Alumni News Summer 2020

BDO Alumni Newsletter – Summer 2020 Edition – Keeping you, our alumni, up to date with the latest news from across the firm including our performance, recent awards and the latest news and events.

a bi-annual newsletter - keeping us in touch ALUMNI news

SUMMER 2020

in this issue “Together with the regular roundup of news and activity from across the firm, this issue focuses on BDO’s Professional Services Group and the work we do in this innovative and forward-thinking sector” Nick Carter-Pegg Head of Professional Services

ALUMNI news

spotlight

And hear from former professional services colleagues: Paul Roberts & Irena Molloy Chief Operating Officer and Executive Director

(respectively), Howard Kennedy LLP Stuart Godfrey (returned alumna) Audit Director, BDO UK LLP

MANAGING COVID-19 Latest advice and guidance to prepare your business for the new “normal” WHAT’S ON THE HORIZON? Neil Williams reviews actions some Professional Services firms have taken when responding to COVID-19 GLOBAL RISK LANDSCAPE Nigel Burbidge comments on the risks faced globally and the need to show integrity

WELCOME

CONTENTS

services firm are its people and adapting to have an engaged and motivated workforce is essential for success. The current COVID-19 crisis is certainly testing the business models of professional firms and in most cases, they have proved to be resilient. The technologies that firms employed to keep people connected and to promote agile working has been critical and, in most cases, firms found they could make the shift to remote working in a seamless transition, maintaining near normal levels of client service. Maintaining collaboration while working remotely has been critical as well as keeping close to clients and helping them navigate through the crisis. As countries start to emerge from the pandemic it will be vital to re-think business models and working practices so that the new ways of working are not lost and can be integrated into the business in the years ahead. At BDO we are holding events with clients and contacts virtually as webinars and workshops. Our first webinar on the crisis outlined ways in which firms, including our own, are starting to look ahead and re-think their business. After focusing on short-term items such as managing finances and cashflow, BDO’s Rethink model directs thinking towards a more strategic view of the firm over the medium term. We have focused on Professional Services as a sector for over 25 years and are proud of what we have achieved. We have built a team of over 100 people strong and led by nine partners – one of the largest specialist teams focusing on the sector in the UK. We have a strong and diverse client base across the legal, accounting, property advisory, consulting and recruitment sectors. Our alumni will always be a key part of our success and I am pleased that we hear from three of our alumni – Stuart Godfrey , Paul Roberts and Irena Molloy later on. We are proud to have a part to play in working with and supporting our clients in this innovative and forward looking sector.

3 5 8 9

News from the top:

X Re-election of Paul Eagland X Managing partner update X New partner announcements X Special feature: managing the impact of covid-19

Welcome

11 13 17 20 25 26 27 28 29 32 32 35 37

SECTOR FOCUS: PROFESSIONAL SERVICES

X What’s On The Horizon For Professional Services Firms?: Neil Williams X Rethinking The Office: TimNeathercoat X ALUMNInews spotlight interviews with Paul Roberts , Irena Molloy & Stuart Godfrey

This edition of ALUMNI news focuses on the Professional Services sector and the work we do in this important sector for the UK economy. The professional services sector – one of the largest sectors in the UK economy - is often overlooked but makes a significant contribution to the economy and to exports. Perhaps traditionally the sector has provided excellent service to its clients, training to its numerous young professionals and contributed its share of taxes in a relatively quiet manner. Many of these professional firms were first established in the UK several decades ago be they in legal, accounting, consulting, recruitment or architecture, and many have grown into substantial global businesses from their UK base. The fact that they are well established and have a long history does not mean that these businesses have been slow to adapt and evolve. The use of technology, agile working, shared service centres, off-shoring or near-shoring, together with a focus on building strong cultures, have all played their part in changing the shape of firms and the way that client services are delivered. In fact, there have been a number of factors, including new entrants to their markets and the global financial crisis in 2008, both of which meant that they have had to speed up their evolution, and their ability to adapt and change. Of course, at the heart of every successful professional WELCOME TO THE SUMMER 2020 EDITION OF ALUMNI news

Stream and sector round-up

X BDO appoints Jill Halford as National Head of Charities X Global Risk Landscape report 2020 X ALUMNInews publications X Webinar calendar X Awards and achievements X BDO commitments to carbon neutrality in 2020 X BDO retains its silver award for wellbeing X BDO Alumni Survey X 5 Minutes with: Naomi Sharpe

In other news

ALUMNI news

SHARE YOUR VIEWS To comment, contribute or feature in future editions, please get in touch with

CONNECTWITH US ON LINKEDIN

Connect with more of your former colleagues and network with them online by joining our BDO LLP Alumni LinkedIn Group. We have over 1,800 members. We use the LinkedIn Group to share thought leadership, interesting articles and firm news with our alumni – a quick and easy way to keep in touch and up-to-date.

your alumni officer, Lorraine Barwell

NICK CARTER-PEGG HEAD OF PROFESSIONAL SERVICES t: 020 7893 2552 e: nick.carter-pegg@bdo.co.uk

NEWS FROM THE TOP

PAUL EAGLAND RE-ELECTED AS MANAGING PARTNER by Matthew White, Senior Partner

Paul joined BDO straight from school 33 years ago and has been a member of the firm’s Leadership Team since 2008. Prior to assuming the role of Managing Partner in October 2016, he held senior positions including Head of Tax, Head of Audit, and Head of Professional Services. During this global public health and economic emergency, we need strong, thoughtful and purpose- driven leaders to guide us. As a partnership, we agree

on this – and we also agree that Paul is the right person to lead our firm for the next four years. In particular, his innovative thinking and collaborative management style has just led the firm through a landmark year with the Moore Stephens merger boosting sustained organic growth to create the UK’s largest accountancy challenger firm.

