11 Jan 2019 | 12.48 pm
Interview: Michael McAteer, Grant Thornton
His favourite rescue was The Sunday Business Post
11 Jan 2019 | 12.48 pm
Outdated Leaving Cert course is deterring students from going for accountancy, says Michael McAteer, Managing Partner of Grant Thornton, which is in expansion mode after relocating to new Dublin HQ
Grant Thornton employees didn’t have far to go when the accountancy firm relocated recently to a new office building on 18-23 City Quay, overlooking the Liffey in the centre of Dublin. The firm’s previous home was next door and the new premises has been fitted out in the modern way – vast open plan spaces where the accountants and consultants line up opposite each other at long rows of work stations.
Individual desk space is minimal – nowhere to pile up paper, books, folders, reports. Dominating each desk is a large computer screen, for all the number crunching and analysis. Grant Thornton occupies six floors of the seven-floor building, and on each floor there’s a coffee area where staff can gather for a break, and there are some dark cubicles too lining the work area for a one-on-one meeting or taking a phone call that requires privacy.
The workspace design takes its cue from the hot desk format rolled out in other buildings in Dublin by Iconic Offices, WeWork and others. Office space in the capital’s Central Business District is now very expensive, so open plan is in and walls are out. There are no corner offices with glass walls either: managing partner Michael McAteer (known to everyone as Mick) and all the other partners are in full view of their junior colleagues all day long.
Across the 80,000 square feet of floor space, there are a few less than 900 desks. McAteer (pictured) likes the open plan set-up because he enjoys wandering around his own floor and the other floors, maybe dropping downstairs to see who’s playing on the pool table. Appointed to the top job a year ago, McAteer sees one of his functions as fostering a small firm culture in a large organisation.
For all accountancy firms, that culture reputation is important. In a booming economy there aren’t enough accountants to meet demand. “The number of business graduates entering the accountancy profession has dropped 25%,” says McAteer (49). He adds that the 20-year-old Leaving Certificate accounting course taught in schools puts off young people from doing BComms and finance degrees.
“The number of jobs for accountants is growing, so there is a skills shortage. Technology can fill the gap to some extent but you still need to have that added-value, the human perspective which says that’s your profit or that’s your loss and here’s what you need to do to fix it, change it, make it more profitable.
“In our business now we have cyber and forensics specialists, experts in risk and compliance, and all the other skills required to navigate business change. If there’s a business problem, often you can’t just fix one part of it, because if you change that and you don’t fix the technology and if you don’t fix the people involved in it, it will all fall back over again. So every change programme requires multidiscipline teams.”
The competition for graduates is illustrated by Grant Thornton’s marketing campaign his year, billed as ‘Less That. More This!’ The firm splurged on a funky 60-second video promising graduates a career that is ‘less spiel and more real’, and then blasted it across social media channels.
Ironically, it’s Facebook, Google, LinkedIn, and their massive presence in Dublin, that’s turning the heads of ambitious grads. Still, advertising works, and on the day Business Plus visited the firm’s new base, McAteer had been meeting and greeting 98 new recruits at the start of a two-week induction programme.
The come-on to attract them was spiel-like in places. Sample: “At Grant Thornton we challenge conventional thinking and deliver creative solutions. We’re always looking for the next big thing. Our mission is to inspire you and to help you flourish in a way that matches your own personality and goals. Someone that’s still unmistakably you, but with a wide range of additional skills.”
Not Just Guff
Still, an encounter with McAteer would make a favourable initial impression, and that perhaps the advertising isn’t just guff and that the firm means what it says on the tin. The managing partner is a relaxed, pleasant and engaging person, always cracking a smile. He didn’t progress through the usual UCD/Big Four route, and he has an entrepreneurial streak. In addition, McAteer’s expertise is insolvency, so he knows lots about business failures and the impact that has on people’s lives.
Another difference from the top accountant norm is that McAteer is a northsider, educated at St David’s in Artane. His dad worked in Dublin Port as a hydrographic surveyor and there was no accountancy or business background in the family. McAteer got 15 points in his Leaving Cert, which even in old money wasn’t enough to get into college. He studied accountancy at school and landed a summer job on a push bike delivering messages around the city for Farrell Grant Sparks.
That role entailed collecting sandwiches and Silk Cut for Pearse Farrell, who took a shine to the young lad and directed him towards the two-year accounting technician course. With the ATI exemptions, McAteer progressed down the chartered route and was a qualified chartered accountant by 21.
After a few years working with FGS, McAteer headed for Australia “to do something different”. He had visited his cousin down under a few years earlier and reckoned that Aussie bars could do with more stout. Fosters owned Beamish in Cork and McAteer had the idea of introducing Beamish to the Fosters pub estate. Unfortunately, stout doesn’t travel well, and McAteer moved on to work with Westpac, one of Australia’s main banks.
