Anchin, a Top 75 Firm based in New York, is marking its centennial this year as the firm continues to preserve its independence and resist offers to be absorbed by a larger player.
“We are 100 years independent, and we believe currently that being independent is helping us tremendously,” said managing partner Russell Shinsky, adding that he receives offers on nearly a daily basis from other accounting firms and from private equity firms seeking to absorb Anchin.
“We believe all the transactions — the merge-ups and the private equity infusions — are creating a lot of disruption in the marketplace, and we are not being affected by that disruption, both from a client perspective, and from a hiring, attraction and retention perspective,” said Shinsky, noting that the firm’s independence hasn’t kept it from being able to compete for talent or invest in new technology. “So far, our business has frankly been booming while everyone else has been busy focusing on these other things.”
The firm has a long history to draw on: It was founded in 1923 by Max Anchin, David Anchin and Max Block — three students who went to school together at City College in New York, and decided they would form their own accounting firm once they graduated, which they named Anchin, Block & Anchin.
“When the firm started, they basically bartered space from their first client up in the Bronx,” said Shinsky. “Three people shared two desks — that’s the way the story has been handed down.”
The firm later moved from the Bronx to the Upper East Side of Manhattan and spent about 20 to 25 years or more on Madison Avenue. For the past 35 years, the firm has been located at 1375 Broadway, but it plans another move in November to Times Square. The firm now has 450 employees, including 60 partners.
“After 35 years, on the tail end of our centennial, we’ll be moving up to a new, beautiful, state-of-the-art space that I think will more represent who we are and what we’ve become as a firm,” said Shinsky.
Member of the firm compiled a timeline of Anchin’s history ahead of last December’s state-of-the-firm event; to compile it, members of the firm talked to retired partners and found old documents in the safe tracing that history. Shinsky plans to talk about that history during a 100-year party on June 15 that will bring together Anchin’s current partners and directors with retired partners and their significant others, and the children of the firm’s founders.
About a year ago, the firm rebranded and shortened its name to simply Anchin. “We built in things about branding and our 100th year,” said Shinsky. “We’re doing advertisements on social media and radio on our 100th year. We’re sharing stories with the staff. We’re going to be distributing some swag to all of our people now that we’ve gotten through our busy season that’s going to highlight our 100-year logo.”
From the past to the future
Anchin is also looking forward to the future of accounting by trying to attract young people to the profession, offering the Max Block Scholarship in honor of one of the firm’s founders. “He was very involved in the New York State Society [of CPAs] and was one of the building blocks of supporting education in the CPA community and the importance of the CPA, and everything that was behind it,” said Shinsky. “The firm established the scholarship many years ago for incoming students in accounting.”
To find young talent, Anchin has been casting the net wider, improving the firm’s demographics in line with its diversity, equity and inclusiveness initiatives.
“For many years, we went to the same eight, nine or 10 universities to recruit, and we had no problem finding the 14 to 20 people a year that we wanted to bring into the firm,” said Shinsky. “[Now] it’s become more of a struggle. What it’s forced us to do, in a good way, is to expand our reach, to look at different universities in different parts of the country and in different demographics. It’s supporting our DEI initiatives really well by going to different schools, and we’re attracting different talent. We’re now looking a lot more like our clients look. For a lot more clients and prospects, this is on the front of their mind, and they’re not afraid to lead with it .”
Clients are asking Anchin for information about its DEI initiatives and how the firm is addressing diversity, including the demographics of the firm and who is going to be working on their account.
Two years ago, Shinsky signed the CEO Action for Diversity & Inclusion pledge and Anchin formed a DEI committee, as well as naming a DEI leader within the firm as partner. “We shared our growth in statistics in various categories, and I was actually pretty proud to see the steps that we’ve made,” said Shinsky.
With the rise of ChatGPT, accountants have been worrying that they’ll be displaced by generative artificial intelligence technology, but Shinsky believes there will always be a role for accountants of the human kind. The firm’s partners met last week and spent time discussing the topic, and their general counsel is in the process of drawing up a formal AI policy on ChatGPT and similar technologies.
“I think technology doesn’t necessarily replace people; it changes their jobs,” said Shinsky.
He looks back at the work he was doing when he started as a junior accountant at Anchin 31 years ago and sees how the work has evolved over the years.
