In this interview Michael McAteer, the managing partner of Grant Thornton, speaks about:

• His unlikely route into the accountancy profession
• His role with some of the biggest insolvencies of the crash, including Quinn Insurance, Eircom and The Sunday Business Post
• His attempts to open a pub in Australia
• Merging his practice with Grant Thornton,
• Why truth and values matter
• What he looks for in a graduate

Ian Kehoe (IK): Hello you’re listening to The Currency podcast. I’m Ian Kehoe and today I’m joined by the managing partner of Grant Thornton Michael McAteer. Michael, you’re very welcome.

Michael McAteer (MM): Hello Ian.

IK: Well I should say on the offset, we have some shared history and we might as well deal with it now. Back at the height of the crash when I was working in The Business Post, you came in as examiner; given 100 days to try and save the company. Thankfully, you succeeded.

MM: Thankfully, there were 100 days because we succeeded on day 99.

IK: Well, we got there. But it must be tremendous, I’ll come back to some of the bigger cases later, but when you see something like The Business Post and the other companies like Eircom that you’ve restructured over the years, there must be a tremendous sense of satisfaction when you still see them trading? Be it The Business Post coming out every Sunday or Eircom charging us for our phone bills.

MM: Yeah, I think I mentioned before that probably The Business Post was one of the ones that gave me the most personal satisfaction. In the sense that I think in the role of examiner, it’s not just a financial restructuring. And if you look at the examinership legislation itself, it’s built around stakeholders who have an interest in an enterprise; that is important for the Irish economy to succeed. And I think when you look at media and when you look at the importance of independent media and The Sunday Business Post and the role that it has played, I think it was more than just a business to save. I think that’s probably what gave us satisfaction at the fact that a number of years later on a Sunday morning…

IK: It was so close. I remember being there, so I don’t mind talking about it, but being there as a senior employee within the company, it was right down to the wire. There was an assumption we were going to be fine until then we thought we were in deep, deep trouble.

MM: It was further than that. On the Wednesday evening, I think it was at 7.00 o’clock, I was at home and the papers were prepared to go into court on the Thursday, the next day, to wind up the company. Because it was day 96 in the 100-day process. And we only had three days to convene the meetings so we were right up to the wire and then that phone call came through and it changed the whole course. And we pulled the paperwork for the liquidation and we proceeded with the creditors’ meetings. It was that close. I’ve never had it closer.

“I went in as the office boy – delivering letters, getting the teas and coffees for the 10 o’clock and 3 o’clock breaks, getting the cakes.”

IK: Right well, you have to pick the one, it had to be the one. I suppose, that’s where you ended up in some of the cases. What I’m interested in, to start off with, is how you got there? You got there, through a different route than many people coming into the profession nowadays.

MM: Yeah, I think it would be quite difficult probably nowadays to get to go the way I went. So, roll back in the sense that I went to St. David CBS in Artane. I probably wasn’t an A student. I had fun in school. I enjoyed school. And the Leaving Cert points that I got at the time wouldn’t have been sufficient to go, even at the most basic level, into university. I suppose that was the first wakeup call that I had.

IK: Were you expecting more?

MM: I didn’t know what to expect. I think I was naive in school. It wasn’t that there wasn’t a group of high achievers in the school itself. It was more that university was not something that the majority of the class were going to do. The civil service was probably the route that most people were going to take or trades. And I think of a class of 30, maybe eight or nine went to university. So, it wasn’t, it just wasn’t really on the agenda back then in the 80s which is completely different to nowadays. And I was lucky enough through a contact of my dad, Greg Sparks, to get a summer job in FGS, Farrell Grant Sparks, at the time which only had a staff of 14 or 15 staff.

IK: It was just really getting going at that point

MM: It was just getting going. They had a couple of years, they were in six or seven Camden Street in a small bungalow. I went in as the office boy. So, the day description of the job would’ve been delivering letters, getting the teas and coffees for the 10 o’clock and 3 o’clock breaks, getting the cakes.

