Managing Consultant Leena Myers discusses how company secretarial functions within professional services firms have evolved in recent years and now offer career opportunities on par with in-house company secretarial roles.
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Briefly rewind to 2005, when if you happened to work as a company secretary within the professions, you may well have been seriously reviewing your career options- especially those subject to the Sarbanes-Oxley Act. The Sarbannes Oxley Act 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 industry as for many years these firms were a defined entry point and training ground for those looking to get into the profession. Across the 10 most established teams, there was a yearly intake of around 50 high calibre trainees that went on to become ICSA qualified. Post Sarbannes Oxley, the number has reduced dramatically to around 15 which is now causing a supply issue for those companies looking to recruit at the junior to mid level.
Fast forward to 2012 and we begin to see evidence of a post financial crisis revival, led by the largest firms that utilise their global network to develop global compliance functions. Where previously the business model had centred around a high volume, low margin annual compliance service, teams are now engaged in low volume, high margin restructuring projects, M&A work and IPO’s for some of the world’s largest and most complex organisations including UK PLC’s. The potential is so big that firms have invested significantly to establish new teams and attract senior talent from their competitors. For those that had previously dismissed it, this dramatically impacted the profile and perception of a company secretarial career in the professions. More importantly, could this be what the sector needed to stem the net outflow of key talent from the professions 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 Ltd companies and small plcs’s continue to benefit from outsourcing their company secretarial work. This lower risk approach has created some companies of significant value that have become takeover targets for the 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 professions has increased by 40% as larger firms gear up to double revenues over the next few years. That said, professional firms have historically struggled to attract talent away from industry but there are compelling reasons why many will now consider the move. Some are questioning whether working in a plc should be the ultimate career goal, especially given the hierarchy that may inhibit promotion and no guarantee of any 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 that take a more holistic view of their career, this is a big draw.
Given the diverse and transferrable 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. But like the great George Foreman comeback in 1994, the professions won’t lose their top talent to industry without a fight.