From under 80 deals to 500-plus: what retiring accounting partners are actually selling

The number of accounting firms worldwide touched by private equity investment reached more than 500 in 2025, up from fewer than 80 in 2021, according to a figure cited by Brett Kelly, founder and chief executive of the acquirer Kelly+Partners, in CPA Practice Advisor ^[1][2]. That is at least a sixfold increase in four years ^[3], and it changes the thing a retiring partner is negotiating: not a headline price, but a two-to-three-year performance bet.

Kelly writes that most deals today include earn-outs or deferred payments tied to client retention and revenue targets over two to three years after close, so the ultimate payout depends on the firm's ongoing performance ^[4]. He also describes the common post-close pattern from the buyer's side: the acquirer overhauls billing rates, layers in new governance and reporting requirements, and reshapes the practice around its own operating model ^[7]. Put those two sentences next to each other and the structural problem is obvious. The seller is paid on retention and revenue while the buyer sets pricing, reporting and operating process ^[13]. In the typical structure Kelly describes, the seller has sold 100 percent of the equity and may stay only as a salaried employee through a transition ^[11], which means the person carrying the earn-out risk is not the person making the decisions that determine it.

The clock mismatch is the second thing worth pricing. Private equity funds typically run a three-to-seven-year cycle of raising, deploying, improving and selling ^[5]. A two-to-three-year earn-out therefore falls due inside the holding period, in most cases well before the asset is resold ^[12]. Kelly's argument is that accounting is a relationship business and that client trust gets tested every time the owning entity changes hands ^[14]. Whether or not you accept that framing, the sequencing is real: the seller's leverage expires first.

Kelly's proposed answers are, unsurprisingly, a description of his own model. He argues that a genuine 49 to 51 percent equity split for the operator, which he calls the Partner-Owner-Driver model, keeps the person running the firm aligned with it ^[6], and that operating partners should hold long-standing agreements designed to renew, with ten years as a starting point, while asking the buyer directly how long it intends to own and how it intends to exit ^[8]. He says he has spent nearly 20 years acquiring accounting firms and that what happens after signing matters as much as the purchase price ^[9]. That is a buyer telling sellers which terms to demand, and it should be read as such. The underlying operational point still holds for a $2 million or $3 million practice with no dedicated HR, technology, compliance or recruitment function, where the owner absorbs all of it in the margins ^[10]: the value of a buyer is in what it takes off your desk, and the cost is in what it takes off your desk without asking.

Three things to get in writing before signature. First, the earn-out definition: how revenue is measured, whether buyer-initiated price increases count toward the target, and who arbitrates a shortfall caused by a buyer decision ^[4][7]. Second, whether any retained equity is real equity in the operating entity or a synthetic instrument that vanishes on resale ^[6]. Third, the intended hold and exit, in the document rather than the meeting ^[8]. Note also that the article does not name the source of the 500-firm count ^[15], so treat the trend as directionally useful and the precision as unverified.