One-on-one with Carl Chatto as he takes the reins at Baker Newman Noyes

Photo / Peter Van Allen Carl Chatto, who in January became managing principal of the accounting firm Baker Newman Noyes, took over from co-founder Eleanor “Ellie” Baker, who is retiring.

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By Peter Van Allen

Carl Chatto oversees Maine's second-largest accounting firm, Portland-based Baker Newman Noyes. In Maine, the firm has 68 CPAs and 146 employees overall. Its in-state revenue was $25.7 million last year. The firm is steadily increasing its footprint, expanding its offices outside of Maine.

In New Hampshire, Baker Newman Noyes has offices in Manchester and Portsmouth. In Massachusetts, Baker Newman is in Boston, Peabody and Springfield. Chatto, a Rockland native, has been with the firm throughout its existence. He was key to last year's merger with Shatswell MacLeod & Co.'s external audit and tax practices. On Jan. 1, he became managing principal, succeeding Eleanor “Ellie” Baker, who co-founded the firm in 1995. At the time he sat down with Mainebiz, he still had an office adjacent to Baker, who stayed on through the transition but was set to retire at the end of June. An edited transcript follows.

Mainebiz: In an age where you can communicate by email and Skype, why is it important to have the smaller, regional offices?

Carl Chatto: We have video technology, so the offices can talk to one another, but there's still a lot to be said for face-to-face communication. That holds true with clients as well.

MB: One of the biggest challenges in Maine is finding qualified employees. How do you recruit junior employees?

CC: We spend a lot of time on recruiting. One of the programs we have is a three-day internship that we offer to sophomores and juniors. The first day is devoted to the audit practice, the second day to the tax practice. The third day is for community service, they work alongside our staff. Some become full time after that. We're able to say, 'That's a great candidate.' It provides interns with 'a day in the life.'

MB: How did the firm make the transition from the leadership of Ellie Baker, who co-founded the firm more than two decades ago?

CC: When she announced she was ready to step back, I was honored to be chosen. The transition went well. It was planned and well communicated to employees and clients. I let my own clients [in the audit practice] know. During the transition, she has provided guidance and counsel. In terms of what I've learned, I have a better understanding. I had been director of the audit practice and was on the management committee. There was a lot I needed to know.

MB: What are some of the trends in the industry?

CC: One of the things that's a trend for both us and our clients is the volume of changes in rules and laws. Federal tax laws, Maine tax laws. All of the states are trying to get their share of the revenue pie. There are international tax laws. What we've done to respond is create industry and client specialization. With the regulatory issues, it gives us a better comfort level. We provide a lot of education and training to our staff.

MB: Accounting firms increasingly seem to be adding 'consulting' as a practice area. What does that mean?

CC: Our baseline is tax returns and audited financial statements. We can also help clients when we can say, 'This is what I've seen [other clients] do.' We can help with estate and tax planning, succession planning. A number of families and businesses are at the point where these are realities. The sooner the planning starts, the better.

MB: What's in store for the future of Baker Newman Noyes?

CC: We had three mergers last year [William Steele & Associates, Shatswell MacLeod & Co. and Albert Stowe CPA]. We brought new practice areas into ours. We want to continue to bring in qualified employees. We want to continue to bring in clients. We want to continue to bring in key data points.