THE UK is becoming the IT investors and inventors’ location of choice, or so London accountancy firm Blick Rothenberg believes. It is so assured of this belief that it recently decided to open an office inthe UK’s answer to California’s Silicon Valley and what the government hopes will become the technology capital of the UK – East London.
Cheekily labelled Silicon Roundabout, the complex has an array of offices holding the likes of Google, Facebook and BT, all located near the Olympic Park and the City of London. It started in 2008, with 15 technology companies, but has quickly grown to the 300 it has today.
Not wanting to miss a trick, Blick tax partner Nilesh Shah saw the opportunity to move the firm into its next phase of technology specialism.
The firm fell into advising businesses in the technology market by working with predominantly owner-managed companies.
Founded in 1945, Blick initially worked with construction, plastering and labour-intensive businesses. However, when it joined the global association BKR International, it found itself facing a new market of opportunities.
The firm started receiving a substantial amount of work from US companies hoping to expand into the UK and looking for an alternative to the large firms.
According to Shah, smaller firms can often attract large US companies looking to set up a UK base, by charging lower fees for providing basic accountancy services.
This opened the door to a new lucrative revenue path and a new direction for the firm.
The partners at Blick quickly discovered that the majority of US parent companies expanding into the UK were US technology businesses. Why? Because, compared with the US, the UK has reliable and high-speed broadband capabilities.
“The UK has a big uptake of mobile technology and the ability of our networking and high-speed broadband in homes across the UK is greater than in many parts of the US,” said Shah.
The consequence of the UK’s internet capacity is that US technology companies based in Silicon Valley are inventing and testing products here before pushing them out to other countries.
Travelling to the US every five weeks or so, Shah was amazed by the buzz surrounding the UK’s tech city. He found that, in networking and face-to-face meetings, the subject of Silicon Roundabout would always spring up.
Not wanting to miss a gap in the market, Shah urged the firm to set up an office at in the area and gained the backing of the partners. A month later, the firm is hoping to build a presence and reputation as the ‘go-to’ firm for technology businesses.
The firm believes that although there is little expense in terms of rental costs, the only substantial cost will stem from the personnel seconded to build the office’s reputation.
Initially, just four people (out of a firm of 200) will be based in the new office.
“Monetary wise, we’re medium sized, not significant in terms of rent. People time, that’s significant. We need to get to know the area, space and culture there. It is a very different culture in tech city.
“It’s a long-term project and it is work that we will be doing without [initially] being able to charge fees. We will just build our presence in the area.”
Silicon Valley has been around for decades, so it will take a while for the UK to catch up he explains. However, this is an ambition he is sure will be realised and Shah is now fully engaged in that long-term vision.
He attributes some of the bravery needed to open the office to a close working relationship with law firm Taylor Wessing, which announced just days before Blick that it would also open offices in tech city.
“It gives us a bit of confidence, not standing out on the line by yourself,” said Shah.
Ripe with competition
The firm prides itself on competing against the likes of Smith & Williamson and Rawlinson & Hunter, as well as BDO and Grant Thornton. However, when it comes to US companies setting up operations here, Shah is very clear – the main competitors are the Big Four firms.
“We don’t compete with the Big Four on audits such as General Motors, but where there is a US company wanting to set up in the UK for the first time, they initially won’t have very big operations. They may not necessarily warrant a Big Four firm in that instance.”
This is where Blick can offer something unique: a specialism and lower fees, backed by its international capabilities thanks to its association with BKR International.
Richard Kateley of Legal & General discusses the advantages of close cooperation between accountants and financial advisers
The Practitioner becomes frustrated with HMRC's approach to a client's VAT investigation
The firm has made key appointments to its executive team, including a new chief financial officer, and a sales and marketing director
Partners at the insolvency firm Craig Povey and Kevin Murphy were appointed liquidators on 2 February