As Major Accounting Firms Expand, Are Smaller Firms Poised to Take the Market Share?

The accounting industry is shifting in ways that could redefine its future. KPMG recently announced its entry into the legal services market, while other firms, like KSM, are expanding into IT consulting. These moves signal a broader trend: major accounting firms are diversifying their services beyond traditional tax and audit. But as these firms pivot, does this create an opportunity for smaller and mid-sized firms to capture more of the core accounting market?

A new playing field

Historically, the Big Four and other large firms have dominated the audit and advisory space. Their latest moves into legal, IT, and expanded consulting services indicate a strategic shift—one that acknowledges a growing demand for multidisciplinary advisory services. This expansion allows them to serve clients more holistically but also raises an important question: If larger firms are moving away from traditional accounting services, does this leave a gap for smaller firms to fill?

The answer may be yes. As bigger firms focus on higher-margin consulting work, mid-sized and regional firms could strengthen their foothold in tax, audit, and accounting services—especially among businesses that feel overlooked by high dollar national firms. This could create a golden opportunity for firms that emphasize personalized client service, relationships, and deep accounting expertise.

The talent tug-of-war

With larger firms expanding into new practice areas, talent acquisition and retention could become more competitive than ever. Traditional accounting roles may lose their appeal to young professionals who are drawn to the high-profile, high-growth sectors within consulting and technology. Meanwhile, firms that focus on core accounting services could find it challenging to attract top talent unless they offer compelling career paths, salary and bonus opportunities, and work-life balance.

On the flip side, this shift could also be an advantage for smaller firms. If large firms prioritize consulting, they may deprioritize traditional accounting career tracks, creating an opportunity for smaller firms to attract professionals who want to focus on tax and audit. Firms that position themselves as specialists with strong career development, deep industry specialization, and culture-focused initiatives may find themselves in a favorable position.

An evolving landscape

What does this all mean for the accounting profession as a whole? The industry is evolving into a more segmented landscape, where large firms become multi-service professional networks while smaller firms double down on specialized, client-focused accounting services. This shift also raises regulatory and competitive considerations—if firms like KPMG are now offering legal services, will there be increased scrutiny on conflicts of interest? How will clients react to bundled services versus choosing best-in-class providers for different needs?

For mid-sized and regional firms, the path forward lies in embracing their strengths. Rather than competing directly with global giants, they can focus on high-touch client service, niche expertise, and a strong workplace culture that retains top talent. They also have an opportunity to adopt technology strategically—not necessarily by becoming IT consultants, but by integrating automation, AI, and data analytics into their accounting and advisory work to enhance efficiency and service delivery.

Opportunity or challenge?

The expansion of big accounting firms into new service areas signals a transformation in the profession. For smaller and mid-sized firms, this shift presents both challenges and opportunities. Those who lean into their core strengths—offering deep expertise, personalized service, and a strong culture—will be well-positioned to capture market share left behind by the industry’s largest players. While the landscape is changing, there’s never been a better time for agile, client-focused firms to carve out their place in the future of accounting.

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