This November, Pension Assurance is excited to celebrate its 10-year anniversary. P/A was founded in 2014 by John Russon and Nathan Johnston who were joined by six employees. The nascent firm’s initial headquarters were in a non-descript Class B office space adjacent to a bowling alley in Tarzana, California, a neighborhood in Los Angeles’s San Fernando Valley.
P/A’s story has been a story of growth. The most tangible aspect of this growth has been in terms of the size of the business. With a team of eight professionals, P/A closed out its first audit season having completed 170 audits. At the end of our most recent audit season, the firm completed nearly 1,000 audits with a team of 63 professionals. This tangible measure of growth, however, is really only a byproduct of the growth of our team in myriad ways, which has enabled us to attract and retain so many great clients.
P/A began, as many successful businesses do, as a calculated risk. But the firm’s gamble was somewhat unprecedented—as many firms seek to consistently expand their service offerings to be truly “full-service accounting firms,” P/A lunged in the opposite direction. By choosing to focus on a single service line—ERISA plan audits—the firm took on both unique challenges and unique opportunities. The challenges are precisely those that lead many firms to try to diversify offerings. Most pressingly, the intense seasonality of ERISA audits, driven by government filing deadlines, meant that there would be significant periods of each year during which payroll costs would remain while revenue would be very low.
But this also presented an opportunity in at least two important respects. The first is something we talk about often at the firm: the power of focus. While having diverse service lines is nice for a firm’s revenue (at least in the short term), it also divides the attention of your professional team. Given the highly technical nature of our work, we’ve found that there would be no way to build the level of expertise that our team now has without having an undivided focus on the subject. Focus is also a key element of audit quality—the Department of Labor’s audit quality studies have repeatedly found that firms that specialize in ERISA audits have substantially lower deficiency rates on engagements.
Specialization has also given us a substantially greater opportunity to reinvest in the firm. When client work is slower, we turn to internal projects that build up and improve the firm. These include making updates to our proprietary audit methodologies and workflow tools, which enable us to provide a best-in-class client service experience. It involves loads of training and revisions to our internal training materials so that our team is ready to enter the next season prepared and smarter than ever. P/A enters its second decade with no regrets about its initial gamble. The decision to specialize has paid off in spades, benefitting both our team and our clients and fueling the firm’s tremendous growth.
