Growth control: look behind you
Wenham Major's demise highlights the need for controlled growth
An old established firm makes the headlines, but for all the wrong reasons.
The headlines indicate ‘financial irregularities’ – whatever they might be – but
when you see the growth rates for the firm indicated in the reports you might
not be surprised.
Delivering accounting, taxation and business advice requires systems to
ensure that standards are maintained as well as good staff at growth rates
approaching doubling fees in a year those control systems are going to be put
under immense strain. Yes, special fees may well not require a doubling of
available staff but the pressure placed upon the principals will take its toll,
as it seems to have done.
The lesson to be learned from the very vague details currently available is
that control systems operated in any professional services firm have to be
robust and capable of coping with rapid expansion and probably in the current
economic climate contraction, too.
Regular internal reviews of the systems are required by our regulatory bodies
but how often are they done and how committed are the principals to having their
own work reviewed? In a growth situation these internal reviews often lag
behind.
As both a practitioner and president of the UK200Group I am always sad that a
firm ends up in the headlines. Just remember that this news appeared not only in
the professional press but also locally.
Yes, some direct competitors will rub their hands (behind closed doors, of
course) and will possibly pick up some work but for the whole profession such
headlines diminish us in the eyes of the public.
I am firmly of the opinion that the system operated by the UK200Group of
annual peer reviews ensure that our member firms do keep those control issues
firmly in the forefront of their thinking. We see many potential members and the
issue is always the regular quality assurance reviews. The firms that go it
alone can and do make it, but sometimes you need friendly support.
I hope Wenham Major’s problems can be resolved quickly and do not burst into
the headlines again. Both for their sake and for the sake of the whole
profession.
David Ingall is president of the UK200Group