A Conversation with Rick Davis, Managing Shareholder of Elliott Davis

By Alan Cooper
December 16, 2013
UpstateBizSC:
What is your education and background?

Rick Davis:
I attended Clemson University and graduated in 1984 with a degree in accounting.  I entered college as an engineering major.  Accounting was something I discovered along the way. I decided to pursue more of a business direction, and I found accounting to be a perfect fit for me.

I started my career at Elliott Davis immediately after graduation and I have been here ever since.  I began as a member of the audit staff and progressed over the years through various levels of the accounting firm structure.  Over time, I took on different leadership positions within the company. I am currently the managing shareholder for the firm, and I have been in this position for over five years.

UpstateBizSC:
What is the best takeaway from an accounting degree?

Rick Davis:
Accounting is the principled use of systems to help companies maintain their records and measure their results.  It is the language of business.  Accounting can be used in a wide variety of business applications.  Career opportunities exist in either internal accounting services for small, medium and large companies or public accounting, which is what we do here at Elliott Davis, working on behalf of clients.

UpstateBizSC:
What is the history of the firm?

Rick Davis:
The firm has been around for 88 years.  It was founded in 1925 by a Boston-based firm.  They sent a gentleman down to the Greenville area to work on the textile mill accounts.  Somewhere along the line, the ties were severed with Boston and Elliott Davis Greenville continued on as a separate entity. After World War II, the owner of the company, Merrill Patten, sold the firm to a group of four shareholders.  Over the years, Elliott Davis has evolved into the current structure we have today, which is a limited liability company comprised of 60 shareholders. Greenville continues to be our headquarters today.

UpstateBizSC:
How has the firm grown?

Rick Davis:
We are up 80% in both revenue and employees over the past five or six years.  At the end of this calendar year, we will have approximately 500 employees.  This has been a period of substantial growth for us.  We have historically been a South Carolina firm, but we now have offices in Charlotte and Raleigh, North Carolina; Richmond, Virginia; and Augusta, Georgia.

 

Rick Davis, Managing Shareholder, Elliott Davis from MidlandsBiz on Vimeo.

 

UpstateBizSC:

Geographical growth can be challenging.  How have you accomplished expansion into other markets?

Rick Davis:
The key to growth is to have a strategic plan.  We decided several years ago to develop a plan that included both geographic expansion and specialization.  We looked for opportunities where we could duplicate our South Carolina successes in other markets. We also looked to acquire firms that would be a good fit within the culture of Elliott Davis.

UpstateBizSC:
What are your lines of business?

Rick Davis:
Tax, assurance, and consulting are our functional lines of business.  Assurance includes deliverables such as audited financial statements. Tax includes tax preparation, tax planning and estate planning, as well as anything that is impacted by the tax laws. Tax and assurance each represent about 40% of our business.

Consulting represents about 10% of our business and comprises strategic planning, merger and acquisition planning, transaction services, due diligence, and business valuations.

The remainder of our business falls under the category of accounting resources.  This is where Elliott Davis acts as a company’s internal accounting department and maintains its books and records.

UpstateBizSC:
Who are your customers?

Rick Davis:
Our customers vary depending on the functional area.  On the assurance side we work primarily with closely held companies ranging from startups to companies with $2B in revenue.  On the tax side we prepare individual tax returns and execute planning and preparation primarily for high net worth individuals as well as working with complex corporate tax matters.  Many of these individuals are associated with the companies we work with on the corporate side of our business.

We cover all industries, but over the years, we have developed very strong teams and concentrations of talent in the following industries: community banks, manufacturing and distribution, governmental, non-profits, real estate, construction, and professional practices. We also have depth in international tax and multi-state tax areas. In all the areas we serve, our goal is to take client service to the highest level.

There are a lot of new government rules and regulations that affect our clients by functional area (tax, audit, accounting, and consulting) and by industry (banks, health providers, manufacturing etc.). Laws can also vary from one region to another. We have leaders in each of those groups that are charged with staying in tune with industry trends.  That is one of the true benefits of specialization.

UpstateBizSC:
What is your leadership style?

Rick Davis:
I seek to collaborate with other team members to understand the big picture and then use these insights to drive key initiatives.

Leadership at an accounting firm, and really any professional organization such as a law firm, engineering firm etc., can be especially challenging. You have a team of very talented, very bright people and solid leadership is critical to bringing their talents to bear.

Each person on your team needs to operate within their strengths. If your team members’ goals are based upon their individual strengths, then they will be in the best position to bring their talents to the market.

Communication is also important.  People need to understand where the company is going, what it is going to take to get there, and what their role will be.

UpstateBizSC:
How important is culture to an accounting firm?  Are there unique challenges to leading culture change in an accounting firm?

Rick Davis:
Culture is very important in any organization.  At Elliott Davis, we spend a lot of time defining what we value – what we want to keep and what we need to change. Culture change is difficult in any organization, but it is especially challenging in this industry because by nature accountants are skeptical.  They are trained to look at everything from a very analytical approach.

Clarity of vision and clarity of direction are critical if you are going to create change in any organization, especially an accounting firm.

UpstateBizSC:
Talk about the strategic planning process at Elliott Davis.

Rick Davis:
We have an ongoing strategic plan that focuses on three areas: talent, specialization and growth.  Talent is important to any organization, particularly one that is in a growth mode.  In order to grow, you need to attract and retain talent.  Industry and technical specialization is the vehicle for providing excellent client service to the market.

I think the top three trends that are going to affect all businesses over the coming years will be leadership and leadership development, talent acquisition and talent retention at all levels, and technology.

UpstateBizSC:
What leaders have influenced you?

Rick Davis:
I have always admired President Jim Barker at Clemson.  He has had a huge impact on the university through his compelling vision and his ability to make that vision a reality.

Another person that I have always admired is Governor Dick Riley.  His unwavering stance on critical issues such as education as well as his ability to prioritize his initiatives in order to achieve his goals is amazing.

UpstateBizSC:
What percentage of your time is spent on providing accounting services versus managing the firm?

Rick Davis:
One hundred percent of my time is spent on the firm.  I do have some client relationships, but on a day-to-day basis I am not involved in client service work.

My primary constituents are the shareholders of this firm.  My commitment to them is to help them be as successful as they can be and to accomplish their goals.

UpstateBizSC:
What is important to you as an individual?  What do you do outside of work?

Rick Davis:
I like to read. I like outdoor activities and I like to keep up with college sports.  I also love family time and have enjoyed being involved with my children’s sports over the years.