MARCH SAW BDO ANNOUNCE PAUL EAGLAND’S RE-ELECTION AS THE FIRM’S MANAGING PARTNER. HE WILL SERVE A SECOND FOUR-YEAR TERM COMMENCING ON 1 OCTOBER 2020.

leading auditor to AIM- listed companies. The firm has also been an active voice in the ongoing audit reform debate, calling for a cap on the number of companies that any one firm can audit. BDO’s FTSE 250 audit client base now stands at 17, having trebled

in the last year. This upward trajectory is expected to continue as more main market companies turn to challenger firms as they realise size is not a proxy for quality and to avert conflicts of interest.

£578m, having driven organic growth of 15%. Under his leadership and purpose-driven strategy, BDO has cemented its market position as the

During his first term as Managing Partner, Paul oversaw BDO’s successful merger with Moore Stephens LLP, which created the UK’s largest accountancy firm focused on mid-sized entrepreneurially-spirited businesses following its completion in February 2019. Last year, the enlarged firm increased revenues by 25% to total

I am proud of the continued success of our firm and our people. Together, we have created a leading accountancy offering for the UK’s mid-sized businesses.

my immediate priority is to lead the business through the public health crisis to protect what we have achieved and to prepare us for the future. This includes ensuring all 5,500 of our people are safe and able to work productively and remotely. We entered this economic crisis with exceptional people, a strong culture, and an impressive record of

helping our clients to succeed. As the economy enters an extraordinarily challenging and uncertain time, we will pull on all the talents of BDO’s workforce to support our clients and to champion the mid-market, which we’re confident will remain the economic engine of the UK.

Our longer term ambitions include continuing to make significant investments in our audit practice, with a particular focus on training and technology to maintain and improve quality. Across all of our service lines, my guiding principle is to continue to “get things right” for our clients and for our people, while working closely alongside BDO’s $9.6bn global network.

During the global outbreak of COVID-19,

NEWS FROM THE TOP

MANAGING PARTNER UPDATE FROM PAUL EAGLAND

SINCE LAST WRITING TO YOU BACK IN DECEMBER 2019 SO MUCH UNIMAGINABLE CHANGE HAS TAKEN PLACE, NOT ONLY TO THE WORLDWIDE ECONOMY BUT ALSO TO EACH OF US PERSONALLY WITH THE OUTBREAK OF COVID-19.

The speed and scale of the economic downturn generated by the coronavirus crisis is unprecedented and the way in which the UK’s businesses emerge from the pandemic will play a huge part in the recovery of the UK economy. We know that companies

that many businesses are confident about their overall prospects and are planning for long-term recovery. They are making swift changes to their operating models to give their companies the best chance possible, with some seizing the opportunity to expand into new areas. We ourselves are advising businesses through our own Rethink model which provides a road map of support throughout the COVID-19 crisis and by raising the concerns of the economic engine to government and media.

ANTICIPATE AND RESPOND TO FINANCIAL PRESSURES

DEAL WITH THE EMERGENCY

THE ‘NEW REALITY’

INTERPRET / UNDERSTAND EVENTS

SUSTAIN OPERATIONS

PLAN FOR THE LONGER TERM

hub are invaluable sources of our latest guidance on how to keep your business running and getting financial support during this pandemic. BDO itself is not unaffected by the situation and we have had to take clear – but temporary – measures to ensure we can weather the current storm and protect jobs. Our own response was to temporally close all of our UK offices and operate as a fully-remote, fully- connected workforce and I

am extremely proud of our people in the way they have responded to this ensuring that our clients continue to receive the quality of service they expect and deserve.

Flexi Force – an initiative that allows us to identify, develop and deploy people across different areas of the organisation where they can best add value as work levels fluctuate. This has already proved extremely successful for the firm ensuring we continue to support thousands of entrepreneurially-spirited businesses and individuals through this crisis. In addition, we also initially furloughed a number of support staff (some of

RESILIENCE Businesses across all sectors have shown their ability to adapt to the evolving situation, but it will require a sustained collaborative effort from politicians and businesses in order to get the economy moving and protect jobs. Every business is having to rethink the fundamentals and prepare for doing business in a new “normal”. Our dedicated COVID-19 hub and our new Rethink

have been hit hard and job losses have been and will be a painful outcome. But it is encouraging to see (from our recent Rethinking the Economy survey)

We are all working in different ways at the

moment and adjusting to ongoing change. It is more important than ever to adapt and to be flexible in our approach as we meet the needs of our people and our clients. With this in mind, we implemented a new concept for BDO -

Discover more about BDO’s Rethink model that identifies key stages, issues and opportunities for businesses. Watch our 20 minute webinar and download our guide here :

NEWS FROM THE TOP

NEW PARTNER ANNOUNCEMENTS

which have now returned) and our trainees. Our partners also agreed to freeze their quarterly dividend payments until January 2021, alongside a monthly pay cut of up to 25 per cent to help mitigate the financial impact of COVID-19 on the firm. I’m pleased to say that taking these measures (amongst others) has assisted BDO to stay in a strong financial position thus far. WELLBEING The wellbeing of our people is still at the top of our agenda particularly during this unnerving time. I am delighted to say that BDO has been awarded “Silver” status for the second year running in the MIND Workplace Wellbeing Index 2019/20 . This is our fourth year of taking part having moved from Action, to Bronze, to Silver. I am proud of the progress we as an organisation have made in trying to support our people and prioritise better mental health in the workplace.

Listen to Paul's first podcast as part of BDO Global’s #TIMETOLEAD series as he looks “over the horizon” and share his views on what the

BEN HANDLEY Ben joined Private Client Services (virtually) in London in June. Ben is a mixed tax specialist with over 20 years’ experience advising private companies, private clients and business owners on transactions, life events and planning for the future against the backdrop of continual law change and increased complexity.

