What We Heard on the Road: A Q4 2025 Composite of CPA Tax Partner Concerns

FIELD NOTES · Q4 2025 COMPOSITE

What We Heard on the Road: A Q4 2025 Composite of CPA Tax Partner Concerns

Across four cities of Q4 partner conversations, the pressures CPA principals described were structurally the same. The Management Services Organization is increasingly the bridge between the practice a partner built and the buyer who can take it forward.

By Alex Jones, EA, CFP®, ChFC®, CLU®, CEPA, Founder & CEO, and Mike Claudio, Co-Founder, Guardian Tax Consultants® · December 18, 2025 · 9 min read

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Between October and early December, we visited CPA practices and continuing-education rooms across Portland, the Dallas-Fort Worth metro, Atlanta, and the Branson advisor retreat circuit. The conversations were not coordinated; the questions partners raised, in slightly different words, were. What follows is a composite synthesis of those Q4 2025 conversations — the pressures partner-level practitioners described, the structural reasons private equity has become the dominant succession buyer for mid-market and Top-100 CPA platforms, and where the Management Services Organization sits in the architecture that is making those transactions possible.

The shape of the Q4 conversations

The visits spanned a range of practice profiles. A Top-100 advisory platform with offices across more than twenty states. A mid-market Texas practice with close to a thousand client relationships. A multi-discipline Atlanta firm with several hundred professionals across industry-specialty teams. Independent Portland-metro practitioners working alongside Pacific Northwest CPE audiences. The economics differed at every stop. The pressures did not.

Partners described the same four-part problem in nearly identical structural terms: senior-partner succession with no internal buyer; a junior bench too thin to absorb the equity; compliance margins compressing under both software substitution and client expectation; and artificial intelligence functioning as an accelerator of workload rather than a reducer of it. None of these pressures, in isolation, is new. The combination is what made the Q4 conversations distinct. Each pressure aggravates the others, and the cumulative read is that the traditional partner-buyout path — one cohort of partners selling equity to the next cohort at multiples the next cohort can finance internally — is no longer the path most of these practices expect to take.

The four pressures partners described

The senior-partner succession gap. The retiring partners we met with across all four metros described the same arithmetic. The equity they built over a career is concentrated in the practice, the practice has no obvious internal buyer, and the timeline for an orderly transition is shorter than the timeline for a junior cohort to grow into it. Internal partner buyouts have historically been financed against future distributions, structured as Internal Revenue Code §736 retirement payments or installment notes under §453. Those mechanisms still work where the next cohort exists at scale. In the practices we visited, that cohort does not exist at scale.

Junior-bench scarcity. The supply side of the partner-track pipeline has thinned. The accounting profession's pipeline issues have been the subject of sustained AICPA and NASBA commentary and trade-press attention. Fewer candidates are sitting for the CPA exam, fewer are following the partner track through promotion cycles, and the practices we visited described an internal math that no longer closes. Where a generation ago a Top-100 firm could count on a partner-track bench three or four cohorts deep, the bench today is one or two cohorts deep, and the cohorts are smaller.

Commoditization at the compliance base. Tax preparation margins are structurally compressing. At the lower end of the client base, consumer software and emerging artificial-intelligence tools pull volume away from professional preparation entirely. In the mid-market segment, clients increasingly view compliance as a procurement decision rather than a relationship decision. The recurring-revenue floor that historically anchored a mid-sized practice — the predictable annual stream of 1040, 1120, and 1065 work — is no longer reliably anchored at the historic price points.

Artificial intelligence as workload accelerator, not reducer. The fourth pressure was the one partners described with the most frustration. Clients now arrive at the engagement carrying questions generated by consumer-facing artificial-intelligence tools. The firm answers those questions, often without a corresponding increase in billings, because the question is folded into the existing scope of service. Workload moves up; realization does not. The technology that the trade press has described as a productivity multiplier has, at the practice level, more often functioned as a demand multiplier on the unbilled-advisory side of the engagement.

None of these four pressures is, in isolation, an emergency. The cumulative read was. The partners we visited — senior, in many cases approaching transition windows — were not asking how to extend the existing model. They were asking what structure exists to monetize the equity they have built when the traditional internal-buyer pathway has narrowed.

Why private equity has become the structural buyer

The four pressures above explain, in plain structural terms, why private equity has become the most visible outside buyer in the mid-market and Top-100 CPA platform conversation. Where the internal-buyout path narrows, the external-capital path widens. Private equity sponsors bring three things to the transaction that the internal cohort cannot: liquidity to the retiring partners on a defined timeline, capital for technology and platform investment that the practice itself cannot self-finance, and a roll-up architecture that allows the acquired practice to participate in cross-practice advisory growth without bearing the integration cost alone. The trade press has documented this shift extensively. Bloomberg Tax has described the broader trend as a private-equity-fueled shakeup of the accounting industry; CPA Trendlines has tracked the deal cadence year by year since 2020.

The structural complication, and it is a real one, is that the licensed-attest function of a CPA firm cannot itself be majority-owned by a non-CPA investor under most state accountancy regulations. That constraint is what the alternative practice structure exists to solve. In the alternative practice structure — APS in the trade-press shorthand — the attest practice remains a CPA-owned firm, while the advisory, tax, and back-office services migrate into a separately-organized entity that an outside investor can capitalize. The advisory entity contracts with the attest entity for shared services. The architecture preserves the licensure firewall and creates an investable platform on the advisory side. That advisory entity is, functionally, a Management Services Organization layered over the licensed CPA firm.

