The PE-Backed Competitor Next Door: How Independent Firms Compete Without Selling

The competitive landscape for independent accounting firms has changed more in the past four years than in the previous four decades. As of 2026, more than half of the largest 30 U.S. accounting firms have sold an ownership stake to private equity investors. PE-backed platforms completed 86 transactions in 2025 alone, and the pace has continued into 2026. A firm that didn't exist three years ago is now a national player. A competitor that was a regional practice two years ago has acquired five firms since January.

For the thousands of independent mid-market firms watching this from the outside, the question has shifted. It's no longer whether PE will reshape the competitive landscape. It already has. The question is what an independent firm does about it, and whether staying independent requires a different kind of intentionality than it did five years ago. The answer, supported by research and demonstrated by firms already doing it, is yes. Independence is a viable path. It is not a passive one.

What You're Actually Up Against

PE-backed firms have three advantages that compound over time, and it's worth being clear-eyed about all three. First, they have capital for technology investment and talent acquisition that traditional partnership models struggle to match on the same timeline. Second, they have acquisition velocity, the ability to build market density and service adjacency in specific geographies quickly. Third, they can offer equity participation and compensation structures that attract emerging talent in ways that most independent firms currently can't.

Those advantages are real. They're also specific. PE capital solves particular problems: succession gaps, technology investment backlogs, and the need for acquisition capacity. For firms that don't have those problems, or for firms willing to solve them differently, accepting outside investment means trading governance autonomy, cultural control, and long-term independence for capital that may not be the only way to get where the firm needs to go. According to the Thomson Reuters Tax Firm Growth Report 2025, more than half of industry practitioners say PE isn't on their radar, and another third aren't interested. Two-thirds believe PE investment would negatively impact firm integrity and independence. That skepticism isn'tnostalgia. It reflects a genuine assessment of what the trade-off actually costs.

The Opening PE Is Creating

Here is what most independent firms aren't talking about: rapid PE-backed growth is generating structural vulnerabilities that create real competitive openings for independents willing to position around them deliberately.

Research from multiple sources documents a consistent pattern inside firms that transacted two and three years ago. Client service is shifting toward transactional models optimized for profitability metrics rather than relationship depth. Younger partners who didn't receive significant liquidity in the original transaction are becoming dissatisfied and leaving. Senior partners who benefited most from the buyout are creating internal misalignment as their interests diverge from the partners who are still building. These aren't hypothetical concerns. They're documented dynamics already playing out across the profession.

For independent firms, this is a talent and client acquisition opportunity with a defined window. The clients most likely to be receptive to a conversation with a different firm are those who built their relationship with a specific partner and are now being rotated through a staffing model built for efficiency. The talent most likely to be available is the next generation of professionals who joined a PE-backed platform expecting a culture that hasn't materialized. An independent firm that positions around relationship continuity, senior-level access, and cultural stability isn't making a soft argument. It's making a structural one, backed by what the research shows is actually happening inside these platforms.

Independence Is a Strategy

The firms that compete successfully as independents share a common trait: they stopped treating their independence as a default and started treating it as a decision with specific investments attached to it. The clearest example at the high end of the profession involves a top-10 firm that committed to a multi-year, nine-figure technology investment plan rather than accepting outside capital to fund it. The logic is transferable at any scale: the firms that stay independent successfully are the ones that solve for the problems PE solves, through their own means and on their own terms.

Thomson Reuters framed it plainly in its 2025 white paper on the topic. Firms that act deliberately, upgrading technology, growing advisory capabilities, and aligning structure with strategy, can compete and thrive whether independent or PE-backed. The only losing move is standing still. That applies to every firm in this conversation. BDO's analysis of succession alternatives reaches the same conclusion: the firms best positioned to maintain independence long-term are those with an emerging talent base, diversified service offerings, and a niche they're committed to building.

Where Independents Win

There are three areas where independent firms hold genuine competitive advantages that PE-backed platforms structurally cannot replicate at scale. Recognizing them and investing in them is the difference between independence as a competitive position and independence as a holding pattern.

The first is client relationship depth. The research consistently shows that clients with long-standing relationships to specific individuals are the least likely to move through a firm transition and the most likely to respond to a competitor's outreach if that relationship gets disrupted. Independent firms can build and protect those relationships in ways that a platform optimizing for standardization and margin simply cannot match at scale. Senior-level access is real, it's valued, and it's something owner-operated businesses and closely held companies notice immediately when it disappears.

The second is culture, and it matters most through its effect on talent. In a profession dealing with serious pipeline challenges, firms that can genuinely offer a different environment from the PE-backed model will attract and retain professionals that equity packages alone won't keep. The CalCPA CEO captured it directly: many firms are choosing to stay independent so they can grow on their own terms and preserve the people-first, client-first culture that defines them. Culture isn't a soft differentiator when the profession is struggling to develop the next generation of firm leaders.

The third is agility. Independent firms can adjust pricing, enter new service lines, respond to client opportunities, and make strategic decisions without navigating the governance layers, return timelines, and investor alignment requirements that PE-backed platforms operate within. In a market moving as fast as this one, that flexibility has real value.

What the Plan Requires

Independence without a plan is not a strategy. It's a delay. The firms building durable independent practices are making specific investments in five areas, and if your firm hasn't addressed all five, the gaps are worth examining honestly.

• Strategic clarity: a defined direction specific enough to drive decisions, not just describe aspirations. Where is the firm going, who does it serve, and how does it compete?
• Specialty depth: a niche or service line built to a standard that commands premium fees and resists commoditization. Generalist compliance work is the most exposed to both PE-backed competition and technology displacement.
• Succession infrastructure: a leadership development pipeline that doesn't require a transaction to solve the partner transition problem. This is where most independent firms are most exposed.
• Technology investment: a deliberate, funded approach to staying competitive on the tools and workflow capabilities that PE-backed firms are building with outside capital. The gap widens every year it goes unaddressed.
• Positioning: a visible, differentiated external market presence that makes the firm's value clear to the clients, referral sources, and talent that determine its future.

Final Word

Staying independent is a legitimate choice, and it's one a significant majority of the profession is still making deliberately. What it requires now is the same level of intentional investment that PE brings to its growth strategy, applied on your own terms and in service of the firm you're actually trying to build. The firms that will look back on this period as one they navigated successfully are the ones that treated independence as a decision, built a plan around it, and executed with the same urgency they'd bring to any other competitive threat.

Hollinden works with independent mid-market firms to develop the strategic clarity, specialty depth, and market positioning that make staying independent a competitive choice rather than a missed opportunity. If your firm is ready to think through what that strategy looks like, let's talk.