General information for practice owners, current to September 2026. All statistics are drawn from ICAEW's Evolution of Mid-Tier Accountancy Firms 2026 Research Findings, published May 2026 from fieldwork conducted 23 February–15 March 2026 among 35 UK firms with 11–249 partners. It is a survey of firms in that size band, not the whole profession — read the percentages as trend evidence, not universal fact, and take your own advice before acting on any of it for your specific firm.
ICAEW put out its third annual read on the mid-tier in May 2026, and its own chief executive didn't hedge about what it found: the sector, he wrote, "is no longer in transition, it is in the middle of a structural reset." That's a strong claim for a professional body to put its name to. What makes it worth a read for any practice owner — not just the 11–249 partner firms it surveyed — is what's changed underneath the headline. The reasons firms say they're buying each other have shifted sharply in twelve months, private equity is now backing nearly half the sample, and almost two-thirds of respondents think the market ends up permanently reshaped by 2030. None of that is speculation from a broker's newsletter. It's what managing partners told ICAEW about their own firms.
The consolidation numbers, in full
Acquisition activity isn't new, but the scale is striking. 74% of the firms in the 2026 sample have acquired another firm, with 40% doing so in the last year alone, and looking ahead 74% expect to make an acquisition in the next three years, with 60% already having taken that to board level. The split by ownership structure is the more revealing number: 94% of PE-backed firms plan further acquisitions, against 58% of independent firms, and every single PE-backed firm surveyed had already discussed M&A at board level, compared with 32% of independents. Private equity investment (PEI) itself has climbed fast — 46% of the 2026 sample is now PE-backed, up from 25% in 2025 and just 12% in 2024, with 14% of the firms taking on investment in the last year alone. Read together, those numbers say PEI isn't one strategy among several in the mid-tier any more; it's increasingly the mechanism driving the acquisitions that are happening.
Why talent stopped being the reason to buy
The detail most worth sitting with is what's driving that M&A activity, because it's changed since 2025. Expanding the client base is still the dominant reason firms cite for acquiring or merging — 89% call it important, barely moved from 92% a year earlier. But the talent-related motivations have fallen away fast.
| M&A driver (cited as important) | 2025 | 2026 |
|---|---|---|
| Expanding the firm's client base | 92% | 89% |
| Expanding or accessing skillsets | 84% | 65% |
| Entering new geographical areas | 80% | 65% |
| Accessing new talent to meet capacity demands | 72% | 46% |
| Accessing new talent for succession planning | 68% | 38% |
That's not a small shift. Buying a firm specifically to solve a capacity crisis or plug a succession gap has roughly halved as a stated motivation in a single year. It lines up with the same survey's talent findings elsewhere: difficulty recruiting qualified staff fell from a top-three challenge for 67% of the firms in 2024 to 46% in 2026, and retention concerns fell even further, from 60% to just 20%. The recruitment crunch that made talent-driven M&A urgent through 2024 and 2025 has genuinely eased for most mid-tier firms. What's replaced it as the top talent worry is future-proofing skills — AI assurance, data, and sustainability reporting capability — which is a very different problem to solve by simply buying a firm with more staff.
The 2030 forecast: a polarised profession
Put the acquisition data and the ownership split together and you get the finding ICAEW's own researchers flagged as the headline: 63% of the firms agree that consolidation will produce a more polarised market by 2030 — fewer large firms, more small firms, and a diminished middle. It's a self-reported forecast from people inside the sector, not a certainty, but the current data supports the direction of travel. PE-backed firms are pulling away on every consolidation metric measured, and firms are split almost exactly down the middle (40% positive, 40% negative) on whether that trend is actually good for the profession. What both camps agree on is where it's heading: 71% think external capital becomes a more common source of finance over the next three years, regardless of whether they think that's a good thing.
