Insight

Why should a CPA firm join a national or global network?

November 2016


Business World: As chairman of the Russell Bedford International accounting network, your opinions may not be entirely impartial. Nonetheless, what, in your view, can a CPA firm gain by joining a network?

Bill Rucci: Having been part of Russell Bedford for over 14 years, impartial or otherwise I think I have a good idea of the benefits of operating both with an international network, and without one. I guess you could summarize the real deliverables as being recognition, credibility and growth.

Business World: It's easy to see how network membership would open up new business development opportunities, but how, specifically, does it help you in terms of 'recognition' and 'credibility'?

Bill Rucci: Obviously, as you say, membership has been a real plus in terms of new business - through leveraging on global marketing and the internationally recognized Russell Bedford brand, as well as international networking opportunities. But as far as clients are concerned, you're only ever as good as your last assignment - and when your clients are expanding into new markets, quality of service becomes absolutely crucial. Holding on to a growing client means following them - or at least finding a way of delivering services to them, wherever they need them, to the standards they're used to. Being part of an established international network means we can be confident of referring clients to member firms in other territories, knowing they won't let us down.

Business World: Talking of brands, some of the larger networks impose a unified global brand name on their member firms, but your network has chosen not to do this. Why?

Bill Rucci: Most firms joining our network have already established themselves as prime service providers in their home jurisdictions. In one sense, you could say this is a double-edged sword: along with a strong and established market presence, they are already well-respected brands in their local markets - something many are unwilling to give up. All our member firms understand the advantages of using the Russell Bedford branding - particularly for international and cross-border work - but some also want to retain the local recognition they've often spent years building up. Our membership regulations give them the flexibility to do that, while enjoying the advantages of our investment into the global brand.

Business World: How can network membership assist in the area of training?

Bill Rucci: Training really underpins everything I believe about quality. Our network works with leading professional advisors to support the training needs of our member firms, from CPA exam tuition, through continuing professional education (CPE) to leadership development for partners, prospective partners and senior managers. Our member firms see this as one of the key benefits of joining - certainly on a par with the benefits we offer in terms of networking.

Business World: Every accountancy group offers networking opportunities as a matter of course, surely?

Bill Rucci: Of course. But networking opportunities have long proved to be our most effective business development tool. To that end we hold an annual worldwide conference for all firms, as well as a dedicated Americas Conference (for our North and Latin American partners), a North American partners retreat, and a specialist International Tax Conference. Our American firms, in particular, have found these to be an invaluable resource in growing their businesses in Europe, Asia and beyond.

Business World: Some accounting groups have taken the decision to declare themselves 'associations' rather than 'networks'. Is there a real difference?

Bill Rucci: Perhaps we should let the lawyers argue the finer points of what constitutes a network or an association. Although, if you want to get technical, I believe the International Federation of Accountants - IFAC - deems the key features distinguishing a network to be the use of a common brand name and common quality control policies and procedures.

If we didn't have universal quality standards, that would worry me. How confident could you be that a client referred to another affiliate would get the same level of service that your firm has built its reputation on? That's the real difference as far as I'm concerned - and the reason the networks that are members of IFAC's Forum of Firms invest so much in training, quality control and independence checking.

Business World: But are there any risks in being a member of a network? Could one firm be held liable for the actions of another member?

Bill Rucci: There was - understandably - some concern about this a few years ago, when certain 'vicarious liability' cases suggested networks might be held responsible for the actions of rogue member firms - for example in the notorious Parmalat case. But in all these cases the courts came down quite firmly on the side of the networks, making clear that they bore no collective responsibility. In the light of such obvious precedent, it is difficult to see how the risks of network membership can be deemed to be greater than those of an association. I would argue that the risks, in either case, are precisely the same.

Author: Bill Rucci