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Deloitte, DJ and a point of departure
Deal of the decade? It’s a little early to call it that. But it’s not hard to imagine that in a few years’ time this week’s merger of Drivers Jonas and the giant global professional services firm Deloitte will be seen as the point when the property advisory world changed forever .
For some while now, agents have feared that the big accountancy firms – more consultancy businesses in truth – would move in on their patch, bringing in enviable economies of scale, cross-selling possibilities that they could only dream of and remuneration schemes that would suck in their brightest and best people.
Well, it’s happened, though not in the way that most expected. Predatory was the expectation, partnership has been the initial approach.
Just as the 1990s saw the birth of a new breed of always global, usually listed firms that have since dominated the advisory sector – CB Richard Ellis, Cushman & Wakefield, DTZ and Jones Lang LaSalle – this decade could well be defined as the period when professional services firms finally lived up to their billing. And if they do manage to become full-service centres of expertise, the impact on clients and advisers alike will be profound.
Deloitte gets to expand overnight…
In this merger, the appeal for both parties is immediately appreciable. Deloitte gets to expand its small real estate practice overnight. It would take it months or years to pick off individuals and teams to grow to the size that it will become next March: 650 partners and employees and a fee bank of £90m don’t come cheap.
Drivers Jonas, meanwhile, gets reach – internationally and into new sectors. Excited partners are already talking about how much stronger the offering can be if it is where both parties are already active – from government to sport and leisure. Others are already preparing wish lists that will take the combined firm beyond the 90 or so sectors it already serves.
…DJ staff can expect greater rewards
In time, and provided they deliver, Drivers Jonas staff and partners should see their remuneration rise. Deloitte is the most profitable accountancy firm in the
That said, it won’t all be plain sailing. Cultural differences will be formidable. Keeping 670 Deloitte partners in step has required strong leadership and John Connolly, the firm’s
Already the differences in approach are apparent. With just 25 equity partners, DJ managing partner Nick Shepherd was able to keep his top team well informed during the process. With nearer 700, Connolly did so by voice message on Tuesday night.
So will the likes of PricewaterhouseCoopers, KPMG and Ernst & Young seek to emulate Deloitte and find a partner among the top agents? Don’t rule it out. But there will be no one-size-fits-all solution.
More pressingly, the new Drivers Jonas Deloitte must not lose the valuable market profile that DJ has built up over the past 285 years; and it must convince clients and potential clients that this new partnership will provide better value for them than the alternatives.
Will the Drivers Jonas/Deloitte tie-up be good for clients? Click here to record your answer anonymously
damian.wild@estatesgazette.com
