CPA Practice Advisor

MAY 2013

Today's Technology for Tomorrow's Firm.

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COVER STORY W hat would your frm do if, suddenly, the power was out and would be for at least a week? If many of your clients' businesses were damaged so substantially they either had to close permanently or at least for several weeks for reconstruction? If you had litle or no ability to contact them, because of power outages and clogged cell transmission lines? What if all of those things happened, and also many of your own staf were facing challenges such as extensive or total loss of their homes, and difculties communicating with them? Tis is the reality that WithumSmith+Brown faced starting on October 29, 2012, when Superstorm Sandy struck the New Jersey coastline. Combined with a full moon and high tides, the hurricane had joined forces with a powerful winter storm and took aim on the most populated cor r idor i n t he Un ited States, washing away homes and businesses, and causing f looding and wind da mage for hund reds of m i les inland. As many as 8.5 million were lef without power for at least a day, while many didn't get it turned back on for weeks. Nine of WithumSmith+Brown's 14 ofces were directly afected by the storm, as well as a majority of its staff and clients who live and do business in the region. Afer more than six months, the efects are still being felt, but the firm is finally returning to something like normalcy. Since Katrina struck the Gulf Coast in 2005, many accounting frms have adopted disaster recovery plans, but puting them to the ultimate test is a diferent mater. How wou ld t hat pla n work u nder a worst-case scenario like Superstorm Sandy? Te senior partners at the frm say they quickly learned what worked and what didn't and they've since taken steps to help prevent some of those issues in the future. Does your frm have a disaster recovery plan? Has it been tested? Have you talked with other professionals that have gone through a disaster? If the answer is no to any of these questions, you need to read on, because you can learn a lot from the real-life example set by WithumSmith+Brown, as partner James C. Bourke, CPA.CITP.CFF.CGMA, and CEO and Managing Partner William R. Hagaman, Jr. answered some questions about the ordeal. Before the Storm ISAAC O'BANNON: WHEN DID THE PARTNERS AT WITHUM FIRST START TAKING THE COMING STORM SERIOUSLY? JAMES C. BOURKE, CPA.CITP.CFF. CGMA, PARTNER: I remember it well; it was on Friday, October 26, 2012. I was watching the Weather Channel and most of the storm models refected the same thing: A category one hurricane that was crawling up the eastern seaboard, was projected to make an historic turn west and slam into the coast of New Jersey. It was the very frst time that I came to the realization that a signifcant number of our ofces, a majority of our staf and a signifcant number of our clients were in the direct path of the storm. Jim Bourke, CPA.CITP, Partner, and Bill Hagaman, CPA, CEO, WithumSmith+Brown. WHAT STEPS DID THE FIRM TAKE IN ADVANCE OF THE STORM? BOURKE: Our number one priority was all of our team members and their families. The management committee made a decision in advance of the storm, on Sunday morning October 28, to close our ofces on Monday and Tuesday. An email went to all of our staf later that morning from our HR department notif ying our staff of the shut-down and to consult with their partner-in-charge for work that they could be doing while at home. We also notifed our staf at the ofce level to synchronize client engagements that were in process so they could be worked on of-site, in the event connectivity to the frm was compromised. Our partners also reached out to clients to inform them we were closing our ofces for 48 hours so that our staf could be home with t hei r f a m i l ies, but t hat ever y member of our professional staff were available via cell phone if they were needed. WHERE WERE YOU WHEN THE STORM HIT? BOURKE: I was home. I was scheduled to speak at two conferences that weekend, but chose to cancel my trip to the f irst conference and my second conference was postponed. I live in a beach town in NJ called Manasquan, and my home is about a half mile inland from the beach. The town was devastated by the storm. Te highest high tide rolled down my street, f looding out a majority of the homes, with at least 70 totally destroyed, many of which a re st i l l awa it i ng demol it ion . Miraculously, my home was virtually untouched. WHAT WERE THE FIRST COMMUNICATIONS YOU HAD WITH PARTNERS/ STAFF DURING AND IMMEDIATELY FOLLOWING THE STORM? BOURKE: The last email to come from my mailbox was on Monday, October 29 at 5:48 p.m. Two hours before the storm made landfall, our power was gone. Te following day, nine of our 14 ofces were without May 2013 • www.CPAPracticeAdvisor.com 9

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