you choose

Never have clients enjoyed so much choice when hiring construction consultancy firms. Iain Withers assesses what the various players have to offer and how all, from the biggest global giant to the smallest start-up, are trying to stand out from the crowd ou used to know where you stood with cost consultants. A host of The role we’re historic, mid-sized partnerships increasingly playing is were on offer, as familiar and dependable as old boots. But over bringing knowledge Ythe past five years the cost consultancy market from one market to has polarised dramatically. First there was a wave of consolidation, with another major names like Davis Langdon, EC Harris Matt Bennion, Arcadis and Currie & Brown – with a combined 332 years of history – being acquired by overseas giants – US-based Aecom, Dutch-based Arcadis are more entrepreneurial and go-getting can and Middle East-based Dar Group respectively. find the change suffocating,” he says. “The idea Small vs big In the midst of this, huge firms from left-field of being a small cog doesn’t appeal at all.” One striking aspect of recent start-ups is their – property agents such as CBRE and Part of the problem, Turner says, is acquiring ability to punch above their weight. Core Five accountants such as Deloitte – have begun firms can bring in a raft of additional processes, and Tower 8 – just over one and two years old muscling in on the market by growing their cost but he says that isn’t confined to firms that have respectively – both have projects on the books consultancy divisions. And more recently undergone mergers and acquisitions. “When with a capital value of over £150m. Relative another phenomenon has hit this once-staid the market turns down, a lot of companies bring newcomer Alinea launched in May, also with profession. A proliferation of start-ups have in more process and tighten their business the express intention of targeting major popped up. Building revealed in May that at controls,” he says. “Process kills enthusiasm.” projects. Its founders were six senior directors least 16 have been founded by former Davis This is a picture James Clark, co-founder of from the industry’s two best-known cost Langdon staff in the past two-and-a-half years Core Five and former Davis Langdon partner, consultants, Davis Langdon and EC Harris, alone, while others have spun out from other recognises. “As the organisation gets bigger the with combined experience of 150 years and firms, such as Tower 8, which came from the management burden gets bigger,” he says. “As major projects such as the Shard and the cost and project management division of Jones young partners we felt we were getting further Leadenhall building on their CVs. Lang LaSalle. from our clients.” Large firms have certain advantages, such as If you widen the scope to include project James Morris, co-founder of Tower 8, argues the heft to invest in innovation and secure management start-ups, there are many more, large businesses are also too inflexible to banking covenants more easily. But Alinea including L+M (founded by former Sweett promote talent. “It’s very difficult to restructure co-founder Iain Parker says his firm is taking directors), Hush (founded by former Deloitte a medium-sized or large business to bring “every step” to enable it to compete “for the next directors) and 3PM (a start-up part-owned by through the dynamic young people.” Leadenhall”. This includes emulating the best QS company RLF). But Brian Kenet – a principal at an M&A aspects of their former firms. “We’ve invested a Start-ups are not new, but what is new is the consultant in New York, EFCG, which lot of our money in things like IT and experience and seniority of the founders and specialises in the construction industry and has covenants; everything a leading organisation their ambition to compete quickly with the big been involved in deals involving Atkins, Aecom, like the ones we’ve come from would have.” firms for major projects – with lots of evidence Arcadis and CH2M Hill – believes there are The new firms are predominantly focused on that this is already happening. some more prosaic factors at work. “One of the the London market, where they claim clients Unsurprisingly the start-ups and global reasons you see more start-ups after a period of want a more personal service with greater conglomerates – not to mention the consolidation is lots of people made money in access to senior experienced staff, which they independents left behind – disagree on which the sales.” say their larger competitors struggle to offer. type of firm can offer the best service for clients. Kenet is sceptical that dissatisfaction with “Both approaches are right, but for different Building examines what’s behind the rise in mergers and acquisitions is a major factor things,” Core Five’s Clark argues. “My view is start-ups and sounds out the various camps. behind the raft of recent UK start-ups. “There’s that the massive multi-disciplinary team is right a lot of gossip in the construction industry,” he for massive game changing projects like the The rise in start-ups says. “Some start-ups are reflective of a lack of London or Rio Olympics. But then you’ve got » The most frequently cited reason for the happiness with a takeover but it may not have proliferation of start-ups is frustration of senior anything to do with that. In my experience staff working at the bigger firms. Toby Turner, there can be a difference between what’s said [in managing director of executive recruitment and the market] and what really happened.” Many Obviously clients are development consultancy Holtby Turner, says major firms have had to make redundancies so looking for value for the start-ups are in part a reaction to the wave of it’s quite possible some start-ups have come consolidation. Turner, who has been involved about through necessity rather than choice. money and [start-ups] in a series of UK mergers and acquisitions in an Perhaps the most important factor behind the can keep overheads advising capacity, says the transition from start-up phenomenon is timing. “The dust has being part of a partnership – with the prospect settled after these acquisitions and the market down James Morris, Tower 8 of an equity stake in the business – to being part is coming back,” Turner says. “People are saying of a larger firm is jarring for some. “Those that ‘If we’re going to do it, we need to do it now.” 30 / feature / cost consultants

