For the first time in a long time, all four Big 4 accounting firms are shrinking at once. The 2025 AFR Top 100 Accounting Firms data reveals a fundamental market shift: while Deloitte, EY, KPMG, and PwC collectively shed 3,200 staff and $300-350 million in revenue, mid-tier firms like BDO, RSM Australia, and William Buck posted double-digit growth.
This simultaneous contraction is not a temporary blip. The partner exodus, market share transfers, and aggressive mid-tier expansion suggest the Australian accounting profession is undergoing structural change that will reshape competitive dynamics for years to come.
Deloitte:
EY:
KPMG:
PwC (FY24 figures):
The partner exodus is equally revealing. Despite promoting 180 new partners collectively, the Big 4 experienced a net loss of approximately 122 partners. This strongly suggests experienced partners are leaving faster than firms can replace them through promotions and recruitment. When partners depart, they typically take client relationships and institutional knowledge with them, creating downstream revenue impacts that may not fully appear in current figures.
Several factors converge to explain this simultaneous decline across Australia's largest accounting firms, according to the AFR data.
The PwC tax scandal created significant regulatory pressure and reputational damage across the entire Big 4 sector. Clients and recruits began questioning the governance and ethical standards of large accounting practices more broadly.
Market conditions deteriorated for high-margin advisory work that drives Big 4 profitability. Merger and acquisition activity slowed substantially compared to 2020-2022. Capital markets advisory revenue declined as IPO activity remained subdued. Corporate restructuring work, while increasing in volume, shifted to specialist firms rather than generalist Big 4 practices.
Aggressive cost cutting and offshoring initiatives accelerated during the period. Firms moved substantial portions of audit and compliance work to lower-cost offshore centres in India, the Philippines, and Eastern Europe. While this improves margins theoretically, it reduces Australian headcount and can create service delivery challenges.
Partner demographics also played a role. A significant cohort reached retirement age during this period, and replacement economics have changed. Firms historically promoted multiple new partners for each retiring partner. Current data suggests a more conservative approach.
While the Big 4 contracted, the AFR rankings show BDO posted 12.3% revenue growth to reach $606.5 million. The firm added 66 new partners and achieved a net increase of 50 partners, representing 17.4% growth in partnership size.
BDO now generates revenue more than three times larger than the sixth-ranked firm, Findex at $494.6 million. The firm is on a trajectory that could see it reach $800 million to $1 billion within five to seven years if current trends continue.
Other mid-tier firms demonstrated the winning formula for sustainable growth:
BDO (Rank 5):
RSM Australia (Rank 7):
Grant Thornton (Rank 8):
William Buck (Rank 10):
Moore Australia (Rank 19):
These firms share common characteristics. They operate at sufficient scale to offer genuine capability breadth across audit, tax, advisory, and specialist services. They maintain national coverage through office networks or alliance structures. Yet they remain agile enough to make decisions quickly and maintain direct partner involvement in client relationships.
The growth pattern shows these firms investing in capacity during market dislocation. They are adding partners and staff while competitors contract, positioning themselves to capture market share as clients reassess their professional services relationships.
Revenue per staff member varies dramatically across the top 100 firms, revealing fundamentally different business models based on the AFR data.
Premium Specialist Models:
Big 4 Advisory-Heavy:
Traditional Mid-Tier:
These ratios indicate whether firms compete on premium specialist expertise or leverage volume-based service delivery. High revenue per staff typically means either premium advisory and restructuring work or very lean operations with minimal administrative overhead.
The AFR rankings show several firms reported growth rates that suggest major acquisitions or significant market share gains.
Acquisition-Driven Growth:
Specialist Market Boom:
Technology-Enabled:
These growth rates stand in stark contrast to the 2-8% organic growth typical of established accounting practices. McGrathNicol's performance particularly reflects the boom in insolvency and restructuring work as interest rates increased and business failures accelerated.
The data reveals several firms showing patterns indicating serious operational challenges.
Synergy Group:
Walker Wayland:
Revive Financial:
BlueRock:
The 2025 AFR Top 100 rankings capture a market in transition. Based on current trajectories, three outcomes appear increasingly likely.
First, the mid-tier will consolidate rapidly. BDO's path to $1 billion in revenue looks achievable, while RSM Australia, Grant Thornton, and Pitcher Partners should all reach $500-600 million. This creates a genuine alternative tier to the Big 4 with comparable capability and reach. Expect mergers among firms ranked 15-30 as they pursue scale.
Second, specialist expertise will command increasing premiums. Firms focusing on restructuring, forensics, wealth integration, and complex advisory work consistently outperform generalist practices. The data shows specialist expertise generates 50-200% higher revenue per staff member than traditional compliance work. This gap will widen as technology automates routine services.
Third, regional generalists without clear positioning face genuine existential pressure. Firms generating $20-100 million without specialist depth or geographic monopolies operate at insufficient scale to compete on capability but lack differentiation to justify premium pricing. Many will exit through retirement, merger, or gradual decline over the next five years.
The firms investing strategically in capability, technology, and talent during this market dislocation are positioning themselves to emerge as winners when conditions stabilise. The accounting profession in 2028 will look substantially different from today, with power and profit distributed more evenly across a restructured competitive landscape.
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