January 04, 2018
If there is a defining moment in the history of Eide Bailly, a juncture where everything the firm was built on melded with all of its potential, it just might be the year 2003. The early 2000s were a roller coaster for the accounting industry. The 2001 fraud scandal involving the energy company Enron and accounting firm Arthur Andersen sent shockwaves through the accounting world. The aftermath effectively dismantled one of the top five accounting firms in the world and ushered in a new era of regulations and rules. By 2003, Eide Bailly was in the same position as many accounting firms, trying to see its way through a changed business landscape. It was a period ripe with uncertainty, but also opportunity, and Eide Bailly faced a decision.
“We knew we could either sit on the sidelines and watch other firms devour the client base falling through Arthur Anderson, or we could jump in and play,” said Jerry Topp, Eide Bailly’s new CEO at the time.
But jumping in required more than just confidence and courage. Even though Eide Bailly had just achieved a goal of doubling the firm’s size in the last five years, continuing that kind of growth would need a strong strategic plan. The firm would have to seek out and acquire other firms to get the skillsets needed to serve clients of a bigger size. But new markets would mean also new competition, and bringing in new firms wouldn’t matter at all if Eide Bailly couldn’t stay true to what was at the heart of its success—the firm’s culture. It was not a decision to take lightly.
“The partners decided on the more proactive route,” Topp said. “And the numbers speak for themselves as to what happened.”
Indeed, as the firm celebrates its centennial year, it’s hard to argue with the numbers—19th largest CPA firm in the nation; more than $250 million in revenue; 29 offices in 13 states; 1,700 staff members. But that fateful decision in 2003 only tells part of the story. Eide Bailly is rich in history; you can trace its roots back to two firms in Fargo who shared a common formula for success: the right people, the right culture and the right timing.
The Eide Side: 1917-1998
In 1917, Fargo was rapidly approaching a population of 20,000 and establishing itself as a major city in the upper Midwest. Seeing an opportunity, the accounting firm Bishop, Brissman & Co., CPAs decided to open an office in the city, and named John A. Cull as manager. Cull took over sole proprietorship of that office in 1925 under the name J.A. Cull and Company, and it was this firm that started the career of Eide Bailly namesake Oliver Eide, who joined J.A. Cull and Company in 1934.
The firm continued to evolve, eventually becoming Eide, Helmeke, Boelz & Pasch in 1967. The firm prided itself on being a place where staff liked coming to work each day, said former namesake partner Dale Boelz.
“We were pretty casual. We worked long, hard hours during the tax season, but we felt staff should enjoy their work and have free time. Nobody was hovering over anyone about time, but everyone knew they had a job to do and were expected to get it done,” Boelz said.
While it was wasn’t formally expressed at the time, that work philosophy became the seed that would later create the culture at Eide Bailly.
“Back then, our best friends were other people in the firm,” said Boelz. “Our social activities almost always involved fellow coworkers. If we held a happy hour after work, it was partners and staff. There were no class distinctions whatsoever.”
The partners knew they needed to keep growing in order to retain their best staff, so the firm kept expanding, eventually shortening its name to Eide Helmeke. They remained Eide Helmeke until 1998, when they decided to join forces with another well-respected Fargo-based accounting firm.
The Bailly Side: 1950-1998
In 1950, just as Eide Helmeke was beginning to strengthen its roots in Fargo, accountant Charles E. Bailly moved to Fargo to open an office for Broeker Hendrickson & Co. of St. Paul, Minnesota. The office quickly established itself as a leader for the CPA profession in North Dakota. It became one of the major audit practices in the area and early specialists in the health care industry once Medicare was signed into law in 1965.
In 1978, Broeker Hendrickson merged into Iowa-based McGladrey, Hansen, Dunn & Company, now RSM. But before that happened, the Fargo and Bismarck partners voted unanimously to withdraw and create their own firm. Bailly’s proven track record made him a natural to lead the new firm, which was named Charles Bailly & Co.
