2 decades in the black.
Over the last 20 years, the co-founders of Mitchell, Titus & Co. have built what started out as a six-client, two-partner firm in 1973 into the largest minority-owned, certified public accounting frim in the nation. In what industry insiders describe as the most competitive market in years, the $17 million firm ranks 37th in the nation among all accounting firms. No easy feat in an industry that has never had more than 1% black representation.
The success of this dynamic duo has been achieved without the Wham! Bam! of their caped counterparts. Strategically planned growth, long hours and a dedication to "doing what's best for the firm" has Mitchell, Titus prepared and poised to challenge the Big Six accounting firms (Arthur Anderson & Co., Ernst & Young, Deloitte & Touche, KPMG Peat Marwick, Coopers & Lybrand, and Price Waterhouse).
In celebrating 20 years of business success, Mitchell, Titus continues to provide demonstrable evidence of the type of topnotch quality and performance available from black-owned businesses today. BLACK ENTERPRISE began chronicling the struggles of Bert Mitchell and other accounting professionals in 1972. Through the years, we've sought Mitchell's business wisdom: He was the subject of a cover story in 1986. Now, the founding partners, Mitchell and Titus, must successfully transfer to the next generation of leadership the business principles and savvy that enabled their firm to survive and thrive.
From the height of his Wall Street office with a view that stretches from the World Trade Center to far beyond the Statue of Liberty, Bert Mitchell presides over his 16-partner firm. The well-groomed chariman and CEO is a force in the industry with celebrity status. He moves effortlessly among the power brokers of the accounting profession. The 56-year-old Jamaican immigrant and Baruch College graduate is the "head" and "heart" of Mitchell, Titus--the visionary, the guru. Thinking ahead as he always does, Mitchell believes that the firm is at a critical transition point.
"Over the next five years, we're going to have a good opportunity to broaden our business base," says Mitchell. He feels the hotly competitive market can help Mitchell, Titus gain stronger representation among Fortune 500 companies and increase its share of minority-owned businesses. With proper decision making, the firm's future opportunities could be as vast as the view from Mitchell's window.
Robert Titus, 53, chief operating officer of the firm's three offices, sees the opportunities as well. A disciplinarian with impeccable organizational and administrative skills, the Brooklyn native, who received his degree from Brooklyn College, is content to toil in the shadow of his more charismatic partner. But Titus knows a profit center when he sees one.
The contrasting styles of the two men complement each other nicely. Mitchell is the "outside man," whose celebrity-like charm and connections bring new clients to the firm. On the other hand, Titus is the "inside man," who maintains client loyalty and satisfaction, with his steadfast attention to details. With Mitchell at the helm, they've charted a course for the firm's steady growth that has sailed them to the top of their profession.
The foundation for that course was developed during Mitchell's rise to managing partner of Lucas Tucker & Co., the oldest black-owned CPA firm in the nation. Arguments over Lucas Tucker's consensus style of management helped Mitchell adopt the position that there can be only a single dominant force within a business. He resigned from Lucas Tucker in 1972, claiming that, "They weren't willing to give me the authority to run the firm although they gave me the title."
Although his strong personality singed colleagues, it helped him capture clients while he practiced privately for one year. As a single practitioner, he developed what eventually became the mold and direction for Mitchell, Titus. Four main principles evolved and still drive the firm today: Choose your clients very selectively; hire only high-quality people; always do what's best for the firm and its clients; and develop a strategic plan that identifies the markets you want to target.
In the early years, instead of taking on all comers, Mitchell, Titus refused many clients. Mitchell understood that reputation would be key. "In my view, we were better off with fewer clients so long as they had the ability to pay and we could really meet their needs," he says. That way, "Clients get the value of the services they are paying for, and we could have mutual respect about their integrity and they about ours."
Even though paying higher salaries to many of its 210 employees cuts a hefty chunk out of his operating budget, Mitchell says seasoned pros produce a higher volume of high-quality work, thereby creating a better value for the firm. Highly qualified employees are a marketing tool because clients want to be served by the best. Says Mitchell: "Anyone who loses sight of the importance of good, competent people in this business doesn't understand what this business is all about."
By rewarding his employees with opportunities for professional development, Mitchell instills in them a zest for doing what's in the best interests of Mitchell, Titus. "The firm is committed to giving the best opportunity to anyone who is still growing and eager to advance," says Jessica K. Ngobi, a manager in the firm's New York office. According to the Uganda native, the willingness of the partners to help others grow creates a family atmosphere unequaled at larger firms. "In this office, everyone knows you and your mother," she jokes.
With the first three principles in place, Mitchell looked to recruit Titus to help him execute his strategic plan. "By the time Bob came to the firm, I had some very definite opinions about where I wanted to go," says Mitchell flatly. "Then it was just a matter of whether or not he wanted to buy into the philosophy."
It didn't take long for Titus to buy in. Normally a low-key fellow, he lit up after Mitchell appealed to his appreciation for numbers. "I was sold on the partnership when Bert showed me his financial statements," says an excited Titus. "He had a good set of clients and he was making money."
With Titus on board, the firm made even more money. During the late 1970s, the firm's strategic plan targeted not-for-profit community-based organizations receiving federal grants from the Great Society programs. Among the first large not-for-profits to enter the Mitchell, Titus stable were the Ford Foundation and the A. Philip Randolph Institute.
As the client list grew, so did the opportunities. Mitchell, Titus was committed to capitalizing on government set-aside programs, most notably the Small Business Administration's 8(a) certification program for minority businesses. The firm opened its Washington, D.C., office in 1979 as part of a push to gain government work from federal agencies. Its reputation for doing quality work kept pace with its growing client base.
