Andrew Lavery has clout. His background in professional services (EY) and vast high-level experience in industry (BA, Peter De Haan’s Private Office and Monarch) gives him unique insight. In this must-read BDLN interview, he explains what makes him choose and stick with his advisers, why the big players need to improve their consistency, and describes the key mistakes firms make before being sacked. This article comes with a warning: it will challenge your approach to business development and client service.
Interview by BDLN founder John Maffioli…
What do you look for in your professional services advisers – what do you value most?
One word: commerciality. For me to choose an adviser and re-use them, they must show commercial acumen, not just subject matter expertise, which I expect anyway.
What is commercial acumen? Take a lawyer, for example. I might be handling an acquisition where there are discussions about representations, warranties, and disclosure. I need an adviser who cuts to the chase. Rather than telling me what’s legally right or wrong, I want a lawyer who will give me real-world commercial advice; guidance such as: “Actually, your risk in giving up that point is very small because it never comes into play.” Or: “No, we must never give that point away.”
It’s that breadth of experience I need. I want opinion. And I want to be told how to do it. I don’t want to just hear what the law is. I can look that up myself.
For me to choose an adviser and re-use them, they must show commercial acumen
Why do firms impress you and why do they wind you up?
They must tell me how I can, not how I can’t. And the only way an adviser can do that effectively is to listen carefully about what it is – exactly – we’re trying to achieve and then become part of the inner circle. They need to understand the pressures too.
It’s also about strength of relationship – you need to get on with them. There’s no getting round it, they need to be personable because you will spend a lot of time with them.
I get irritated when firms bring in extra people who don’t add any value. They need to contain their spend, not throw bodies at projects. I hate it when someone just grinds out work for the sake of it.
I get irritated when firms bring in extra people who don’t add any value. They need to contain their spend, not throw bodies at projects
Have you ever sacked your advisers and, if so, why?
We’ve certainly followed individual lawyers through firms. The relationship is often with the individual rather than the firm, which is dangerous for the firm, but a fact of life.
I have changed auditor twice, both for similar reasons. When you boil it down, the UK audit market consists of four very large firms and the others. When you’re a smaller business, a very large firm doesn’t necessarily suit. On both occasions, as a smaller business, we found we didn’t have a consistent relationship partner or manager, so we moved to a smaller firm and now have the same audit manager every year. Bigger firms can do everything, no question, but delivery can be inconsistent as sometimes you’re not at the top of the pile. If you do have the right relationship team [at a big firm] who care deeply about your business then they’ll make it happen, but the moment that situation ends and your work isn’t quite so important for the next relationship person, the service can falter.
My experience is that smaller audit firms deliver more consistency because you’re a bigger client for them. And I see less staff turnover in smaller firms.
Bigger firms can do everything, no question, but delivery can be inconsistent as sometimes you’re not at the top of the pile
What about private clients – how can advisers best support CFOs who work for entrepreneurs? I’m thinking of the time you worked for Peter de Haan.
Entrepreneurs are challenging people. They wouldn’t be entrepreneurs if they weren’t. It comes down to what the entrepreneur wants to achieve and what the adviser is actually telling them. There needs to be tact and diplomacy. The adviser has to be crystal clear about what the advice is and what it’s based on. If you’re basing advice on assumptions different to those of the entrepreneur, you’re lost.
An example of where an entrepreneur and an adviser might clash is over the value of the business. The entrepreneur might say: “At some point I want to sell my business.” And before too long they’ll ask how much it’s worth, which often leads to the adviser pricing up the business as it stands. Quickly you’re in a downward spiral conversation over value. But actually the client hasn’t said they want to sell now; they’ve said they want to sell at some point. So what they really want to talk about is how to maximise value and when tactically is the right time to sell.
This is a common pitfall we came across with our advisers. So my advice is to tread carefully and find out the private client’s real objectives before offering advice.
If you’re basing advice on assumptions that are different to those of the entrepreneur, you’re lost
Every firm says it provides heroic service. Are they all right?
From what I’ve seen they’re all capable of it. With larger firms, consistency is an issue – it comes down to individuals and their personalities. A client’s experience of a firm is of the individuals on that particular assignment. That’s where the rubber hits the road – with how individual advisers deliver and how they interact with the client. Some do it better than others. World-class client service needs to be engrained in firms’ cultures. If they get that right then money will follow.