Accounting: regulation, big 4 pullback boosting smaller firms.

The reallocation of clients and resources going on at the biggest accounting firms appears to be a boon for their smaller rivals.

Take RSM McGladrey (tax and business consulting) and McGladrey & Pullen LLP (audit), the second-tier firm headquartered in Minneapolis. McGladrey recently announced that it would need 350 employees in the next six months, an 8 percent hike over the 4,400 it currently has on the payroll.

"We've experienced significant growth for a variety of reasons--regulatory requirements of Sarbanes-Oxley, the Big Four's decreased focus on mid-sized companies, a stronger economy and our expansion of industry and special services practices," said William D. Travis, McGladrey's managing partner, in an announcement.

Big Four firms are clearly reassessing their client rosters. One of McGladrey's accountants recently related an instance where a Big Four firm bid $1 million on a job where McGladrey bid $650,000. The company elected to go with the bigger firm because it felt it needed the cachet, but when the work was later revamped and the price tag went up to $2.5 million, the big firm decided to bow out anyway.

Actually, accounting firms of all sizes should benefit from a projected surge in accounting employment: the U.S. Bureau of Labor Statistics estimates that the total number of accounting-related jobs will grow almost 20 percent by 2012.