| Two
of the key problems in the profession are succession and management.
"There are very few experienced managers" says Mr.
Underwood. "Even where there is a lead partner, partnerships
tend to work by consensus. This will be a real problem if more firms
move towards limited liability."
Consolidators who are
active in the profession and have the resources to buy up small
practices and bring them together have mixed success and failure in
America. One key observer says they have funds, but the process is
unlikely to work because it will be very difficult to impose the
discipline that is expected on the smaller firms most likely to be
brought together.
"There is a role for
consolidators in the UK," says David Turnbull, the chief
executive of the UK 200 Group of Chartered Accountants. "But
not necessarily as a vehicle into which to sell one's practice. The
smart firms will see consolidators as a spur to overhaul their
practices, with a view to dramatically improving their services and
viability. That way they will not only gain significantly increased
earnings, but also a happier partnership and staff." |
Where
they have developed a suitable infrastructure to offer the necessary
range of services, smaller and medium sized practices also stand to
gain from the buoyant small and medium-sized enterprises (SME)
sector. The smartest are likely to target smaller clients of the Big
Five and the second division firms. Practices which should do well
are firms that belong to associations such as the UK 200 Group, now
in its 15th year, with a national membership of 175 leading independent
practices. As the largest mutual association of its kind in the UK
within the accountancy profession, the group's ai is to improve
standards of service and technical competence and to provide the
widest range of professional services on a national and
international basis. Standards are rigorously monitored by
independent reviewers. Where standards are not maintained, members
are subject to removal. |
Membership
of an organisation such as UK 200 Group clearly places members in a
stronger position to compete. David Ingall, a partner at J.W.
Pickles & Co., long established in Selby, North Yorkshire, says
that although all the Big Five have offices in Leeds, the
fast-growing financial centre, his firm is confident it can continue
to compete in the North and beyond "because we offer better
value for money for SME's".
There is some comfort for
smaller and medium-sized practices. A recent survey by Accountancy
Age and Reed Accountancy Personnel showed that more than half of the
finance directors polled said bigger firms do not necessarily
provide a better service. The majority of finance directors said
smaller firms offered as good a service as bigger firms and often a
better one, and favoured personal service and specialised knowledge.
Surprisingly, only 24
percent came out in defense of larger firms. Large firms according
to one finance director, are too impersonal for dealing with small
to medium size companies. |
