Professional status

The lawyers – and accountants – are coming.

Professional services firms are making their way up the Interstate 25 corridor to Northern Colorado for its ever-expanding client base. Accounting and law practices from around that state have been sizing up the region, with some deciding on expansion, increased visibility or new offices, with an eye toward picking up underserved clients who in the past opted for a “big four” firm.

Kansas-based accounting firm Kennedy and Coe LLC has been in the Northern Colorado market for 10 years. The company employs about 30 in its Greeley office and is typically considered a general practice firm. But that is about to change.

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“We feel pretty strongly that the Northern Colorado market has a lot of opportunity in it,´ said Kennedy and Coe CEO Kurt Siemers. “It’s probably No. 1 on the list in terms of opportunity.”

Kennedy and Coe operates 11 offices, in Colorado, Kansas and Oklahoma. The Greeley office is the most recent to adopt the firm’s new strategic direction.

“Part of our plan in Northern Colorado is to restructure our office to serve not only general practice, but also in specific industry areas,” Siemers said.

The structure is one that has been in practice, in part, in some of the firm’s offices for about 10 years. The strategy calls for the firm to create specific industry groups with a devoted staff for industries including banking, manufacturing, agriculture and medical.

“We feel like it gives us an advantage to let customers and potential customers know we have developed deep knowledge in certain industries,” Siemers said. He added that the structure will allow the company to offer more intensive consulting services.

Kennedy and Coe is already transitioning to the new model, in addition to its general practice. Siemers said the firm will move an employee from the banking group in Wichita, Kan., to head up the group in Greeley. The firm might transfer someone from another office to start the manufacturing group.

In all, the new strategy will evolve in the Greeley office during the next 24 months. Siemers estimates that the firm could add another 20 employees to its staff in that time.

National attention

Kennedy and Coe isn’t the only accounting firm that has noticed the potential in Northern Colorado. National accounting firm Grant Thornton LLP recently sold its Colorado Springs office with the intention of focusing northward. Managing partner Brett Lewis said the closure in Colorado Springs will allow the firm to focus on markets that better fit its strategy.

“We know there are a fair number of those companies in Northern Colorado,” Lewis said.

The company has no plans to open another office in Colorado, instead operating exclusively from its Denver office. Lewis said the company would target customers based on their needs rather than their geographic location and anticipated most of those would be along the I-25 corridor.

Lewis said the biggest opportunity for picking up new clients will come from underserved customers. He explained that many medium-sized businesses served by one of the “big four” firms – PricewaterhouseCoopers, Ernst & Young LLP, Deloitte & Touche LLP and KPMG International – are seeking alternatives.

Since the implementation of the Sarbanes Oxley Act, Lewis said, many of the very large firms are focusing more energy on their largest clients.

“It’s about the fit,” Lewis said. “Do you want to be an important client or a small client?”

This phenomenon is what is keeping the Northern Colorado market busy, said Chris Otto, one of the principals for Ehrhardt Keefe Steiner & Hottman.

While Grant Thornton might not feel the need to locate an office in the region, another Denver firm did. Less than a year ago, EKS&H formed an office in Fort Collins.

Otto said that because of the growing number of underserved clients the increasing competition in Northern Colorado isn’t likely coming at the expense of any of the firms that have operated in the region for a while.

“There’s been a lot of opportunities and continue to be a lot of opportunities,” Otto said. “That’s why so many professional services firms are looking.”

EKS&H established an office in Fort Collins last July with five employees from the Denver office. Months later the firm grew by six when it merged operations with Kermit Allard, another area CPA. Today, the firm is in a new office, employs about 20 and is still looking for talent.

“We’re always looking to add good, quality people,” Otto said.

Lawyers increasingly obvious

Accounting firms aren’t the only professional services that are getting in on the act.

Denver-based law firm Holland & Hart has had an increasingly obvious presence in the region, but a partner with the firm said it is business as usual.

The firm operates 14 offices, mostly in the Rocky Mountain region. Its areas of expertise include intellectual property, real estate, employment, corporate, securities and several general practice areas.

Since the start of the year, Holland & Hart has sponsored two of the region’s largest technology events – the Northern Colorado Rockies Venture Club and Bioscience Larimer County.

Despite the increased exposure in the region’s technology industry, Holland & Hart will not be jumping into an office in Northern Colorado.

“We don’t have any intention, currently, of setting up an office in Fort Collins,´ said Christopher Leh, a partner in the Boulder office.

Leh said that the company has not ramped up exposure in Northern Colorado, but instead is responding to the growing market.

“We already have clients up there and we’re always looking to better serve our clients,” he explained.

But he doesn’t discount the possibility of a Fort Collins office.

“It’s hard to know what the future is,” he said. “We know that these are important times up there and for Colorado business in general.”

Important times call for important people. With many firms looking to expand staffing, accounting and law professionals stand to become a hot commodity. According to labor market information from the state, these professional groups will likely require some of the largest increases in employment in the near future.

Estimates show that while accountants and auditors will only increase about 2.5 percent from 2002 to 2012, the actual number demanded by this profession will increase by more than 5,000. Likewise, percentage growth numbers are under 3 percent for both lawyers and bookkeeping, accounting and auditing clerks, but actual hard numbers suggest increases of 2,500 and 4,080 respectively.

Additionally, statistics show that the employee demand will be driven by growth rather than replacement of other professionals. For example, average annual growth in accounting employment will be around 920 due to growth in the occupation and only 415 due to attrition.

As such, the competition in Northern Colorado might be less for the client and more for the talent.