Firms with annual net fees over $2 million enjoyed annual net fee growth of 11.4 percent, up from 9.7 percent in 2005, and an increase in average income per partner to $350,000, up from $311,000 in 2005.

The SOX impact is both direct, in the form of actual SOX work (primarily for the national and mega-regional firms) and indirect, as work trickles down from the capacity-strapped larger firms, who are focusing on their public company practices, to smaller, local firms.

According to the survey, the substantial increase in profitability to a robust income per partner figure of $350,000 has resulted from increased demand for services, increased leverage as measured by fees per partner, rising billing rates and continuing efficiencies in technology.

"This tremendous growth in fees and profits is all the more impressive in view of the continuing shortage of staff," said Marc Rosenberg, creator of the survey. "No firms find it easy to recruit staff, but the bigger and/or better firms have been able to increase their staffing levels despite the tight labor market.  This is no doubt due to a heightened commitment by firms to make their firms great places to work, a commitment that is unprecedented in the history of the CPA industry."

In 2006, fees per partner passed the million dollar mark for the first time in history, posting a 15.2 percent increase from the prior year. "Partners are managing an increasingly larger volume of clients due to the boom in business and the continuing dearth of staff ready for promotion to partner," said Rosenberg.

By firm size, the performance differences between groups are quite significant, as they have been for many years, noted Rosenberg:

.	Multi-Partner Firms
	Over $10 million in net fees	$2-10 million in net fees	Under $2 million in net fees
Annual growth rate	16.3%	9.9%	5.2%
Income per partner	$473,897	$310,594	$190,802

Other findings and results:

• Annual billable hours for staff, which has been low ever since the tight labor market emerged in 2000, had increased slightly each year since 2004.  But in 2006, this figure went back down a bit.  For the "Over $2M Group," staff billable hours declined to 1,527 in 2006, down slightly from 1,539 in 2005.
• Outsourcing of tax returns continues to be an activity that is simply not catching on with CPA firms.  Less than 5 percent of all firms in the survey are doing any meaningful amount of outsourcing, the same as last year.
• Fifty-four percent of all partners at multi-partner firms are now over age 50, up from 51.5 percent in 2005. Depending upon the size of the firm, between 4 percent and 9 percent of all partners will be retiring within the next three years.

The Rosenberg MAP survey includes the results of 301 firms, most of which range from $2-20 million in annual fees. Nearly 100 MAP statistics are measured. It can be purchased for $350. Visit www.rosenbergassoc.com for the order form.