The public APS record: Baker Tilly, Aprio, Citrin Cooperman, Eisner Advisory Group

The public deal record is what makes the structure concrete rather than theoretical. Four transactions, all reported in the financial press and the trade press, illustrate the architecture at the Top-100 level.

Baker Tilly. In 2024, Baker Tilly separated into Baker Tilly Advisory Group LP, which holds the tax and advisory practice, and Baker Tilly US LLP, which holds the attest function. Hellman & Friedman, joined by Valeas Capital Partners, made a strategic investment in the advisory entity. Accounting Today's coverage described the transaction as the largest private-equity investment in the U.S. accounting profession to date. The attest entity is owned by its CPA partners; the advisory entity is the platform that the outside capital sits in. The architecture is the publicly cleared template.

Aprio. In 2024, Charlesbank Capital Partners took a strategic position in Aprio under a parallel APS architecture. The advisory entity, Aprio Advisory Group, holds the non-attest practice; the attest function remains in Aprio, LLP.

Citrin Cooperman. New Mountain Capital acquired a majority position in Citrin Cooperman's advisory practice in 2021, in what the trade press at the time treated as the leading-case private-equity transaction in the Top-25 accounting tier.

Eisner Advisory Group. The 2021 separation of EisnerAmper into Eisner Advisory Group LLC and Eisner Advisory Services Group, with TowerBrook Capital Partners' investment in the advisory entity, was one of the earlier public examples of the APS architecture in the U.S. Top-100. The transaction has been widely cited in subsequent deal documentation as a template.

Each of these transactions sits in the public record. None of the characterizations above goes beyond what the parties themselves have disclosed in press materials or what the trade press has documented. The relevance for the partner-level reader is not which sponsor backed which platform, but that the architecture — an advisory entity, separately capitalized, contracting with a CPA-owned attest entity for shared services — has been pressure-tested at the largest end of the Top-100 and at the Top-25 over a four-year window. The structure has cleared the regulatory and economic tests that determine whether a transaction of this kind can be financed and closed.

Where the MSO sits in the succession architecture

The trade-press conversation around private equity in the accounting profession has, understandably, focused on the headline transactions. The structural point that received less attention in the Q4 conversations we hosted is that the Management Services Organization is not a private-equity device. It is an organizational form. Private equity is the financial counterparty that has, more often than not, sat across the table in the recent APS transactions, but the structure itself is older and broader than the current deal cycle. It is the architecture that allows a professional-services practice to separate the licensed function from the non-licensed function, and to raise outside capital against the non-licensed function without disturbing the licensure of the attest practice. Our technical brief on law-firm MSOs and private equity walks through the parallel architecture in the legal profession, which has tracked a similar arc with parallel regulatory constraints.

For the partner reading this composite, the more immediate point is that the MSO architecture is not exclusively a sale-to-private-equity vehicle. The same structure that allows an outside sponsor to capitalize an advisory entity can also accommodate an internal succession that brings in outside debt rather than outside equity, a recapitalization that allows a retiring partner to monetize a portion of equity while remaining engaged in the practice, or a generational transition that moves equity to a next-cohort partner group on a financing timeline the cohort itself can carry. Where the related-party economics support a defensible management fee under Internal Revenue Code §482, deductible as an ordinary and necessary expense under §162 and outside the reach of the personal-service-corporation reallocation authority in §269A, the MSO can carry retained earnings on the advisory side that fund the buyout on a multi-year timeline. The accumulated-earnings rules in §531 apply to those retained earnings, and the substantiation discipline that supports the related-party fee runs through the entire planning window.

Our technical brief on management-fee transfer pricing walks through the §482 substantiation file in detail; our brief on strategic exit paths for C-corp MSOs addresses the parallel question of how the structure interacts with a future external transaction. The point worth recording from the Q4 conversations is narrower than either of those briefs. It is that the partners we visited were no longer treating the MSO architecture as a planning device for private-family operating-company clients exclusively. They were beginning to look at it for their own practices.

After the Q4 partner conversations, our team reviewed the published practitioner record on how the MSO architecture is being deployed in adjacent professional-services markets. Holland & Knight, whose legal-services transactions team has been among the most active in documenting MSO partnerships in the legal profession, has observed that the structure has cleared the regulatory and economic tests that allow outside capital to invest in licensed professional-services platforms while preserving the licensed function inside a separate firm owned by its practitioners. That observation, framed for legal practice, describes the same architecture the CPA partners we visited were now studying for their own succession arithmetic. The structure is the same; the regulatory firewall is different; the planning lens is the same one.

Closing observation

The Q4 conversations did not reach a single conclusion. They surfaced a single composite question. When the internal-buyout path has narrowed, when the compliance base is compressing, when the junior bench is too thin to carry the equity, and when artificial intelligence is moving workload up faster than it is moving billings up — what structure remains that lets a partner monetize the practice they built without forfeiting the relationships that made it worth building? The MSO architecture is not the only answer to that question. In the public deal record, and in the conversations we hosted across four cities of Q4 visits, it has increasingly become the answer most often documented. For partners reading the same trade-press headlines and considering the same transition arithmetic, that pattern is worth noticing.

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