» the more tenacious London private the firm’s cost consultancy division and developer who is keen to assemble the best argues cost consultancy and financial services team of individuals they can; who wants to are a natural fit. “Deloitte offers a bundle of orchestrate a team like a conductor.” services that help firms set up efficiently and Parker agrees: “Some clients want a cost consultancy fits nicely into that.” He says consultant that can do a project in the outback Deloitte’s reputation and access to blue chip in Saudi Arabia as quickly as possible. London clients helps the division pick up major work. is very different.” He adds that London clients Elsewhere property agents such as CBRE want “on-the-spot advice”, which experienced and JLL are growing their construction bosses in start-ups are able to give. “Clients do consultancy businesses, including their cost lose patience with the QS that goes away or consultancy offering. Much of that work is says ‘let me get back to you tomorrow’.” won off the back of CBRE managing or The start-ups also argue their lean structures advising on property transactions. “Clients can reduce service costs. “Obviously clients are looking for value for money and [start-ups] can keep overheads down,” Morris says. As young partners we Firms that have been acquired, like Davis Langdon and EC Harris, naturally dispute all felt we were getting this. They say there are benefits to being large further from our that help them deliver great service locally. Peter Flint, head of buildings and places in clients EMEA for Aecom and a former Davis Langdon James Clark, Core Five and formerly at partner, says that, although the firm has a Davis Langdon presence in 140 countries, it has kept a “strong” network of offices in the UK and describes the “local aspect of our business” as “fundamental”. want a single point of contact,” Matt “I was seeing a local client in Manchester Wilderspin, CBRE’s head of projects, says. He and explained how lessons we’ve learned says the firm offers “every single [consultancy] delivering offices in places like Australia and service”, including project management, M&E the US – such as not using raised access consulting, CMD, health and safety and flooring or air con in similar climates to here environment. Most of the firm’s work is on – could help him save money. We can bring corporate fit-outs, particularly in London, that knowledge to bear for a local client.” where it is managing and fitting out three of Matt Bennion, global director of buildings the capital’s five biggest insurance firm moves. for Arcadis and a former EC Harris partner, Meanwhile the independent firms say the agrees: “The role we’re increasingly playing is old ways are not broken and there’s great merit bringing knowledge from one market to in large scale, independent consulting. Turner another. Clients are looking for more value & Townsend and Gardiner & Theobald – both from their consultants and that can come firms that grew in their last financial year – are from overseas.” increasing their international footprints while diversifying, albeit less radically. What’s on the market Nick Townsend, Turner & Townsend’s What’s clear is that clients have never had so managing director of cost management, says much choice when looking for a firm to price a independence is crucial for offering impartial project. “There’s a wide series of different cost advice. “We’re very comfortable with our options in the market,” Neill Morrison, position in the model of that as independent,” Deloitte partner and head of cost consultancy, Townsend says. “Cost advice should be says. “If you roll back five years all the cost independent.” Adam Glover, senior partner at consultants were much of a muchness in Gardiner & Theobald, says clients value this terms of what they were offering. Everyone in approach. “Our clients want an independent the market needs to know what their service, that’s what they’re asking for. They differentiator is now.” value independence, strength in depth and At the larger end of the market, many firms high-value service. We deliberately don’t set have sought to differentiate themselves from our stall out as all things to all people. You their competitors by bundling cost need to know what you are and stick to it.” consultancy services up with other disciplines, The cost consultancy market has never been such as engineering in the case of Davis so shaken up, and with a wide variety of firms Langdon, EC Harris and Currie & Brown. jockeying for your attention, it might be time Deloitte is a different kind of cost consultant. to refresh your contacts book. The accountant has bolted cost consultancy onto its vast array of financial services. What do you think? Post your views on any of Morrison left Davis Langdon in 2010 to found the issues in this article below the version on our website at www.building.co.uk

19.07.2013 BUILDING MAGAZINE