Industry Issues

Our specialist professional services team pride itself on pre-empting issues and challenges in the industry and offering tailored solutions to help move your business forward.

Mergers and Consolidation

In this challenging market some firms may find the way forward is in growing their business by way of a merger.  Other firms are looking to consolidate their practice to focus on their core business areas.  Either route offers challenges in terms of people, financial and system issues.  We have worked with many management teams in guiding them through the process and bringing new ideas and our experience of dealing with similar businesses to the table.

Legal Services Act

The Legal Services Act will significantly change the legal landscape in the UK. We are starting to see some of the changes already with legal disciplinary practices allowable from March 2009 and we expect that there will be a move towards alternative business structures (ABSs) which allow external ownership of legal businesses from 2011/12.

Our dedicated team of multi-disciplinary experts are at the forefront of the planning in the run up to the introduction of ABSs and have been leading discussions on the legal, financial and commercial impact of the legislative changes with a wide range of future stakeholders including:

  • Law firms
  • Banks
  • Legal and business process outsourcers
  • Private equity and family fund investors
  • Corporate providers of legal services

Our team can provide you with a wide range of legal specific services from audit and tax to partnership structuring to mergers and acquisitions advice and fund raising.

Download: Planning for Change (PDF, 291KB)

Tax Mitigation Strategies

The 2009 Budget contained unwelcome news in the form of a hike in income tax rates to 50% from 6 April 2010, together with the withdrawal of higher rate tax relief on pensions for those earning over £150,000.  Our tax specialists within the professional services team can assist your business plan effectively for the introduction of the 50% tax rate, and working together with BDO Investment Management are able to offer tailored solutions for planning for retirement.

More information on our specialist solutions can be found in our latest publications, which can be downloaded on the following links:

International Growth and Opportunity

UK professional service firms have seen a period of unprecedented international growth, and few firms can ignore the impact of the worldwide economy on their business.  Using our international BDO network we offer advice to businesses setting up and expanding their operations throughout the world.  Local knowledge is the key to any successful overseas expansion and our sector specialists throughout the world offer practical advice and business insight to enable professional service firms to concentrate on their business without worrying about local bureaucracy.

Working Capital Management

Many professional services firms have seen the combined stresses on cash of falling revenues, increasing bad debt write-offs and the costs of restructuring and making redundancies all at once, causing the more highly leveraged to increasingly crop-up on the radars of the bank’s business support teams.  However, the current climate is throwing up opportunities for the well-managed, strategically active firms, and those that closely monitor their working capital cycle will already be looking forward to how they can finance the growth in working capital that will eventually come with the upturn.

The everyday practices of working capital management need to be actively policed, and overdue debtors and records of unbilled time regularly reviewed not only at management level, but by the individuals who take responsibility for managing their own client bases.

Those firms that can keep a close eye on their working capital management and financing needs, with a clear strategic view will be best placed to survive the downturn, and take advantage of the upturn when it comes.

Efficient Business Structures

The days of professional service firms only operating as unlimited partnerships have long gone.  Businesses now days need advice on business structures which will suit their dynamics, values and enable the business to expand.  Many professional service firms operate using a range of entities in the UK and overseas to ensure that their structure also operates tax efficiently.  Our professional service sector experts have a wealth of experience in advising on the best business vehicle to meet requirements.  Recently we have been working with a number of companies where this business model was no longer effective (from both a management and tax perspective) and have moved their businesses into limited liability partnerships, in some cases achieving significant tax savings.