NIGEL HARKER Nigel joined the Business Assurance team in Gatwick in April and will focus on external audits across a wide range of listed, private equity and privately owned businesses. MIKE PHILP Mike joined the Gatwick Business Assurance team (virtually) in June. Mike’s has over 20 years’ experience working with a range of businesses, from privately owned and private equity back portfolio companies, to FTSE and US listed groups. He has spent much of his career advising clients on the journey from Private Equity ownership to Listed. PAUL KNIGHT Paul returned to BDO to lead the Not for Profit Tax business in April based in Gatwick. Paul has over 22 years’ experience of advising on a broad range of tax issues to charities, social housing associations, higher education providers and membership organisations.

economic landscape and business might look like in a post COVID-19 world.

JULIA MCCULLAGH Julia joined the Corporate

International Tax team in London in February. Julia has a broad experience in all UK and international corporate tax areas with particular expertise in the tax aspects of cross border operating models and supply chains.

RETURNED ALUMNI

ANTHONY APPLETON Anthony re-joined BDO after spending six years overseeing the development of UK Financial Reporting Standards. He joins the Technical Standards Group in London and will support them in maintaining and improving the quality of corporate reporting by our clients focusing on listed companies.

RETIRED FROM THE PARTNERSHIP: Andrew Perrett, London; Don Bawtree, Gatwick; Ian Gardner, London SADLY THE FOLLOWING ALUMNI HAVE PASSED AWAY: Brent Wilkinson, Frank Goldberg, Doris D’Souza, Keri Pay

NEWS FROM THE TOP

SPECIAL FEATURE: MANAGING THE IMPACT OF COVID-19 THE SPEED AND SCALE OF THE ECONOMIC DOWNTURN GENERATED BY THE CORONAVIRUS CRISIS IS UNPRECEDENTED. BUSINESSES ACROSS ALL SECTORS HAVE SHOWN THEIR ABILITY TO REACT TO THE EVOLVING SITUATION, BUT IT WILL REQUIRE A SUSTAINED COLLABORATIVE EFFORT FROM POLITICIANS AND BUSINESSES IN ORDER TO GET THE ECONOMY MOVING.

Every business is having to rethink the fundamentals and when it comes to keeping your business up and running, knowing the right questions to ask and where to find the information you need can make all the difference. Our experts across all industries are aware of the effects of the COVID-19 pandemic on our people, our global network, our clients – and the economy as a whole and are advising businesses regularly on how to recover from a crisis and how to boost resilience. We have brought all of this advice and knowledge together and created a dedicated COVID-19 Hub collating together all the latest guidance on how to keep your business up and running as well as how to prepare for doing business in a new “normal”. This includes information on the Coronavirus Business Interruption Loan scheme,

the Coronavirus Job Retention scheme and all the other government measures to provide financial support to business and people during this pandemic. You will also find useful insights and ideas on managing tax , supply chain and contracts , fraud , risk and cashflow .

GOVERNMENT SUPPORT

SECTOR ANALYSIS

BUSINESS IMPACT AND CONTINUITY

UNITED KINGDOM

TAX IMPACT

WEBINARS

RETHINKING OUR FUTURE: Supporting business recovery Identifying key stages, issues and opportunities for businesses progressing towards succeeding post COVID-19.

VISIT OUR COVID-19 HUB

For the latest guidance on how to keep your business up and running and as well as prepare for doing business in a new “normal”. Every business is having to rethink the fundamentals.

TALK TO US

if you would like to discuss how COVID-19 is affecting your business.

Financial support for individuals and businesses Explaining the government package of additional support measures for individuals and businesses including loans, grants and business rates relief.

COVID-19: VAT zero-rating changes

Recovering from a crisis and boosting resilience

Explaining the temporary measures relieving domestic supplies of PPE from VAT and the permanent zero-rating for e-publications.

Reviewing economic recovery scenarios and key areas for consideration.

SECTOR FOCUS: PROFESSIONAL SERVICES

SECTOR FOCUS: MANUFACTURING

Our new Professional Services Hub is home to insights, technical updates and advice for those working in legal, recruitment, consultancy and property advisory firms. Visit the hub for our latest thought leadership, hot topics, emerging issues and upcoming events: Industry intelligence

AN INNOVATIVE AND FORWARD-THINKING SECTOR IN 2019 BECOMES A SECTOR OF RESILIENCE IN 2020

T he UK Professional and Business Services (PBS) sector accounts for approximately 11% (£190 billion) of the UK economy’s Gross Value Added (GVA) and 13% (4.6 million people) of employment 1 . The sector has traditionally been resilient and in recent years, firms have had a strong focus on operationally efficiency and effectiveness in the face of changing client demands, rising property costs and technological advances. BDO have built a strong Professional Services team that has grown from strength to strength over the last decade to become one of the largest dedicated teams in the UK, employing over 100 industry specialists.

Our experts understand the unique challenges that professional services face sand the team are passionate about sharing their knowledge and helping our clients succeed. As an industry that is embracing innovation and ways of becoming more digital, people will always remain at the heart of driving these businesses. Our sector specialists advise and support law firms, recruitment businesses, property advisory companies and consultancy organisations providing practical advice and thought leadership across the many facets of this diverse sector.

The UK Professional and Business Services (PBS) sector accounts for approximately 11% (£190 billion) of the UK economy’s Gross Value Added (GVA) and 13% (4.6 million people) of employment 1

GVA

1 BEIS Professional & Services sector report February 2020

SECTOR FOCUS: PROFESSIONAL SERVICES

WHAT’S ON THE HORIZON FOR PROFESSIONAL SERVICES FIRMS?

by Neil Williams, Tax Partner

AT THE TIME OF WRITING IT’S MY SIXTEENTH STRAIGHT WEEK OF WORKING FROM HOME AND LIKE MANY OTHER ACCOUNTANTS, LAWYERS AND CONSULTANTS, I’M IN THE FULL SWING OF REMOTE WORKING. HERE I SUMMARISE SOME OF THE ACTIONS WE’VE SEEN PROFESSIONAL SERVICES FIRMS TAKE SO FAR IN RESPONDING TO COVID-19 – WHAT’S WORKING AND WHAT MIGHT SHAPE THE WAY WE DO BUSINESS IN THE FUTURE?