Mitchell, Titus pioneered joint venture projects with the Big Eight accounting firms in 1978 when it teamed up on a contract to conduct New York City's first independent audit with KPMG Peat Marwick. Joint ventures would become a boon to the firm through the late 1980s, when an industry downturn whittled the Big Eight down to the Big Six. By focusing on contracts that required minority participation in order to satisfy affirmative-action requirements, the firm held its own with Big Six firms while gaining a portion of lucrative contracts that it could never have won by itself.
These successes provided the foundation for Mitchell, Titus to expand its operations and services. In 1984, the New York-based black-owned accounting firm Stewart, Benjamin and Brown was acquired, adding expertise and resources. In 1986, Mitchell, Titus established its management consulting services division to help attract commercial clients and to cash in on the mushrooming multibillion dollar consulting industry. And in 1990, the firm added its third and newest office by merging with another black-owned accounting firm, Philadelphia-based Leevy, Redcross & Co., in a move to establish dominance throughout the Northeast corridor.
To be sure, Mitchell, Titus' ledger has been in the black financially as well as managerially through its first 20 years. Who could argue that point with the firm boasting a cadre of more than 2,000 clients, including the National Urban League, the Dance Theatre of Harlem, Time Warner, Philip Morris and PepsiCo? But Mitchell, Titus cannot rest on past successes if it is to continue its business longevity.
Today, the accounting industry is still struggling from the severity of the last recession, with all firms threatened by price competition. "Five to ten years ago, there were less competitive pressures. Now, firms are willing to cut price to get business," observes Robert Isrealoff, incoming vice chairman of the 310,000-member American Institute of Certified Public Accountants. "Those accounting firms that are not aggressive at cutting internal costs, operating more efficiently and using computer technology to save money are going to have a tough time surviving."
Mitchell, Titus assesses its strengths and weaknesses each year, mainly through its three-partner control committee. Mary Centeno, the firm's only female partner, served on the quality control committee for four years before becoming managing partner in charge of the New York office. According to Centeno, the committee's renewed diligence saved the firm $2 million in "write-downs"--undercalculations of the actual cost of performing audit work--for 1993.
The firm uses such financial sleuthing to save money for clients as well. Will Archie, managing partner in charge of consulting services, is developing a strong consulting practice that he says is "critical to growth and bringing in new clients, but also to be able to properly service our existing clients. If we don't provide those services, someone else will."
The firm's health care consulting experience is earning growing respect. "In one case, we helped a health care company realize an accelerated $12 million in revenues over a three-month period," says Archie.
The industry leader in consulting services, Andersen Consulting, garnered $2.8 billion in revenues in 1993. While no one is expecting Mitchell, Titus to reach those numbers, the firm is confident it will improve on the approximately $3.5 million in consulting fees it earned last year.
Mitchell, Titus is also looking to court Fortune 500 firms and minority-owned businesses. "Our thrust will be one-on-one, direct contact with clients," says Mitchell. He believes an aggressive marketing campaign that involves all employees will show significant gains in the long run.
"Clients are looking for value-added services. Firms must understand not only the accounting, but how their client's business makes money and what the economic and social issues affecting that company might be," says Beverly Everson-Jones, executive director of the National Association of Black Accountants. Everson-Jones says that this may be particularly crucial for securing business from small black-owned businesses poised for growth.
Both Mitchell and Titus agree with Everson-Jones. But the challenge lies in convincing the Fortune 500 and minority-owned companies that Mitchell, Titus can deliver superior consulting services. Titus is upbeat, especially in regard to minority firms: "We think the black business community is becoming more aware of the importance and necessity of doing business with other black businesses."
A sign that Titus might be right was evident recently when the firm helped structure a joint venture between Burger King Corp., Arkansas-based Hudson Foods Inc. and black-owned Diversity Food Processing, LLC (DFP). The agreement calls for DFP to construct a state-of-the-art meat processing plant in Petersburg, Va. to supply beef patties to Burger King and other restaurants. (Hudson Foods is an investor in DFP.) Mitchell, Titus partner Mike Watson explains: "We helped DFP calculate financial projections and advised them on key parts of their operating agreement."
Retaining the most skilled employees is another major issue. Mitchell, who penned studies detailing the dearth of blacks in the profession in 1968 and 1989, charges that his firm is "raided" every year by competitors seeking qualified minority personnel. Many of his brightest people are wooed away.
To combat this, Mitchell, Titus quickly moves its most technically competent employees up the ladder to become partners. Some senior managers with at least six years of experience have made partner in four years or less. "Using this technique helps us keep a lot of senior people involved with building Mitchell, Titus as opposed to losing them to competitors," says Mitchell.
As for the future, the firm is considering another wave of expansion. Offices in Chicago, Atlanta or Boston are being considered. "It is likely that by the year 2000, we might have offices in two more cities and 500 employees," says Mitchell, who marked the company's 20th anniversary with his plans to relinquish the leadership of the firm.
Mitchell says he'd like to step down in three years. Titus has been more vague, suggesting he will retire in five or six years. Both men say they are comfortable with their decisions and believe the firm will be in great hands. Says Mitchell: "Right now, we have at least three key [partners] that are ready to take over."
It just might take three people to replace these two super heroes.
|Printer friendly Cite/link Email Feedback|
|Title Annotation:||Countdown To 25 Company Profile; Mitchell, Titus & Co.'s continuing success|
|Author:||Scott, Matthew S.|
|Article Type:||Company Profile|
|Date:||Oct 1, 1994|
|Previous Article:||25 years of blacks in financing.|
|Next Article:||Affirmative action and the "dilemma of the qualified." (excerpt from 'The Rage of a Privileged Class') (Book Excerpt)|