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The IPA 100 gets most of the attention, but the other 400 firms in the IPA rankings reveal how quickly strategies are spreading across the profession.

In this episode, Chelsea Summers and Rob Brown compare the IPA 200, 300, 400 and 500 across growth, profitability, service mix, leverage, pricing and offshore staffing.

Compliance remains more dominant among smaller firms, but advisory, alternative pricing and offshore staffing are increasingly part of their strategies. And while fewer smaller firms use offshore FTEs, those that do rely on them at higher concentrations than their larger peers.

Chelsea and Rob break down what the numbers mean for firm leaders and why the strategic gap across the rankings may be narrowing.

View the complete 2026 IPA 500 rankings and learn more about IPA’s benchmarking and analysis at insidepublicaccounting.com.

So if I have a managing partner, firm line leader listening to this, what's the big picture takeaway across all four tiers?

Yeah, I think the tiers are converging. So compliance is still anchoring those smaller firms more than the larger ones. But even the smallest firms in the IPA five hundred are building those advisory lines. They're adjusting and thinking about pricing models, and they're concentrating on offshore talent at rates that exceed their bigger peers.

Welcome back. This is the Inside Public Accounting Podcast, where we turn the accounting profession's most important data into insights you firm leaders can actually use. I'm Rob Brown.

I'm Chelsea Summers, Executive Director of Inside Public Accounting.

Now most of the attention every year goes to the IPA five hundred Chelsea. It's the biggest firms, the biggest names, but today we're gonna use our time somewhat differently, aren't we? We're going somewhere different outside the one hundred.

Yes, we're gonna talk about the two hundred, the three hundred, the four hundred, and the five hundred.

And and the four tiers, four hundred firms. It's really interesting data that you put in together with all of these rankings.

Yeah, and I I would probably argue that this is where the real story of the profession is playing out. These firms are proving that you don't need to be a top one hundred name, a large practice to run a sophisticated profitable operation.

Yeah, there's some amazing firms on the list. So let's set the stage for our audience. Give us a scale of what we're talking about here with these four hundred terms.

Yeah, so the IPA two hundred covers those firms ranked number one one through two hundred, and they range from twenty-six point seven million to sixty-four point six million in revenue. Together they generated just under four billion dollars. The IPA three hundred picks up in those firms two hundred one to three hundred, sixteen point six million to twenty-six point six million, and that's two point one five billion in combined revenue. The four hundred is number three one to four hundred.

from 10.9 million to 16.5 million. And then that IPA 500 rounds out with number 401 to number 500, from 6.1 million is our IPA 500 firm to 10.9 million.

Astonishing numbers and these firms are are so active. So we're talking about roughly eight billion dollars there in combined revenue that that doesn't nearly get the airtime the top one hundred does.

Exactly. And what struck me looking at this year's numbers side by side is these firms aren't just smaller versions of top one hundred. They're running the same the same playbook. They're just doing it at different speeds and different scales.

That's a really good way to put in it. Okay. So let's start with the IPA two hundred since it's closest to the top one hundred. Well what's the headline here?

headline I saw was discipline. So organic growth held at seven point five percent, which was consistent with last year. And total growth, which included mergers, it pulled back a little bit to eight point one percent. It was eight point six percent last year. so the top line growth moderating slightly.

Profits didn't moderate, did they?

They did not. So net income grew to twelve point six percent, which is way ahead of the seven point six percent last year. Yeah.

The story, isn't it?

Net income per partner came in at eight hundred and six thousand, which was up from eight hundred and one thousand last year.

That's a very meaningful gap. So growth is cooling, but income is accelerating. How does that happen?

So productivity and cost management. So net revenue per employee climbed to 238,000 from 230,000 last year. That's five straight years of gains. And firms are getting more out of every person on staff, even while their personnel cost crept up slightly this year. It was 50.6% of revenue, up from 49.8% of revenue last year.

