Haines Watts' unique structure is the way to build firms in the 21st century, says managing director Richard Gibson
IN MAY, Haines Watts announced the introduction of a mobile-ready website for business owners, finance directors and financial controllers. Well ahead of the curve, considering earlier this month Scotland saw its first firm roll out online capabilities to its clients. However, it is the firm’s unique structure that allows it to make these decisions and implement them quickly, explains managing director and director of the Glasgow office Richard Gibson (pictured).
Although the firm wouldn’t stretch so far to say that it is in fact a franchise, its structure has a unique pulling power to the right candidates and partners.
The firm has different services, but each service is spearheaded by an individual and is almost run like a separate business, and each office is run nearly independently from the main head office.
For example, in Glasgow there is a head of business recovery, head of tax and head of audit, among others. Each director is in charge of the day-to-day running of their section. At the end of the fiscal year, to simplify, the director pays all costs, including a fee to the head office, then they take their portion of the profit.
In this way, although directors are part of the larger firm and have the backing of a top 20 brand, they can also make their own decisions on how best to run their section. They are free from a range of limiting aspects in partner politics found in many LLPs. Usually, if a big change is desired in an LLP, it comes down to a partner vote which, in the larger firms, could amount to dozens, if not hundreds, of people voting on a change.
“It is very much down to the individual [at Haines Watts]. Although it is not an independent practice, we are given more engagement and autonomy to do what we want to do,” explains Gibson.
“It has been described as a slightly unusual structure to most accountancy firms. We set up a number of subsidiaries and each subsidiary is a different service line. For example, if someone comes up with an idea for a service line, we’ll [Haines Watts] give them X% of shares, they go and run that with their team and make that idea happen. Because we have a small team, we don’t lose the personal touch or tread on toes.”
Ironically, the firm advises owner-managed businesses, with Gibson explaining that Haines Watts itself also runs like several small linked owner-managed businesses. The structure also allows a more direct influence because of the lack of bureaucracy.
You can run into partner politics, explains Gibson. “If there are 20 partners, the business can be cumbersome. We have a very tight-knit team, but ask the departments to focus on their own business, and leave the running of the whole business to the group board. Meetings are also informal and flexibile, which is something many competitors may not have.”
However, with great flexibility and opportunity comes great responsibility. All individuals are responsible for the success of their own service, and, on the downside, there is no one else to blame but themselves if a service fails.
However, Haines Watts, and Gibson in particular, understand that, with this structure, the onus is on the person tasked with driving that service line.
“When we first set up or aquire a business we find the individual. It is the person who leads that team – if we find the right person, we’ll start that service line. We are not service line-led; we are people-led. The right individual is more important than anything else,” he says.
Gibson explains the firm will not introduce a service line based on whether it believes it wants one. It will make the decision based on whether it can find the right person whom it believes will fit in with the ethos of Haines Watts as well as make it a success, and has a passion for it.
He adds that for this structure – of putting so much onus on the person – to work, the firm takes the recruitment process very seriously.
“We invest very heavily in the time we spend with recruitment consultants. So they know what we’re trying to do. We’ve got a steady stream of high-quality candidates, and that can only come from spending time with recruitment consultants so that they can understand exactly what you require,” he says.
“This is the way to build accountancy firms in the 21st century.”
Without a partnership, Haines Watts runs the risk of creating a disjointed firm. In partnerships, all partners, who will usually filter information down to their team, are kept in the know about how the firm is doing, what its prospects are, and how it is being driven forwards. All must be revealed. But this is not necessary in a non-partnership organisation.
However, Gibson is quick to point out that there is no “protectionism and self-preservation” at the firm. You can’t build a business if you are worried about your own position or those around you.
“It is vital that the firm must be open, clear and honest as well as completely transparent in management. You have to let the staff know what you’re doing on issues and everyone needs to believe in the firm and each other.”
Gibson believes one of the best ways to achieve this is to lead from the top. He claims to be completely open and transparent with his staff and is keen to build up client relationships and pass them to his various section heads.
He also describes his boss, chairman Douglas McGhee, as the most inspirational accountant he has ever come across. McGhee has had his fair share of understanding structures in both partnerships and private companies.
He set up his own practice, J F Miller and Company, in 1982, which later became Walkers Chartered Accountants in 1989. Walkers subsequently merged with HLB Kidsons – now Baker Tilly – where he was the Scottish managing partner for a number of years. In 1999, McGhee joined garden furniture retail business Klondyke as group CEO. Under his tenure, Klondyke grew from a turnover of about £7m to more than £35m by 2006 when he left and, in the same year, joined Haines Watts.
As the managing director, Gibson is very aware of how he works so he can lead by example to his staff and he is keen to highlight that Haines Watts is one big team.
“If I’m sitting behind my desk, I’m not doing my job. My job is to get under the skin of the client. Being out of the office is a sign of being busy – I need to lead the focus on client-winning and development.”
And, as he says, “some people [this set-up]’ll fit and some it wouldn’t”.