In Practice Firm focus
A different model
Alvarez: An American MD surveying British prospects
It might employ accountants and compete with
top firms, but Resources Global Professionals
says it’s definitely not an accountancy firm.
Sally Percy meets UK MD Don Alvarez
I
Vital statistics
No of UK offices: 3
Legal status: Listed company
Financial year end: 31 May
Fee income (2006): £17m
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t’s not hard to mistake Resources Global
Professionals (RGP) for a top accountancy firm. For
starters it has all the hallmarks of one. Born out of
Deloitte in the US (global CEO Don Murray is an exDeloitte partner), it has over 80 offices worldwide and a
highly-skilled workforce, significantly populated by
qualified accountants. It specialises in providing finance
and accounting services and its client base is largely
made up by the well-heeled companies of the
Fortune 1000 and the FTSE 100.
This, together with a UK annual fee income of £17m
and counting, would put RGP in 26th position on
Accountancy’s most recent annual league table of firms.
But as it happens, RGP is most emphatically not an
accountancy firm and nor is it trying to be one. Instead it
has its own model, which could be broadly described as
a cross between a consultancy and an upmarket
temping agency, employing experienced staff who are
hired out to clients on a project basis.
Don Alvarez, the softly spoken American who is
regional managing director of RGP’s UK office, describes
it simply as a ‘professional services firm’.
He says that what separates RGP from accountancy
firms is the fact it doesn’t provide attestation services
such as audit and tax preparation. Instead its services
are primarily of a consultancy bent, but even here there
are differences between RGP’s model and that of the
Big Four consultancy practices, for example, or
Accenture.
‘I would say we’re more like an internal consulting firm
as opposed to an external consulting firm that provides
methodology and basically works separately from the
client,’ Alvarez explains. ‘We’re more a consultancy that
works side-by-side with the client, integrated with the
client’s team, helping them execute their internal
initiatives.’
A gap in the market
RGP was founded in 1996 after then Deloitte partner Don
Murray identified a gap in the market for clients needing
experienced financial personnel to work in their
organisations on a project basis. At the same time, he was
aware of a pool of ex-Big Four people who had opted to
go into industry because they disliked the long working
hours of the big firms but who secretly missed working
in professional services.
Together with co-founders Karen Ferguson and Steve
Giusto, Murray ‘connected the dots’ (Alvarez’s words) and
January 2007 accountancymagazine.com
Firm focus In Practice
‘Very frequently our clients try to hire our people,
however very infrequently do they actually go’
realised there was a way to meet both the needs of his
clients and those ex-Big Four people who had a yearning
to return to the professional services world.
RGP was initially founded as a division of Deloitte,
becoming a wholly-owned subsidiary in 1997 and then
an independent company following a management buyout two years later. In 2000, the company listed on the
NASDAQ National Market system and soon after found
itself named one of America’s 200 Best Small Companies
by Forbes magazine.
Now, a mere decade after its foundation, RGP has a
formidable office network across the globe. But just how
did it grow so quickly? ‘Some of it was done through
acquisition; most of it was organic,’ says Alvarez. ‘In the
US it was very easy because we were part of Deloitte so
we followed the footprint of the offices with Deloitte.
Since we left Deloitte we’ve added offices throughout
the US.’
International expansion only began once RGP had
gone public, with London being the first office to open.
Since then offices have opened in Sweden, the
Netherlands and France, among other places, and as far
afield as India and Australia.
According to Alvarez, there’s no official strategy about
where the next office will open since it’s all rather
opportunistic. ‘We have a situation where a client has
particular demands in a particular area and so we’ll open
an office to support them in that particular area or we
come across a particular person who we think lives and
breathes the RGP culture and has the right background
and is entrepreneurial.’
Along with the Big Four, RGP has benefited
significantly from the wealth of regulation unleashed by
the controversial 2002 Sarbanes-Oxley Act.
‘It [Sarbox] had a positive impact on our business from
a couple of perspectives,’ says Alvarez. ‘Obviously there
was incremental work. The clients were overloaded with
a new project that required a different skill set from that
which generally existed in the business. But more
importantly, it afforded us the opportunity to meet a lot
more people in our client organisations.
‘Our relationships historically had been controller,
CFO, corporate level people. Sarbox is a very enterprisewide initiative and all of a sudden we were getting
exposure not just to corporate controllers, but to
divisional controllers and divisional CFOs.’
accountancymagazine.com January 2007
Down to the people
Along with other organisations that specialise in
supplying intellectual capital, RGP’s greatest assets are its
people. And these, according to Alvarez, are a group of
‘wonderfully experienced, talented, conscientious
individuals’.
But unlike other organisations that supply finance
staff on a project basis, RGP specifically recruits people
who like working on projects and don’t see temporary
roles as an avenue to permanent employment. The vast
majority of the company’s workforce is made up of
‘associates’ with the average associate having 18 years’
experience in professional services. In the UK, 36% of
associates have a chartered accountancy qualification
and may be former finance directors or senior financial
personnel, people who have already climbed to the top
of their career tree and are now looking to regain a worklife balance or perhaps fit their careers around their
children. They are paid on an hourly basis (‘You’d be
amazed by the number of people who really find value in
that,’ observes Alvarez) and are allowed to say ‘yes’ or ‘no’
to a project.
It might sound too good to be true, but there are
downsides to being an RGP associate. There is a degree
of financial risk and also RGP’s relatively flat
organisational structure means there is limited
opportunity for career progression within the company.
Nevertheless the model must suit most of RGP’s
associates since they generally resist regular attempts to
poach them by the company clients. Says Alvarez: ‘Very
frequently our clients try to hire our people, however
very infrequently do they actually go. They don’t want to
get involved in the politics that go along with working in
a large organisation.’
RGP has experienced prodigious growth over the past
three years with UK revenues climbing by a staggering
412%.The growth is all the more remarkable since RGP is,
in Alvarez’s words, ‘not a big marketing type of
organisation’ and has relied on networking and the
reputation of its associates more than anything else.
‘I often tell my clients, if you need them to prepare the
board book, they can prepare the board book. If you
need them to present the board book, they can present
the board book,’ says Alvarez. ‘They run that distance
with respect to the client’s needs and the clients really
appreciate that.’
Firm history
1996: RGP founded in the US by
ex-Deloitte partner Don Murray,
Karen Ferguson and Steve
Giusto
1997: RGP becomes a whollyowned subsidiary of Deloitte.
National expansion programme
begins and offices are opened
across the US
1999: Management-led buyout
of the firm is undertaken and
RGP becomes an independent
company
2000: RGP completes an IPO
and is listed on the NASDAQ
National Market system
2001: London office is opened.
Start of international expansion
programme
2003: Birmingham office opens
2006: Edinburgh office opens
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