India boasts of several remarkable CA firms, but only a handful of firms have been able to assemble teams of 1000 or more.
Collaborating with international networks can open doors to new markets, clients, and expertise. However, it is very important to have absolute clarity when opting to be a part of a network.
In an exclusive interview with The Finance Story, CA Shailesh Haribhakti, Chairman of the Board at Shailesh Haribhakti and Associates, shares insights into his successful collaborations with internationally renowned network firms like BDO, Baker Tilly, and Moores Rowland.
Here he discusses the motivations behind establishing partnerships with international professional services networks and the strategies he employed.
1. Identify your objectives
Joining an international network has both its advantages and disadvantages, so understand the ‘why’.
When I started at my father’s firm in 1978 we were a team of 20. Growing into a larger entity wasn’t my goal. I aimed to excel in a few areas where I believed the firm could succeed.
Despite our rapid growth, the absence of an established global brand presented challenges in attracting top talent and larger clients.
To address this, we joined Moores Rowland and later, in 2010, the BDO network.
This decision marked a turning point, leading to rapid expansion over five years, with the establishment of 20 offices and the acquisition of an impressive array of clients.
Consequently, Haribhakti & Co. transformed from a modest team of 20 into a powerhouse of 1,000 professionals.
What are your objectives?
Improved Knowledge Management System
- Auditing firms must invest in certain areas, and Information technology (IT) is one of them.
- Joining an international network can help you improve your knowledge management system which can then lead to greater efficiency and competitiveness for your firm.
Shared resources and expertise
- We actively participated in creating audit manuals and process manuals with our network partners.
- Why did I spend hours and hours trying to help build a new manual? Because I knew that the shared benefits would show up in the future, in terms of referred work across the world.
- Indian organizations and firms should embrace this approach.
Access to a broader network
When you become a part of an international network, you have the privilege to attend conferences worldwide, meet network member firms from different parts of the world, and discuss a potential collaboration.
- Joining an international network is a great way to obtain global clients.
- Suppose I have a client in India who requires services in France. In such cases, I’d readily refer them to someone I’ve met at conferences or seminars, specifically someone within my network.
- Similarly, someone from the network would refer to my firm when the time comes.
2. Market Research and Due Diligence
There are several international networks. Once you have your objectives defined, it’s time to assess which network aligns with your firm’s objectives and spirit.
Thoroughly research the core philosophies of those shortlisted networks. Look through their websites, converse with their staff, or even communicate with their clients.
This way, you gain a true sense of what the network embodies and whether you align well with the network’s core values.
Consider joining a smaller network firm. The first network we joined, Moores Rowland played a significant role in our growth. Having that initial stepping stone enabled us to grow and connect with a larger network of professionals. That’s how transitions like these often unfold.
3. Make your firm attractive
Haribhakti & Co. was registered in every place whether it was with The World Bank, the ADB, or for Cooperative Societies’ Audits.
Wherever there was a registry being developed for professionals, we made sure to be on it and kept our registration active, to remain in the game.
That is the first baseline and that’s why we are so widely known to people who need our services.
4. Build a reputation
I observed it’s not just about what you can do or how you advertise your firm; your growth is primarily dependent on the reputation you built.
What does it take? It requires being true to your word, dedicating yourself to your work, meeting deadlines, and ensuring client satisfaction.
If you can deliver your work efficiently, and make a meaningful impact, your presence will spread naturally.
Our profession heavily relies on word of mouth. If you have done an excellent job for one client, he or she will refer you to other businesses, leading to your next assignment.
5. Promote your firm
Today, any firm that can present itself well, promote its services effectively and deliver results will be in high demand.
Make yourself known by attending conferences, writing blogs, authoring books and presenting yourself professionally.
You will find the doors of opportunities opening up.
6. Ask yourself – Are you ambitious enough?
This is the most important of all.
When you are a part of the network, you have to devote yourself to it. If you are not an enthusiastic participant, you won’t get many referrals, and will not be able to scale.
Then the cost of being a part of the network may turn out to be too expensive.
You have to be highly driven as well. We kept innovating and staying 3-5 years ahead of the curve.
Don’t get stuck counting every penny, instead, figure out strategies to help the network grow so everyone can benefit. That’s the attitude and approach one needs to acquire.
Of course, in addition to the above, you need good clients and a team to attract international networks.
What are the pathways for a CA firm’s substantial growth?
If you ask me, the most obvious option a firm can opt for would be to become a part of a larger international network.
Additionally, two other strategies include domestic mergers or offering specialized niche services.
Does the International Network invest money in member firms?
You have to make your money nobody is going to guide you as to how much and how to get there.
All these network firms are equity-oriented. You have to be your boss and generate income.
The only network that had a global investment pool shared by every member firm was Andersen. I believe the only other firm that follows a similar approach is Mazars.
Does the member firm get access to the technology that the International Network has invested in?
The member firms can access the technological tools, but nothing comes for free.
You have to pay a fee to be a part of the network, and this is the pool from which investments in technology, manuals, and other areas are made.
The amount that you need to contribute varies from one network to another.
When we joined the BDO Network (back in 2010), the subscription cost ranged from around INR 4 lakhs to a maximum of INR 29 lakhs.
Can a small firm with three or four Partners, be considered by an International Network firm?
There is no strict criterion that only a 200-member firm can join an international network.
Even a 20-member CA firm offering a few niche services can be attractive to these global networks. But there is a catch – you need a reputation.
To achieve that recognition, you have to position yourself in the market appropriately.
Is it possible for a member firm to make an exit and join another network?
There are many network firms to choose from. Find one that suits the objective of your firm.
So yes, in certain situations, specific firms may find that a particular network is not suitable for them, so they may switch networks.
Today anyone who can present themselves well, articulate what they are doing effectively, and position themselves as outstanding professionals will find themselves in a favorable position.
It’s the best time to seize opportunities. I would strongly recommend that people take advantage of this moment.