Alternative Business Structures

together
#1

It’s only just come to my attention that from this month alternative business structures can be established with lawyers working alongside accountants to provide an all-round offering to client. Although this is all very new to all of what does anyone think this will do to those of us looking to study accountancy and those of us recognising that there are benefits associated with combined degree? Will this, in reality, make any difference to the way in which we work as an unlikely to be specific degree courses established in order to deal with this substantial change in the market? I do actually think consumers will gain from a practical point of view as it makes great sense to allow at least two professions to work together very closely but I do also think it will have an impact on the training needs and maybe we should be looking more closely at the new options and looking at this stage to make sure that we are ready for these changes?

#2

Nia

A very quick comment. For many years now the big 4, and indeed the big 5 when it existed have been offering the combined lawyer/accountant approach. The need to have in house lawyers to assist in IPOs and M & A’s has meant that it was expedient to employ their own lawyers, and following the practice of forming LLPs and indeed Ltd Co’s there has been a great growth in this practice.
Allied to this is the way in which degrees are combining both areas so I think the practice is here to stay and indeed is beneficial to their client banks.

#3

Hi both!

I think there has certainly been a trend both in industry and in education to combine both accountancy and law and this makes sense particularly given the way that the practical application of these professions has emerged. As you say egghead with LLPs and the speed of movement when it comes to M&A arrangements having an internal lawyer for the big accountants is logical.
I seem to remember from the dim and distant past that KPMG actually had K-Legal but I can’t see any evidence that they are still in operation. Of course several years ago they had to work as two separate organisations therefore much of the benefit associated with merging the industries was lost.
Do people think that we will end up with accountants also becoming legally qualified and vice-versa and if this is the case how is this going to change the way in which education is delivered. For example is it going to be a bit like America where you have a first degree and then a second degree?
There seems to be an increasing move towards doing two periods of study (often as undergraduate and postgraduate) as well as doing combined degrees so there clearly is a demand for this, I’m just wondering how it will play out for those coming through higher education now?
Any thoughts welcome
S

#4

Stella

I too have this fear as to the Americanisation of the degree programme or is it program? You see that the American influence is everywhere and I fear that the first and second degree is the path that will be taken but that of itself produces issues under the fee system which will prevail from next year. The average family will struggle to put a child through university once let alone continue to pay for a degree after that. Does this mean that we will have a breed of lawyers/accountants who might be said to have a privileged background where money can buy the education. One of the pleasing facets of both of these professions over time has been the fact that there has been an intake of people who have seen the ups and downs of life and have needed to struggle to educate themselves. This has opened up the law to people who can relate as opposes to those who cannot understand why people are where they are on occasions. Yes I think there will be a two degree structure, and yes I think there will be more people studying and qualifying in both. particularly in Law and then accountancy as opposed to the other way around. Not sure though that I look forward to the way they will get there.

#5

Some really good points there. I do think that the issue of people not being able to afford the double degrees will become very relevant although arguably it is still a big issue now and it hasn’t become a double system just yet. From my experience the large organisations will train their graduates in the specialist areas that they see valuable. For example I’ve seen law firms spend quite a lot of time training lawyers on accounts and accounting procedures and clearly this wouldn’t have a large cost implication on the individuals. On the whole though the two industries are so interlinked and the regulators are seeing this so it is only a matter of time before the education systems follow on.
Regardless of this I think there’s value in looking at expanding degrees so that they study sub units which enhance general understanding but fundamentally an accountant is an accountant and a lawyer is a lawyer, creating a hybrid product could result in too much dilution if you ask me.
That said there are different needs within the industry particularly with the alternative business structure and universities need to recognise this when delivering their courses.

#6

This whole business of doing “double degrees” is to a large extent following the practices of America where on majors and then has a minor. I think the difference is that in the UK we do not quite seem them as “major and minor”. There are certain modules which remain compulsory but then one can branch out to suit one’s taste. so to speak. The point is not so much the principal of selection but of being wisely overseen in those choices so that the degree adds up to something that has a meaningful application the commercial world. The idea of studying say Accounting and Art may at first glance seem folly, but if one looks at the investment value of art, the wealth of art galleries and the costs involved there is a relevance in a FD of a gallery having a good knowledge of the art world.
Again an accountancy degree that is paired with law has obvious future application. It is not however just balancing the accountancy and the law, but making sure e.g. that the law is relevant. If one wished to study say divorce law then it would have a tenuous relationship to accountancy.
I think the term Stella uses of hybrid dilution is very accurate and we should be aware that if the degree does not have enough “strength” and “good combination” it may have been enjoyable, but will have limited commercial application.