It was only this elite that could service many clients, they would say, as it was only this elite with the reach, resources and corporate muscle that the biggest corporates demand.
It wasn’t, of course, all one-way traffic. The mid-tier used to argue long and hard that they were a very different beast to the bigger boys, offering a more personal, a more tailored and – they would say – a better service.
But these days that clear blue water seems to be silting, largely thanks to the efforts of the larger mid-tier firms to make those differences seem rather more grey than they once appeared.
This week, for instance, saw Horwath Clark Whitehill become the first firm outside of the Big Four accountants to separate its management consulting practice from its core accountancy business.
‘The decision to separate the consulting practice is a direct response to changes in the accountancy profession and anticipated tighter regulations to increase auditor independence,’ ran the firm’s statement. ‘The change will ensure that both HCW and the consulting practice can demonstrate complete independence and eliminate any perceived conflicts of interest.’ In terms of tone and result this was very Big Four behaviour.
Meanwhile, – as we reveal on this week’s front page – smaller firms are increasingly picking up work at the expense of the big firms who, in this new transparent world in which we live, are increasingly being conflicted out of offering certain services to clients.
At the same time, with their growth rates stalling in many service lines, the big firms are looking at the SME market to advance their fee income.
Back in February mid-tier firm Grant Thornton won the audit contract for luxury department store Harrods after PricewaterhouseCoopers stepped down, and GT launched an attack on the Big Five, claiming their monopoly over the mid-tier was ‘dissolving in the face of increased competition’ from middle market specialists.
If those claims sounded a little far-fetched back then you can bet that senior partners at Deloitte & Touche, PricewaterhouseCoopers, KPMG and Ernst & Young are listening more attentively today.
Watch this space.
HMRC breaches client confidentiality; and partner profits fall at EY. These stories and more discussed in Friday Afternoon Live
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