Devin Mathews has a 14-year-old dog that had never been sedated for a dental cleaning—not once in 14 and a half years. Then a private equity firm bought his veterinary office. Suddenly, the dog needed his teeth cleaned twice a year, at $1,000 a pop.
“I never knew my dog needed so many dental services,” Devin tells Blake Oliver on the latest episode of the Earmark Podcast. “It’s the upsell opportunity.”
This small anecdote captures the anxiety spreading through the accounting profession as private equity floods in. What really changes when PE takes over? Who benefits? Who gets hurt? And what about artificial intelligence? Is it going to make all these PE investments obsolete?
Devin brings an insider’s perspective with an outsider’s freedom to speak plainly. As a partner at ParkerGale Capital with 30 years in private equity, he knows the playbook. But since his firm invests in software companies, not accounting firms, he can share what really happens without affecting any deals. He regularly fields calls from employees at freshly acquired firms trying to figure out what just happened to their careers.
The Satisfaction Gap: Partners vs. Everyone Else
Blake starts with data that sets the tone for the entire conversation. An Accounting Today survey found that over two-thirds of partners at PE-backed accounting firms say they’re satisfied with their experience. But only about 15% of non-partner employees feel the same way.
“Let me get this straight. The partners who got paid in the transaction are ecstatic because they have terminal value,” Devin says. “And the rank and file who probably didn’t even know the business was for sale, their lives have completely changed, and expectations have gone through the roof.”
That’s the core issue. When PE acquires an accounting firm, the capital is there to buy out the existing owners, not fund operations. Partners cash out. Staff wake up to a Zoom call announcing new ownership and dramatically different expectations.
Most employees don’t realize how much analysis has already happened before that announcement. “Some 26-year-old in New York has run all that math,” Devin explains, “and they literally know you and your business better than you know it.” PE firms have sorted every employee by bill rate and utilization. They’ve hired McKinsey or Bain to benchmark everything against industry standards. They know exactly where they can push harder.
The first target is the person who gets paid a lot but doesn’t bill many hours. “This guy has been around for a long time,” Devin describes. “Maybe they’re great at business development, but they’re just not billing the hours anymore.”
How PE Actually Makes Money in Accounting
The mechanics are straightforward: bill more hours, raise bill rates, get more efficient, and make acquisitions. When revenue equals people times hours times rates, those are your main levers.
But Devin acknowledges the challenge with professional services. “The assets walk out the door every night.” Push too hard, and those assets can walk across the street to one of the 44,600 CPA firms in North America that aren’t owned by private equity.
Blake raises a critical point based on his own experience as a manager at a top-25 firm. The traditional path of working your way up, becoming a partner, and receiving ownership and profit distributions disappears under PE ownership. Instead, you get RSUs or phantom equity that only pay out if there’s an exit event.
“You drive home after that speech,” Devin imagines, “and you say to your spouse, ‘Remember that path I had to be a partner? That’s gone. Now I only get paid if there’s an exit.'”
Good PE firms try to address this through transparency and communication. Devin describes his ideal post-acquisition speech: acknowledge the surprise, address the fear directly, and promise that resources will match the higher expectations. “Expectations of ten out of ten, resources of ten out of ten. That’s a great combination.”
But the reality hits later on. “I walk you through the PowerPoint and it sounds really great,” Devin says. “Then six months later you’d be like, ‘Where’s Devin? What happened?'” The speech is easy. Delivering on it is where most PE firms struggle.
AI Changes Everything, But Not How You Think
The conversation takes an unexpected turn when they start talking about artificial intelligence. AI is threatening the entire economic model PE investments depend on.
Devin’s firm is all-in on AI. Every Friday is “DIY Friday,” and everyone spends two hours experimenting with AI tools, trying to replicate workflows, and testing what works. They pay for all the major models. They’re true believers.
But the results aren’t quite what they’re hoping for. “A lot of times it takes me twice as long to review and audit what the AI built than it would have taken me to build it on my own,” Devin admits. The tools hallucinate. It’s “wildly confident about things it knows nothing about.”
The key insight is that AI is a “ceiling raiser, not a floor raiser.” It makes experienced professionals amazing. It makes entry-level people only slightly better because of domain knowledge. An experienced accountant can spot what the AI got wrong and fix it. An entry-level accountant doesn’t know enough to catch the mistakes.
“An entry-level developer, like an entry-level accountant, doesn’t have enough domain knowledge or experience to see what the AI did wrong,” Devin explains.
“It’s a great time to be mid-level or experienced. It’s a bad time to be entry-level,” Blake observes, noting the cruel paradox. The routine tasks that used to train new accountants, like sampling, confirmations, and rolling forward work papers, are being automated first.
The legal profession offers a preview. Harvey, an AI platform for law firms, raised about half a billion dollars. It claims to work at the level of a fifth-year Harvard Law associate. Every major firm supposedly uses it. “But Kirkland and Ellis isn’t charging me any less than they used to,” Devin notes. The efficiency gains aren’t reaching clients. Firms capture them as profit.
Your Options Are Better Than They Appear
So what should accounting professionals actually do? Devin has specific advice.
First, if you’re at a PE-backed firm, demand transparency. “Show me Bain Capital’s value creation plan,” he suggests. “How did they underwrite this, and how are they going to get there?” Understanding the plan helps you align your work and see your compensation trajectory. If they won’t share it, that tells you something, too.
Devin identifies three problems that plague most firms before PE arrives. There’s no clear plan (or too many plans), no communication about why leaders make decisions, and nobody understands how compensation works. Good PE ownership can fix these issues. Bad PE ownership makes them worse.
The good news is, PE has bought only about 400 of the 45,000 CPA firms in the US. “There are 44,600 CPA firms in North America that aren’t owned by private equity,” Devin points out. “And you can leave.”
Devin has advice for early-career accountants facing pressure from private equity and AI automation: Start your own firm.
“Get really good with the AI. Way better than the 35-year-old or the 45-year-old. And start your own firm. Be an AI-first accounting firm, and you own all of it.”
It’s never been easier, he argues. You can set up an LLC on LegalZoom. You can reach clients directly through LinkedIn or YouTube. The barriers that kept young professionals locked into traditional firm hierarchies are crumbling.
“It’s pretty obvious most adults have no idea what they’re doing, and they’re mostly full of BS,” Devin says with characteristic bluntness. “So don’t wait for your turn. Go get it.”
The Bottom Line
The traditional accounting career ladder is being dismantled. PE is removing the path to partnership, and AI is removing the entry-level work that trains new accountants.
But professionals who understand what’s actually happening have more options than they might think. There are still 44,600 independent firms. Starting your own practice has never been easier. And if you’re staying put, you can at least demand to see the plan and understand where you fit.
As Devin puts it, “Why do you need to wait in line and have some private equity firm tell you how you get to run your business? Go find some other people who believe in it the way you do, and go build the firm in your image.”
For the full conversation, including Devin’s stories about his own podcast journey and more details on how PE firms evaluate acquisition targets, listen to the complete episode of the Earmark Podcast.