Public accounting firms hunker down in flat market. (Special Report: Financial Services) (Industry Overview)

Firms try to squeeze growth as lawsuits pend, ethics questioned

If humor truly reflects social perceptions, the '90s have not been kind to the accounting profession: Multimillion-dollar settlements with government regulators and intimations of shoddy ethical practices have made "accountant" nearly interchangeable with "lawyer" as the ignominious butt of jokes.

Add to the litigious atmosphere a recession, and the pressure gets turned up three-fold. In response, Pittsburgh's CPA firms battened down the hatches by trimming excesses and exposing all practices to intensive scrutiny. The tarnishing of the CPA image, however painful professionally, has not, according to local managing partners, directly affected the bottom line; they report flat to minimal growth, but no substantial losses. All agree it's not over yet, though.

"From a management perspective, the last two years have been the toughest in the last 15 to 20 years," says Bob Glatz, managing partner at Deloitte & Touche, …