IK: Seriously?

MM: Yeah that would have been the initial job and then you know..

IK: Sent out for the cigarettes ..

MM: Sent out for the cigarettes and the sandwiches and things like that and then you get ‘can you put that box of invoices together and put some structure or some kind of organization on it’.

I got the Leaving Cert results, as I said, in August. Disappointed and then Pearse Farrell at the time, I suppose gave me my first break in the sense that he said ‘well do you want to be an accounting technician’. There was a course that you could do that didn’t have a minimum starting. I think it was five passes in the Leaving Cert was the standard. But what it did do is if you did that course and you got in the credits, it gave you an exemption from the first level of chartered accountancy so you bypassed..

“It worked to my benefit because I hadn’t gone to university and because I started at 17, I was done, finished and qualified by 21.”

IK: You’re on the path. Obviously Pearse saw something in you?

MM: Maybe he did as the young lad that got the cigarettes for him in the morning time. But, look over the years I’ve often.. you know luck has, I think, a huge part to play in somebody’s career and you meet people on the journey that have an influence on your career and an influence in your life. And Pearse was certainly one of those people.

IK: So how did how long did it take before you became an accountant?

MM: It worked to my benefit because I hadn’t gone to university and because I started at 17, I was done, finished and qualified by 21.

IK: Wow. Not many people do that now.

MM: Well you wouldn’t because normally you would go to university as your channel. You’d come out of university at 22 or 23 and you’d be exempt from the first level of charters. Then you’d end up qualifying at 25, 26.

IK: Is that journey too linear now? I had a conversation with Eugene McCague and he was concerned about the manner of which people were coming through to be lawyers. That there were, you know, the system wasn’t set up anymore for it. You know firms weren’t promoting early enough and everyone was 25 and expecting to retire at 45. Is it too in accountancy, is it too linear? Everyone goes to university and in effect you get the same people automatically almost coming through.

MM: There is certainly a danger of that. I think that the definition of accountancy firms is changing. It would’ve been very static for the last 100 years up to maybe 10 years ago. Accounting firms consisted of audit tax and advisory in the financial field. I think nowadays I look at our make-up of staff and we’ve got actuaries, we’ve got software technicians we’ve got consultants who never looked at P&L or the balance sheet before. So the mix is different. But again we are still I suppose feeding from the same university pool and that does create, I suppose, a level of groupthink unless you do things.

So we look for different skills so our tax department will be made up of agricultural science candidates. Because the learning in ag science gives them that different mindset in thinking and we’ve actually started to look now back at accounting technicians to try and look at school leavers as well. Because I think that the wider the gene pool, the better you’re going to have as you go through the layers of different skill sets later on.

“I wanted to travel to Australia to actually open a pub. That was my ambition.”

IK: You also went travelling and saw some of the world.

MM: I did I suppose by 21, 22, qualified, working two years post qualified, and I kind of felt I’m only 22 or 23. I didn’t see Dublin as the end of the world. And again, I suppose back then it was 92, 93 going home to my parents and saying I wanted to go and leave a job and to go to travel to Australia to actually open a pub. That was my ambition.

IK: Was this an ambition in the short term or was this in the long term, I’m emigrating I’m gone?

MM: It was kind of a bit of both because when I went to Australia I said I wasn’t going to go as a one year backpacker so I went and applied for residency and because I was a qualified accountant, I had enough points to do it. So it meant then, at least, when I was landing I had the option or the ability to stay rather than just as a one year backpacker having to move around. And the idea I had was I had gone to Australia two years previously on holidays. The European Irish pub phenomenon had really just kicked off.

I saw the market in Australia. I realised that Beamish at the time was owned by Foster’s or Carlton & United Brewery and the Australian pub scene had no Irish pubs. The Irish pubs that were down there were really just Australian pubs with a tricolour sitting in the corner and I thought maybe there was an opportunity to basically do what Guinness was doing in Europe but do it in Australia on the basis that they were the home brewer in the Australian market. Unfortunately, that just didn’t work out.

