Opinion - Independence may be under threat from shareholders.
Mid-tier accountancy firms are well and truly in the grip of consolidation fever. As revealed by Accountancy Age in the past two weeks, Levy Gee and BKR Haines Watts are the latest to have their plans made public.
But it is likely there are more firms out there that are quietly but seriously looking at the prospect of converting from professional partnership to company status – and are perhaps looking for like-minded firms to join them.
Tenon, the ‘accountancy-based business services company’, as it likes to be called, has already taken 15th position in the Accountancy Age Top 50 league table, and is showing the way for this new business model.
However, as with all fevers, cures to what is perceived as a crisis can sometimes be taken rather too hastily. Any mid-tier firm heading down the consolidation path just because it thinks its rivals are doing so should think twice.
John Mellows, senior partner at Mazars Nevill Russell, this week sounded a rare note of caution on this new trend. He argues that accountancy firms have benefited from not having pressure from investors. ‘As a profession, independence is all-important. The pressure of responding to the wishes of external shareholders does not lend itself to such independence,’ he says.
There are those – many of them at Tenon, Levy Gee and BKR – who would disagree. But Mellows’ views should be taken on board by firms thinking of joining the fray, and by the profession as a whole. Fundamental changes are taking place in UK accountancy firms, and their consequences must be considered.