ICAs rethink 75% rule
Chartered accountancy firms could get the go-ahead to recruit more non-accountant partners before the millennium.
The English, Scots and Irish institutes have established a working party to investigate the question of ‘control criterion’ for firms wanting to use the title chartered accountants. At present 75% of partners have to be chartered, but the working party will investigate the possibility of reducing the threshold to ‘not fewer than 51%’.
Raymond Fear, director of practice regulation at the English ICA, said: ‘A few firms requested we make this change. But we are just looking at the issue at the moment. The power here lies with council, but we’ll test the membership and if they are in favour that will probably decide the issue.
‘It is important for firms to be multifaceted today,’ added Fear. ‘They may want to carry out investment business, which may mean employing a non-accountant. They may want to recruit insolvency practitioners.
If you’re a two-partner firm, the 75% rule can make this difficult.’
A decision in favour of a move to the 51% threshold would also enable bigger firms to employ more lawyers, effectively creating multidisciplinary practices. Ronnie Fox, chairman of the Association of Partnership Practitioners, said he thought the news would frighten many lawyers.
‘Some lawyers enjoy the competition,’ said Fox. ‘But many are scared by the way the big, well-managed accountancy firms are coming in and swallowing law firms.
‘The acquisition of Wilde Sapte has really heightened their fears. It also makes it look as if the Law Society is dragging behind on this issue.’