The success or failure of an accountancy firm, like many businesses, is primarily down to its staff. The managers who make the strategic decisions. The senior team who ensure the quality of the work. The juniors who do the lion’s share of the accounts production. Maslins have always been keen that our staff benefit from their hard work.
To date, this has just been informally with discretionary bonuses, generous pension scheme, and other perks. We realise keeping staff happy is the key to keeping clients happy, which in turn is the key to the success of the business. Most new clients are referrals from existing clients (big thanks for that, and we reward you too!).
Having reviewed several options, we believe the Employee Ownership Trust (EOT) model is most suitable for our situation. We have been working towards this over the last couple of years and now feel the firm is in a good position to transfer a controlling stake in the company to an EOT. This sets the staff’s rights and rewards in stone.
An Employee Ownership Trust is sometimes referred to as “the John Lewis model”. They’ve been set up this way for about a century, long before it was popular! More recently other high-profile names have followed this route, including Richer Sounds (HiFi/TV vendor) and Aardman Animation (of Wallace and Gromit fame). We believe this will be a growing trend for stable companies with 10+ staff, as a way to deliver long-term business viability.
The majority of the shares of Maslins Ltd are now owned by an Employee Ownership Trust (Cos Hse ref 13463765). This means the majority of profits will be for the benefit of employees. Generally this involves paying most profits out to staff, though some may be reinvested in the business. Put simply, if the company continues to do well, the staff will be the main financial beneficiaries.
Well, sort of, but not in the “normal” way we know some clients dread to hear. Often when an accountancy firm is sold, it’s to one of their bigger competitors/venture capital. The acquiring firm typically looks to recoup the purchase costs quickly. This tends to mean hiking prices to clients whilst downsizing staff to reduce costs, leading to a (short term) profit spike, but worse experience for most involved. This option did not appeal.
Technically a majority of the company shares have been sold. However, it’s on very amicable terms, and the buyer is a trust set up purely for the benefit of all employees, current and future. The founders have retained a minority stake at least for the short term, so are incentivised to ensure a smooth transition and the future prosperity of the business.
By a controlling stake in the company being owned by an EOT, the staff should be incentivised to care even more about serving you and other clients well. Happy clients stick with their accountants. Happy clients are also more likely to recommend us to others. Our staff know that. As staff will directly benefit from future company profits, they know that serving you well is nicely aligned with their own financial prosperity!
Clients who have been with other accounting firms and not been well served often complain of poor staff members who don’t seem to care, or change every few months as unhappy (but potentially good) staff move on. Whilst our staff are, of course, humans with lives outside work, which may on occasion not be compatible with staying with us, we feel we can confidently state we have among the most loyal and well trained staff in the industry, and those are the people looking after your affairs day in day out. The EOT should further cement this.
In the short term, on a day to day basis, nothing! The name above the door is not changing. The accounting work will still be done by the same people in the same way. There will be no change to service or price. The founder will gradually take more of a back seat. Senior staff will gradually take on more of the legal responsibilities.
Longer term, things may change, but no more or less so than they would have before. We as a firm will continue to consider our clients’ needs and how we can best serve them. We will continue to assess the ever changing market. IR35 changes, Covid, and Brexit have all provided challenges over the last few years, and we’re sure there will be more challenges for us to navigate ahead. The involvement of an EOT doesn’t really change this.
Chris will still be involved, though more in the background, trying not to stick his nose in day to day! He’s committed for the next 4 years to ensure a smooth transition, with senior staff increasingly taking over formal responsibilities.
Independently of Maslins Ltd, Chris has a few other projects on the go, both business (eg MVL Online) and charitable (eg homeless day centre expected to open Sep 2021). Accounting has been his life for two decades, he’s getting regular reminders he’s approaching middle age, and will be looking for new challenges.
Happy loyal clients sticking with us and recommending us to their friends/colleagues has been the key to our success to date, enabling us to take this step to secure the firm's long term future. Thank you all!