And I was guest on a firm's podcast recently. It's an internal podcast. A firm called Dean Dalton, Chelsea, and mentioned some of the IPA stats that you've got, and specifically the one where the fastest growing firms have more staff per equity partner than the others, 27 to 16. And that was a really startling start for the firm that I was working with. And just testimony to how.

these stats really play out in firms and and just in their strategy too.

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So tax compliance looks like it's still the anchor for this group of firms, Chelsea.

It is. So tax averages forty point three percent of their firm wide revenue, where consulting and advisory pulled back a little bit, down to thirty point six percent of revenue from thirty four point five percent of revenue that the year before.

Is interesting. So advisor is retreating, even as everyone's talking about it being the future.

Yeah, it it is interesting. It's a bit of a gut check. I don't think it means if advisory is fading. It I think it either means that compliance just grew faster this year, which happens. It also could be that the IPA 200 list changed slightly with all of the mergers this year. Yeah. But it made me think that the advisory shift isn't going to be a straight line up every year for every tier of firms.

The other aspect too is that compliance is not dying. It's it's still very much the backbone, the bread and butter of firms, and maybe they're just doing it better and pricing it better and all kinds of things going on there. Let's talk about offshoring for a moment, Chelsea, because there's a theme running through every one of these tiers.

It is for the IPA 200 offshoring is really the norm now. 72% of firms employ offshore staff. And among those firms that have offshore staff, they make up about 5.6% of total headcount, which is up from 5.1% the year before. So on top of that, 56% of firms send at least some of their tax prep work to an outside vendor.

So very few firms are pulling back on offshore.

ninety one percent of those firms that are already outsourcing or offshoring plan to keep doing it or expand next year. I think we're not in an experimental phase anymore for these top two hundred firms. It's part of their infrastructure.

Yeah, that's a really good point. It's working and it's proven. It used to be a stigma back in the day when it started, but now everybody's on board with it because it's a it's a proven model. Let's drop down to the IPA three hundred, Chelsea. So these are the firms ranked two hundred and one to three hundred. What changes there?

So growth has slowed a bit more here as well. Organic growth came in at six point five percent, which was down from eight point five percent the prior year. But like the two hundred, profitability was a more positive story. So net income growth stayed in double digits, ten point six percent. Net income per partner climbed five point six percent this year, and it was seven hundred and ninety-one thousand dollars per partner.

Okay, so significant. And a similar pattern, the growth is easing, but the profits are holding up.

Yeah, and I think that pattern is probably gonna show up in every tier we talk about today. Efficiency is doing a lot of the heavy lifting. Net revenue per FTE reached two hundred and thirty thousand. That's about ten thousand dollars up from the year before that.

What about the service mix at this level?

Yeah, so tax continues to be heavy, 42.3% of revenue. But in this tier, advisory is gaining some ground. So client accounting services alone produce $241 million across the group, averaging 12.6% of revenue of the firms that offer it. So investment advisory services also added another 35 million, about 7.2% of revenue for the firms that it offers, investment advisory services.

So cas while it's still young, it used to be a side offering, it it's becoming a real business line.

Yeah, and I think that's important because CAS requires a different delivery model than their compliance work. Firms that are this size are building that muscle that tells you that they're gonna be thinking several years ahead.

Mm, what does the offshoring look like in this group?

So fewer firms are using it, but the ones that are using it are leaning on it heavier. So fifty seven percent of the IPA three hundred employ offshore FTEs. But those firms that have offshore staff, it makes up seven point seven percent of total headcount. So that's a higher concentration than the IPA two hundred.

Okay, so to translate that, the smaller firms are actually more dependent on offshore stuff where they use it, even if fewer of them have adopted it yet.

Yeah, that's the pattern, and we're gonna see that get even more pronounced as we move down the tiers. We know many of you listen to this podcast on the go, driving to work, working out, even doing chores. Now you can get CPE credit for that time. With Earmark, you can earn free NASBA approved CPE for listening to the Inside Public Accounting Podcast. After you listen to an episode, take a quiz and your certificate will be ready. Earmark has courses for everyone in your firm, from staff to partners. Get started today at Earmark.app.

