Where The Whole Is Greater Than The Sum Of The Parts

Monday, October 4, 2010 - 01:00

Editor: Howard, please tell our readers about your experience as Managing Partner and CEO of Amper, Politziner & Mattia. How will your role change now that you are Chairman of the combined firm EisnerAmper?

Cohen: As only the second managing partner in Amper's 45-year history, I spent the first two years of my transitional term, beginning in July 2008, setting up a strategic plan, which led ultimately to the combination with Eisner, and in trying to enhance the infrastructure of the firm. As far as any role change with the combined firms, the most significant thing is the challenge of integrating two very strong organizations into one, as well as creating a strategic plan and increasing the market awareness of the new firm, EisnerAmper LLP.

Editor: Charly, you were formerly Managing Partner of Eisner LLP and have become the new CEO of the combined firm. What new duties will you assume?

Weinstein: The obvious duty for both of us is to facilitate the most immediate changes - the coming together of the two legacy firms to make all of our partners and staff comfortable with the combination. The next most important objective will be to position the new firm as a leader in the markets that we serve. We have considerable strength on a combined basis and bringing that to the attention of the marketplace and to our clients is going to be one of the biggest responsibilities that Howard and I have.

Editor: Is your structure similar to that of a corporation in the sense that the chairman oversees the broad strategy for the firm in looking at its long-term growth prospects and the CEO is more of the hands-on executive in working directly with the professionals?

Cohen: I think running a professional service business just by its nature is different from running a typical corporate structure. When you have 170 partners, the dynamic of managing is entirely different. Charly and I divided between us various responsibilities, but we also decided on certain duties we should share, two key areas being strategic planning and HR. In terms of other responsibilities, we're both well versed in having managed firms and as such are able to separately oversee other areas.

Editor: In what practice areas will the combined firm have outstanding strengths and expertise?

Cohen: We have certain niche areas where we bring to market a significant degree of talent and expertise.Our joint financial services area gives us a strong presence with the hedge fund, private equity, broker dealer and investment bank community. Amper has a substantial professional insurance and banking practice. Our technology practice encompasses everything from your standard technology company producing hardware and creating software to such areas as clean tech and life sciences, including healthcare. We each have a significant SEC practice and our combined firm will be ranked about number 10 in the country in auditing of public registrants. In the real estate area we have complementary expertise - from development to construction to real estate ownership, making us a powerful force in this industry.

Weinstein: Another area where we have great combined strength is the work we do with law firms - not only in planning, auditing and accounting work, but also in the depth and breadth of our combined litigation support practices.

Editor: Why does the combination of your two firms form a valuable new resource for corporate counsel?

Weinstein: Given our deep experience in working with public companies, we have a keen grasp of issues affecting public companies. We work very closely with corporate counsel on SEC and compliance matters. Combining this work with our expertise on the litigation support side, we have many resources under one roof to help law firms and corporate counsel - whether it's forensic accounting, white collar investigations or working with audit committees. It is a full service practice. Taking the breadth of experience across both firms, our litigation support group is well in excess of 50 experienced professionals. The talent in the combined firm provides a one-stop shop for corporate attorneys.

Cohen: In-house counsel is often responsible for complying with numerous regulatory requirements in dealing with various government agencies, and our services lend them support in dealing with regulatory authorities. Obviously, we are able to assist with any corporate governance issues whether they relate to audit committee governance or internal investigations. We serve as risk advisors, providing a potpourri of services that range from looking at controls, making risk assessments and examining ERM, to all the various areas within a corporate organization that deal with pinpointing the greatest areas of risk.

Editor: How does the combination become a magnet for attracting talent?Cohen: Having a larger platform makes us very attractive for professionals who are looking for an alternative to the big four national firms. Both firms have a long history of attracting top quality talent.

Weinstein: What we will provide is the opportunity for our professionals to handle greater challenges in working on more complex assignments. In the combined firm there are more leadership opportunities. We're always looking to expand into new practice areas, but beyond that what we will not do is change the culture of both firms where we operate in a very collaborative and collegial environment. This work environment together with our growth opportunities makes us a magnet for attracting talent.

Editor: I understand that the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act played a role in facilitating the merger. Do you see the enactment of this law requiring more compliance assistance to your corporate clients?

Weinstein: We see a trend toward greater complexity, and Dodd-Frank is just one aspect of this trend with the attendant emphasis on compliance. Our clients in the financial services industry are already reaching out to us with respect to how to navigate the compliance requirements of the Act as regulations come on line and take effect in the next months. Our professionals are on top of the legislation and are already working with broker dealers, banks and other financial institutions in addressing both federal and state registration requirements, custody rules and the like.

Editor: Do you have any insights as to how some of these agencies are going to draft the regs, which are still to be fleshed out?

Weinstein: If you look at the Volcker Rule, there is a possibility that the larger banks may exit hedge funds and certain trading areas, depending on how the regulations come down. Therefore, there will be other opportunities for new start-up operations, for traders to go elsewhere and for different vehicles to evolve. We want to be at the forefront of that new trend.

Editor: What particular provisions of the Act will prompt clients to call upon your firm to give them guidance, particularly financial companies?

Cohen: Interestingly, some of the legislation actually takes away one level of compliance. Keep in mind that Dodd-Frank did away with SOX compliance for companies with less than $75 million in market cap. Stripping away the cost of compliance for smaller companies could actually reactivate the domestic markets, such as NASDAQ and others, to compete for listings where they have been losing for years post-SOX to the Hong Kong and other exchanges because of the reduced cost of compliance. If the economy and the stock markets cooperate, we may see an uptick in the level of small cap IPOs, making U.S. markets more competitive.

Editor: How is your business going to be affected by the inclusion of non-bank financial firms that must now conform to new regulations? Will your professionals be involved in setting up compliance structures so that they may conform to new regulations?

Weinstein: We have large, sophisticated practices in the insurance area; we work with broker dealers, all types of alternative investment companies and with offshore vehicles, so we think that all of these types of entities are potentially going to be affected by this new regulation. We're well positioned on a combined basis to serve the broad financial services community. We're looking to be even more valuable to our clients in those particular areas. Not only will we be called upon to design compliance structures, but with the redesign of compliance structures go tax planning needs, setting up of control systems and other business opportunities. Many tasks will be embedded in restructuring for clients.

Editor: Your firms have also been very active in the life sciences. How will the new healthcare legislation affect your clients in terms of their need for accounting and financial advisory assistance?

Cohen: As a general statement, healthcare reform impacts just about every client. Anytime there is legislation relative to the life sciences, our experts look not only at ways our clients' businesses are affected, but also at the opportunities that are opened up.

Editor: Where do you see your firm in terms of its geographic reach and size in the next five years?

Cohen: As to geographic reach, we speak in our press releases about EisnerAmper being the preeminent firm in the Northeast, which includes New York, New Jersey and Pennsylvania. If opportunities were to present themselves at the appropriate time, we would be looking at possible expansion in the future to the Boston area and possibly as far South as the Washington, DC area. These two areas are not only key economic centers but also homes of professional institutional money, private equity and hedge funds.

Weinstein: We have the mindset that we are going to lead with our strengths. While do not consider ourselves a national firm, we do have national practices and an international presence - in insurance, financial services, hedge funds, private equity funds, broker dealers. We'll go where our clients take us, and to the extent there are appropriate opportunities for us to be in other financial capitals, such as San Francisco or Dallas, we'll watch the market and go where the opportunities lie which match our strengths.

Please email the interviewees at howard.cohen@eisneramper.com or charles.weinstein@eisneramper.comwith questions about this interview.