Accountancy Age catches up with Saffery Champness as it takes stock of a period of change
IT was only three years ago that Accountancy Age last met with Saffery Champness’s managing partner, but much has changed in that time.
Most fundamentally, it is settling into new headquarters on Queen Victoria Street, in the thick of the City of London, just a few minutes’ stroll from the Mansion House Tube station, having spent the better part of the last 30 years on in Holborn.
Then there is the small matter of a changing of the guard at the top. Previous managing partner Jonathan Fox – notable for being the only managing partner in the Top 50+50 without a background in accountancy – has handed over the reins to his predecessor Rob Elliott to pursue the launch of his own consultancy almost a year ago.
Fox’s spell in charge “confirmed non-accountants can run firms”, Elliott tells Accountancy Age as we meet at their smart new home.
“We decided the path we wanted to go down was knowing what we could do, making sure we do it well and growing the business,” he explains. “I think what we learned was somebody who isn’t an accountant can bring different perspectives to the party. The big thing that Jonathan – a marketer – brought to us was ‘people people’. Primarily accountants are numbers people, and the way of dealing with people and managing people was something he really brought to the party.”
Turning his attentions to the new office, Elliott explains that while finding a new home as the end of the previous lease on Red Lion Street in London’ Holborn drew to an end was hugely important, priorities over what was needed changed over time.
“When we started looking at the end of the lease, we said ‘okay, what’s important?’ and whereas ‘own front door’ had previously been at the top of the list, it didn’t feature,” he recalls. “The reason for that is that nowadays clients are so used to going to professional advisers who’ve got one or two floors in a very big building, so we just didn’t feel the need.”
At Red Lion House, the firm had been strewn across six different floors and were “initially able to put our practice areas on different floors”, but as they grew at different speeds, Safferys had to move its VAT group from the tax floor because they’d got too big. “It was not ideal,” Elliott admits.
“We eventually found this place and I think the layout is slightly different in that you’ve got two mini atriums in the centre and we looked at it and thought we could make it work,” he adds. “We still have offices for partners, which quite interesting – whether to go open plan or not – we decided we still wanted to have offices for partners.”
Another advantage is saving on rent: “It’s cheaper than a completely clean open plan area would be, so we think we’ve done pretty well in terms of getting a pretty new-looking office which we were able to fit out ourselves for something that was, believe it or not, £5 per square foot cheaper that what we could have got in mid-town.”
It’s a lot of transformation for one of the oldest firms in the business; a firm that, by Elliott’s own admission, is “cautious” and generally “sticks to what it’s good at”.
It’s easy to see why given that the 161-year-old firm has doubled in size since 2005, when it was turning over £35m. Since then it’s more than doubled – it grew 8.72% in the year to 14/15, reaching £70.5m; 10.2% in 13/14 to £64.85m. And Elliott expects to post more positive numbers in the upcoming 2016 Top 50+50.
“We are very pleased,” says Elliott. “Part of the reason for the move here is we’ve taken just under 20% more space. We’ve been expanding, we’ve needed the space. In our Edinburgh office we’ve sub-let space and we’re taking that back because we need it. In a lot of our regional offices over the last four years we’ve moved to get extra space, so there’s a theme there.”
And, by and large it’s organic.
“We got to the stage in the early ‘90s where we realised we were over-partnered and some of the partners weren’t performing,” Elliott says. “We had to let them go and it was something we found distasteful, emotional and we didn’t like it. I think the reality is if you go for a merger, it’s always going to be the good and the bad. If you’re happy to deal with the bad culturally, then fine, but we prefer not to. We’d much prefer to keep the collegiate atmosphere. Growth for us is organic and cherry-picking.”
Executive partner Ben Bennett’s “trial by canapé” is one such example of that cherry-picking, and it’s a process he describes as “fantastic”.
“You really get to know the firm,” he explains. “You almost feel like you’ve joined the firm before you join it because you meet so many people along the way. That’s reassuring for the firm because they get a good look at anyone coming in, and for the person joining you really get a sense of what the firm is about. Obviously there are interviews and there are various stages of that, but ultimately it’s crowned off by trial by canapé, where you’re introduced to a variety of partners and you try not to spill one down your tie while you’re chatting and having a nice glass of wine. We went down the pub afterwards as well. That process embodies the fact the firm is a good home for people.”
That being the case, it’s of little surprise that – the acquisition of the now-defunct RSM Tenon’s film and entertainment team in 2012 apart – there has been no M&A activity into Saffery in more than a decade.
That move saw 19 members of staff join Saffery where they were reunited with Tenon’s former head of media Julian Hedley, who had earlier made the move to become a partner at Safferys. The film and media arm was one of Tenon’s key service lines, providing advisory services on tax and compliance as well as audit services for blockbusters including The King’s Speech, The Dark Knight, Love Actually and Casino Royale, among others. It continues to be one of Safferys’ most important units, and last year worked on Marvel’s smash hit Avengers: Age of Ultron, which grossed $1.4bn (£970m) worldwide.
“There’s two sides to it,” explains Elliott. “One is the financial side of it, which wasn’t really a problem because we advise clients on mergers, acquisitions and doing deals and due diligence on their behalf anyway, so that wasn’t so difficult.
“There were some logistical challenges. We only took 19 people, but in order to get 19 people into our London office, we ended up having to move 85 people, so that was something you don’t really think about. The deal itself was really truncated and had been in the offing for some months but it didn’t look as if it was going to happen and then it all had to happen inside two weeks. It was more the logistics than the finance side.”
As for Saffery’s future, Elliott is keen to put in a clear succession plan, pointing out the firm’s age profile means several partners are likely to retire at a similar time.
“The way the recession fell meant there was a bit of a dearth of recruitment into the profession, so it you look at a typical firm’s age profile, there’s a bit of a hole in the 45-to-55 age band,” Elliott explains. “We’ve got quite a few partners retiring over the next three or four years, and a few recently retired too. The challenge is keeping the clients happy, and helping a different bunch of people who are retiring enter retirement.
“It’s great in some ways because opportunity-wise – there’s nothing worse than staff looking at a partnership and thinking ‘I’m never going to make it – so it does breed that in people’s minds, but logistically it’s quite a challenge.”
Saffery Champness in numbers
Offices: Nine in the UK, plus Guernsey and two in Switzerland
Fee income: £70.5m
Sectors: Consultancy businesses, corporate, entrepreneurs, international, landed estates & rural, not-for-profit, private wealth, professional practice, property, recruitment and executive search, regulated entities, sports and entertainment
Bluffer’s guide to Saffery: With a 161-year history, founder Joseph John Saffery’s name adorns one of the first bricks lain at the ICAEW’s Chartered Accountants’ Hall