It was interesting. I spent three or four months as I was doing temporary work for a bank down there and then eventually I kind of went back to the day job. So I worked for a bank for the following five years.

IK: So you didn’t get the pub?

MM: Didn’t get the pub.

IK: An interesting idea actually. I mean it kind of could work you can see the similarities of what Guinness did all across Europe.

MM: And one of the reasons was that, unfortunately, Carlton & United brewed Guinness in Australia and therefore could not brew Beamish. So that was the reason why the concept didn’t get off.

“Be honest be upfront and be available and explain to people what is happening. It’s never a good story. It’s never a good message.”

IK: And then you came back.

MM: So I came back in 1999. Myself and Brendan Foster at the time, who had worked together in FGS, had kept in touch over the years. I met my wife previously when I was back on holidays. So she was a bit of a home bird so she wasn’t going to go to Australia. So I came back and we set up Foster McAteer. Brendan has previously set up Foster and Company and then that became Foster McAteer in April 1999.

IK: And that was a boutique and I remember writing about it a lot. It was a boutique insolvency firm

MM: I’m a bit of a one-trick pony.

IK: They say during the good times you’re corporate financiers, during the bad times you’re liquidators and receivers. But it was, I mean, your daily bread and butter was very sad.

MM: Yeah. Absolutely. And I think even back in 99/2000 /001 when everybody would have thought the Celtic Tiger, everything was absolutely flying. Even back then you had the dotcom bust you had 9/11 tragedy which then led to an impact on the tourism industry. And so there were always pockets of Ireland, even in the Celtic Tiger, that had to go through some form of restructuring and it was the area that I knew before had left so it was the most natural place to go back into.

IK: Yeah. I mean what was interesting certainly around those periods I mean there were so many provincial liquidations you know in different towns, provincial towns around Ireland and real businesses. You know if we say and we can come to it in a while but if we say the great crash was all about property businesses and the impact on this. These were real tangible living.. I mean you’re dealing with people.

MM: You are and every single situation there was, you know you’ve always got to remember when you’re dealing with a form of insolvency and it is a people’s business in the sense that you are affecting people in every decision that is made. And I think one of the things you always have to do is be truthful. Be honest be upfront and be available and explain to people what is happening. It’s never a good story. It’s never a good message. But if you don’t face, if you don’t treat it as a human story and be available to give that message then I don’t think insolvency’s for you.

IK: You have your own business. Things are going well. It staffed up to peak. How many did you have?

MM: I think around 2007 we would have had about 45/50 staff.

IK: Which is not insignificant.

MM: No. It’s a number where the infrastructure needs to match the size. So you need to start to take on a full-time financial controller. Somebody looking at HR and all those facilities all of those issues and then you put that layer of overhead into a business and, of course, you’ve just got to grow just to basically pay for it for that level of overhead.

So Brendan and I and Declan MacDonald at the time sat down and said we can either grow this business ourselves which we needed to grow to probably 100.

IK: And because you can’t as you say it’s.. I think a lot of businesses see this where it’s not a case of going from 50 to 60 or 70. The utility of scale doesn’t work.

MM: Yeah we had to make it a leap step up. And so we looked around and we either do it ourselves or do we merge with another firm of a similar size and therefore collectively we get to that 100 number in one fell swoop or do we use this as an opportunity to kind of say well where are we going into the future. So we looked around and we had discussions with a number of firms and Grant Thornton was the one that we felt most at home with.

“It was probably one of the nicest reliefs that I’ve had in the sense of when you’ve got your name over the door everybody wants to speak to you about all the problems that land on your door. You don’t have the infrastructure.”

IK: So you merged?

MM: We merged.

IK: And of course Declan went on and became a partner down in PWC. But how was that process? Was it a tough process to say goodbye to a firm with your name over the door and go to a big firm where you’re a partner but you’re not the boss?