WHAT INITIAL APPROACH HAVE PROFESSIONAL SERVICES FIRMS TAKEN? L ooking back at the responsiveness of professional services firms; core to the decision- making process has been a thorough forensic examination of business resilience and continuity plans. This was followed by many with rigorous scenario planning, to help guide leaderships team in making strategically important decisions.

Central to balancing the optimal mix of actions in responding to a crisis is the protection of people, and protection of an organisations brand and reputation. It has been essential for firms to adapt their client service offering to maintain service levels but being able to manage the short-term position of the firm, while remaining agile for what may happen in the coming months is a difficult balance for firms to get right.

maintain the business, allowing firms to keep their workforce and protect jobs, while also helping to

Central to balancing the optimal mix of actions in responding to a crisis is the protection of people, and protection of an organisations brand and reputation.

support short-term cash flow requirements. Here we look at the key measures professional services firms have adopted:

We’ve seen a focus on defensive measures to

SECTOR FOCUS: PROFESSIONAL SERVICES

PEOPLE ACTIONS

PARTNER SPECIFIC ACTIONS

manufacturing where demand has reduced have been focussing more on furlough, pay cuts, and in some cases redundancy.

For the time being, firms are following and interpreting government guidance on how and when offices can be successfully employed again. This is not a one size fits all exercise across the sector and we explored this further in our Space to Work: Offices in 2020 whitepaper. RETHINKING FOR THE LONGER TERM The speed at which we have observed professional services firms adapt to support remote and flexible working in response to COVID-19 has been phenomenal. Firms have also acted quickly to implement measures to stabilise finances and ultimately protect jobs. The focus is now turning to doing business in the “new normal” and as lockdown measures in the UK are eased, every business is having to rethink the fundamentals. What will be the same, and what will need to change?

less and to continue to work from home more, or it could mean a full rethink of a business model and delivery of client services. The technology has proved robust for most and it has given many individuals the chance to put their travel time to better use. The results of this will almost certainly impact how firms use their office space going forward and possibly allow people greater choice on where to live that isn’t dependent on the ideal commute. Across the sector, firms have dedicated teams liaising with landlords to consider the office environment and what preparation might be required. It is likely we’ll see a combination of measures that may include; working from every other desk, one- way systems, shift working, staggered days, a focus on the temperature of the office, etc. These measures of course will all require firms to update their HR policies and procedures and crucially a well-informed communications strategy. It is likely that most firms will go beyond what is required by government guidance to help manage the return to the office for those who really need it.

FREEZE STAFF PAY | SALARY REVIEWS DEFFERED

PAY CUTS FOR STAFF

X Recruitment and

CUT EMPLOYEES WORK HOURS | DAYS (HOLIDAYS)

PARTNER PROMOTIONS

PARTNER PAY CUTS

architects are perhaps suffering most with many firms having taken deep dives into furloughing professional staff together with a reduction in pay levels.

CONSIDERING REDUNDANCIES

DELAYED OR CANCELLED PARTNER DISTRIBUTIONS

CASH INJECTIONS FOR WORKING CAPITAL

REDUCTION IN PARTNER HOURS

DEFER PAYMENT OF SALARIES

FURLOUGH STAFF

RECRUITMENT FREEZE

The measures taken have been a factor of the financial stability of the firm and their cash flow projections. Deferral of distributions and additional working capital from partners have been largely consistent across large partnerships reflecting their cash requirements and planning for the next six months. With a perception of strength in larger firms who have a more diverse service offering and wider market spread, some firms are looking at opportunities in new combinations. On the flip side however there have been a few instances of more profitable teams exiting these firms to focus on their own business growth outside the associated costs of stabilising other parts of the larger business.

OTHER ACTIONS In addition to the measures outlined already, a significant number of firms have utilised other financial measures to help bridge the gap until ‘normal’ trading levels resume. These include the deferral of tax, extending of bank loan facilities and delayed study support for trainees. WHAT DOES THE IMMEDIATE FUTURE HOLD FOR PROFESSIONAL SERVICES FIRMS? A real key for professional services firms is how they can learn and adapt from recent experiences and come out stronger to support the recovery and restoration period. There is a strong opportunity for firms to re-imagine and reform their business. This could simply mean expecting to travel

X Accountancy firms

generally announced a freeze in pay rises and promotions together with a small amount of furloughing of

professional services industry: X The majority of law

The actions of firms have varied, as you might expect, based on the type of advice provided by the team and importantly by the sector their clients operate within. The resilience of clients plays a key part for professional services firms. Typically, people costs account for around 40% of the cost base for professional services firms and are generally viewed as the most valuable asset. Firms have learned lessons from past downturns and have mainly focussed on the measures that seek to retain people while reducing costs, such as the deferral of pay rises and cutting hours rather than redundancies. We have seen general trends across the various sector groups within the

non-chargeable staff, with the larger firms seeking to weather the storm through partner measures (noted below). Alongside ensuring business stability, it’s imperative for all employers to focus on maintaining the health and wellbeing of their employees and we expect additional financial implications from ‘social distancing’ measures to come.

firms have announced plans for part time working with a corresponding reduction in pay as a key measure to manage the reduced workload. We would expect this to help manage the consistency with their clients and keep their teams in place for a recovery.

