26 June 2017 by Leena Myers
Company secretaries taking the professional services route develop extensive marketable experience, says Leena Myers
Let’s briefly rewind to 2005, when if you happened to work as a company secretary within an internationally-operating professional services firm, you may well have been seriously reviewing your career options – especially those subject to the Sarbanes-Oxley Act.
Sarbanes-Oxley stipulated that companies could no longer outsource their company secretarial administration to their auditors. What followed was a wholesale restructure of the sector, including closure of departments, high-profile mergers and acquisitions, and the establishment of joint ventures between law firms and the larger consultancy firms.
The knock-on effect was felt across the professional services industry, as for many years these firms had been a defined entry point and training ground for those looking to enter the profession. Across the 10 most established teams, there was a yearly intake of around 50 high-calibre trainees who went on to become ICSA-qualified. After Sarbanes-Oxley, the number reduced dramatically to around 15, which is now causing a supply issue for those companies recruiting at the junior to mid-level.
Fast-forward to 2012 and we began to see evidence of a post-financial crisis revival, led by the largest firms that utilised their global network to develop global compliance functions. Where previously the business model centred on a high-volume, low-margin annual compliance service, teams were engaging in low-volume, high-margin restructuring projects, M&A work and IPOs for some of the world’s largest and most complex organisations, including UK PLCs.
The potential was so big that firms invested significantly to establish new teams and attract senior talent from competitors. For those who had previously dismissed it, this dramatically impacted the profile and perception of a company secretarial career in the professional services. More importantly, this looked as if it could be what the sector needed to stem the flow of talent out of the professional services into industry.
Evidence suggests that attrition rates within teams that provide bigger-ticket project support to global clients has reduced by 60%. The big firms offer the opportunity for key personnel to lead international project teams, address skills gaps, and work with clients onsite.
For many, the sheer variety of work, coupled with the ability to engage with the brightest minds within a global network has reduced the need to seek a role in-house, as they are effectively doing the work already, albeit for a portfolio of companies.
The small to medium-sized practices continue to benefit from the recurring income from loyal clients and steady growth over time. They are growing their teams as an increasing number of limited companies and small PLCs benefit from outsourcing their company secretarial work. This lower-risk approach has created some companies of significant value that have become takeover targets for larger firms looking for a more balanced risk profile and the opportunity to cross-sell services to an established client base.
In the past two years, recruitment into the professional services has increased by 40% as larger firms gear up to double revenues over the next few years. That said, professional services firms have historically struggled to attract talent away from industry, but there are compelling reasons why many will now consider the move. Some question whether working in a PLC should be the ultimate career goal, especially given a hierarchy that may inhibit promotion and offer no guarantee of interesting project work.
The professional services have invested in strong leadership, first-class training and development, agile working, and flatter, more collegiate team structures. This encourages creative thinking and opportunities based on merit and ability, not just length of service. For the new generation of company secretaries coming through and taking a more holistic view of their career, this could be a big draw.
Given the diverse and transferable nature of global compliance work, listed companies are ditching the ‘PLC-experience only’ approach to recruitment and taking a fresh look at those coming out of the professions. However, the professional services will not lose their top talent to industry without a fight.