Accounting for friendship: childhood pals lead Denver firm.

• Author: Taylor, Mike

Rex Hughes and Lowell Gordon were friends long before they were business partners. The two met as eight year-olds in the second grade in Wichita, Kan. They attended college together at Kansas State University. They both studied accounting, with/Gordon going on to law school at Washburn University in Topeka.

Years later, the friendship that was born decades ago led to the formation of Gordon, Hughes & Banks, now one of the oldest and largest Colorado-base d accounting firms.

The seeds of Gordon, Hughes & Banks were planted in 1972, when Lowell Gordon moved to Colorado and joined a one-office accounting firm in Breckenridge. Rex Hughes, who had been working on the international corporate audit staff at Texas Instruments in Dallas, joined his friend in 1974.

"Lowell called me after he got out there and was pretty enthusiastic about the opportunities," Hughes remembers. "He said, 'There's a great opportunity to try and build something if you want to come out here and join me.'

"I was not totally sold on the corporate environment, so I decided to come out and take a look."

Together they took over the small, four-employee firm in Breckenridge, buying out the founder. Gordon then established an office in Grand Junction in 1980. Offices in Lakewood, Frisco, Englewood, the Denver Tech Center and Boulder followed.

The 32-year-old company now boasts about 2,000 clients, with 54 employees in six offices. It ranks among the top accounting firms in the inaugural ColoradoBiz list of the state's top professional service companies.

The lists cover six fields of business: accounting, architecture, law, general contractors, PR/advertising and engineering. Rankings of the Colorado-based companies are based on number of employees.

Today Hughes is the managing partner of Gordon, Hughes & Banks; Gordon is a senior partner in charge of estate taxes and training programs. Most of the staff has been with the firm between 11 and 18 years; the third founding partner, Penny Banks, has been with the firm since the 1980s.

"I think the key to our success has been a lot of hard work," Hughes says. "But also having a vision of a one-firm concept in trying to bring people into the firm who believed in the success of the firm as a whole."

As young accountants, both Hughes and Gordon once worked for Arthur Andersen in Kansas City, Hughes on the commercial audit staff and Gordon on the tax staff. Both took pride in being Arthur Andersen alumni, so the recent scandals of the giant accounting firm wounded each of them personally.

"At the time that we were members at that firm, it was very, very conservative, very much the standard-bearer for innovation in accounting standards, taking a hard line on disclosure -- the kinds of things that we took great pride in," Hughes says. "It certainly would not appear to be the same type of management at the top as what we were accustomed to. They sort of lost their mission. It's devastating to us.

"Somewhere along the line, with all the pressures of retaining partners or whatever else, it sort of appears they lost that one-firm concept."

That concept is something Hughes and Gordon are determined not to lose as their own firm continues to grow. And their friendship, they say, will never get in the way of what's best for the firm.

"We always knew we were going to be lifelong friends," said Hughes. "And we have not allowed our friendship to interfere in handling the business of the firm. That's obviously something that I think the partners in our firm and younger people in our firm might wonder about, but we're very independent thinkers.

"We've been friends over a long period of time because we've always been able to agree to disagree."

Long-lasting relationships are one of the hallmarks of the companies on the six ColoradoBiz lists. The companies are not only the largest in the state in their respective categories, but in some cases among the oldest. Among them, Davis Partnership Architects and the law firm Sherman & Howard LLC are both 110 years old, and engineering giant MWH Global is 157 years old.

The top revenue-producing firms on the list are general contractor Hensel Phelps Construction Co., with revenues of $1.59 billion last year, and MWH Global, with revenues of $856 million.

The engineering firm ARCADIS G&M is the largest employer on the lists with 8,500 employees, followed by MWH Global with 6,000.

ColoradoBiz Top Professional Services Firms * Accounting firms YEARS IN RANK COMPANY COMPANY HEAD EMPLOYEES BUSINESS 1 Ehrhardt Keefe Steiner & Robert Hottman 120 25 Hoffman P.C. 2 CBIZ Colorado Inc. Steve Lake 81 27 3 The GHP Financial...