“I spent two days manually adding up an inventory run that was handed to me from a client,” he recalled. “They don’t have to do that anymore. They’re doing more interesting work. I view AI as just a further evolution of the work that people are going to do. I don’t view it as a replacement of people. People will just do different work to support and hopefully add more value to the technology.”
Since the pandemic hit, many employees have been working remotely and the firm has been spreading out geographically. Anchin opened a second office on Long Island in 2021 in Uniondale, New York, and an office in Boca Raton, Florida in 2022. Now it’s currently looking at opening an office in New Jersey. As more employees work in a hybrid environment, Anchin will be downsizing its footprint in Manhattan when it relocates to the Times Square area. It’s also been moving to a hybrid arrangement where employees can work in the office for two or three days a week and the other days at home.
“We are significantly downsizing our headquarters,” said Shinsky. “At one point, we were close to 120,000 square feet. We had a fire in the beginning of the pandemic, and it knocked us down to 100,000 square feet. We’re downsizing to approximately 47,000 to 48,000 square feet, and we’re going to a hoteling model, which allows you to do that, along with utilizing some of our satellite offices. Knowing that people want to work remote, let’s say two to three days a week, we believe that’s going to be the right amount of space for us. But we’re also moving into a state-of-the-art building that has full amenities that we don’t have today. That provides a lot of extra flexibility if we want to do full team trainings.”
Shinsky is mulling some mergers and acquisitions for the firm. “We measure our deals from zero to 10 as far as how far along the continuum they are, and we have two different practices that we’re looking at right now that I will say are probably somewhere between a five and a six of likelihood of happening,” he said. “We look at acquisitions as a way to either improve something we’re doing today or get into something new. We’re not about growing our top line for the sake of growing our top line. We’ve done that very successfully organically over the years. These two acquisitions that we’re looking at are very targeted at areas that we do today and would be complementary to our practice.”
Anchin focuses on several core industries: private clients, consumer products, professional services, software and technology, real estate, financial services, architects, engineers and contractors. Within those sectors, the firm provides audit, tax and advisory services. It has grown over the past roughly seven years from approximately 7% advisory to 25% advisory work. Those advisory services include family office support, research and development tax credits, state and local taxes. cybersecurity, litigation support, forensics and valuation.
Not looking to PE
Shinsky constantly receives private equity pitches for his firm, but so far he isn’t convinced. “I know it sounds like I’m making it up, but if I looked at my email right now, there’s probably another solicitation,” he said. “They come in several a week. If I responded to every single solicitation, it would be my full-time job. We periodically meet, we talk to the marketplace, we talk to the consultants to understand what firms are doing and why they’re doing it. And we believe we’re different.”
He contends the lack of private equity funding hasn’t kept Anchin from being able to compete for talent or invest in technology. “Our partners have committed to make those investments on our own,” he said. “We’re doing it and we think we’re doing it successfully. Right now we’re proud to be a partner-owned firm and I think that’s resonating with our middle-market client base very well.”
He’s skeptical about the role of private equity in accounting, although it may work for other types of businesses.
“The models, when you dig into them, get very simplistic,” he said. “You’re selling your future profits. If private equity comes in and buys 60% of your firm, you’ve sold 60% of your future profits, which means your remaining partners get to keep 40% of it, so the only way to make the model work is to grow it significantly and quickly.”
On the other hand, one of his own clients became a multibillionaire thanks to private equity, so he has seen the model work well.
“It’s not for all businesses,” said Shinsky. “Currently we don’t believe it’s right for Anchin, and we’re very successful without it as a 100-year-old firm. I’ve been managing partner coming up on three years now, but I’ve been with the firm for 31 years. I’ve been on our executive committee since 2015, and this isn’t my firm to sell. I’m the seventh managing partner in 100 years. This firm was handed off to our executive committee of four people, including me, and our job is to continue to grow and make the firm more successful, and be ready to hand it off to the next generation. It’s almost our fiduciary responsibility as owners of this firm, to have it here for the next generation and for our employees.”
The firm’s centennial leads him to reflect on Anchin’s long history. “It’s an amazing feat to be part of a business that’s been around for 100 years,” said Shinsky. “We try not to take it lightly. We’re trying to smell the roses and appreciate it and understand all the hard work for generations to get where we are. And so we feel this kind responsibility to keep it going, to pay it forward. And that’s how we run the firm.”