MM: It was probably one of the nicest reliefs that I’ve had in the sense of when you’ve got your name over the door everybody wants to speak to you about all the problems that land on your door. You don’t have the infrastructure. You come into work in the morning, you are the H.R. manager, you are the financial director, and then you’re still trying to do the job that you actually want to do, the one you feel you can add value to. So walking into Grant Thornton that morning we have to say well there’s the person looks after finance areas, there’s facilities, there’s HR.

IK: So I’ve got a computer that is not working, it’s that guy.

MM: There’s that. I can actually spend seven and a half hours a day working on client work.

IK: And what was the attraction you say you spoke to a number of different firms with the attraction of Grant Thornton?

MM: I think Paul McCanon, at the time was head of advisory and was my competitor in the sense of recovery. And Paul set out his vision and why he felt that two and two would make five. And Paul was very clear, fair and socially we got on in the sense that it’s important in partnership that you can actually have a relationship with the partners. So it just felt the right fit.

“I’ve been lucky. I’ve worked in probably four or five of the biggest cases on one side or the other.”

IK: Yeah. And it turned out to be very fortuitous. I mean when the crash came you were with a company a firm that had the scale size and the brand to be able to get the really big cases. That was I suppose the double digit.

MM: That was yeah that was the plan.

IK: The plan worked. You did Eircom. You went in as administrator by this stage to Quinn Insurance, you know some big cases over that period.

MM: Yeah the gas thing was that at certain times you can say well this is the job for life. The one that you’ve always thought about it and then another one came along and then another one came along and it just went well. So I mean I’ve been lucky in the sense that when you work in a profession, you want to work in the biggest cases, you want to work in the most complex and challenging assignments and so to get one is very lucky. But I, you know, sometimes size is not necessarily the more complicated or interesting ones. But I’ve worked in probably four or five of the biggest cases on one side or the other.

IK: Yeah and sort of some silly. I won’t get into the weeds on Quinn Insurance even though that’s still ongoing.

MM: Yes. I mean thankfully on the insurance side it was different from the QIH and the industrial side of the of the group but the Quinn Insurance.. I mean, again, it affected 2,400 people.

IK: And the policyholders

MM: And the policyholders. But if you deal with the people in the first instance in the sense that they were operating in locations that didn’t have an awful lot of other opportunities for them. They were a very talented workforce and there was a good business there. It just unfortunately..

“I think in a sense when Paul was coming to the end the second time and the economy itself was recovering and the role of an insolvency practitioner was starting to basically decrease.”

IK: Yeah and some of those circumstances will play out in the courts over  the coming years. You mentioned Paul McCann. Paul went on to become managing partner in Grant Thornton and drove it further and further. When he stepped down, I think after two terms as managing partner, you engineered quite a remarkable reverse takeover where Foster McAteer essentially took over Grant Thornton, I jest. But you became managing partner in that period. Were you lining that up in advance?

MM: No. I mean again just sometimes circumstances just play the way they do. I think in a sense when Paul was coming to the end the second time and the economy itself was recovering and the role of an insolvency practitioner was starting to basically decrease even though there was a lot of significant historical work.

IK: You weren’t going to be getting anymore Eircoms or Quinn Insurance.

MM: Exactly. So I think timing sometimes can work in your favour so it wasn’t a planned strategy. Right place, right time.

“It probably took me about six months to realise I’ve got to let go of something and I stepped down from a lot of the client work at that stage.”

IK: How did you adapt to that role, from dealing with clients to essentially dealing with partners?

MM: I suppose I think the first six months was probably the most difficult part of my career in the sense that, to go back to what you asked me, I enjoy client work and so then having taken on the role as managing partner and letting go of that crutch of client work where you get that instant satisfaction of a client being rescued or are being satisfied with it. Versus the internal work which can take an awful lot longer to basically see the fruitions of ideas.

