Growth Dropped Below 10% for the First Time in Five Years — And Your Partner Retirement Promises Were Underwritten at 13%

The accounting profession's growth engine has stalled. CPA firm revenues grew just 7.9% in the most recent measurement period — the first sub-10% reading in five years, and a steep drop from the 13% that briefly became the profession's benchmark during the post-pandemic surge. That gap between 13% and 7.9% sounds manageable until you realize where the 13% was actually baked in: partner buyout formulas, deferred compensation schedules, and retirement payment commitments that assumed the boom was a new normal. It wasn't. And the firms that treated it as such are now staring at a math problem with no clean solution.

The 13% Assumption Built Into Your Succession Agreements

Partner retirement structures in most CPA firms are not actuarially funded instruments. They are pay-as-you-go obligations underwritten by the implicit assumption that the next generation of partners will be more productive, more numerous, and operating inside a firm generating enough growth to cover both current partner compensation and outgoing retirement payments simultaneously.

The 2025 Rosenberg MAP Survey captures the structural fragility here precisely. Firm valuation multiples for retirement payments have already slipped, dropping to 76.9% of revenue from 78.4% the year prior. Income per partner grew only 3.2% to $615,000 — lagging revenue growth — while the average new partner buy-in sits at $133,000. The retirement payments covering exiting partners average 2% of net fees for the 56% of $2M+ firms currently making them, according to CPA Leadership. That looks modest until you stress-test it against a sustained 7–8% growth environment while simultaneously onboarding new partners and absorbing escalating technology costs.

Marc Rosenberg has been direct about this for years: firms with less than $8 million in annual fees face the prospect of collectively paying out billions of dollars to retiring partners within a five-year window, with most retirement plans remaining largely unfunded. That window is now open.

The Post-Pandemic Advisory Surge Was a Pull-Forward, Not a New Baseline

The profession's brief 13% growth era had a specific catalyst: the confluence of pandemic-era complexity (PPP, ERC, deferred filing deadlines), a surge in advisory demand as clients navigated volatility, and fee compression finally reversing after a decade of price sensitivity. Firms that averaged 6–8% growth for fifteen years suddenly posted 10–13%, and the temptation to treat that as structural rather than cyclical proved irresistible.

It was cyclical. CPA Trendlines confirms the 7.9% figure reflects tightening margins, escalating operational costs, and a market that has absorbed the advisory pull-forward demand. Meanwhile, Accounting Today's analysis of the Top 100 firms shows only 41% reported double-digit growth in the most recent year, down from 47% previously. The bifurcation is sharpening: high-growth firms are now posting 33.4% median growth, while the average-growth cohort sits at 9.6% and the no-growth segment has contracted 10%. Firms in the middle — the ones most likely to carry the heaviest legacy retirement obligations relative to their capacity — are getting squeezed from both directions.

The Retirement Queue Is Real, and It Peaks Right Now

The demographic math compounds the financial math. The AICPA reports that approximately 75% of current CPAs are Baby Boomers approaching retirement age. Baby boomer managing partners are already departing in substantial numbers, per Rosenberg's data, replaced by younger partners who carry their own buy-in obligations and have less capacity to generate the partnership income that funds predecessor retirements. This is not a future risk — it is the current operating condition.

The critical issue is the mismatch in timing. The partners with the largest accumulated goodwill and longest deferred compensation schedules are exiting precisely as growth rates compress. Firms that structured multi-year retirement payment streams during the boom years now face the prospect of honoring those commitments from a thinner revenue base while simultaneously funding the technology investment required to stay competitive. That is not a planning scenario. For a significant number of firms, that is Tuesday.

Distress M&A Is the Pressure Valve — but the Valve Has Weaker Terms Now

The profession has processed prior succession crises through merger activity, and that mechanism is still running — but the conditions have changed materially. Accounting firm M&A reached 180 deals in 2025, with projections tracking toward 280 in 2026. Private equity-backed platforms alone accounted for nearly a third of January 2026 deals. Micro-PE funds are explicitly targeting the $5M–$20M revenue segment to solve Baby Boomer succession crises, per Firm Lever's 2026 M&A analysis.

The critical distinction that managing partners are underweighting: selling into a high-growth market and selling into a slow-growth market produce fundamentally different economics. Traditional internal firm valuations settle around 80% of fees — already down from the 100% of fees that was standard a decade ago — while PE-backed acquirers can offer external multiples that appear attractive but come with governance concessions, earnout structures, and cultural integration obligations. Inside Public Accounting's survey data shows 40% of firms are already reconsidering their buyout structures, with 71% of those citing PE's presence as the driver. Firms that wait until the retirement queue forces their hand will negotiate from distress, not strategic optionality.

What Sustainable 8–9% Growth Actually Requires

Sustaining even 8–9% growth in the current environment requires a different operational posture than the one most mid-market firms are running. The Accounting Today data on high-growth firms is instructive: they invest 9% of revenue in marketing (nearly double the industry average), rely on referrals 34% less than stagnant firms, and show over 90% AI tool adoption across workflow and content functions. The Inside Public Accounting 2026 outlook frames the productivity divide bluntly: modernized firms are showing higher revenue per employee and improving margins, while traditional firms face flat output and rising costs.

The firms currently relying on the 2022–2023 growth rate to honor 2019 retirement agreements are, by definition, not the high-growth cohort. They are the average-growth cohort, and average growth right now does not cover legacy promises.

The Two Paths: Restructure the Math Now or Let the Math Restructure You

The profession does not have a shortage of options — it has a shortage of urgency. Firms can restructure partner economics proactively: adjust valuation multiples to reflect current market realities rather than boom-era expectations, extend payment timelines, revise buy-in structures so incoming partners are not subsidizing predecessors from day one, and add claw-back provisions (currently used by only 14% of firms, per Rosenberg data) that align retiring partners' economics with future firm performance.

Alternatively, firms can wait. Retirement obligations do not wait with them. The partners in the exit queue have legally structured claims against future firm earnings. When growth cannot service those claims, the options narrow to: sell under pressure, merge on unfavorable terms, or watch talent drain as younger partners recognize they are subsidizing an unsustainable structure. The Baker Tilly/Moss Adams combination — creating the sixth-largest CPA firm in the US — is the headline version of this reckoning. The same dynamic is playing out at hundreds of firms where the math is quieter but equally unforgiving.