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And leverage staff per equity partner, how does that compare?

So the IPA three hundred runs more leverage than the two hundred. So it's thirteen point seven FTEs per equity partner versus twelve point six. And looking at that five year trend, that number has climbed from eleven point three five years ago to thirteen point seven today.

So that's a real structural shift. That's not just a one year blip.

That's right. Partner compensation for new admits tells a, I think, a story here as well. So new equity partners average 311,000 and new non equity partners at 205,000. So that's the starting compensation. And the pay spread between the highest and lowest equity partners is 2.7 times. So that's more compressed than 3.3 times we see in the IPA 200.

Okay. So we've covered the two hundred, we've covered the three hundred. Let's get to the IPA four hundred. What's the store there?

So this is where compliance really starts to become a dominant service line. So tax accounts for forty five point seven percent of revenue, the highest share we've seen, and assurance adds another twenty five point four percent with non compliance work, that consulting, CAS, advisory that averages twenty eight point nine.

The smaller the business, the more it's running on compliance.

Consistently, yes. The growth held up reasonably well for this tier as well. So total growth, including mergers, averaged seven point seven percent and net income jumped to eleven point two percent from seven point four percent the year before.

What about partner income?

Yeah, so net income per partner reached six hundred and seventy-eight thousand, which is a three point nine percent jump from last year. So it's lower in absolute dollars than the larger tiers, but that growth rate shows you that these firms are moving in an upward direction as well.

They're all moving and it it must be that they're pricing differently, they're running more efficiently. That I know we've talked about pricing in some of the other issues. Is that a theme here?

Yeah, it's in transition. So traditional hours times rate billing still generates fifty-eight point five percent of revenue, with fixed or upfront fee arrangements making up thirty-eight point nine percent. So this tier is experimenting with alternative pricing, but it hasn't fully broken free from that billable hour model yet.

billable hour. And I know you're becoming something of a pricing expert, Chelsea. You've been asked to speak on pricing at at certain events. The the offshore model is jumping out at me at all levels, but it it's particularly interesting here.

Only forty two percent of the IPA four hundred firms employ offshore staff. So lowest adoption rate we've talked about so far. But at those firms that do, offshore FTEs make up nine percent of total headcount. That is a very high concentration.

So again, fewer firms are doing it than but ones that commit to it are going all in.

Yeah, that's the pattern that we're seeing. Eighty percent of firms that are already using outsourcing or offshoring plan to sustain or grow it next year. So once those firms cross that adoption threshold, they really don't look back.

Mm-hmm. What about leverage, which is becoming my favorite statistic in some of these rankings?

eleven point eight FTEs per equity partner. So a little bit smaller than the IPA 300 at 13.7. But that makes sense given these firms are smaller and smaller firms are typically a little more flat. But when we look at the five year trend, leverage has climbed from 9.7 FTEs per partner five years ago to 11.8 today. That's a big shift for firms of this size.

And it's amazing that you can see it over five years, Chelsea, because you've got that longitudinal data and you look for patterns over time and and so many things come up that you that you don't see in a one off hit. So let's finish with the IPA five hundred, the smallest firms in the Rack and so these are four hundred and one to five hundred. What's going on there?

So they're the smallest by revenue that with that IPA 500 coming in at 6.1 million this year, but they're not small in impact. So they generated $878 million in revenue together, and their tax compliance work was very dominant. So 47.1% of total revenue came from tax compliance. and assurance added 23.6%.

And growth?

Pretty strong. So organic growth came in at seven point eight percent and total growth reached seven point nine percent with mergers included. So that's pretty in line with those larger tiers. So I don't think that growth is just a big firm story. It's consistent on all size firms.

What about the bottom line?

