We invited managing partners from more than 100 firms with 11 to 249 partners to participate in the research, and we received responses from 40%. Among the respondents were a range of firms: 40% had between 11 and 20 partners, and the remainder had more than 20 partners. This range of participation allowed us to gather insights into the trends and dynamics shaping mid-tier firms.

Mid-tier accountancy firms stand at a pivotal juncture, poised to capitalise on emerging opportunities and address evolving challenges. By embracing change, fostering strong leadership and leveraging technological innovation, firms can navigate the complexities of the current economic landscape and emerge as strategic partners to their clients.

As the profession continues to evolve, the demand for the expertise and professional services provided by chartered accountants remains robust, reaffirming the profession's role as a catalyst for positive change and sustainable growth in a dynamic global economy.

Firm structure and operational model

Firm structures are evolving rapidly, with growth through mergers and acquisitions (M&A) occurring for nearly half of firms in the recent past, and more than half looking to pursue this activity in the next three years. This ongoing activity means that firms counted in this tier are in a perpetual state of flux. M&A has been a popular mechanism to help many firms satisfy their ‘growth-led’ culture.

Some firms are embracing private equity investment, seeking capital and strategic partnerships to fuel growth and innovation. Other firms see an opportunity to distinguish themselves by remaining independent and growing organically. The emergence of private equity in the profession has polarised opinions, but it appears set to remain part of the range of structures operating in the mid-tier.

Financial performance and service lines

Service line offerings are expanding in breadth, and this presents opportunities and challenges for accountancy firms. While traditional service lines, such as tax, audit and accounting remain fundamental offerings, emerging areas, including ESG (environmental, social and governance) and tech app advisory services, are gaining prominence and are predicted to grow.

By diversifying their service offerings, firms can position themselves as strategic partners to their clients, providing holistic solutions that address their evolving needs and contribute to sustainable growth and long-term success. There is, however, a disconnect with ESG. Firms recognise the growing demand to provide support to their clients, but less than half are taking ESG considerations into account in their own decision-making processes and none see this as a key cultural component of their firm.

With widespread issues in recruitment and retention of qualified staff, half of respondents have already offshored or outsourced at least one service line, most commonly accountancy, tax, audit and payroll. While only a small number of respondents (7%) listed offshoring and outsourcing as one of the top opportunities for their firm, the research confirms that more respondents are predicting greater use of these models across a broader range of service lines.