X In the consultancy sector it is clear that those providing

services to say Pharma and Healthcare are somewhat sheltered from the downturn and have seen little drop in demand. Whereas firms advising areas of retail and

SECTOR FOCUS: PROFESSIONAL SERVICES

P roperty usage by changing in recent years in response to the way we work. Technological advances, the drive for greater collaboration and innovation as well as catering for different professional services firms has been generations has changed our work environment. However, in response to COVID-19, the industry now faces tough decisions over the future use of property space. Here are some of the big questions on our clients’ minds: X How are businesses preparing for a post lockdown return to work? X Balancing remote working and flexible working as we go forward, will the future purpose of an office change? X Are businesses looking at using property differently? Does it make sense to have large HQ’s in premium locations? In March 2020, we published a Property Advisory whitepaper report: Space to Work: Offices in 2020 . Our opening line read: The world of work has transformed and with it the workplace itself. The impact of COVID-19 and the disruption we have all experienced in the

requirements, with tech allowing for remote working to become the norm rather than the exception. Putting personal circumstances to one side, large-scale remote working for professional service firm staff has proved successful for business continuity in recent months, and with arguably productivity improving and commutes not being missed, the percentage of time people work from home is likely to increase compared with pre-pandemic years.

subsequent months means this is truer now than ever it was before. SPACE TOWORK: OFFICES IN 2020 In Autumn 2019, we interviewed leaders working across the workplace industry to explore the trends and transformations of office environments we’ve seen in recent years and how the Property Advisory industry itself was responding to challenges; both in terms of its offering to clients and how property businesses were changing their own approach to the real estate they inhabit. While the views of our experts have likely changed in light of recent events, the key themes raised and the emphasis on flexibility remain very relevant. We expect these transformations of office space will continue, but taking a different path, and at a hugely accelerated rate. Here are the key themes discussed in our report and their relevance today: X Technology: Technological advances

in close proximity to the office may no longer be essential. X People: Businesses are now more aware than perhaps they have ever been to the critical value inherent in their people and their retention, firms are seeking new ways

solely for collaboration is an interesting debate. As Neil Williams covered in the previous article, the speed at which we have observed businesses adapt to support remote and flexible working in response to COVID-19 has been phenomenal and the same will be required to

The war for talent and the drive to get the best out of the workforce are paramount.

adapt working environments to be suitable for social distancing.

to unlock it to drive productivity.

In summary, while there is no doubt that the way professional services firms use their office space from here forward will change, the question is to what extent, and how this may differ over the short and long term. IS THIS A BLANK PAGE MOMENT? COVID-19 is possibly the biggest opportunity for professional service firms to reconsider and redesign the way they use property. Now really could be seen as a blank page moment: X Hot-desking is certainly off the cards for the short term, so will a smaller desk to staff ratio now be relevant? X Is there merit in adapting office space to allow for social distancing, or does

The war for talent and the drive to get the best out of the workforce are paramount. Property strategies have a key role in delivering higher levels of productivity and generating value from high performing individuals. Despite many of us adapting quickly to home working, connecting with colleagues face-to-face, learning from others on the job and maintaining an organisations culture all point to the continued importance of an office environment. Whether we will see the purpose of an office change from an everyday working environment, to a place

X Rising costs: Rising costs in premium city locations had

encouraged occupiers to be smarter with their real estate usage, while also recognising its critical role in attracting and retaining the best and brightest talent. This remains important, but we may see businesses consider smaller HQ’s and the use of satellite offices as they look to maximise return on the cost of space, and as their people recognise having a home location

RETHINKING THE OFFICE: HOWWILL THE RECENT LOCKDOWN AFFECT FUTURE PROPERTY REQUIREMENTS OF PROFESSIONAL SERVICES FIRMS?

by Tim Neathercoat, Audit Partner

have fundamentally altered what work needs to be done, how it is performed and, importantly, where and when it is performed. This has led to a reduction in space

SECTOR FOCUS: PROFESSIONAL SERVICES

ALUMNI news

spotlight

the cost outweigh the benefits – especially if the property is not being used a full capacity? X The demand for face to face contact remains, but working from home has now been proved possible. Will we see some real radical solutions, where desks are ripped out and office space is transformed

lease terms? And how will the industry respond if firms reduce their office footprint by up to 50%? The full extent to which COVID-19 will impact future property requirements and usage for professional services firms remains to be seen, but there is no doubt the property advisory industry will have a large role to play in meeting the changing needs of office landlords and tenants. CONTINUING THE DEBATE In late June, we hosted a virtual event as part of our ‘Professional Services – Rethinking the industry’ online event series (available to watch here ), to discuss

requirements of Professional Services firms. We posed two key questions to our guest speakers from Savills and Flexioffice; Has the ‘purpose’ of an office changed, and are businesses looking at using property differently? The picture is complex and overall we conclude now is not the time to make huge property decisions and firms should allow the next 9-12 months to play out, however it would be a lost opportunity if the last 100 days have not impacted the way we work in the future. For further information, you can read our report to learn more about the key trends in the use office space that have been exacerbated by the current situation and why flexibility is so important now more than ever.

to interpret covering everything from one-way systems to providing sealed tea bags, one thing is certain - there is not a one size fits all approach and businesses face tough decisions around their property and work spaces. WHAT DOES THE FUTURE HOLD FOR THE PROPERTY ADVISORY MARKET?

NAME Paul Roberts CURRENT JOB Chief Operating Officer, Howard Kennedy LLP AT BDO DATES 2011-2013 AT BDO OFFICE London and Gatwick

NAME Irena Molloy CURRENT JOB Executive Director, Howard Kennedy LLP AT BDO DATES 2002-2013 AT BDO OFFICE London

into flexible space used only for collaborative purposes?

