A myriad of business models and structures see firms differentiate themselves, but there are some worrying trends, says Kevin Reed
191 OFFICES, or one? £17.6m in fees per partner, or £250,000?
These numbers are an illustration of the different ways in which firms structure themselves and operate to serve clients. One firm will operate differently to another because their client bases are different, while others will go for the same clients but find another way of doing so.
The Accountancy Age Top50 +50 contains a myriad of LLPs, franchises, partnerships and Ltds, serving a wide range of corporate and individual accounting, tax and business services.
But some patterns emerged from the data we collated. It’s clear that things aren’t easy out there. Nearly a fifth of firms saw revenues shrink in their last reported year. Bar a small handful of exceptions, those that grew revenues did so modestly.
The cutoff for entering the Top 50 has dropped to £11.3m, from £11.6m in 2011. But partner numbers have held up, at 5,753 in 2012 compared to 5,741.
Is it worrying that the Big Four firms have all grown revenues, while BDO and GT saw less impressive performance? Perhaps, but then it could be argued that BDO and GT are trying to fight more fights than the Big Four – for high-end work and much further down the chain at regional level.
What is more worrying is that equality issues still permeate the profession, but maybe there is some silver lining.
There are five female managing partners across the Top50 and the +50. One in twenty is not really good enough. However, male-female partner ratios appear to be heading in the right direction – now at about one in seven – and hopefully these partners will represent their firms as boss. It is clear though that this process is not quick.
Half of the Top50 firms fail to provide details of their ethnic split for partners and qualifieds. There are reasons for this: many feel they can’t collect such data. Well, some firms manage to do it, don’t they? The data that is provided isn’t too promising, though.
What is clear, however, is that a new generation of IT-literate accountants, unwilling to operate within old partnership models, will start making inroads into the Top50 charts.
Continued consolidation will see familiar names disappear.
How long before we see a single-partner firm, founded by a woman from an ethnic background, break into the Top50? Probably sooner than you think.
Kevin Reed is editor of Accountancy Age