WHEN IS A NAME not a name? Perhaps when another name is tagged onto the end of it.
Accountancy Age rather cheekily asked Robert Holland, managing partner of James Cowper Kreston, why the recently-added ‘Kreston’ was attached at the end of its name. In contrast, south east-based firm Reeves has rebranded to Kreston Reeves.
Holland is relaxed at the differing approaches. He sidesteps a direct answer to the question, instead focusing on the importance for smaller firms to appreciate that their client-base is more internationally-focused, and while it can make a big play on having a range of international contacts with knowledge of local markets, the brands are different – and some clients want more comfort – which manifests itself in sharing a brand. In this case, with the Kreston International, the global accountancy network.
Building the ‘new’ brand
The branding issue is particularly complex as far as Kreston is concerned because, as a brand itself, it is not particularly well-known, “because only half of the firms have adopted the branding”, says Holland. The branding will become stronger as more firms take part, but as yet not all see a strong enough benefit – an element of chicken and egg.
Surely Holland would therefore advocate a BDO-style shift to a single name – no suffixes or prefixes – across the globe? That might be so, but Holland still wants the best of both worlds – James Cowper Kreston is “fiercely independent” in terms of its outlook. “Having said that, we also want to be collaborative with our sister and brother firms around the world.”
Holland has seen direct benefit of Kreston membership. A recent client win came about as the group FD wanted good contacts within the Netherlands and the US – regions where Holland had himself just visited to meet Kreston firms. “That personal contact means you can pick up a phone and just get stuff done,” he explains.
A year into his three-year term as the firm’s managing partner, Holland is looking to help it evolve rather than turn itself upside-down. He describes the partnership as “genuinely collaborative”, and working “fairly seamlessly”, no matter who sits in the top seat.
The firm is aiming to extend itself while retaining its core identity – that of a strong regional firm that “punches above its weight”. He admits that it would be nice to “find a kindred spirit” in the London market, but beyond that it is trying to increase market share in its core locations (Oxford, Newbury, Reading and Southampton) and specialisms. Thames Valley gives it access to some London clients, but there are many parties that check for a London address – a nod by Holland again to the importance of branding, image and perception. “Having that presence in London ticks a box,” he says.
Alongside keeping overheads down by maintaining its head office outside of London, clients receive better value from a core of experienced partners that are a mix of internal promotions and former ‘big firm’ hires. Teams support the partners, and the partners are the port of call for clients.
“There’s that horrible phrase, ‘trusted adviser’, but there is a core truth that lies beneath it – accountants are the parish priest of the 21st century. For an owner-manager you have nowhere else to go to.”
External hires ‘hard’
The ability for a partner to collate, analyse and present this information to clients is key. Internal recruits tend to be of the mindset, set through the firm’s culture, but Holland admits that external hires are “hard to do”. “One thing I’m not going to do is break that for short-term gain.”
Maintaining that culture, and quality, is at the forefront of Holland’s mind. The “critical thing” for the firm to deliver is succession planning over the two terms that he would be likely to serve as its head; and work has been underway for months.
This isn’t limited to choosing a successor for him, but with an ageing partner mix. Three partners are over 60, and the firm “tends towards the 50’s rather than the 40’s”. Holland says he finds it “interesting” to see the number of firms that he believes are failing to nail down the succession issue.
“You end up degrading the firm because, over time, anyone with ambition and talent will go elsewhere because they can’t see a way through for themselves.”
While the ‘baby boomer’ age mix is at part to blame for this crisis, Holland is quite pointed in blaming individuals who have hung around too long in the hotseat.
“They like what they’re doing and fear creating room for somebody else because of what that entails.” Holland suggests that the potential future principals for the firm in the medium-term have been identified.
Longer-term planning, which appears to be a big part of the firm’s so-called ‘culture’, saw it take big and painful decisions post-financial crisis. The firm made a couple of hires, rather than take a mass-redundancy approach. “Sometimes firms can be short-termist in their people approach, looking at the next year or two, rather than the next five or ten years,” explains Holland.
While “a few people” left the firm during the recession, Holland says it made fewer cuts than if it was being “economically rational”. “We chose this [route] as partners to keep our teams together and, frankly, take a bit of a dip in earnings for a while to make sure we could benefit going forward.”
Smaller firms, says Holland are “retiring on their feet”. The very small firms are struggling to survive”, he says. “They’ve also tended to have succession issues.”
But while firms hunker down, or fade away, the world moves on. KPMG now looms large over the mid-tier of the profession. The Big Four firm’s foray into a technology-based attempt to win small clients is a regular talking point among practitioners. A “factory approach” can work, says Holland, and there are examples of successful volume players. But it is a different approach and market for KPMG.
The concern is that as a portion f those clients grow and require a more sophisticated offering, KPMG will be able to service them.
If this is KPMG’s aim, Holland is philosophical. “We’ve always taken clients in two ways: firstly, when people feel they’re being neglected by firms bigger than us; and secondly, those who have outgrown firms smaller than us. Technology will help us and other firms, but the core of what we do is human interaction.”
The impact of technology for all firms, is the bigger issue. He expects further technological gain will make the professional accountancy market a lot smaller, in terms of the number of practices that exist, and the number of practitioners.
“You will not necessarily have accountants as we know them; you will have an electronic document, and a whole different way of giving an opinion on it. However, there’s’ the core human interaction that we do remarkably well that we’ll continue to do remarkably well. And, providing we focus on that, I’m very confident of our future.”
In ten years’ time Holland believes the firm will be “settled and secure” in its chosen environment, having progressed further.
“We progressed massively in the past 15 years and will progress further – in an evolutionary way, rather than revolutionary.
“There is a good space for firm our kind of size, and scale, who can deal with entrepreneurs in middle-stamp business. They want a kindred spirit guiding them through in terms of their tax, finance, and other things.”
James Cowper Kreston in numbers
Top 50+50 ranking: 44
UK fee income: £12.9m
No of offices: 7
No of partners: 14
Sectors: Bloodstock/Equine; academies; farms/estates; leisure; OMBs
Bluffer’s guide to James Cowper Kreston: The firm is the ninth biggest public interest entity auditor in the country, dealing with a number of venture capital trusts. Managing partner Robert Holland undertakes quality reviews of other firms within the Kreston network.
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