Boxes and crates. That’s what I see when I arrive at Gerald Edelman’s Harley Street office. They’re everywhere, piling out of each office and emerging from beneath every desk, but despite this, CEO Richard Kleiner, who steps out from behind a wall of them to greet me, is completely unflustered. “We’re moving next week,” he says, “to a much bigger office in Cornhill, in the City, so excuse the mess.”
In fact there isn’t any mess – everything is neatly packed, clearly labelled and extremely organised, an indication no doubt of the precision with which this firm goes about all aspects of its business.
Gerald Edelman has worked from its Harley Street premises since the late 1950s (it also has offices in Whetstone, north London, and Braintree, Essex), but the combination of a rapidly-expanding workforce and a push from their landlord precipitated the move.
“We’ve needed to find new offices for a while,” says Kleiner “but were just stalling to avoid the upheaval. We’re glad our landlord forced our hand, commercially speaking, because we’ve found super premises in Cornhill. The ground floor is open plan, so will be more conducive to working as a team, the location should make it easier for us to recruit new talent, and we’ve got a lot more floor space – 9,000 sq ft as opposed to 7,000.”
Looking for new business should always be on one's mind, that's why we put such emphasis on networking
Kleiner has big plans for the future, which should see the Cornhill floor space filled before long. Recruitment, he says, is an ongoing process so he’s always on the lookout for people who will build up the business and help safeguard its future. “The firm currently comprises 112 people, which includes 13 partners; I’d like to take that number to 20 within the next three years. That’s the number of partners I think we need before we can take on more IPO, M&A and corporate finance work, which is the direction I’d like us to go in.”
Building up the firm is a question of striking the right balance between promoting home-grown talent – and therefore probably forfeiting a vital injection of new business – and recruiting new partners from outside who would most likely bring their own clients to the practice but might upset internal candidates hoping to step up. “We have eight partners who were promoted from within the firm and five who came to us from outside,” says Kleiner. “Right now we have a couple of internal people we’re watching – they should be ready for consideration in the short- to medium-term – but what I’d like in the interim would be to absorb some smaller practices, taking on the partners and their clients in the process.”
He would also very much like to bring more women in to the firm, particularly at that senior level because as things stand, all 13 partners are male, as is 66% of the workforce. It’s a problem he sees across the profession as a whole, particularly in mid-tier firms where women are still under-represented.
The constant search for new clients, partners and seniors means that networking has become a key tactic among all Gerald Edelman’s employees. “There was a time when accountants could rely purely on word-of-mouth recommendation but our profession, just like all others, has become much more commercial so networking is now a relentless, never-ending activity,” he says. “I have people who aren’t very good at it, and who shy away from industry events, but what I say to them is to start small and to think of every client meeting, and every new introduction, as a networking opportunity. Our clients come from all walks of life: no job is too small or too big for us, so even a friendly chat with a sole trader could lead to new business.”
Gerald Edelman is a one-stop general practice with no one specific specialism or industry bias. Having said that, many of its 3,000-plus clients are high-net-worth individuals who have diversified into all spheres of property and real estate, so the firm’s expertise in this area has grown accordingly. Aside from that, it deals with all key areas of accounting, including tax consultancy, audit, wealth management (including strategies for retirement, future funding, protection and investment), company secretarial/statutory compliance, business advisory, payroll and business recovery (including both solvent and insolvent liquidations, IVAs and rescue plans). It has also applied for a probate licence and is looking forward to this being an important new revenue stream.
Of its £9.5m turnover, £5m comes from audit/accounts, £2.1m from tax, £1.3m from wealth management and £500,000 from corporate finance, with other services making up the remainder more or less evenly.
The firm’s projected growth for 2014–2015 is 7.5% but Kleiner expects they’ll fall a little short of that target. “Our average for the past decade is about 4.5%, with our lowest ever being 2% during the year immediately after the credit crisis hit,” he says. “Growth is essential to survival so looking for ways to bring in business, both from new clients and from existing ones, should always be in one’s mind. That’s why we put such an emphasis on networking and on all partners working on their personal brand. That’s where new work comes from, from our partners building extremely strong relationships based on trust, professionalism and creating added value for their clients. I expect us all to impress our customers each and every time we meet them.”
This year Kleiner wants to focus more on marketing the firm, not through advertising, but by boosting its “virtually non-existent” social media presence. “That’s something we’re way, way behind on, but we’re contracting a social media expert to put that right. She’s going to get us onto Twitter and LinkedIn and show us how to use them effectively. Again, it’s a mark of how the profession has changed that we need to be ahead of trends. Our clients expect it of us.”
Gerald Edelman spends big on both technology – nearly 7% of its annual expenditure, and on training – about £80,000 per annum. Each year, it recruits between two and four graduates and/or school-leavers and all staff, no matter how senior, receive on-going training. Education, says Kleiner, is something the firm is deeply committed to: “It’s vital that we provide everyone who works for us with opportunities to develop and learn. In any case, every penny we spend on training our staff is an investment in the firm – provided, of course, they stay with us.”
Staff retention is actually very good, mainly because the practice seems to be a nice place to work with flexible working, generous bonus system and many social events. “Our social committee has an annual budget of £25,000,” says Kleiner, “and has arranged some terrific events for us. We’ve been bowling, go-karting, to the races at Windsor and we’ve had some fantastic Christmas parties.”
Customer retention is also very good, and when clients do walk away it is mostly because of price. Kleiner says that the commercialisation of accountancy has brought about its commodification, with people treating their audits or tax returns, say, as goods that they can compare on price. “Accountants provide a service, not a commodity, but people don’t often look at what they’re getting for their money. They look only at the baseline figure and will sometimes go with a cheaper firm. If we lose clients on price alone, I don’t mind. If we lose them because we’ve made a mistake or haven’t treated them as they would liked to have been treated then, well, that’s when I get very upset.”
Gerald Edelman’s guiding principle, “sophisticated not complicated,” underpins every aspect of its working practices. In addition, it has three core customer commitments:
- Clients will have only one point of contact who will manage their affairs by liaising and co-ordinating with other partners and team members from within the firm.
- Clients will always be offered fixed or capped fees.
- The practice will always try to bring real, commercial and added value to its clients.