In an earlier feature on domestic firm alliances (See “A Shared Outlook”), we demonstrated the advantages of an alliance in 2015. Technology services, mutual support, and the sheer reach that an alliance can provide make it a tremendous option for those looking for a boost in business opportunities and connections.
However, providing an even broader range of business prospects is the notion of international firm alliances. As exploring options internationally has become easier than ever, a firm alliance abroad can provide an amazing opportunity to make a lasting, worldwide impact for your firm and its future. It’s important to note, then, what currently affects these international alliances before diving head-first into the global marketplace.
THE REST OF THE WORLD
It should come as no surprise that different countries have different needs and levels of progress in the profession, so having a basic sense of the world stage is fundamental to an international alliance and its members.
Maureen Schwartz, executive director of BKR International — which houses over 500 offices in 80 countries — paints the picture thusly: “American firms are concerned about recruitment and succession,” she said. “South American firms are focusing on navigating their individual, and many times volatile, economies, and maintaining market stability. The Europeans are working in a mostly stagnant economy, and negotiating with the weakest euro in over a decade. We have found China, India and Southeast Asia to be hot spots for accounting firm growth, and with that increased interest in international alliances. Much of BKR’s new member growth has occurred in the Chinese and Asian markets over the last few years.”
Julio Gabay, president and CEO of Abacus Worldwide — an association of independent accounting, consulting and legal firms founded in 2012 with 38 firms globally — sees international work becoming much more common in today’s world, as well.
“As an international firm alliance, we are seeing much more cross-border work between our member firms,” he said. “Clients of firms are tending to become less local and more outward-bound in their planning and investments. One of the drivers for this is the instability of country-specific economies, which allows for investment flowing to more stable jurisdictions. Because Abacus works with both accounting firms and law firms globally, we have also seen an increase in litigation, real estate and transactional/M&A work internationally.”
“As an association, client needs drive our focus and support,” Gabay continued. “For this reason, [we’re] focused on bringing on the right firms in the right locations to support this outbound business. It’s not just about pins on a map, and it’s not just about the traditional accounting firm, but more about having the proper representation for the business owner and clients of our members who are seeking a trusted advisor — be it legal or accounting.”
Alan Deichler, president of CPAmerica International (itself a part of the Crowe Horwath International network and expanded to more than 100 countries) echoes Gabay’s view of having a relationship-first view. “In the past, it was most important to have a reliable network of international firms,” he said. “It is still important, and clients benefit greatly from support from international networks, [but] that said, the environment to support global business efforts requires collegial work efforts between both the international and U.S. firms. Having established relationships between U.S. and international firms is critical to the success of their common projects and providing maximum value to clients. Annual meetings, regional meetings, niche get-togethers, are all ways firms can get to know each other. It requires the investment of time to meet and it can take more than most Americans are used to investing, but the returns in satisfied clients can be rewarding.”
LENDING A HAND
Part of being in an alliance of professional firms is the mutual support offered among its members. On the international stage, that might mean putting in a more concentrated effort for more results.
Rob Tautges, chief executive officer of HLB International, noted that keeping HLB’s firms up to standard is one of the most pressing needs for his alliance. Especially when countries are situated inside a developing business environment, it’s the duty of the alliance to “maintain standards of the network and assist the quality of those firms” in emerging countries.
“Some [international firms] are active in the emerging accounting profession, but most of them don’t have a real robust organization like [the American Institute of CPAs],” said Tautges.
He explained that HLB employs a “buddy system” abroad — so if a certain firm receives a low QA rating, HLB will team them up with another firm from the region for mentoring.
Maureen Schwartz agrees that an alliance must be a resource to its members in order to maintain professionalism. “They rely on BKR to provide them the extended resources for their clients that they, as one firm in one market, could not possibly provide. We make it easy for them to get to know the people they can work with,” she said.
“Our leadership and staff are multilingual, multicultural and diverse,” added Gabay. “We are continually looking at the association as a business tool that assists members in meeting their clients’ needs — not as a club or association, but as business people doing business together.”
FACING THE FUTURE
As the lines between domestic and international business become blurrier, how your current (or future) alliance maintains and prepares itself is critical. On the world stage, no stone should be left unturned.
“International alliances need to become more like their members: international, connected and business-focused,” urged Gabay. “The structure of a traditional association is usually more along the lines of a club with one of two models — either very much one world region pulling the others along (usually North America or Europe), or the second model being four very autonomous and separate world regions that don’t communicate very well. Those structures are already obsolete for the way we do business today, not to mention in the future.”
“In order to deliver value, we need to be involved internationally, winning clients in their market,” said Tautges. ”The challenge is to get firms to go out into their local market. The worst thing I can have is a firm not engaged in any cross-border work.”
“Members rely on us to share member news, as well as news from the accounting world on social media sites — not just internally,” said Schwartz. “We are one of their preferred channels to stay up to date. We want to do more of this to help members cut through the clutter and also enjoy getting to know their colleagues around the world.”
“International alliances must adapt to meet client need and demand,” said Deichler. “Clients will continue to grow globally and alliances will have to manage their business development and support systems, including maximizing communications efficiencies between international firms to meet client expectations. ... Clients with multinational locations will require support from firms they perceive as working together toward meeting client needs.”
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