The industry has been leading the charge in

helping businesses adapt for the evolving reality of the modern workplace. However, with supply and demand in the property market likely to change, a more radical change in thinking may be required. To what extent will firms seek shorter or more flexible

We expect business continuity planning will look different across professional services firms, but in order to thrive in the modern economy, businesses must continue to be agile and adaptable. Firms are following government

how the recent lockdown will affect future property

...many of us adapting quickly to home working, connecting with colleagues face-to-face, learning from others on the job and maintaining an organisations culture...

PAUL ROBERTS AND IRENA MOLLOY ONCE WORKED TOGETHER AT BDO – AND ARE NOW COLLEAGUES AGAIN AT LAW FIRM HOWARD KENNEDY. A TEAM OF ALUMNI LEADERS AT THE HEART OF LAW FIRM - HOWARD KENNEDY.

Irena was BDO UK’s Director of HR before leaving after 11 years and taking on the role of HR Director at Howard Kennedy in 2014. Promoted to Executive Director in 2016, Irena is a member of the law firm’s Management Committee, she shares responsibility for the day-to- day running of the business, while overseeing strategy development and execution. She continues to act as HR

Director and oversees the firm’s HR and development strategy. Paul overlapped with Irena at BDO, having been BDO’s Chief Financial Officer from 2011 to 2013. For Irena, who had spent her earlier career in large organisations, BDO offered the opportunity to gain more generalist experience and have more autonomy. "My role was so varied and I

guidance on how and when offices can be successfully utilised again and this is no easy task. With over 50 pages of guidance

SECTOR FOCUS: PROFESSIONAL SERVICES

could make more decisions," she says. "There was no head office in the States telling you what to do, and I loved that." She enjoyed her time with the firm. "I had a brilliant experience," she says. "The people were amazing. Apart from gaining the great experience of being in an ambitious firm that was growing, I truly got to understand about values. When I joined, BDO was just kicking off its first values project, which taught me so much about culture and values, which runs through everything I do now." Paul joined BDO because he was looking to move into the professional services sector, having previously worked in commercial retail and distribution and entrepreneurial internet- based businesses. He enjoyed his experience at BDO. "As it was the first time I had worked in the sector, I was learning something new – learning about the business model and how firms operate," he says. He also appreciated working with then COO Mark Sherfield, now BDO’s CFO. "It was the first time I had come across somebody in non-HR roles who had a real people focus," Paul says. "Before that I was very much a pure finance guy, so I learned a lot."

profile and with potential progression opportunities. Howard Kennedy fitted the bill. Paul joined initially as CFO in 2016, before taking

firm’s culture has benefited. "We have had to trust our people to work with limited supervision," she says. "The fact we can all work effectively remotely will shape what we do moving forward. The exciting bit for me is looking at how we can adopt digital solutions and how that will change the way we work."

Irena left BDO when she was expecting her second child and considering her career options. When the opportunity arose at Howard Kennedy, she couldn’t resist. "It was a blank sheet of paper," she says. "They had recently done a merger but no integration so I had a free rein to do what I thought was right." Paul joined Howard Kennedy after an intervening period with Herbert Smith Freehills as FD for UK, US, EMEA and Asia. "I realised the roles I had enjoyed most in my career were in smaller businesses that were allowed to run autonomously and involved a wider role than pure finance," he says. Having a couple of law degrees, Paul wanted to stay in the legal sector, so looked for a firm that suited his preferred

about trying to make sure the business will survive," he says, "taking decisions quickly to make sure we come out of this current crisis in the best possible shape – to protect the business, the people and their jobs." If there is a silver lining from COVID-19, Irena thinks the

DO YOU SEE ANY SIMILARITIES BETWEEN BDO AND HOWARD KENNEDY? ‘At Howard Kennedy and BDO, everyone has the same ambitions for their clients – whether they are lawyers or accountants,’ Irena says. ‘That’s one of the reasons I stayed in professional services. I love that ambition and focus on client service.’ ‘In terms of their values, the firms are very similar,’ Paul says. ‘And in the way we interact and go about our business on a day-to-day basis.’ It’s not surprising then that Howard Kennedy has welcomed other BDO alumni: X Ian Harvey , former BDO partner, was Howard Kennedy’s former Chief Executive (2013-2019) X Sarah Elazoua , the firms’s Head of HR, was an HR manager at BDO from 2010 to 2015; X Alan Hutchinson , Howard Kennedy’s Facilities Director, was previously BDO’s Director of Property & Facilities X Lindsay Pearman , now the firm’s Head of Information Technology Operations was a former Service Desk Team Leader at BDO.

“We live our values and look to work with people who share them. We are working hard to make our firm a place where people and clients want to come and stay, where everyone feels included, and where 'unique'

the COO role in 2019. Both Irena and Paul sit on Howard Kennedy’s

Management Committee. "You can make the right decisions because you know exactly what’s going on," Irena says. "That’s what I enjoy the most – being at the centre of everything." She also appreciates

TWO FINAL QUESTIONS

WHAT ONGOING RELATIONSHIPS DO YOU HAVE WITH BDO? "BDO are our auditors and give us advice on the tax side – corporate and tax compliance, as well as doing most of the partners’ tax returns," Paul says. The firm also completes Howard Kennedy’s Solicitors Regulation Authority audit. Paul has regular contact with audit partner Nick Carter- Pegg, tax partner Colin Ives, CFO Mark Sherfield and other team members. He’s also friends with BDO’s FD Yvonne Barratt, who Paul himself recruited, initially as financial controller. Both Paul and Irena appreciate Mark Sherfield’s support and advice. "I’m also in touch with Colin and may be doing a seminar with him in September," Irena says. She’s also in contact with Zoe Bailey, BDO’s Director of Strategic Development. Both Paul and Irena agree there is a "strong connection" between BDO and Howard Kennedy, with positive relationships between partners and work referrals. WHAT’S YOUR VIEW OF BDO TODAY? "The business has gone from strength to strength," Paul says. "I think the brand has got stronger. The firm has a much stronger proposition as an alternative to the Big Four." Irena agrees. "BDO has got a big voice in the accountancy world," she says. "The firm has got bigger and bolder."

the firm’s culture – one that "balances fun with seriousness".

