There has been discussion for some time about the Big Four networks forging
closer ties (the loose combinations have always been something of a fiction),
but senior people at KPMG
kept this proposal tightly under wraps.
Will it go through? It’s hard at the moment to see why not, unless there is
some sting in the tail for partners. The German firm is around half the size of
the UK firm in revenue terms, so how profit sharing and appointments to partner
will work under the new structure may be of concern to some. The fact, of
course, that the headquarters will be in Frankfurt could be a first sally in
attempts to prove that this is not a UK takeover.
The real enigma about the whole thing is: why? The key driver appears to be
risk, with John Griffith-Jones mentioning better control of risk as a key reason
for the move. It’s difficult to assess whether that will or will not work.
Likewise, there appear to be few synergies in merging. Senior figures have
already appeared to rule out any job losses or back-office cuts. Perhaps the
process of billing international clients will become easier?
Rivals are whispering about the difficult cultural challenges of merging the
two. Accounting, after all, is the art of helping businesses by explaining very
local issues, the technical terminology and semantics of local rules.
KPMG can respond that there are as many opportunities in learning from other
cultures as there are barriers.
It could also be argued that law firms – intrinsically similar businesses –
have been operating as global firms for years. So why are accountancy firms
reluctant to do the same?
Mark McMullen joins the private client services team from Smith & Williamson
Merger between Clear & Lane Chartered Accountants and Magma Chartered Accountants was finalised on 3 February
BDO has taken its new partner intake to 23 during the first half of its financial year, including the appointment of five partners in five weeks
The firm reports 7.6% global fee income growth for the year ending 31 December 2016