STAYING INDEPENDENT AND COMPETITIVE.

• Position: Brief Article

No matter what your firm size, you're no longer competing with your rivals across Main Street. Your new competitors are the large companies now positioning themselves across the United States as full-service financial experts--American Express and H & R Block Inc. (HRB), for example. These companies spend millions of dollars on branding and marketing, and they build their market share by buying up CPA firms and insurance and financial services companies. HRB, for instance, announced in August it would buy Olde Financial Corporation, the parent company of the fourth largest discount brokerage firm in the United States. Companies like these are constantly looking for new markets and market niches to give them a competitive edge.

How do you stay independent and compete? Many small and midsize firms are joining CPA firm associations so they can remain independent, build on their resources and referral banks and be part of a unified front. Some of these associations are billing themselves as exclusively independent firm alliances, while others consider themselves gateways to a worldwide market. Whatever their strategies are, the associations offer CPA firms who wish to remain independent resources that will help them compete with consolidators.

No sellouts

Take, for example, a recently formed alliance of 19 U.S. firms, each of which averages more than $10 million in annual revenues. The Leading Edge Alliance, based in Chicago, was formed in August to help larger independent CPA practices find solutions they need to increase their profitability.

"As I watched the consolidators move through the profession, it became clear there was a whole group of top-quality firms that were too independent, too secure and too dominant in their markets to consider consolidation," said Gary Shamis, CPA, managing partner of Saltz, Shamis & Goldfarb in Cleveland and chairman of Leading Edge. "Those of us who plan to remain independent need an association that allows us to work together, leverage our strengths and exchange strategies that help us build better firms."

Leading Edge provides its members with

* An interactive network of practice management knowledge.

* "Best practices" research and information.

* Strategies for high-quality, market-driven products and services.

* A conduit for building alliances, referrals and cooperative ventures.

* An international network for multinational engagements.

Many such associations allow members who have been purchased by a...