Paul sees similar attractions of working life at Howard Kennedy, though there are challenges too. "In a people business, you have to accept you are never going to get 100% of the people on board with the next initiative to implement – particularly partners," he says. "There are also challenges in growing the bottom line so you keep the partners happy, but at the same time are investing in technology and people to keep the business moving forward."

is a word that is overused in relation to our culture”

IRENA MOLLOY EXECUTIVE DIRECTOR, HOWARD KENNEDY

HOWARD KENNEDY - ABOUT US

Continuing to succeed despite the COVID-19

outbreak is an additional challenge. With remote working achieved, Paul is highly focused on assessing the potential commercial impact of the virus. "It’s

SECTOR FOCUS: PROFESSIONAL SERVICES

ALUMNI news

spotlight

through from infancy to perhaps selling the business. It was quite fast paced.” Later he became a manager on the audit of a Big 4 firm. “I also audited quite a lot of recruitment consultants, which became a bit of a specialism for me, “ he says. Subsequently Stuart joined the Professional Services team, reflecting the bias of his portfolio.” As the division grew, Stuart’s career also thrived and he progressed to Senior Manager. In 2014 he was named in Accountancy Age’s ‘35 under 35’ list of rising stars. He enjoyed his initial time with BDO. “The people are good to work with,” he says. “They are driven, but friendly, so there’s quite a good social vibe. Some of my best friends now are people I trained with. I also enjoyed the challenge of being able to progress really quickly – working with big clients and being trusted to do that.” However, to the surprise of many colleagues and even himself, after 11 years and seven months with BDO, Stuart left the firm. In March 2018 he become Finance Director of twogether, a B2B marketing agency specialising in technology and part of the Next15 group. “For an advertising campaign, they would put

together the creative ideas right through to designing the assets, be that websites, graphics or videos,” Stuart says. “They also started up a media buying agency after I joined.” The business generates turnover of around £12m, employing around 110 people in Marlow, London, Glasgow and San Francisco. Stuart was introduced to the opportunity by a former BDO colleague working in the Next15 group. “I had a meeting with the MD of twogether,” Stuart recalls. “I thought we were just having a chat but soon after they offered me the FD job. Once you have that opportunity, it sets your mind turning. I knew my career at BDO was going well so I didn’t have an incentive to leave.” However, the chance to move straight into an FD position, without taking a preliminary financial controller role, proved too tempting. “I also audited quite a lot of recruitment consultants, which became a bit of a specialism for me.”

Stuart enjoyed the dynamic environment at twogether. “It was a fast moving business,” he says. “Someone would come along and say, ‘I think we should set up this new product line’ and it was great to adapt to that.” It had its challenges too. “They had a finance team but had never had a finance director before,” Stuart says. “So I had to communicate what the job involved and that an FD is not just an accountant. My day-to-day job involved commercial aspects – working out profits and what systems we needed to get the right information. There was a bit of HR too.” He also got involved in streamlining the company’s many internal systems and

Stuart returned to BDO in October 2019 as an Audit Director in the Professional Services team. His portfolio contains many recruitment and consulting firms, including a large retail space consultancy. Around 30% are familiar. “But a lot of them are new clients, so I am busy trying to build relationships,” he says. Doing this during the COVID-19 outbreak is proving interesting: “You are working from home, you haven’t met the client face to face and you’re on Skype trying to build a rapport.” As well as serving clients, Stuart is enjoying other aspects of his role. “As we’re a growing department, there’s a challenge in making sure we still have the right support for staff and they are getting the right level of training,” he says. “It’s an area I like to focus on – developing people and making sure they are enjoying their career.” Supporting people working from home during the COVID-19 outbreak is particularly important. “We catch up on Skype as a team to make sure we are all talking to each other,” Stuart says.

WHAT DO YOU ENJOY MOST ABOUT YOUR ROLE AND BEING BACK AT BDO? “It’s the people and the fact we’re growing quickly – we’re winning more work,” Stuart says. COVID-19 is affecting Professional Services clients perhaps less harshly than businesses in other sectors. “The Professional Services sector is probably more robust,” Stuart says. “It’s not reliant on people walking in the door and buying something. It’s a lot of advisory work and you can do it remotely.”

NAME

Stuart Godfrey

CURRENT JOB Director, Professional Services, BDO AT BDO DATES 2006-2018 and 2019 onwards AT BDO OFFICE London

TWO FINAL QUESTIONS

HOW HAS YOUR EARLY BDO EXPERIENCE HELPED YOU IN YOUR CAREER? “When you work for an accounting firm, you are exposed to senior people early on, both in the firm and at clients,” he says. “You build up confidence in how to run meetings. You gain a broad range of skills. I did a lot of pitching at BDO, and that helped when I was in industry. BDO also lets you make mistakes – it’s a really good environment to learn in.” HOW HAD BDO CHANGED WHILE YOU WERE AWAY? “There had been some partner movements in Professional Services, a couple of graduate intakes and the merger with Moore Stephens,” Stuart says. “So when I came back it took me a bit of time to get up to speed with who everyone was and the impact of the merger. It did feel very much the first day at a new job. Then after a month you settle back into it.” The firm has changed in a positive way, he thinks. “The firm feels bigger and more set up for the future,” Stuart says. “We just need to make sure we grow in a sustainable way that maintains the culture of the business – that’s what keeps people here.”

complex data flows. Despite enjoying his

experience at twogether, after 18 months Stuart was tempted to return to BDO by the potential of new challenges and opportunities. Having kept in touch with his former BDO colleagues, he knew

STUART GODFREY ENJOYED 18 MONTHS AS A BDO ALUMNUS BEFORE RETURNING TO THE FIRM AS A DIRECTOR TO HELP GROW AND DEVELOP THE PROFESSIONAL SERVICES TEAM.

that the Professional Services division was

Having gained a degree in Accountancy and Finance at the University of Aberdeen, Stuart joined BDO for the first time in 2006, training with the London audit team. “I wasn’t particularly looking for the largest clients, but to learn how businesses work,” Stuart says. “BDO felt like the right place for that and

where you would get more responsibility quite early in your career.” When BDO introduced sector specialist groups, Stuart initially joined the Technology & Media team (TM). “A lot of our clients were growing quite quickly,” he says. “You took them

growing. “There had been a number of movements internally that had created a gap for a potential partner going forward,” he says. “There were quite big portfolios for directors and I missed being a fee earner. I wanted to be at the coal face, leading teams and earning money for the firm.”

