From the August 2009 Issue
“If I were running this place, I’d do things differently.”
For 17 years, Chris York, CPA, watched as the partners at his former practice continued doing things the same way, year in and year out. Despite the significant changes in technology that the profession was experiencing, there would be no evolution at that firm, not on their watch. Or at least that’s the impression they gave.
From Chris’ point of view, the practice was suffering under its own administrative weight. He had served in most of the firm’s departments during his tenure, had seen the areas that he thought were losing the battle for productivity, and had kept up with technology enough to know that there were proven solutions on the market that could enable even that very established practice to operate more effectively and provide better client service.
For a time, things seemed to show promise. A new managing partner was named whom Chris knew to be much more receptive to change. But the old guard prevented even this partner from making the decisions that both he and Chris thought were necessary.
So they examined their options — either continue to work at the technologically stunted practice the way that its legacy shareholders had, which would ensure a continuation of professional frustration, or….
So one day, they decided the “or” was the best path for them.
Chris York and Glen Thomas, the fellow CPA and managing partner at Chris’ prior firm, struck out in October 2007, forming the new practice of ThomasYork, LLP (www.ty-llp.com) in the East Bay city of San Ramon, California. “Glen is the entrepreneurial genius, managing business growth and evolution,” according to Chris. “I’m the counterweight to Glen, helping to keep us more grounded.”
The full-service firm specializes in providing audit and tax services to privately held commercial construction businesses, real estate development entities and high net worth individuals. Shortly after founding the practice, the two also acquired an existing San Ramon bookkeeping practice, Martins Accounting & Management Services (www.martinsams.com), which continues as a separate entity under the same name, offering business services, payroll management, write-up and virtual bookkeeping.
Although operating for less than two years, Chris and Glen have built up an impressive practice, with a staff of 19 (including Martins AMS) and a client roster that includes several hundred million dollar-plus businesses. Perhaps the most notable early client win was the addition of one of their former firm’s largest clients, an infrastructure-oriented construction business that has since grown from $50 million in revenues to more than $150 million, and recently was awarded the first stimulus project in California.
In order to build a more productive work environment, one of Chris’ initial efforts was establishing a policy of value-based, flat-fee billing. This means that the firm never bills by the hour and doesn’t use time management technologies. While this removes a great deal of bureaucracy from day-to-day work, he admits that it makes staying on top of productivity a challenge.
“We have started to implement tools to achieve greater efficiency, but removing the tedious tasks associated with tracking and reporting time has given us more time to provide client service,” Chris stated. “This leads to greater productivity, but it isn’t as precisely measurable.”
He also notes that a vital aspect to flat-fee billing, especially on audits and other extensive engagements, is being good at setting the price. “We pre-negotiate everything, so we have to evaluate projects as thoroughly as possible and also leave room for renegotiations and change orders. It has been a learning process.”