Steven L. Gerard, 55, has taken the helm as CEO of the troubled roll up outfit, known as CBiz, the firm said. Prior to joining CBiz, Gerard most recently served as chairman and CEO of Great Point Capital Inc., a provider of operational and financial advisory services. Gerard also formerly served as chairman and CEO of Triangle Wire & Cable Inc., as a senior managing director at Citibank, and as vice president of the American Stock Exchange Securities Division, according to the firm. Gerard will also serve on CBiz's board of directors.

CBiz, which began swallowing up small and mid-size accounting firms at a rapid clip in 1997, has been struggling to recover from a string of troubles that began last fall, after the firm began an ill-fated attempt to search for a merger partner or buyer.

Since then, CBiz has had more than its share of leadership issues. After news in January that its fourth quarter results would be dismal, the firm's president and chief operating officer, Fred Winkler, suddenly resigned. In May, chief financial officer Charles Hamm departed his post, and last month lead director Joseph Plumeri left after less than six months on the job.

CBiz leaders, naturally, expressed optimism about the firm's future. "Given his experience with complex financial services companies and strategy implementation, we are confident Steve's leadership will help us better focus CBIZ's resources and personnel on achieving our strategic objectives and long-term goals," said chairman Michael G. DeGroote.

"CBIZ is already in a very favorable position to capitalize on the trend in outsourced business services," Gerard said. "The Company has enormous market opportunity and an impressive complement of products and services. I look forward to working with the management team to provide the corporate leadership that will expedite the strategic plan currently being implemented and I welcome the challenge of taking CBIZ to its full potential."

But challenge may be the key word. Industry observers note that redeeming its reputation in the eyes of the market will be no small feat for CBiz.

"Here we go again," was one leading industry consultant's reaction to the announcement.

"Round and round she goes, where she'll stop, nobody knows," commented Jay Nisberg of Jay Nisberg & Associates in Ridgefield, Conn., a well-known consultant.

"CBiz just doesn't get it," Nisberg said. "They must find someone who understands the CPA business and the CPA culture, who knows how to bring together the firms they've acquired."

"They've got some very high quality firms, and not a clue what to do with them," Nisberg said.

"They're going to have to rebuild a lot of credibility," agreed industry pundit Gary Shamis, a noted speaker on consolidation and managing partner of Saltz Shamis & Goldfarb in Cleveland. "Hopefully they've got the right guy to do it."

Shamis and Nisberg agree that CBiz's troubles may have tempered the industry's consolidation fervor.

"There's a lot more perceived risk with that model based on CBiz's performance," Shamis added. "How do you convince people that that is still a good strategy?"

Three years ago, when the "eat or be eaten" mentality took hold of the accounting community, firms were scrambling frantically to hop on the consolidation bandwagon. Now, "the anxiety's gone, and firms are more educated, and more skeptical," Shamis said.

"The consolidation move in general has definitely cooled off," Nisberg agreed. While Nisberg expects to see other consolidators coming down the pike, he warned accounting firms to exercise caution in choosing a consolidator.

He also offered some advice for CBiz's equity owners: "Consider carefully spinning off the accounting firms into a new structure or holding company and allow the firms to buy themselves back or sell them to another consolidator, such as RSM McGladrey."

-- By Melissa Klein

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