Hunger of professional services to change questioned
Major professional services firms could be missing a trick by not acting more quickly ahead of the Legal Services Act, which allows law firms to be owned by non-law practising entities.
That’s according to Mike Reeves, managing partner of Clearwater Corporate Finance. Speaking at Insider’s 'The Future of Professional Services' breakfast on Friday (11 November), keynote speaker Reeves said: "In the shorter term, and at the micro level, there are problems accessing finance.
"But at the macro-level, what is wrong with a big professional firm adding new service lines, building a strong and consistent brand? It’s a great idea. I know it wouldn’t be easy to achieve. There is sometimes a mindset of not wanting to change in professional services, but there’s a danger of being left behind by clients who are always looking to change."
However, Jonathan Hurst, chairman for the northern region at KPMG, cast doubt on the chances of Big Four firms taking the plunge. He said: "I think that all accounting firms have their core specialisms. We’ve tried something seven years ago with a law firm (McGrigors) and it didn’t work. Law firms have big challenges. There will be some’ buy and builds’ and there will be winners and losers."
John Ashcroft, chief executive of Pro Manchester, added: "There are issues around corporate restructuring. Good structures are market-focused and currently there’s nothing to suggest there’s a market demand for professional services conglomerates. I don’t see it happening. Furthermore, I don’t see much appetite from private equity in putting capital into professional services."
Also on the panel was David Partridge, chief executive of Argent, developer of The Hive building in Manchester’s Northern Quarter, where the event was held.
Asked whether he saw businesses changing in style, Partridge said: "There’s always the question in hard times – do you fall back on what you know you can do, or do you seek new opportunities? I think the business that will flourish will step out of their comfort zone and find new things to do, they’ll be themselves and trust their instincts."