“Westpac had come up with the idea in the 1990s of doing home loans in Swiss Francs, because interest rates were 20% in Australia and 8% in Switzerland,” he recalls. “Then the currency devalued and this great idea turned into an absolute disaster. Westpac responded to the crisis with a big change programme, which was basically a relook at the whole banking operation.
“I joined the change team in 1994 and we had carte blanche to do everything we wanted. We created a paperless office in the branch network, we automated the processes and we centralised the mortgage function. The bank launched internet banking in 1997, way ahead of its rivals.”
Entranced At Tamangos
McAteer might still be on the other side of the world had he not taken a Christmas trip home, when he was entranced by his wife-to-be Marie in Tamangos, where the gang goes in Portmarnock. The other factor was Brendan Foster, who was McAteer’s manager in FGS and had gone out on his own. Foster McAteer came into being in April 1999 as a four-person general practice with a bias towards insolvency, as this had been McAteer’s specialism in his FGS days.
According to McAteer: “We grew that business to around 45 staff and Brendan and myself realised that we were the finance partner, the HR partner, the facilities partner, we were everything. We had chats with different people who told us that 40 to 50 people is when an organisation starts to require layers of proper management controls. If we started adding those layers, we would have to grow the business by 25% just to pay for them.
“So before going down that road, we talked to other accountancy firms of the same size, below us and above us. The one thing we were very clear about was that we would only do a merger with people we could work with. If we didn’t find them, we’d stick on our own.”
Enter Grant Thornton, which traces its roots back to the midlands in 1889 and over the decades had built up bulk through various mergers. Its principals in Ireland were Paul Raleigh and Paul McCann and in 2008 McAteer arranged a chat over coffee. “We could both see the change coming in the economy. We had a good reputation in the insolvency market, GT had the international reach and brand, and did some insolvency as well. It was really a conversation around two and two making five and we quickly got to the yes – a merger does make complete sense.”
The merger was a leap into the big league for Foster and McAteer: the Grant Thornton headcount was 345 at the time of the deal. Then came the recession, which was good for Grant Thornton and its new partner. McAteer had forged a reputation as one of the big beasts in the insolvency jungle, and he attracted major restructuring assignments such as Quinn Insurance, Eircom and Treasury Holdings.
“Maybe it was because I was a one trick pony, in the sense that even in the good times I didn’t call myself anything other than what I was,” he remarks. “After the merger early in 2009, we organised a workshop for the banks to explain receiverships and liquidations and the difference between them. That knowledge hadn’t existed in the Irish economy for nearly two decades. I suppose there was a perception in the marketplace that I knew what I was doing because I had been involved in insolvency all through my career.”
When asked to cite his favourite insolvency job, McAteer references rescuing The Sunday Business Post after owner Thomas Crosbie Holdings entered receivership in 2013. McAteer was appointed examiner of the newspaper operating company and had 90 days to find a buyer or the paper would close.
“With examinerships you become emotionally involved because they are a rescue solution,” McAteer explains. “With a liquidation or receivership, you are more than likely putting something to bed, or what you rescue out of it is going to be much smaller than what went in.
“With the Post we were literally 12 hours away from liquidation. We had shaken the tree and one by one everyone had walked away. Key Capital had been there and had walked away too. And it wasn’t a walk away negotiating strategy – they were gone. We had papers prepared to go to court on a Wednesday to appoint a liquidator, and I was coming into work to sign them when I got a phone call at half seven telling me that Key were back in. They had walked away and then something happened. I have no idea what it was, whether Conor Killeen just made a decision that he was going to do this.”
McAteer adds: “During an examinership you get to know the staff in the company as you’re down in their office every week. I knew the Post’s editor Ian Keogh, and many other journalists too. So it was a great satisfaction to get that phone call.”
Since 2012, Grant Thornton has grown fee income by 130% to €110m, with the headcount increasing from 400 to over 1,200 people at offices in Dublin, Belfast, Cork, Galway, Kildare, Limerick and Longford. As managing partner on a three-year term, McAteer’s remit now extends far beyond company saviour or undertaker.
“The day you stop growing is the day you start going backwards, and I wanted a new challenge. I could see the end of the recession and I like to be kept busy and to have a varied day. I think I’m a people person, I like getting around and meeting people and communicating. From my background in insolvency, I believe you can never over-communicate.”
Grant Thornton is anticipating up to 400 new hires from this year out to 2020, Brexit permitting. “We are in a new era of business which is very different from the last decade, and while it is full of opportunity there are also numerous challenges on the horizon. We are working very closely with our clients to guide them profitably through this time while also staying focused on growing our own business in a number of key sectors.
“The recovery has spread from Dublin to Cork, Galway, Limerick and beyond, but in places it is fragile. If there is a knock to the agriculture and food sectors, the recovery could stall.”