“Chuck was one of the most tenacious marketers you’d ever meet,” said Jeff Strand, former Charles Bailly & Co. partner and current Eide Bailly partner and director of risk management. “He kept doors open. He ended every conversation with, ‘When can we meet next?’ ”
Bailly was just as adamant about bringing out the best in his colleagues. “He had a knack for showing you how you could improve—always in a positive way,” Strand said. And, like Eide Helmeke, Bailly also wanted staff to have active lives both in and out of the firm.
“Chuck shared with me once that in our profession, we need to look at balance,” Strand said. “Part of that was making sure we gave back to those who helped us. That revolved around your family, faith, profession and community. That really drove me in my involvement outside the firm.”
Charles Bailly & Co. grew steadily by adding firms and locations in the upper Midwest, always staying true to the vision of client service it had when it began. By the late 1990s, it was one of the strongest accounting firms in the region; but that success also created new challenges—mainly, how could the firm ensure its continued growth in order to attract the best clients and talent?
The Eide Bailly Merger: 1998
The challenges of growth were also hitting home across town at Eide Helmeke. Charles Bailly and Eide Helmeke were the major players in the Fargo region and much of the upper Midwest, both ranked in the top 50 accounting firms in the U.S. The two firms were often directly competing for the same clients and talent.
“It looted both firms’ ability to grow,” said Topp. So conversations began between the firms—what would it look like if the two firms combined? The discussions continued, and the idea of a merger mushroomed.
“We found there wasn’t as much client overlap as we thought. The firms actually complemented each other well,” Topp said. “We just kept taking steps.”
When the decision to merge the firms was made, the vote was unanimous by the partners of both firms. The new firm became Eide Bailly, and the merger immediately launched it into one of the 25 largest accounting firms in the U.S. As the firm began to work through the details of how it would operate, tenets from both sides became fundamental aspects to the new firm’s culture—work-life balance, a dedication to client service, and having fun.
“The merger was really positive,” said retired Eide Bailly Principal Chris Champ, who was part of Charles Bailly & Co. at the time. “We laid it out well and worked through the process to develop a combined culture statement—something everyone could support and live with.”
What started as a list of qualities the partners wanted to see in the new firm, eventually was narrowed to 10 principles that guide staff in their everyday actions, then and now.
“When we got into the merger process, it became clear that this was the glue to hold things together,” Champ said. “With a unified culture, everyone moves in the same direction, and that is tremendously powerful.”
Eide Bailly Defines Itself
Obviously, a culture doesn’t thrive on paper. A culture is created through the actions of the people who believe in it, and the partners and staff of Eide Bailly take pride in living that culture every day. It’s a supportive and caring culture that extends to family and community. Best friends are within the walls and while everyone works hard, they play hard too.
That’s where the goals from 2003, to jump in headfirst and push the firm forward, come back into light. Eide Bailly’s leadership has seen to it that the firm meets its strategic goals while staying true to its culture. Eide Bailly has enjoyed tremendous growth under the tenures of managing partners Darold Rath, Jerry Topp and, currently, Dave Stende. Each of them found ways to connect the core culture principle of giving back while moving forward.
A Strong Future
How Eide Bailly will define success in the next 100 years will likely look very similar to the early part of the 21st century, when the accounting landscape meant embracing change or falling behind. Technology and the Internet are actively reshaping the way businesses operate and interact. The pace of change is accelerating, but it will be firms like Eide Bailly, whose success is owed as much to its long-held principles as it is to its ability to adapt, who are poised to turn that change into opportunity.
“To be in business 100 years, it means you’re doing something right,” Stende said. “It’s in the DNA of our firm to grow by expanding our geography and our services. I give Darold Rath credit for setting the vision for the firm. He said we could be more than just a small regional firm—and he was right. Our footprint is growing and we are successful. You can sense an excitement across the firm, from staff associates to partners, about where the firm is heading, and what the future holds.