Fast-growing companies can outgrow the capabilities of their accounting firms as easily as they outgrow office space. That's a lesson Don Middleberg learned quite early in the management of Middleberg & Associates, a New York City public-relations and advertising agency.

"We've changed accountants twice during our 14 years of operations," he recalls. "Our first firm, a one-man practitioner, was right for us when we were equally small. The firm we switched to, a somewhat bigger operation, was able to handle our next phase of growth. And when we reached about $1.5 million in sales, our needs became so financially sophisticated that we needed to make another switch, to a midsize regional firm, which improved the range of accounting services we received." Below, his tips on shopping for a new accounting firm:

* Solicit leads within your industry, as well as from more traditional sources like bankers and lawyers. "Then narrow the list down to five or six strong prospects," Middleberg advises, "by obtaining enough information from the firms to be able to tell which ones have sterling credentials, experience with businesses like yours, and competitive price structures."

* Conduct in-person interviews with each firm's managing partner or the partner who would handle your account. "At this stage of things, I try to get a sense of a lot of intangibles -- like the personalities involved. Are these people I'll feel comfortable with when talking about our most intimate financial details? I also want to make sure I'm neither too large for the accountant to handle nor too small to be of significant value."

* Request written estimates from each prospective firm about the kinds of service it would provide, the anticipated cost, and a commitment about the partner who'll handle the new account.

* Involve key managers in the final decision-making process. "Although I could anticipate being in touch with the accounting firm at least half a day every quarter," explains Middleberg, "my financial manager would have to deal with it much more closely on a weekly basis. So it made sense to get her input."

* Middleberg says making the choice was as much a matter of personality as of credentials. "We chose the firm we felt most compatible with because it seemed to be made up of savvy, street-smart New Yorkers who knew our business and could handle its growth." -- Jill Andresky Fraser

How Much Does It Cost?
Here's what you can expect to pay for an hour of a partner's time, depending on the type of accounting firm you choose. Higher rates don't necessarily signal greater experience in dealing with growing companies. In a recent survey of Big Six accounting firms, Inc. found that none was willing to disclose the percentage of its client base in the small-to-midsize market.

Size of firm Hourly partner rates

Big Six $235

National $202

Large regional $150

Medium local $142

Small local $117

Source: Accounting Today magazine, New York City, 1990 survey.