Small Firm Drawbacks
If you've read some of my other content on this website, you will know that I am a huge advocate for public accounting firms outside of the big four. Mid-size, regional, and even small firms allow you to work with different types of clients to provide you the experience you need to take the next step in your career. Simply put, if you like working with larger clients like the Fortune 500, the Big 4 is the obvious choice for you. But if you want to work with smaller and growing businesses, then a smaller firm would be more appropriate. Despite my praise for these smaller firms, it’s important to understand that it’s a completely different working environment compared to a larger firm. Today, I’m going to share with you some of the drawbacks of the smaller firm working environment. Let’s jump in!
Disclaimer: Every firm is different, and your team will have a huge impact on your experience when working in public accounting firms. The examples I am sharing today are real examples of what I have witnessed people in my network experience, and I hope you can learn from them.
#1 - They Tell You What You Want to Hear
At a smaller firm, you are a larger part of the team simply because you make up a larger percentage of the total workforce. Because of this dynamic, the firm partners are more incentivized to get you to stay as long as possible because they have fewer options when replacing you in your absence. If you are a solid performer, most smaller firm partners will tell you what you want to hear to get you to stay with the firm. Here’s a few (paraphrased) examples of what partners have told my network in the past:
“You're on the way to promotion! I don’t see any reason why you wouldn’t be promoted next year.” - The partner then had this senior do a ton of work during busy season instead of giving them supervisory experience, and then did not promote them due to a lack of supervisory experience.
“Of course, we can find other types of work for you. Let’s start working on this new role for you so you aren’t doing audits all the time.” - After the employee spent hours working on setting up the new type of work and the templates that went along with it, the partner pulled the plug on the new work just in time for the employee to spend all his time doing audits for busy season.
In both cases, the employees left their firm within a year because they realized that management didn’t really mean what they were saying previously and could not be trusted any further.
#2 - Promotions & Small Office Politics
Office politics will always play a role in career advancement, but some of the most egregious examples I’ve heard of are from smaller firms. At these smaller firms, I’ve seen people that are stuck at the staff accountant level for more than 4 years or others that spent 5 years as a supervisor without promotion because someone didn’t like them. I can confidently say that in both of these cases, the individuals in question were certainly performing above the level their title would lead you to believe. If you are good at playing office politics or aren’t worried about people liking you, this is likely not an issue for you. However, it’s not something that I would want to deal with as an employee as it creates undue stress on top of the regular public accounting stressors.
#3 - Long-term Career Growth vs. Short Term Productivity
The biggest difference between large and small firms is the number of people available to do the work. At a large firm, engagements tend to need bigger engagement teams and as a result, team members are able to gain more exposure to different types of engagements and they even may get the opportunity to switch service lines if they are lucky. Smaller firms do not have this luxury of flexibility and as a result, some employees may find themselves unable to effectively grow in their career. The perfect example of this is already mentioned above where there were not enough staff to allow a senior to take on an oversight role on an engagement. Instead, that senior prepared workpapers very efficiently and got the job done in a timely manner, without gaining any supervisory experience. Any partner with a brain could have seen this coming and chose to do something about it but instead, the partner chose the short term efficiency over the long-term career growth, which ended up in the employee quitting months later.
Should I Work for a Smaller Firm?
It depends. I know plenty of people that have had successful careers working for smaller firms. It really is a question of whether the environment suits your career aspirations and if you can navigate the potential disadvantages of being in a smaller firm. Since you made it this far in the article, congratulations! You have taken the first step in educating yourself about the potential pitfalls of working in a smaller firm. If you can proactively identify issues like these at your workplace and steer clear of them, you should have no issue progressing your career. But if you feel like you are on the wrong end of these issues, get out fast!