And I suppose that for six months was that challenge between letting go of what I enjoyed doing and realising, well, I’d been elected to do this new role. And so it probably took me about six months to kind of realise I’ve got to let go of something here and I stepped down from a lot of the client work at that stage.

IK: And I mean the firm has got bigger. You’ve got the big four: Deloitte, Grant Thornton, KPMG, PWC in whatever order they argue it out, depending on headcount or whatever else. But you are number five, below those guys but way above everyone else.

MM: Yes and I think a lot of that is down to the firm. And before even Paul, we’ve just launched our own new strategy 2023 and when I was getting that organised and going through the thought process with the partner group, I went back and looked at some of the old strategies and it was quite interesting. You go back to 2008, our strategy back then..

“Do I see us growing at the same 20 per cent, year on year. No, I think there is other headwinds coming. The market is changing and I don’t think you can go 20 per cent every year.”

IK: That would be Paul Raleigh’s time.

MM: That was Paul Rally’s time and it basically it was a very simple strategy but it was called “Client-focused” and it was about being out in the street, knocking on doors, using shoe leather when everybody else was probably retreating into the back and kind of cutting costs.

Paul’s vision was that now’s the time to actually go on the front foot and we started to expand and we opened offices during the recession. We opened offices in Galway. So in 2008, we had two offices in Dublin and Limerick and by 2014 we had seven offices in Belfast, Cork, Limerick and Galway, Longford and Dublin. So that, I suppose, risk of a small firm going into the market when everybody else is leaving put us in a position where we were where we built on that, on that growth.

IK: And it’s not the plan going forward to keep on growing and growing. Are you comfortable in your own skin now or do you see room for growth?

MM: I think you’ve always got to grow if you don’t grow, you go backwards. Do I see us growing at the same 20 per cent, year on year. No, I think there is other headwinds coming. The market is changing and I don’t think you can go 20 per cent every year. So I would call it more sustainable growth going into the future but we will continue to grow.

IK: Yeah and you mentioned the headwinds, it is something. I mean whichever way you look, even if you leave aside the domestic and the Brexit stuff, there’s an awful lot of trouble in global economic indicators.

MM: Yeah I think that’s probably one of the issues. You know what helped us recover over the last number of years is the fact that we do have a large FDI exposure which was insulated from the domestic economy. So that was hugely important for us to get to where we are today. The downside, of course, is that they were exposed to the international market. So if there’s, if there’s a downturn in the US or a downturn in China or a downturn in mainland Europe, I think it would be just, we are going to suffer some sort. Now will it be at the same level that happened previously? Not in the slightest because our economy is completely different but we’re not immune from issues that are going to happen around the world.

“We believe in building relationships rather than transactions. So we start off with a new client doing small pieces of work to build that trust level to build a relationship.”

IK: I mean you’re out there competing for business with Grant Thornton, is it tough to break into that? The big four. To try and convince people to go away from there and go with a different firm? Or is it becoming easier?

MM: In the domestic market in Ireland, it’s probably easier because our brands and our work and our experience is of a nature that I think people understand what they get, when they get us. When you go internationally our brand may not be as strong in some jurisdictions. The big four will be strong in those in those jurisdictions. So we have a very simple philosophy. We believe in building relationships rather than transactions. So we start off with a new client doing small pieces of work to build that trust level to build a relationship. And having established that we can do a very good job and we provide a huge amount of energy to that relationship, we then build out through those clients because it’s the repeat customers that we see is how we’re going to grow our business.

“The fact that they’re self-starter, they understand that they’ve got to get out and earn a few quid as they’re going along. That is probably the most important thing we look for in a CV.”

IK: Well yeah if you can keep them. It’s always better and it’s much cheaper to keep a customer than it is to go out and buy one.

Look, we’re at that period where lots of people are coming through, they’re trying to get into the accountancy profession from different things. When you are looking to hire someone or to bring someone into your graduate programs, what are you looking for?

