Building By the Numbers

John Darcy, managing partner of the Darcy Group, compares compiling a tax return to building a bookcase or painting a landscape, all of which he does well.

by Tom Gresham

John Darcy, managing partner of the Darcy Group at 30 Main St. in Burlington, says 50 percent of his firm's work comes in the area of business planning.

For John Darcy, household tinkering is more than a casual hobby. It's a serious habit. He possesses skills and experiences beyond those of the average weekend handyman. He has installed an oak stairway, constructed bookcases, replaced doors and removed walls. He has renovated houses. And during the past two years, Darcy has taken his tinkering talents to the office and applied them to an accounting firm. Darcy holds the position of managing partner of the Darcy Group, one of Vermont's largest accounting firms.

Formerly Dayman, Goldsbury and Lurie, the Darcy Group has undergone a major remodeling since 2000, when the original partners left to pursue new business opportunities and Darcy assumed top responsibilities at the firm.

Instead of playing it safe and attempting to survive with the same strategy that had worked in the past, Darcy took the management turnover as an opportunity to provide the firm with a new beginning. Under Darcy's direction, the Darcy Group has started to reshape its identity by not only expanding old strengths but also exploring new ones.

"We've become a lot more traditional in some respects," Darcy says. "We've moved more into traditional and specialized audits for local companies."

When fully staffed, the Darcy Group boasts 10 full-time employees and four independent affiliates, including two former partners, Jim Lurie and Jim Goldsbury. The firm draws clients from Vermont, upstate New York, the upper valley of New Hampshire and Quebec.

Customers of the firm generally occupy the realm referred to as the middle market, a classification that contains the small to mid-sized businesses that dominate Vermont's economic landscape. Many of those businesses cannot afford to employ the staff needed to navigate the labyrinthine tax laws and other complicated accounting-related tasks exit strategies, for instance that businesses inevitably face.

Arthur Weitzenfeld, the president of Vermont Furniture Designs in Winooski, has worked with Darcy for about three years. At first, Darcy only handled Weitzenfeld's personal tax issues. Then, when Weitzenfeld's business accountant moved out of the state, the Darcy Group took over the accounting work for the company.

Weitzenfeld says he has confidence in the relationship and that it will continue, because "on a yearly basis, he probably saves me a lot more money than it costs me to go to him." Recently, Weitzenfeld elected to buy into another business. He says Darcy's advice was critical to his decision.

"I have a whole lot of faith in John in terms of his ability to know what's OK and in terms of his ability to evaluate business decisions," Weitzenfeld says.

Darcy says 50 percent of his firm's work now comes in the area of business planning. The firm sublets an office to a financial planner, Charles Dinklage, who through his affiliate relationship works with Darcy Group clients. Darcy calls it "the logical next step for our business."

"Vermont mostly has closely held businesses, largely family-owned businesses," Darcy says. "They are very good at what they do in terms of making their business successful but they don't necessarily understand everything about accounting and taxes. It's often very sophisticated work."

To help handle the work, the Darcy Group enjoys access to the expertise and resources of BDO Seidman, the sixth-largest largest accounting firm in the country. Dayman, Lurie and Goldsbury became an alliance office of BDO Seidman in 1997, and the relationship between the firms has continued through the partnership changes. Darcy says the alliance provides a great benefit to his firm's clients.

"It means they have access to experience in the sort of areas that they wouldn't naturally find in Vermont," Darcy says. "It allows us to have a big-firm sophistication with a local office presence."

The Darcy Group has 10 full-time employees and four independent affiliates. Ann Marie Witzel (left) and Ea Richards are executive assistants; and Kathy Rouleau is business manager.

During Darcy's tenure, the firm has increased its interest in consulting for some of the captive insurance companies housed in Vermont as well as for cross-border businesses. Many of the captive insurance companies do not actually have a significant presence in the state and must turn to local accounting firms to work through local laws. The case with cross-border businesses is similar: International firms (most often Canada-based) that ship into the United States need an American accounting firm to help them engage the U.S. market.

The Darcy Group has one employee, Joe Bogdan, who works exclusively with cross-border clients. Darcy says his firm helps international businesses decide which state to ship into in the United States, guiding them to a decision from a logistics and tax perspective.

"We can save them quite a bit of money in state taxes, which vary considerably," Darcy says.

International client work is an element of the Darcy Group's practice that Darcy hopes to see grow. He has a particular interest in cross-border business, having worked extensively with international clients during some of his previous employment stops.

A native of New York City, Darcy took his first accounting job straight out of college with a master's degree in taxation from St. John's University in Jamaica, N.Y. He joined the IRS at the urging of his father, who worked 40 years in government service and knew the security of a federal position. Shortly after starting at the IRS, Darcy was called into service by the armed forces. He served three years in the Army infantry.

