“We didn’t need to wait for our pension, we had an exit plan”

Jun 25, 2017

trolfe

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At Financial Eye, one of the key areas that we help law firms with is business planning and we are always delighted when we help these plans through to the desired conclusion.

We were contacted by Bryan & Mercer in 2013 to see if we could help them tackle a set of business challenges they were setting themselves. They are an established and successful high street practice in St Albans and had always taken their regulatory obligations very seriously, having worked with our sister company, Legal Eye, for many years.

The firm wanted to change their practice management system, change to an outsourced book-keeper and get in place a proper exit/succession plan which ensured an ongoing business could be transferred in the most tax efficient manner.  On top of this they wanted to ensure they were complying with the COFA regulatory obligations.

As part of the COFA plus Support Package Financial Eye carried out a review of their existing business and quickly put into place the documentation and controls suitable for a firm of their size.  We introduced an outsourced book-keeper who have streamlined the way they operated their client account so that errors were eliminated and adherence to the Accounts Rules has become second nature.  Regular, timely Management Accounts are now produced in a format the fee-earners understand and we also introduced an integrated financial model which has aided budgeting and cash flow forecasts – all essential not only for running a successful business but for what was about to happen next.

We helped the sole equity Managing Partner, Teresa Cuesta-Roca to define the business plan including the succession plan which would lead ultimately to the exit, on a 5-year timeline.  We introduced a firm which specialise in tax planning for firms of this size and they had already identified two fee-earners within the business that appeared to have the necessary qualities required to drive the business forward.

Add to this the normal business challenges like relocation/refurbishment questions, changes in bankers as well as the system change and you have some time-consuming challenges for any firm.

As Teresa recalls “whilst we had a good idea of what we needed to do, the guys from Financial Eye were always on hand to provide practical guidance based on years of experience.  They have also made introductions to other firms who have the technical expertise to help us.”

The business has seen an increase in fee-income and profitability and over the next 3 years, equity was released in accordance with the plan.  However, the Brexit referendum result was a catalyst to accelerate the plan.  At the beginning of 2017, the three shareholders agreed to completed the transfer of the business in June.  Plans do change, even allowing for earlier execution.

Throughout the entire process, Financial Eye has been on hand to lend support and guidance to everyone involved and ensured that the business was compliant and in good financial shape for the new owners. The original owner has been able to exit in the most tax efficient way, did not require run-off insurance and is looking forward to an early retirement in Spain.  By the way, Teresa also has a pension as part of her tax-efficient plan, but is still too youthful to take it!

Financial Eye was delighted to be involved in such a hugely successful story and continue to work with the new owners to achieve even greater things.

Key areas to think about are:

  • What is the current ownership structure
  • Is the business vehicle right for what you want to achieve
  • Who do you want to hand-over to
  • Do you have people in your business to hand-over to
  • How do you achieve your goals using the optimum allowable tax regime
  • What are the insurance implications

Financial Eye have a wealth of experience in planning, financial risk management and compliance and work with chosen specialists in the field of tax planning, talent management and insurance advisory.

Please get in touch with us if you would like to discuss how we and our team can help you.

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