MM:  Yeah, I think let’s assume the educational background in the sense that we want smart people, so let’s take that as a read. But we want self-starters, self-motivators, so we would always look at the CV. Have they got a part-time job, that could be working in a convenience store, that could be in charity work, that can be working as a lounge person in a bar. It is irrelevant. The fact that they’re self-starter, they understand that they’ve got to get out and earn a few quid as they’re going along. That is probably the most important thing we look for in a CV. If that’s not there, I would struggle even no matter how good the grades are after that.

Then you’re looking for the rounded part of the person. You know, are they interested in sport. While we’re on sport, we look for things like are they part of committees because again are they showing something.. because if the CV is all academic, it’s probably not a cultural fit for us.

IK: Yeah because I have been in your office over the years. You don’t have an office.

MM: No .

IK: It’s all open plan, very unusual in accountancy firms. Does that say something about the way you see yourselves?

MM: Yeah, I think we see ourselves as grounded. Our core values include fun. If we don’t come to work and have a bit of a laugh and have social interaction with people around your desk on a Monday morning,

IK: Are you specific about those values?

MM: Yes.

IK: that you know, that your staff will know what they are.

MM: Yes they really are everywhere and we refer to them at all times. And we make sure that when we were setting our strategy 2023 we constantly had our values up there to make sure that they actually were consistent. And nothing we were doing in that was going to be counter to our values because I think people nowadays, especially the younger people, they can see through just symbolism or just names and rhetoric. You have to live your values.

IK: It’s funny I saw a speech that Domhnal Slattery of Avalon gave recently and they have this thing called TRIBE values you know and when he was raising money from corporate financiers and venture capital all over the world they looked at it and I remember there’s a quote in a case study that he made reference to where they said ‘look you know they can have their values, once it doesn’t cost us money’ and then he went actually, after about a year or two, he realised that actually the values were an increasingly important part of the company’s ability to deliver shareholder return.

MM: It’s key. I mean you know I think values hold you to accountability because when something’s happening and we’ve 150 employees so you know things happen on a daily basis. Absolutely. But then when you look at your values and that will basically tell you, it will guide you what the right course of action is.

IK: Finally Michael, what’s your advice? You’ve obviously had a really interesting journey. You’ve gone the non-linear way, you’ve gone in, worked as a technician, trained up, left Ireland, went to Australia, came back, set up your own business, merged it, took over at that, and handled some big cases in between. So it’s a great story but your advice to people starting out?

MM: I think the one thing I did which is different now, which I think is great, is the fact that you can change careers. I think changing careers back in the 80s was a much more difficult thing to do. You got a job, you didn’t let go of that. And I think if you’re going to be in a career for 35-40 years, you better enjoy it. You better like it. And at the same time that doesn’t mean you do a flip flop, every time something gets hard or difficult you decide this is not for me and change.

So I think what people need to do is they need to be, they need to take the time out to understand what they want to do. They need to give it appropriate time. And even when something comes out differently, they work through it and then I think they’ve got to expand their horizon. I do think the travelling I did for that five year period, you could never learn that in a textbook or working for the same organisation. You had to go away to see how things are done definitely, work in a different industry. I worked in banking. It just opened up.

“If you don’t enjoy what you’re doing. Stop doing it.”

IK: And look after yourself. You know it’s funny. I remember, I’m from the country so it was always when I went up to college there were two people. There were the guys who lived at home who still couldn’t do their washing and the rest was trying to figure out how to manage a budget. And it was very formative actually.

MM: Yeah. No, I mean when you land somewhere and the safety net has gone and you’ve got no mobile phones. I had two phone numbers of people, one was a friend, a guy I knew in school, and one was a friend of a friend and that was it. So you’re starting from scratch with two phone numbers.

IK: But I’m looking at you here and you’re smiling. You seem to visibly enjoy what you do.

MM: I do. If you don’t enjoy what you’re doing. Stop doing it.

IK: I think that’s a great sentiment and Michael, thank you very much for joining me today.