If you're staying independent, you're not staying still
The research doesn't read as private equity versus decline. 79% of independent firms in the sample said they have no intention of pursuing PE investment in the next three years, and their reasons are specific rather than vague: concerns about cultural and ethical alignment were cited by every one of those firms, concern about the impact on succession to senior roles by 87%, and 80% said they simply don't need the external financing. A fifth of all firms surveyed, PE-backed and independent alike, actually named staying independent as a growth opportunity in its own right — a differentiator for winning clients and staff who specifically don't want to work with a PE-owned firm. What separates that group from firms drifting in the middle is that it's a deliberate strategy: organic growth backed by deeper client relationships, a clear specialism, and using technology to free up capacity for higher-value advisory work, not just holding the current service mix and hoping scale doesn't matter.
AI is reshaping who does the work, not whether the work exists
The AI findings sit alongside the consolidation data as the other structural force ICAEW's respondents named. 95% expect their use of AI to increase over the next three years and 91% expect more automation, with 86% saying their tech strategy already explicitly includes AI adoption. Current use is described as moderate rather than extensive even in the highest-adoption areas — internal knowledge management and client management, both at 88% of respondent firms using AI to some degree, followed by audit (77%), accounting (75%) and tax (66%). The workforce implication firms themselves flagged is specific: 68% agree AI will reduce demand for early-career accountants, compress mid-tier roles, and push more responsibility onto senior staff with broader capabilities. Only 17% of the firms said they can actually assess the impact of that on their own workforce. Alongside it, firms expect to shift their trainee mix — 49% plan to increase school-leaver recruitment while 40% expect to reduce graduate trainee numbers — and 74% expect to increase recruitment of non-chartered specialists, overwhelmingly in data analytics and technology roles.
Worked example — illustrative, not a real firm
Take a hypothetical 28-partner firm, Ashworth Grey, sitting squarely in ICAEW's "medium" mid-tier band. Two years ago the partners discussed acquiring a smaller local practice mainly to solve a recruitment problem: they couldn't hire enough qualified staff to service a growing client list, and a merger looked like the fastest fix.
By 2026, that specific pressure has eased — the firm's recruitment difficulty has fallen off its own top-three concern list, echoing the sector-wide trend from 67% to 46%. But the partners now face the question ICAEW's data puts in front of every firm their size: expand the client base through acquisition funded by PE, which 94% of PE-backed firms in the survey are doing, or stay independent and rely on organic growth and deeper existing-client relationships, the strategy 79% of independents without PE backing are committed to. Ashworth Grey's honest answer is that they haven't actually decided — they're doing neither, which is precisely the drift that the 63% who expect a "diminished middle" by 2030 are describing. The forecast doesn't punish firms for choosing a side; it flags what happens to firms that don't.
What this means for your firm
- Nearly half of mid-tier firms in ICAEW's 2026 sample are now PE-backed, up from a quarter in 2025 — and PE-backed firms plan acquisitions at more than 1.5x the rate of independents
- Talent has quietly stopped being the main reason firms buy each other: capacity-driven M&A fell from 72% to 46% importance, succession-driven M&A from 68% to 38%, as recruitment and retention pressure genuinely eased
- 63% of the firms ICAEW surveyed expect a more polarised market by 2030 — fewer large firms, more small firms, a diminished middle
- 79% of independent firms have no plans to take PE investment, mainly over cultural alignment and succession concerns, and a fifth of all firms see independence itself as a growth differentiator
- 95% expect AI use to increase over the next three years, but only 17% feel able to assess its impact on their own workforce — the gap between adoption and understanding is the real risk, not AI replacing the role
- The practical takeaway isn't "sell" or "don't sell" — it's that drifting in the middle without a deliberate position is the one strategy the data says gets harder to sustain
What to do with this before your next partner meeting
- Work out honestly which side of the split you're actually on. Are you scaling with a clear funding and acquisition plan, or growing organically with a defined specialism — or neither?
- Revisit any acquisition plan that was built around a staffing crisis. If recruitment eased for your firm the way it did for the sector, check the underlying rationale for a deal still holds.
- Get a current, realistic view of what your firm is worth before you need the answer under pressure — see our take on whether practice valuations have peaked in 2026.
- If PE money looks like the only route to scale, understand what you're actually signing up for — our piece on PE roll-ups versus selling direct covers the integration strains showing up behind the headline multiples.