STREAM AND SECTOR ROUND-UP

GLOBAL RISK LANDSCAPE 2020 THE INTEGRITY INDEX

CHARITIES UPDATE

over the years at BDO to buld up a well-established offering to the charity sector. I am truly honoured to continue his hard work and couldn’t have asked for a more experienced and knowledgeable team to work alongside in the team’s next chapter. The team is a truly powerful force with a leading reputation in the sector. The majority of UK sectors are currently facing huge challenges as a result of the COVID-19 pandemic, and the charity sector is no exception. I am pleased that we have such great expertise and capability within the team to support our clients at a time like this. Our commitment to charities remains as strong as ever and I look forward to leading the team in continuing to help our clients and the wider sector succeed.” experts into our Advisory Stream, creating one bumper team of Digital and Risk Advisory Services that will help entrepreneurial, fast-growth and ambitious businesses succeed. This change will further grow BDO’s Advisory practice and build our digital

Listen to the first in our series of Charities Update webinars which focuses on the impart of COVID-19 on financial reporting within the charity sector providing guidance challenging areas inc. Going Concern, reforecasting, cashflow and Trustees questions:

BDO APPOINTS JILL HALFORD AS NATIONAL HEAD OF CHARITIES April saw Jill Halford appointed as National Head of Charities . Jill joined the firm as a partner in November 2019 and has 20 years’ experience advising a wide range of charities across all sectors, as well as significant in-house experience, including her current role as Treasurer

Jill takes over from Don Bawtree, who had led the team for 24 years and will be continuing to provide support as a special adviser to BDO. She will be supported by a team of dedicated charity experts in multiple locations across the UK. BDO’s merger with Moore Stephens LLP in February 2019 saw the team expand, increasing the range and depth of experience and expertise. Jill says of her appointment, “Don has worked tirelessly

Global businesses are vulnerable to events that damage their reputation and business leaders are increasingly aware of the need to show integrity, with 70% of businesses having experienced an event that has proposed a threat to its reputation. Business leaders also recognise that they need to be more proactive in managing these risks, according to the findings of our fifth annual Global Risk Landscape report.

Reputational issues top the list of risks to businesses X 70% of businesses have experienced an event that has threatened its reputation X One in three (35%) of

companies remain reactive in their approach, with less than half (45%) of companies believing their crisis strategy is proactive, with over a third (35%) considering themselves to be reactive when it comes to reputational issues. Trying to demonstrate corporate integrity while acting without values is an issue that can touch even reputable companies. BDO’s survey revealed the scale of so-called ‘integrity washing’ the act of businesses worrying more about the perception of integrity than the practice. A significant 87% of executives believe their organisation is culpable and almost half (49%) agreed with the statement: “Completely, so long as we are perceived to have integrity we do not prioritise putting it into practice.”

company may be guilty of integrity washing. Clearly there is work to do. Integrity should be woven into the fabric of the company. Everyone must share the same ethos.

Clearly integrity is vital, with 99% of respondents agreed

on that. Being trusted confers extraordinary advantages to a business and secures customer loyalty. Customers flock to brands they believe in and that sense of integrity allows the company to outperform rivals. However, we found deep disagreement on who is responsible for transparency. One in three companies admits to being “reactive” on reputation: not the best strategy. And a worrying 87% say their

at ACEVO and trustee of the School for Social Entrepreneurs.

businesses believe they have a reactive approach to reputational risk, rather than proactive.

The firm’s Not for Profit offering was additionally bolstered by the return of Paul Knight to lead the national team providing tax services to charities, social housing associations, higher education providers and membership organisations.

“I look forward to leading the team in continuing to help our clients and the wider sector succeed.”

BDO’s survey of 500 C-suite executives across EMEA, Europe, the Middle East, Africa, Asia-Pacific and the Americas shows companies are alert to the dangers, with 25% saying shareholder price is a primary consequence of reputational damage, and a quarter also believing customers will take their custom elsewhere. Family run business and manufacturers felt the highest reputational risk.

NIGEL BURBIDGE GLOBAL CHAIR, Risk Advisory Services

KEY HIGHLIGHTS: INTERACT WITH THE DATA BEHIND THIS REPORT AND JOURNEY WITH US THROUGH THE KEY HIGHLIGHTS AS WE EXPLORE THE TOP BUSINESS RISKS IN 2020

A NEWTEAM AT BDO: DIGITAL & RISK ADVISORY SERVICES The rapid pace of development in digital technologies is creating new business models and driving digital transformation that many businesses are struggling to keep up with.

BDO is responding to this opportunity by combining the full might of its Tech and Risk Advisory offerings. At the beginning of April, we brought together our non-audit experts from our Technology Risk Assurance (TRA) team and all of our Risk Advisory Services (RAS)

offering in the market to better service client needs. It will also enable our Audit stream to have a fully dedicated team of Technology Risk Assurance

specialists focused on delivering high quality audits and associated assurance services.

Despite the threat, it is clear that too many

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