So net income growth was a little bit more modest for these IPA 500. It was 6.1%, but that was up from 5.5% last year. So smaller than the double digit gains we saw in the IPA 100 or those larger firms. but we did see personnel cost hold at 46.5% of revenue. So that's the lowest personnel cost we saw of any group.

So less top line growth, but tighter disciplines with costs.

Yeah. And I think that discipline is one of the reasons that these IPA five hundred remain viable and independent even at this size.

So the offshore number, I'm guessing, is gonna be the most extreme of the day. We've seen the direction of travel here.

It is only thirty six point five percent of the IPA five hundred employ offshore FTE. So that's the lowest adoption rate of any tier, consistent with the trend we're seeing so far. But in those firms that have offshore staff, they make up nine point six percent of headcount, the highest concentration that we've seen.

So the smallest firms in our rankings have the least adoption and the deepest reliance once they do adopt. Yeah.

And eighty two percent of those firms plan to maintain or expand their offshoring strategies. So even at the smaller end of the market, once the firms commit, they really stick with it and grow it.

So give us the the leverage and partner pay figures to close that out.

Yeah, so leverage is the leanest of all the rankings at 9.8 FTEs per equity partner, but it is up slightly from 9.6 the year before. partner pay is the most egalitarian of any tier. The highest paid partner earns just 2.1 times the lowest paid partner. it's a a compression trend that runs from the IPA 200 3.3 times and goes down in the tiers.

So if I have a managing partner, firmware leader listening to this, what's the big picture takeaway across all four tiers?

Yeah, I think that tiers are converging. So compliance is still anchoring those smaller firms more than the larger ones. But even the smallest firms in the IPA five hundred are building those advisory lines. They're adjusting and thinking about pricing models and they're concentrating on offshore talent at rates that exceed their bigger peers.

So it's the same game, they're just playing it at different speeds.

Exactly. Five years ago, a lot of these strategies, offshore staffing, alternative pricing, has as a real business line were very top one hundred conversations. But now they're showing up meaningfully in firms as small as six million dollars in revenue.

Which means the strategic gap between the ten million dollar firms and the sixty million dollar firms, that's narrower than it used to be.

Yeah, I think that's exactly right. So growth is broadly healthy across every tier. Profits are rising over the last five year window that we looked at, and leverage has climbed steadily in the two hundred or in the three hundred, four hundred, and five hundred specifically. So these firms are professionalizing pretty fast.

That sums it up really well, but

It's a real word, but we're gonna use it today.

No, I got it. You we're creating a new dictionary, a new doxology, as they say. But that's right, they are. They're getting slicker, they're getting more powerful, they're getting more leverage, they're utilizing everything at the disposal. It's such a a great message. So what we're saying here is for the firm leaders outside the top one hundred, it it don't assume these strategies just apply to the big names.

Yeah, if you're running a $15 million firm and you're not thinking about offshore capacity, alternative pricing, or advisory services, your peers in the same tier as you already are. And the data is showing that the those those experiments are really paying off for those firms.

It's a classic good to great question, isn't it? What are the great firms doing that the good firms are not? And this data really highlights it. Well, Chelsea, this has been an amazing tour of data that we don't spend enough time on. And thanks for walking us through.

Always happy to dig in the tiers that don't always get all the spotlight. There is a lot happening here, and we just gave you the top high-level highlights of those 200, 300, 400, and 500 firms. we will be publishing a lot more in our sorry our August IPA insights. So if you're interested, check out the show notes and we will have links to purchase.

Yeah. That's it for today's episode of the Inside Public Accounting Podcast. If you found this helpful, please like and subscribe. We love it that you do that. Leave us a comment. We listen and watch for all of those. We'd love to hear on how your firm stacks up against these numbers.

Thanks for listening and we'll see you next time. Thanks for listening to today's episode. If you enjoyed this podcast, you can click below to subscribe and check out more from Inside Public Accounting.