After the service, Darcy returned to the IRS and began a wandering period that saw him employed in a variety of accounting jobs in New York, Charlotte and Memphis. During that time, Darcy gained experience working at a pair of venerable Big Five accounting firms: Deloitte & Touche and Arthur Andersen. He says his time at those grand firms prepared him for his current leadership post.

"A larger firm like Deloitte is very structured and very formalized," Darcy says. "You pick up some good habits in both the organizational side and the technical audit and tax side of the way you do things."

In 1985, Darcy decided to stop moving from job to job and city to city. He and his wife, Nancy, whom he had met when they both worked for the IRS and married in '68, had two daughters about to move into middle school and high school. It seemed like an appropriate time to find a home. Vermont offered mountains, skiing and, because of its proximity to Canada and cross-border businesses, an obvious market for Darcy's skills. The family moved to Shelburne.

After a stint at another Burlington accounting firm, Darcy joined Dayman, Goldsbury and Lurie. Darcy clearly finds accounting and the complex puzzle that is tax law a gratifying and enjoyable pursuit not merely an avenue for making a healthy living.

Since taking the helm of the Darcy Group, Darcy has expended a great deal of his energy and time performing administrative duties like assembling an employee manual, handling personnel issues and working on the firm's finances. "I wear a lot of hats," he says. He finds, though, that he has missed the nitty-gritty detail labor of tax work an adventure steeped in challenge to Darcy.

"Tax law is an ever-changing thing and every business situation is different," says Darcy. "You're applying these ever-changing laws to these very individual situations. It's one of the things out there that allow you to be creative in a good way. You are working to keep as much of your client's money as you can not doing it in a deceitful way, but in a way that uses the law correctly to your advantage."

Darcy knows accountants have taken a beating in the public eye in recent months. He says he cannot predict how the new federal accounting laws, passed recently by Congress in the wake of massive corporate accounting scandals, will affect smaller firms like the Darcy Group. However, he notes that the dangers of phony bookkeeping are probably much less significant in the small and mid-sized businesses that constitute the Darcy Group's clientele. The more serious dangers and enticements for fraud involve larger, publicly held companies, which are motivated by shareholder price. None of the Darcy Group's clients is a member of the Securities and Exchange Commission.

Although Darcy believes it's too early to tell whether the new laws will change the Darcy Group's business approach, he says he is particularly concerned by the prospect of accounting firms' being barred from auditing the same businesses they work with as consultants. He says that would be a severe handicap to small businesses.

"Businesses, especially smaller businesses, need a variety of services from their accounting firms," Darcy says. "As an accounting firm serving a small business, you need to be able to handle a number of business possibilities for your client on a consulting basis."

Over the years, Darcy has instructed hosts of college students and others on the finer points of taxes and accounting. He has lectured and taught full courses at the University of North Carolina at Charlotte, Champlain College, the University of Vermont and the National Tax Institute. Darcy's willingness to teach his trade reflects his genuine interest in the world of tax law.

"Mostly, I just do it because I like to see people learn about taxes and business," Darcy says. "It's something that I enjoy. I'm on a hiatus right now, though. I've been too busy working on a plan here."

Darcy's duties as head of a firm have also cut into his free time. In addition to his considerable interest in home renovations and woodworking, Darcy enjoys painting watercolors, oils, charcoals, pastels and creating stained glass. Eventually, he would like to build period furniture. For now, it will have to wait "I just don't have the time," he says.

Joe Bogdan, tax manager, works exclusively with Darcy's cross-border clients. He compares notes with Kristina Webb, a staff accountant.

Darcy passed down his love of art to his daughter, Erin, who attended the Parsons School of Design in New York City. Darcy's younger daughter, Kristy, attended the University of Vermont and recently moved back to the state (to the evident pleasure of her father).

Darcy says his mother had a great interest in art and, perhaps from her, he learned to find a certain contentment in creating various forms of art. "It's like therapy for me," says Darcy, who has plans to soon build another bookcase for the office. "It offers a change. It gives me a very different atmosphere from the one at work."

Darcy acknowledges that parallels probably exist between his job and his leisure pursuits. Painting and woodworking require an often exhaustive attention to detail certainly, a critical element of accounting. Strange as it sounds, he says, compiling a tax return has much in common with building a bookcase and painting a landscape.

Each is quiet, focused work that requires high levels of concentration and patience. Frustration will come, but it cannot linger. Darcy appears to be blessed with a determination to tinker until things come out right, whether the project requires a hammer and nails or a pencil and calculator.

"I'm a perfectionist," Darcy says. "Things have to look like they're supposed to look. They have to look the right way. It takes a lot of patience to do some of these projects. Then, when they do come out looking pretty good, it's very satisfying."

Originally published in September 2002 Business People-Vermont