
“We were confident that many of our clients would follow us to Grant Thornton, but we didn’t know how many,” recalls Randolph Smith, who headed the Carolinas tax practice at that time. “We were optimistic that our clients would recognize they would be served by the same professionals with the quality, breadth and depth they were accustomed to receiving.”
McGuire identifies his three key milestones critical for a successful venture: “I knew that we needed to secure our client base, retain our quality team of professionals, and attract the best talent in the marketplace as we grew,” explains McGuire. “We kept our people together and we converted most of our Andersen clients.”
McGuire’s final checkpoint—recruiting new talent—was making sure a firm with little name recognition in the Carolinas could still attract quality talent from college campuses. At the time, interns and recent graduates who had thought they were going to work for Andersen had to be convinced to stay, and the upcoming recruiting season had to generate a strong crop of recruits for the following summer.
“As it turned out, we had one of our best recruiting years ever,” beams McGuire. “Our recruiting team did a fabulous job, and that’s when I knew joining Grant Thornton was going to work.”
“As evidence of a commitment to providing opportunity for our people, Grant Thornton has admitted 45 people in the Carolinas to the partnership over the last 10 years,” shares Gabosch. “Many of our leaders have grown up in the Carolinas and then have had the opportunity to grow their careers in other markets around the U.S. and the globe.”
With the move to Grant Thornton, Gabosch left his role as managing partner of the Carolinas practice to become Grant Thornton’s national managing partner for audit. McGuire replaced Gabosch as the managing partner in the Carolinas.
“I committed to a two-year revenue target and many may have thought I was crazy,” laughs McGuire. “We were going to go from nowhere to one of the largest offices in the firm in just two years. Well, we nearly hit that number in just one year. I’ve never seen a group of people work as hard as they did to make it happen. I was so proud of everyone on the team.”
When Gabosch became the national head of audit, he was first of a long line of Carolinas veterans who have gone on to play major roles in the national organization. But because Gabosch was immediately sitting at the table with the national leadership, the channels of communication were open and new ideas flourished.
One of the Carolinas partners who have taken on a major national role is McGuire. About two and a half years ago, Gabosch returned to his former role leading the Carolinas practice, and McGuire became the national managing partner for industry and market development (sales and marketing, industry programs, private equity, and client service). On August 1, McGuire’s leadership expanded again, to include national responsibility for people and culture.
“Of the six people who report directly to CEO Stephen Chipman, two came through the Carolinas practice—Trent Gazzaway, our national managing partner for audit services, and me,” explains McGuire. “Three members of our nine-member U.S. partnership board also have ties to the Carolinas practice—Randy Robason, Dave Wedding and Doug Gawrych. In addition, Ken Sharp, who once ran the Carolinas audit practice, is now the global head of audit for Grant Thornton International.”
McGuire believes that the Carolinas practice has been successful partly because of the unique leadership opportunities available to younger team members in the Charlotte community.
“The size of this city is perfect because Charlotte is a large business center, but it is small enough to let our younger people take on leadership roles in civic organizations,” says McGuire. “I think it helps us develop our people, and I really believe that one of the reasons our people have been so successful in leadership roles is because of the experience they can get in Charlotte. I think this community is a very open and embracing community where young leaders can develop and flourish.”
The Instinct for Growth
In 2002, Grant Thornton was primarily an audit and tax firm, having sold their consulting practice a few years earlier. But with newer regulations, the team knew they needed to re-establish an advisory services practice to include litigation support, forensics, Sarbanes-Oxley consulting, valuation, and mergers and acquisitions. The Carolinas practice also built expertise in managing large-scale engagements involving as many as 500 people from around the firm.
“The Carolinas practice was the incubator for a lot of our firm’s new initiatives,” says Gabosch. “We had the vision to go out and start some of these services and make them into lines of business. As a result, a lot of our people have been promoted into national positions.”
“The economy over the last four years has been tough on businesses,” continues Gabosch, “and we provide the type of advisory services that help our clients figure out their path forward.”
“We built a corporate restructuring service at just the right time,” adds McGuire, explaining how the recession has offered Grant Thornton opportunities to help clients weather the storm. “We serve as the chief restructuring officer for companies and get them back up and running.”
For Grant Thornton’s Carolinas practice, their instincts have proven well-directed.
Says CEO of Grant Thornton LLP Stephen Chipman, “The Carolinas practice is one of our leading practices, helping our dynamic clients achieve their potential for growth.
“The commitment of the Carolinas leadership team to quality, our clients and employees led them through a difficult transition. They persevered and are continually recognized for their contributions to the firm.
“This practice has managed some of our firm’s largest engagements, is a consistent revenue leader, and is recognized as a notable local employer.”
Ed Nusbaum, CEO of Grant Thornton International, who was the CEO of the U.S. affiliate when the combination took place, lauds their “outstanding leadership in helping dynamic Carolina companies grow their businesses.”
He says, “The ultimate winners have been our clients and the former Andersen clients through our combined world-class repository of best practices, intellectual capital, and professionals with an instinct for growth.”
“Ed made a bold move to take us 10 years ago, and the firm has nearly quadrupled in size over the last decade,” adds McGuire.
“There is a tremendous sense of pride in what we have accomplished,” adds Gabosch. “But this is still an entrepreneurial play because it isn’t all built yet. A young person can still influence how things get done around here.”
“We felt from the beginning that the real benefit of this transaction was for our younger people,” McGuire concludes. “We thought this was a platform where they could thrive in a rapidly growing firm where there will always be an appetite for talent that allows our people to take on new roles and gain new experiences.
“As we look back now on the last 10 years, the reality is greater than the dream.”