COMPANY/BUSINESS
- Practice with two offices, based in the South East
- Each office was run by two partners
- Fees circa £1.5 million to £2 million
BACKGROUND
Prior to helping this practice expand through growth, the team at Foulger Underwood had been undertaking some consultancy work to improve the general productivity and profitability of the practice. There were general management issues in both offices that had to be resolved, but the practice was well-connected and partners were garnered with some specialised knowledge of wealth management services and a degree of speciality in the public sector, namely charities and academies.
CONCERNS
- There were two partners in each office, sharing profits equally. However, one of these offices was much more profitable than the other, causing an imbalance.
- The larger office was earning approximately 60% of the total fee income.
- The two offices were run totally independently.
- There was a younger partner in the larger office, with little career progression on offer.
ACTIONS
Foulger Underwood had to deal with each office separately and introduced a two-office brief. One partner then decided to leave due to personal reasons and this allowed a deal to be struck, which in the main, satisfied all parties. However, the sole remaining partner in that same office, had a change of heart and decided he did not want to be managed and acquired. Arrangements were thus made for this office to continue independently under the existing brand.
Concurrently, Foulger Underwood introduced the partners of the second office to a national, multi-office accountancy practice. This larger practice was seeking to acquire a firm within the south east and benefit from their well-established connections and strength in wealth management services. The acquired practice could also share in the charity and academy sector experience of the acquirer. To merge with the national practice would enable both parties to grow and develop these mutual sectors, become far more competitive and benefit from an enhanced, combined knowledge-base.
OUTCOME
The remaining practice was acquired by the national practice and the office was closed. The client list, partners and staff were transferred to the new acquirers office. In addition, deferred goodwill was calculated for one of the partners as he was due to retire in three years. The remaining partner joined the new firm, initially as a salaried partner, with a view to profit sharing, dependent on performance and to be reviewed at a later stage.
BENEFITS
- With the help of the Foulger Underwood consultancy team, each of the practice's offices had their issues resolved.
- The larger, more successful site was acquired and the partners, their clients and services were moved to the acquirer’s office.
- Improvement in management style and leadership was created and still exists.
- A clear career path strategy was put in place for all staff.
- The younger partner received more focus, security and certainty over his future.
- The premises, owned by the older partner, were sold when they moved into new premises.
- The existing clients benefitted from additional services provided by the acquirer.