- Name your AI and workforce gap specifically, rather than leaving it as a vague board-level worry — ICAEW's own data shows most firms haven't done this yet.
- If you've been putting off a decision about the next chapter of the firm, this research is a reasonable prompt to stop drifting and have that conversation now rather than in 2029.
Frequently asked questions
What is ICAEW's Evolution of Mid-Tier Accountancy Firms research, and how reliable is it?
It's ICAEW's third annual survey of managing partners and CEOs at UK mid-tier firms — those with between 11 and 249 principals. The 2026 findings, published in May 2026, come from fieldwork carried out between 23 February and 15 March 2026, with 35 of 110 invited firms responding, a 32% response rate broadly in line with previous years. Respondents were split roughly evenly between smaller (up to 20 partners), medium (21–50) and larger (50+) firms. It's a self-reported survey of a specific size band, not a census of the whole profession, so treat the percentages as directional evidence of where mid-tier sentiment sits rather than exact market-wide truth — but tracked consistently for three years, the trend lines are the genuinely useful part.
Is private equity investment in accountancy firms still growing in 2026, or has it peaked?
It's still growing among mid-tier firms, but the growth is concentrating rather than spreading. 46% of the firms in ICAEW's 2026 sample now have PE backing, up from 25% in 2025 and 12% in 2024, and 94% of PE-backed firms plan further acquisitions in the next three years. But new PE-to-firm deals are reported as running below the 2024–25 peak, with growth increasingly coming from PE-backed firms buying more firms and from PE-to-PE sales between existing platforms. Appetite for taking on PE for the first time is also softening: only 5% of independent firms in the 2026 survey said they're likely to accept it in the next three years, down from 15% in 2025.
Will the "diminished middle" really happen, and what does it mean for a firm my size?
63% of the firms in ICAEW's survey agree that consolidation will produce a more polarised market by 2030 — fewer large firms, a shrunken middle, and more small firms. That's a forecast from practitioners inside the sector, not a certainty, but it lines up with what the same data shows happening now: acquisition appetite and board-level M&A discussion are running far higher at PE-backed firms (94% planning acquisitions, all with board discussions held) than at independents (58% and 32% respectively). If you sit in the middle without external capital or a clear specialism, the practical read is that organic growth alone gets harder to sustain against faster-scaling competitors, which is exactly the position that makes a proactive decision — buy, merge, sell, or double down on a niche — better than drifting.
Does ICAEW's research show AI actually replacing accountants?
No — the firms surveyed don't see it that way, and the numbers back that up. Only 12% agreed the profession's attractiveness will decline because of a perception that AI will replace accountants. But 68% do agree AI will reduce demand for early-career roles, compress mid-level positions, and require more of senior staff, and 83% think the accountant's role will pivot from compliance and reporting to judgement, interpretation and ethical oversight by 2030. AI use in the firms surveyed is currently described as moderate rather than extensive even in the highest-use areas (client management and internal knowledge work, both 88% of respondent firms), but 95% expect that use to increase over the next three years. The shift is in what junior and mid-level roles look like, not whether the roles exist at all.
If my firm doesn't want private equity money, what are the alternatives to staying stuck in the middle?
ICAEW's data shows independents aren't simply standing still. 79% of independent firms said they have no intention of pursuing PE investment in the next three years, citing concerns about cultural and ethical alignment (cited by 100% of that group) and the impact on succession to senior roles (87%). A fifth of all firms surveyed said they see remaining independent as itself a growth opportunity and a differentiator for attracting clients and staff, provided it's paired with organic growth, deeper client relationships, and using AI to create capacity for higher-value advisory work rather than just holding the current model. The alternative to PE-backed scale isn't inaction — it's a deliberate choice about identity, service mix and, eventually, who you sell to and on what terms.
Working out which side of this split your firm is on?
Whether that means building capacity, bringing in fractional support to sharpen the numbers before you decide, or a confidential conversation about selling directly, start with a no-obligation call.
Book a confidential call