With margins tightening even as revenues rise, tax firms can no longer rely on traditional growth methods, and firm leaders must now treat pricing, capacity, service mix, and succession as levers that can separate their firm from competitors — these 5 growth strategies will show them how
Key takeaways:
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Ways of achieving growth has changed — Sustainable growth now depends less on raw revenue and more on improving income per partner through smarter leverage, intentional service mix, and disciplined pricing.
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Proactive firms will be better positioned — Firms that adopt data-driven pricing, bundled offerings, and subscription models will be better positioned to communicate value, raise fees confidently, and protect margins.
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Differentiators are shifting — Leadership depth, culture, and succession planning are emerging as decisive differentiators as demographics shift, private equity reshapes the tax market, and next-generation partners step into control.
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Tax, audit & accounting firms are still growing, but not all that growth is reaching the bottom line — indeed, 2026 is shaping up as a separate or be separated moment for many tax firm leaders. To sustain income per partner while the market shifts, firm leaders need to be far more intentional about how they grow, price, staff, and position their tax practices.
Here are five important ways that tax firm leaders can ensure their bottom-line growth keep pace with their top-line revenue:
1. Be deliberate about how you grow
Revenue is rising, but margins are under pressure. For example, for firms with revenue of more than $2 million, revenue grew 7.9%, yet income per equity partner (IPP) increased only 3.2%. This may imply that although firms are bringing in more money, the remaining profits available to distribute to equity partners isn’t growing at the same rate. This could mean that it’s costing firms more to generate more revenue possibly because expenses are eating into margins.
Meanwhile, 13.9% of total growth for firms whose revenue is more than $2 million now comes from mergers, and for firms with revenue of more than $20 million, more than one-fifth of growth is merger-driven.
For growth strategy, leaders should clarify their organic growth plans in light of this robust M&A drive, deciding when acquisitions are truly about capacity, specialization, or geography and when they are merely propping up lagging organic growth.
Leaders need to protect IPP metrics by focusing relentlessly on revenue per partner and revenue per person as primary levers, rather than chasing top-line growth for its own sake. Leaders also need to build optionality — with private equity, mega-firm consolidators, and independents all active, factors such as succession, capital, and ownership design have become core strategic decisions that can no longer be left to chance.
2. Treat pricing as a growth discipline
In the Thomson Reuters Institute’s pricing report for tax, audit & accounting firms, 64% of decision-makers said their firms saw revenue increases, but only 45% reported increased profits — a clear indication of margin compression. Further, just about 1-in-5 professionals said they feel “highly confident” that their firm’s current pricing reflects the expertise of its professionals.
To be sure, key pricing work now involves moving beyond what the market will bear. While hourly billing still dominates (according to the report firms said over 40% of client engagements are billed on an hourly basis) — value-aligned methods such as fixed fees, subscriptions, and bundled packages are strongly associated with higher pricing confidence and a firm’s greater ability to raise fees.
To excel in this area, tax firm leaders need to use data rather than their gut. Although only 30% of respondents said their firm regularly benchmark their pricing against competitors, leaders overwhelmingly say better market intelligence would increase pricing confidence. Also, firms should expand subscription and bundle pricing options, since respondents form subscription-billing firms report significantly higher confidence that their pricing reflects value. Indeed, many firms using bundled packages have raised prices 10% to 24% or more over the past two years.
3. Build a capacity model that scales
The Rosenberg data is blunt: The fastest path to higher income per partner is not logging more partner hours — it is using smart leverage and stronger rates. Elite tax firms (those with IPP above $800,000) generate roughly $3.9 million in revenue per equity partner and maintain staff-to-partner ratios of around 17:1.
Several capacity dynamics matter in practice. Leverage drives profitability, for example, and those firms that have staff-to-partner ratios above 10 report IPP roughly double that of firms with ratios below 3, even though they may carry higher salary percentages.
Further, outsourcing has become mainstream. More than 4-in-10 firms (42%) with more than $2 million in revenue now outsource full-time equivalent (FTEs) employees, a figure that rises to 63% among firms with more than $ 20 million dollars. Interestingly, turnover has eased to about 11%, the lowest for the industry in years, but expectations have shifted as firms intentionally reduce average billable hours per staff member to prioritize sustainable workloads.
In fact, the key growth question is no longer Can we find the work? but rather Can we design a capacity model — onshore, offshore, AI-enabled — that supports higher rates without burning out our people?
4. Formalize strategy, marketing & service mix
Firms with written strategic plans earn about 4.5% more IPP than those without, according to the data, and firms with a formal marketing plan enjoy about 9% higher IPP. The most profitable firms are also more intentional about service mix, tilting toward advisory and financial services.
Growth-enabling practices start with written strategic and marketing plans. Firms that document these plans consistently outperform their peers, particularly when navigating private equity interest, AI adoption, and succession decisions. Many leading tax firms are deliberately shifting from compliance to advisory, reducing their reliance on commodity tax compliance and expanding into higher-value advisory work to drive stronger profitability. These firms are also packaging and communicating value more effectively by bundling compliance and advisory services into tiered packages, which in turn gives them greater ability to raise fees and justify premium positioning in the market.
5. Invest in leadership, culture & succession
Growth without leadership depth is fragile, especially in the tax profession in which the average partner age has remained high. Most recently, however, the average partner age has dipped slightly to about 52 years old as more retirements occur. And female partners now account for roughly one-quarter of partner groups overall, showing progress but also a persistent equity gap.
For many firms, succession remains a primary concern, and leadership-related growth priorities begin with treating succession as strategy, not an HR project. More firms are revisiting buy-in levels, which average around $133,000, and are experimenting with non-equity roles and alternative practice structures to create more flexible pathways to ownership. At the same time, leaders must protect and modernize their firm culture, recognizing that poorly managed PE transactions, rigid return-to-office policies, and underinvestment in technology-forward talent can quickly erode the very engines of growth they depend on.
Additionally, firms are elevating the managing partner role. In larger practices, managing partners’ chargeable hours are now meaningfully lower, reflecting an intentional shift toward having that role work on the business — strategy, talent, pricing, and M&A — rather than in it.
For tax firm leaders, these five considerations form a practical checklist for 2026 planning. Grounding each strategic initiative in data and taking visible action can help ensure that the next wave of growth shows up not just in revenue, but in sustainable, rising income per partner.
You can download a copy of the Thomson Reuters Institute’s pricing report for tax, audit & accounting firms, here
