Press Comments

ACCOUNTANCY JUNE 2006

Comments from Phil Shohet in an article in the Analysis section on the dangers of office romances

Phil Shohet of KATO consulting, an adviser to small-to-mid-tier firms doesn't approve of office romances in any form, even when they involve two single people. "They re bad for business" he says bluntly. "I think one has to set an example in the workplace"
Shohet says "If you must have an extra-marital affair, surely you can find someone outside the environment without brining it into the office? It can't do anyone any good morale-wise" He cites an example of a married malepartner who had been having an affair with a single female partner unknown to the rest of the staff. Their relationship only cam eto light after the female partner brought her four-year-old child into the office. The child ran straight up to the male partner when he was standing in the audit room and shouded "Daddy!" According to Shohet the reputations of the partners involved were irreparably damaged by in incident which staff considered 'a huge joke'.
Shohet also believes that husbands and wives working together in senior positions within the same firm is very bad news. He has known anumber of mergers to be called off because the merger would bring spouses together in partnerships: "Either they would vote together, or they will vote against one another which will create another conflict" he says.

ACCOUNTANCY MARCH 2006

Comments from Phil Shohet in article on the uncertain future of Tenon

Phil Shohet of consultancy KATO said he’d be ‘very, very surprised if one of the Group A firms didn’t pick off elements of Tenon or just take the whole lot. The firm does have some very good clients’
He added: ‘I think the jury’s still out on the consolidation model, it doesn’t really work.’

ACCOUNTANCY MARCH 2006

Comments from Phil Shohet in article on Bentley Jennison acquisitions

Phil Shohet of consultancy KATO, however, questioned the firm’s direction. ‘The firm is very well managed but they’ve had considerable growth over the years simply by acquisition and I can’t see what their end game is.’ he said.

ACCOUNTANCY NOVEMBER 2005

Comments from Phil Shohet in article on age discrimination

For accountants in smaller practices there are a number of economic drivers affecting how long they continue to work. According to Phil Shohet of consultancy KATO, very few partners are retiring early unless they've got good pensions.

It's a fact not widely highlighted, but the collapse of life insurer Equitable has had an 'almost unbelievable' effect on the profession, says Shohet. "Equitable has its teeth right into our profession. Many say: "We would have retired at 55, but we can't now," he adds.
'Another dimension' as he puts it, is the increasing number of accountants who have now remarried and find they have a young family to support again in their mid to late 50s. As a result of this they have to 'plough on'.

ACCOUNTANCY SEPTEMBER 2005

Comment from Phil Shohet in article on Mid-tier merger frenzy

Phil Shohet of accounting consultancy KATO says mid-tier mergers and acquisitions are likely to continue – with one or two occurring among the Group A firms in the next 12 months. “There are a number of firms that should be looking around if they’re not already doing so for negative defensive reasons – lack of succession, lack of representation in certain towns and cities and lack of profitability:” he said.
“I think, however Begbies Traynor and Bentley Jennison are ones to watch for positive reasons – they’re ambitious, have strong management and know exactly what they’re doing and where they want to go”.

ACCOUNTANCY JUNE 2005

Comments from Phil Shohet in article on Vantis takeover of Numerica

"Vantis is really in the frame now for being a real aficionado firm of some considerable size"

"A lot of the top 20 firms are going to be looking over their shoulders to see where Vantis is going. If it's ranked 14th now, who's to say it won't finish up by being 10th or even eighth eventually. It could make people very nervous"

"Some people might think this could take Vantis's eye off the ball because its such a big acquisition. Whether they can bed in a merger of this size, well the jury might be out to some degree"

Extract from feature article on consolidators

Phil Shohet of accounting consultancy KATO, said he was very wary of the whole consolidator idea. "It hasn't worked anywhere else. Look at Australia. That was all doom and gloom. Why should it work here? You need partners facing in the same direction. At Numerica that didn't happen."

ACCOUNTANCY APRIL 2005

Extract from feature article on threats to sole practitioners

Phil Shohet, director of KATO Consulting, says that there is a real concern that sole practitioners and small practices are in serious decline. In the last five years, he says, we have seen the near-demise of lawyers working as sole practitioners and the accountancy profession looks set to go the same way.

The situation is, he says, "pretty grim". Not all small local businesses, florists, independent garages, small printing firms - want to take their business to mid-tier, national firms. "People want choice," he says, "but in 20 years the choice will be zero."

Shohet says that most sole practitioners he comes across are generalists. To survive they may develop a leaning towards a particular market sector or professional group, and the sensible ones forge alliances so that they can access other specialist expertise as needed.

So how should sole practitioners go about finding a buyer or potential merger partner? The first port of call should be firms in your own area, says KATO's Shohet.

CA MAGAZINE MARCH 2005

News item reporting the results of the KATO Survey

The "cobbler's bairns" principle applies to accountants and how they manage their practices. A new survey of independent firms found that 95% of the accountants who responded were unable to break down their profits by service line and/or size of job.

The few who could do so found that their profits came disproportionately from transaction-based work rather than general services, the consultants, KATO, found. Most accountants still charge by the hour and don't mark up costs for value-added work such as tax advice - and thus miss a trick, KATO implies.

Half a typical small firm partner's time is non-chargeable, spent on things such as continuing professional development, admin and management, and practice development. But is it time well spent? Nobody knows - they have no way of telling.

Maybe some time could be spent advising themselves - before clients find out that they are not as on the ball as one might expect.

ACCOUNTANCY AGE 22 APRIL 2004

News item entitled "Succession devastates firms"

A partner succession crisis is looming in the accountancy profession, which could see more than a quarter of independent accountancy practices disappear, according to a new survey.

The study, from Kato Consultancy, found that a lack of new talent and funds to pay off retiring partners meant that 28% of the 200-plus firms questioned felt a sale or merger was the only long-term option for survival.

"Over the last 15 years, nine of the top 10 firms have disappeared and 38 of the top 73 have gone the same way" said Kato director, Phil Shohet.

"This trend will continue unless there is a sea change in the way firms are run".