Editorial
Front Page - Friday, December 25, 2009
Johnson, Hickey and Murchison managing partner talks business
Samara Litvack
Some people have always known what they wanted to spend their lives doing; others fall into their professions by chance. For Jeff Durham, managing partner of Johnson, Hickey and Murchison, his fate was definitely decided by the latter.
“I took a course in college, Introduction to Business, and wrote a paper on the accounting profession,” Durham says. “And they said, ‘You know, there (are) lots of jobs out there.’ And I said, ‘Well, that was what I wanted to do.’”
Luckily, accounting came naturally to Durham, although it wasn’t only because he was a numbers person. Rather, he credits his success to being able to see the “big picture” and, therefore, being able to fit each piece of a company’s financial puzzle together in the most efficient way possible.
He got his start fresh out of college with local accounting firm Bernard Stone and Company. There, partners Bernard Stone, Harrison Hickey and Dan Johnson gave him the opportunity to grow as a young accountant.
When the firm dissolved in the late ‘70s, Johnson and Hickey partnered with Pat Murchison to start their own business, aptly named Johnson, Hickey and Murchison. Today, the firm – located on the second floor of University Tower – works mostly with commercial construction companies and nonprofits.
“We got into doing some of the bigger commercial contractors actually at Bernard Stone and Company in the ‘70s and just built that niche,” says Durham says.
Many of the clients working for the large contractors in those days later branched out to form their own companies, and a lot of them followed Durham, Hickey and Johnson to the new firm.
Johnson, Hickey and Murchison focuses on commercial contractors rather than smaller homebuilders (the firm has between 60 and 70 such clients), and Durham has worked with some of the largest companies in the region. These companies have done work in most states east of the Mississippi river but, since they got their start in Chattanooga, they have kept their home offices (and, therefore, their financial consulting) in the Scenic City.
Additionally, the firm works closely with several local nonprofits.
“If you name a nonprofit,” Durham says, “there’s a good chance we do it.”
But how does one firm specialize in two totally different arenas that are completely unrelated? Durham credits that all to timing.
“Their services rendered are complimentary in a lot of ways, however they’re worked on at different times of the year,” he says. “With nonprofits, year ends are typically June 30, whereas commercial contractors (and) corporations are typically Dec. 31. They fit well.”
Rounding out Johnson, Hickey and Murchison’s trio of specialties is a focus on audits for multi-family, low-income housing projects. But while there are long lists of services the firm can do for their construction and nonprofit clients, the approach for the auditing portion of its work is done a little differently.
“There (are) not a lot of extra services we can do for them,” he says. “They’re required to have an audit. They’re required to have a tax return. It’s hard for us to differentiate ourselves from another firm. It just is what it is. However the firm has become extremely efficient with this audit and very competitive with its pricing. Therefore, this part of our practice has contributed to the firm’s success.”
As with many successful companies, much of the firm’s business comes by way of referral. Durham says he and his colleagues don’t do cold calling or any hard marketing. Rather, they focus on building relationships with each of their clients and hope their service speaks for itself, loudly enough for everyone in town to hear.
“It’s a relationship business,” he says. “You build a relationship with that client. You become their trusted advisor.
“That owner needs somebody to talk to, needs somebody to consult with, and they’ll call us… So you become that trusted advisor, somebody they can throw ideas off of and sometimes it’s just a matter of listening to them.”
And, according to Durham, once he or someone in his firm becomes a person’s trusted advisor, they go above and beyond the call of duty to maintain that trust.
“One of the things, I think, that differentiates us from other firms is the partners and senior managers here, we spend a lot of time with our clients,” he says.
“We just feel like that’s the way we keep our clients. They like to see us out there. They want to see us. With many of our larger clients, we take a team approach to ensure quality service for our clients.”
And, he adds, Johnson, Hickey and Murchison is less concerned with the growth of the firm and more concerned about quality of service it gives its clients. When the original partners of the firm retired, for example, the company worked diligently for several years to ensure the transition was a smooth one.
“When we started the succession process, probably seven years ago, or thereabouts, I could not find hardly any literature on the subject,” Durham says. So, the firm did what it does best; it stepped back, looked at the big picture and formulated the most efficient plan.
“You’ve got older owners. They’re going to leave. How are you going to pay for them to get out (and) bring new owners in and keep everyone happy? … We dealt with it. We came up with an agreement. We spent a couple years working on that agreement and it’s worked very well.”
Durham became managing partner of Johnson, Hickey and Murchison in 2003, and one of his main focuses since the changeover has been transitioning the company’s clients from the retired partners to their current advisors.
“Where Dan or Pat was once a client’s trusted advisor, now they’ve got to rely on somebody else and you’ve got to start that transition process far ahead of time,” he says. “It’s worked very well.”
But even though the transition process has been trying at times, both generations of Johnson, Hickey and Murchison partners agree it was all for the betterment of their clients.
“What tends to happen is partners think, ‘I’m never going to retire. I’m just going to keep working forever,’” Durham says. “Well, at some point in time, you need younger blood, and you need to step aside and let the next generation grow. We made that decision to start the transition process seven or eight years ago and it’s worked well so far.”
It’s that level of commitment, of always doing what is in the best interest of the client – from the firm’s partners making face-to-face visits to its founders handing over the reigns – that has kept Johnson, Hickey and Murchison a successful and well-respected business for more than 30 years.
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