Over the last few years, Alvarez & Marsal has greatly expanded its roster and borders to encompass most regions of the globe. Today it has more than 1,000 operating professionals around the world, making it the largest global tax firm outside of the Big 4, according to Paul Aversano, Managing Director and Global Practice Leader of A&M’s Transaction Advisory Group. From India to China to Europe to Latin America, the firm has made having dedicated local teams of professionals on the ground a high priority. Consulting sat down with Aversano to discuss the firm’s worldwide expansion and the future of the firm’s growing Transaction Advisory practice.
Consulting: What are some differentiators that set A&M apart from its peers?
Aversano: Our model is somewhat different than what most people typically deliver as far as other professional services firms in this space. In the transaction advisory group we’re more than 200 people strong globally. Everyone there is ex Big 4; they’re all transaction service professionals, CPAs or chartered accountants. We hire folks with experience and we’re very strict with hiring. It’s a very homogenous group of transaction services professionals. The business model is to combine the traditional Big 4 financial accounting with the traditional Big 4 tax, but then integrate into that all the operational, industry and functional expertise A&M is known for worldwide. That is a very unique offering to the market. A&M today is a global professional services firm. We do everything a Big 4 accounting firm can do except audits. The transaction advisory group has been expanding around the world to coincide with the A&M operational expertise and our global tax expertise.
Consulting: What does A&M look for in a region before expanding there?
Aversano: When I look at the expansion it’s driven by a few things but whether we’re opening up a new office or a new country, there are 3 criteria I’ve learned must be in place in order for us to be successful. First, does A&M already have a significant presence in the local market? Second, do we like the local market in and of itself? We will not open a transaction advisory practice where it will just be fed from other parts of the world. We started in Munich about 3 years ago and combined our team with our tax affiliate, expanded to Frankfurt, lifted out a team of folks from Deloitte and started a Transaction Services practice in Frankfurt. Third criteria is if we’re losing work to competitiors because we don’t have boots on the ground. If we’re getting calls from existing clients asking to meet our German or Latin team and we don’t have that, and they’re going to competitors, then we know that’s the time to go.
Consulting: What’s behind the timing of the expansion?
Aversano: Some of it to be honest is my own capacity (laughs). You have to prioritize and you need to evaluate how much you can do. When the world was a blank sheet of paper, we started with New York, Chicago and LA. Then we said ok, Europe is probably second, we started in London and got Europe up and running. The next part was going to be Asia, after India we opened in Mainland China. Then Latin America had a big M&A boom years ago, and now the market has gotten very depressed. I like building businesses in a down economy for several reasons. Everything we do is for the long term. We’re not looking for short-term revenue grabs, we’re looking to build a long-term, sustainable practice. It’s all about finding the right people and the right leaders. More recently over the last year or two when the market had slowed significantly in Lat-Am, it enabled us to hire people more easily, typically at a better price point. It’s favorable to our restructuring and improvement practice. We’ll get our team up and running and I’m hopeful that by the time M&A starts picking up again we’re now locked and loaded with a team and riding that upward trend.
Consulting: What’s the ultimate goal of this global expansion?
Aversano: We don’t want to be the biggest; we want to be the best. The world is increasingly becoming more global. In order to serve clients properly, we need to be there. There are clients we worked with 10 years ago that were small private equity firms who are now successful and investing in other parts of the world. If we don’t keep up with that client growth and the ability to serve them, they’re going to find someone who can. We want people to call us with their most difficult transactions. We want to be the most sought after transaction services provider around the world. Doing that takes the best people. I’m personally involved in recruiting because I believe it’s all about finding the best people. The best people do the best work and attract other good people, and that’s how you grow the business. And that’s our model. We don’t acquire other firms, we’re all about building it ourselves, finding the right leaders, supporting them, and having them build the practice. If you find the right leadership and the right people, almost anything is attainable.