HORNE CPAs & Business Advisors built its brand as specialists in helping hospitals navigate the twists and turns of Medicare financial regulations.
While the partner-run company achieved considerable success as the go-to-firm for Mississippi’s hospitals, Roy Ward never got entirely comfortable entrenching HORNE in the medical sector during his 30 years as president and CEO. Ward saw the federal government as the entity that controlled Medicare as much too unpredictable for the firm to continue to stake 60 percent to 65 percent of its business on.
“That kept me awake at night,” Ward said. “One sweep of the pen and we could lose half of our business overnight.”
The solution was to diversify, to “reduce the percentage down from 60 percent to a more reasonable percentage,” said Ward, who led the firm from 1977 to 2003.
The chosen strategy: Keep growing the medical sector work but add clients in a variety of fields such as construction, financial institutions, franchising, private equity and wealth management, among others.
“We grew the dollar amount on health care every year but got that percentage down to 30 percent. And we grew the business in a lot of other fields.”
HORNE had put offices within an hour-and-a-half drive of every Mississippi hospital — Biloxi-Gulfport, Grenada, Hattiesburg, Ridgeland and Lucedale. Though designed to build and service the firm’s hospital clientele, the local offices served as bases from which the company could recruit new non-medical clients, Ward noted.
HORNE added professional staff at a steady clip. And as outside companies pried loose senior staffers to fill positions as CEOs and CFOs, the firm often gained business from the companies and institutions that hired them, Ward noted.
Recently retired partner Larry Welborn witnessed the cycle frequently in his 40 years with HORNE. “Our best business development is the alumni we have out there in the field,” said Welborn, who joined HORNE’s Laurel office in 1971 and retired as a partner in August.
Ward said he noticed a tendency for former staffers to return to the firm, and bring new business with them. “At one point we had 18 or 20 people who had left and come back,” he said, and added they tended to be more committed their second time around.
Part of the attraction, Ward said, was HORNE’s emphasis on keeping professional staff involved in the sectors that made up their main interests. “We tried to develop a practice so people could do what they like to do all the same. A lot of people like taxes. Their recreational reading is the IRS code. So we let them specialize.”
Staff longevity has factored into the lengthy stays some clients have had with HORNE, as does the firm’s philosophy that even the most senior of managers must do client work, Ward said. “We were able to represent ourselves as having the same people working on your account year after year. This included partners working on your account, whereas the Big 8 clients never saw a partner.”
Welborn, who finished his HORNE career as chairman of its board, said rank did not exempt anyone from the nuts and bolts work. “We don’t have a position where you sit behind a desk. You are out there.”
The challenge, noted Ward, is to become large while “staying small.”
Welborn credits Ward for igniting the firm’s growth through diversification but emphasizes the branching out could not have occurred had HORNE not already established itself as a leader in serving Mississippi’s health care sector.
“When a firm has a strong distinguished expertise they can definitely grow better and faster.”
Franchising, especially in fast foods, marked an early non-medical client target. HORNE developed “a unique turnaround” service for the franchisers that involved making their financials available monthly and helping them to better operate their businesses, Welborn said.
“Then we got into the banking business,” he added.
Nimbleness to react to events has helped the growth as well.
For instance, in the weeks after Hurricane Katrina the need to help businesses account for their losses and regain their footing became obvious. HORNE thus created a disaster recovery practice that continues today.
Client growth has also occurred in the construction practice, despite one of the worst prolonged building slumps in memory.
In fact, the economic slump has led clients across a range of sectors to rely more on financial service and business advisory firms to help them through the downturn, said HORNE partner Joe D. Havens, who takes over May 3 as executive partner.
In a hard recession, a momentary lag occurs as everyone draws back, Havens said. “But then they decide, ‘I’ve got to have somebody who is really focused on my business to help me through this.’”
Today, with much of the battering over, “more clients are saying, ‘I need additional services. I need additional help.’”
As HORNE enters its second half-century, the partner-run company will be recruiting a certain type of professional to fill its ranks: an individual who takes a client loss personal and one who wants to join the partner’s table, Welborn said.
“If you don’t want to be a partner in this firm, it probably isn’t for you.”
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