He’s proud to be a QS, he’s not afraid of enjoying himself and he doesn’t think every big practice should be an LLP. Mark Leftly met Richard Steer, senior partner of Gleeds, and found a leader in his prime.
Richard Steer has caused a stir in the normally sedate world of the quantity surveyor. A fortnight ago, Building reported that he was planning to turn Gleeds, where he is senior partner, into a limited company within five years. This bucks the current trend for large QS practices to turn themselves into limited liability partnerships.
“It’s a funny thing,” giggles the ever-cheery Steer, a glass of white wine in his hand. “I’m doing my roadshow of offices at the moment – I do a tour every couple of years – and I don’t normally get too many questions. But at our Bristol office someone piped up and asked me about the article. I said it was absolutely true and nothing to worry about. A corporate approach is a modern approach.”
Most of his rivals beg to differ. They argue that the LLP model protects them if a project goes wrong: in a standard partnership, the principals have unlimited liability. Steer, who has been with Gleeds since 1981, believes that the “doomsday scenario” of a partner losing the family home just doesn’t happen. What does happen, he says, is that overseas clients are confused by the LLP because most are not familiar with it. In China, for example, Gleeds signs its contracts through a subsidiary that is already set up as a limited company.
The QSs that have moved to LLP status naturally don’t agree. The boss of one says it sets up limited companies when working abroad, but what it makes “all comes back to the LLP”, he says. “Gleeds is inhibited by its structure – operating as a series of separate firms – a partnership there, a limited company here – risking casting some subsidiaries adrift. Richard is a great lunch companion, though.”
Rob Smith, senior partner at Davis Langdon, also says Steer’s strategy is not for him: “I can see why Gleeds would go the way of the limited company, but a business is really only as good as the partners. As soon as you sell the interest in the practice to another company or the banks, rather than having partners with equity stakes, then staff are on service contracts. What if in three or four years those contracts are over and they go elsewhere? Then your business is no good.”
Steer seems to revel in what passes for controversy in quantity surveying. But then he has acquired the reputation of being a bit of a maverick. For one thing, he is not afraid to have fun: his 40th birthday party was described at the time as “a well-lubricated affair attended by scantily-clad waitresses”, and his 50th birthday was one of the main attractions of this year’s Little Britain regatta.
So it was always likely that Steer would be the contrarian of the QS world. So, he happily declares that there are many “myths” about LLP status. For example, it is widely reported that it helps raise capital, as partners pay for the stakes. But even the leading proponents of LLPs admit this raises little capital. “You’re not really increasing your capital base,” says Steer, “You only save on National Insurance and on funding the pension scheme because the partner becomes self-employed.”
Richard Clare, chairman of EC Harris, was the first big QS to move his practice to LLP status. He argues that the move is a cultural one: it increases ownership and so gets people more involved in the business. He points out its popularity among staff – out of the 115 staff given the chance to become partners in November 2003, 112 did. It now has about 200 partners; before November 2003 it had just 45.
I had an American over here and he said, ‘I’ve never had a cost overrun.’ That was because the contractor had always priced the project …
But cultural change is not what drives Steer. He has ambitious growth plans: fee turnover is currently £65m a year, more than double what it was when Steer took the helm in 1999, and he says, “The sooner we hit £100m the better. I think we can do that in three to four years.”
Steer thinks he can do this by offering a traditional QS service overseas. He points out that many of the leading practices don’t like describing themselves as “quantity surveyors”. It is another area where he disagrees with EC Harris’ Clare, who growls at the term, explaining that as only 25% of EC Harris’ business is in cost consultancy, the company should therefore be described as a “consultant”.
“I’m a QS by training,” Steer, who qualified in 1979, declares proudly. “There is now a growth in QSing internationally. The Americans have never used QSs before. I had an American over here and he said, ‘Why do I need you? I’ve never had a cost overrun.’ That was because the contractor had always priced the project. So we told him, ‘Think what premium you’ve been paying so that the contractor could ensure there would not be a cost overrun’.”
If Steer is to grow the company to meet this demand he is going to need a lot more staff. Gleeds currently has 1000 people on its books, but Steer wants 1500 by 2008/09. He is not blind to the obvious problem: “There is a severe shortage of good staff,” he admits. “We’ve got graduates coming in now who do not know how to measure. They’re just not taught it. I was talking to an architect the other day who lives near me, Keith Priest of Fletcher Priest. He told me it’s similar in the architectural world, as new architects are not taught detailed design, they’re taught about imaging instead. He looked at me and said, ‘I hope it’s not going this way in the medical profession’.”
The shortage will not squash Steer's ambitions, though. Although he is keen to point out that Gleeds remains predominantly a QS, he says that expansion into other areas such as project management and management consultancy, is helping to attract well-trained staff – even Cambridge graduates – that in the past would have sneered at joining a surveyor.
Steer polishes off his wine, happy that the traditional QS is finding ways to overcome the skills problem. He is perhaps even happier that he is playing devil’s advocate with an entire profession, arguing against the LLP model and fiercely determined to call himself a “quantity surveyor” rather than a “consultant”. He grins as he contemplates this, and pours himself another glass.
Steer on Steer
Worst habit Too much exotic travel
Best joke Knock, knock (Who's there?) David Blunkett (David Blunkett who?) How quickly they forget …
Actor to play you in film version of your life Meat Loaf – he's my favourite performer
Perfect woman Nicole Kidman – a mixture of intelligence and beauty
Epitaph I made a difference