The start of a new year is traditionally the time to look forward and predict what is likely to happen in the next 12 months. However, a successful future can only be planned by taking into account the lessons of the past.

The face of the accountancy profession was very different 20 years ago. Of the top ten firms in 1988 only one name, Grant Thornton, has survived unchanged. Of the top 60, only 20 are still around today. The remaining two-thirds have merged, changed their name or disappeared altogether. This activity is reflected, albeit on a smaller scale throughout the rest of the profession.

Many factors, not least the recession of the early 90s, have contributed to this upheaval and will continue to do so. But what of the smaller independent practices? What lessons can they learn from all this? How can developments at the top end of the profession bring opportunities for those further down the scale?

In the first place, the increased movement at the top has had a considerable effect on the employment market. Youngsters in the top firms are working in a pressured and controlled environment. Many of those looking to further their careers in practice see the route to partnership as long and arduous, with no guarantee of success, and eventually leave to take control of their own careers. The different marketplace, culture and opportunities in smaller firms can make them a very attractive proposition for younger recruits.

Many firms have struggled under the burden of ageing partnerships. Currently 60% of partners are aged 50 or over and 20% are over 60. Three years ago the figures were 52% and 15% respectively, so the problem is getting worse. The independent sector needs the new blood but has to ‘sell’ itself to get it.

Independent practices should be more proactive in seeking out new blood from the large and mid-tier firms. They also need to consider the opportunities for acquiring new business that inevitably arise when larger firms merge.

The smaller OMB and SME companies that are the lifeblood of the independent sector may dislike having their business in the hands of a large organisation. Provided the level of service is there, the personal touch and cost benefits offered by independent firms give them a great advantage.

For many, M&A is the way forward and the events of the past provide lessons for the future. Far more of today’s mergers are the success story that the firms involved were striving for. However, there are still too many partners who fail to identify the core requirements of a merger: to make the business more profitable, to improve client services and to benefit partners and staff.

When creating a vision for the future it is wise to have one eye on the past. Profiting from the experience of others is better than making expensive mistakes of ones own.

Phil Shohet is a director of Kato Consultancy