The Top 50 – Ten years on

The business of accountancy is dull, some might argue, but when has the
profession ever really been without a notable event?

If you take a decade as the horizon, some startling changes emerge. First,
the Top 50 of 1998 contained at least 20 firms that have subsequently either
disappeared through merger or acquisition, or failed to keep up and slipped from
the hotlist.

The biggest, of course, was Andersen, which became part of Deloitte in 2002.
Despite that massive change, Andersen’s disappearance did nothing to dent the
biggest firms’ share of the market. In 1998 the Big Five controlled 78.6% of fee
income by proportion of the whole of the Top 50; the year after the Enron shock,
the figure was still 76%. Slowly but surely, though, that dominance has eroded
to 72.7%, which should hearten their rivals.

The next largest firm to disappear, Kidsons, number ten on our list a decade
ago, is now part of Baker Tilly. Soloman Hare, once 24th, has been taken over by
Smith and Williamson. Levy Gee, formerly 21st, became the core firm for the
first consolidator Numerica, which in turn was bought by Vantis.

Vantis, along with Tenon and Numerica, marked the advent of consolidators and
the entry of publicly listed companies into the accountancy sector. A PLC
accountancy business was little more than a fledgling idea in 1998.

Other firms have survived the decade but rebranded. Pannell Kerr Forster
decided to modernise and became PKF, while Neville Russell turned into Mazars
Neville Russell after becoming part of a French practice before simply rebadging
itself Mazars.

But what about opportunities for advancement among the 50 largest firms?
There were around 2,700 partners sharing the spoils from accountancy ten years
ago, but that figure has shrunk to 2,495 in 2008.Though small, the fall reduces
the opportunity to take equity and gain the big rewards.

Something else has happened, too. The number of professional staff employed
has fallen slightly from 61,000 to 60,000. This suggests that firms closely
manage staffing levels and do not necessarily rely on more employees to generate
more income.

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