RSM Forges New Alliance Model to Counter Private Equity Pressure in Accounting Sector

Strategic Transatlantic Partnership Reshapes Accounting Industry Dynamics

RSM’s US and UK leadership have unveiled an innovative partnership model that offers member firms an alternative to private equity investment while strengthening global collaboration. The agreement between RSM US and RSM UK creates a new framework for cross-border cooperation that could redefine how mid-tier accounting networks compete against both the Big Four and private equity-backed rivals., according to according to reports

A Flexible Alternative to External Capital

According to Brian Becker, CEO of RSM US, and Rob Donaldson, CEO of RSM UK, the partnership structure specifically addresses member firms’ growing need for capital without requiring them to surrender equity to outside investors. “A lot of member firms need the capital to build consulting, advisory or other services, and we have the capital together to do all the investments that we need,” Becker explained to the Financial Times.

Donaldson emphasized the inclusive nature of the arrangement: “We don’t want them to think this is some closed arrangement that they can’t participate in if they wish. The door is open. It is an alternative to outside investment.” This approach comes at a time when private equity firms are increasingly targeting accounting practices outside the Big Four networks., according to related coverage

Structural Innovation Addresses Regulatory Concerns

The transatlantic agreement represents a compromise from the full financial merger originally contemplated last year. The final structure maintains separate legal entities while creating unified leadership and compensation systems. This design successfully addresses regulatory concerns about maintaining local control over sensitive audit operations while enabling closer cooperation., according to additional coverage

The arrangement also avoids drawing UK partners into the complex US tax system, a significant consideration that might have complicated a full merger. The flexible structure allows other RSM member firms worldwide to join the partnership over time, creating a scalable model for global expansion., according to recent innovations

Competitive Positioning in Evolving Market

RSM, ranked as the world’s sixth-largest accounting network by revenue, brings together substantial resources through this partnership. The US operation contributes approximately $4 billion in annual revenue with nearly 17,000 employees, while the UK firm adds roughly £600 million in revenue and 5,400 staff. Combined, the partnership will account for about half of RSM International’s $10 billion global revenue.

The timing is strategic, as rival networks including Grant Thornton, KPMG, and BDO are also consolidating their member firms. The partnership, internally codenamed “Project Bamboo” for its “fast-growing, flexible and resilient” qualities, positions RSM to compete more effectively in an industry experiencing rapid transformation.

Investment in Technology and Talent Development

The combined leadership board will oversee partner compensation and profit-sharing arrangements while directing funds toward strategic investments. Key priorities include AI-driven upgrades to RSM’s audit platform and other technological enhancements that improve client service delivery.

“The big picture objective is to drive more collaboration, better client experience and more talent opportunity,” Donaldson stated. He noted that even independent sister firms within the RSM network would benefit from the faster-growing US-UK business, which would refer work throughout the network.

Future Flexibility Maintained

While the current model provides an alternative to private equity, both leaders maintained flexibility for future capital strategies. Donaldson acknowledged the industry’s rapid evolution: “There’s been more change in our profession in the last five years than in the previous 25 years, so who knows what happens next?” He suggested that a major acquisition might eventually require private equity partnership.

Becker even raised the possibility of a future stock market flotation: “If the ultimate endgame is our industry goes to the public markets, we have that opportunity to do the same thing. It comes with its share of challenges. I don’t see the benefit as of yet, but the important thing is we are keeping our options open.”, as additional insights

Industry Implications and Strategic Significance

This partnership model represents a significant innovation in professional services firm structure. By creating a middle ground between complete independence and full merger, RSM has developed a template that other mid-tier networks might emulate. The approach allows for shared investment in technology and talent development while preserving local autonomy where it matters most.

The timing is particularly noteworthy as accounting firms face increasing pressure to invest in technology, particularly artificial intelligence and data analytics capabilities, while competing for talent in a tight labor market. RSM’s solution provides the capital needed for these investments without the constraints that often come with private equity ownership.

This strategic move demonstrates how professional services networks are adapting to market pressures while maintaining their core values and partnership structures. The accounting industry continues to evolve rapidly, and innovative governance models like RSM’s new partnership may become increasingly common as firms seek competitive advantage.

This article aggregates information from publicly available sources. All trademarks and copyrights belong to their respective owners.

Note: Featured image is for illustrative purposes only and does not represent any specific product, service, or entity mentioned in this article.