But it is a mere slip of an enterprise compared with Ernst & Young, which has 85 000 staff in 132 counties and a turnover of £7.25bn. The alliance apparently means that the two firms will work for clients under a single letter of appointment, with one firm then subcontracting to the other.
What's in it for us?
Bearing in mind the differences in size and nature of the firms, what are the attractions of the deal for both sides? I can see what is in it for Currie & Brown. Presumably, it thinks work will be given to it by an organisation with much more clout than itself. For Ernst & Young, which could probably buy a firm such as Currie & Brown out of petty cash, its reason for forming the alliance is that the deal will enable it to bolt-on additional services, rather than having to grow them organically.
I guess they may also want to dip their corporate toe into the waters of construction. After all, accountants are quite good at looking at the profitability of companies, and only a few years have passed since the recession of the early 1990s, when it was hard to find a profitable consultant in UK construction. On the other hand, accountants are not well known for publishing losses.
So, does this show the way forward for the rest of the QS profession? Should we all be looking to form similar alliances? And more importantly, will they work? The first thing the companies have to do is get work together. At the time of the announcement, Ernst & Young was reported as saying that the joint companies "… would be trying to identify situations in the market where offering comprehensiveness is best".
Reading between the lines, this sounds as though they have little or no joint work on at the moment but hope to find some. I can offer them some advice from Cyril Sweett's days in Chesterton, when previously friendly agents mysteriously became a bit elusive. Do not look to your alliance partner's competitors for work. They will not touch you with a bargepole.
There has to be something in it for both sides. If not, then tension builds up, accusations are made, and the alliance falls apart
Alliances tend to fail for a variety of reasons. For instance, in theory, suitable work should be passed from one firm to the other. In practice, it can be difficult to make this happen. A hypothetical man in Ernst & Young in Cheltenham may take some convincing that it is a good idea to give work to an unknown from Currie & Brown if he already had a successful relationship with another QS practice in the town that delivers him work in return. A bad job by the unknown firm could mean the loss of a client.
Sharing the profits
Cross-charging can also become an issue. Should Ernst & Young get a portion of the fee for work that originates from them but is carried out wholly by Currie & Brown? What if it is a particularly lucrative job? And what happens when Currie & Brown passes something on to Ernst & Young that the accountant has to carry out at lower rates than it would usually charge? Then there is the question of remuneration. Accountants are, of course, better paid than QSs. So, if you are trying to build up team spirit in this alliance, how do you explain to your QS staff why they are paid much less than their accountancy colleagues? This is hardly going to be good for morale.
It's about giving and getting
Problems are most likely to arise as the result of a lack of input, or perceived lack of input, by one firm. There has to be something in it for both sides. If one firm ends up giving work to the other and little or nothing is returned, tensions build up, accusations are made and the alliance falls apart.
Strategic alliances can be half-hearted affairs compared with mergers. After all, the alliance is either right for both organisations or it is not. If it is, then there are gains to be made from integrating the two firms that are not achieved by an alliance.
Postscript
Andrew Hemsley is a director of quantity surveying with Cyril Sweet
