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Accounting and business advisory firm WMS is among a rare breed of companies on the Gold Coast where the big four firms are thin on the ground.
The firm, which was founded as Watter McDermid & Staff (WMS) in 1994 following Paul Keating’s “recession we had to have”, was born from an exodus of seven Gold Coast-based Ernst & Young staff led by John Watter and Jeff McDermid.
The lead partners have since retired, but the firm this week celebrates 30 years in business led by managing partner Aaron Lavell, who was among the original staff that joined from Ernst & Young.
The history of WMS offers snapshots that track the emergence of the Gold Coast as a global city during a period when the population has grown from about 300,000 to nearly 700,000 today.
Booms and busts were among the key challenges faced by WMS, a six-partner firm led by Lavell for almost 20 years. However, Lavell notes that those days appear to be well behind the Gold Coast despite new challenges emerging.
He also says that holding true to its founding values has been critical to WMS becoming the largest independent Gold Coast-based accounting and advisory firm.
“When we started in 1994, we were coming out of Paul Keating’s recession and at that stage it was a very tough economic environment,” Lavell tells Business News Australia.
“We were a true startup without any policies in place. To attract staff, John and Jeff adopted a bottom-up management policy and they let us all do what we did best.”
Among the early challenges WMS faced was the Asian Financial Crisis in 1997 which hit the firm hard as it had several major clients from Japan and Korea.
“Being the Gold Coast we’ve always had a lot of work in the property sector and that is still there to this day,” says Lavell.
“The GFC was also hard, but I was very proud of the way we handled that. We had two choices to make - one of them was to cut hard early and regenerate.
“But we took the view that the wheels would turn at some stage, and that it would be hard to then go find the team. For a period of two years the partners simply took home less.
“We may have been a bit naive, but on the flipside our staff knew that we had their back.”
Since the GFC, WMS made a strategic decision to diversify with an expansion into the medical sector. The firm now has close to 90 medical professionals and allied health practitioners on its books.
“For a firm with about 80 staff, we have a very high average client value but not a high number of clients,” says Lavell.
“The way we interact with clients may have changed with technology but we are still very much a high-touch firm.”
Client retention has been another strength with some having been with WMS from the very beginning.
“However, COVID wasn’t as big a challenge as I thought, partly because we’ve had flexible working for some time,” says Lavell.
“So, when we had to start working from home, we were already geared up to do that with our processes and cyber security.”
During this period, personal tragedy struck the firm with the loss of partner Anthony Karos who drowned in a surfing accident in 2021.
Karos, the first employee to join the former Ernst & Young crew at WMS, is described by Lavell as the “moral compass” of the firm. His loss “rocked us to the core”, he says.
During this difficult time, the WMS team leaned on the wellness group pioneered by Karos two years earlier.
“With eight mental health officers and a corporate psychologist chairing the wellness committee, I guess we were ahead of our time in that space and it helped us bond together. But it was still tough – even now.”
Karos is not forgotten by WMS staff who still refer to Karos’s office as “The Alley” in tribute to the iconic Gold Coast break at Currumbin that he loved to surf.
Staff wellbeing is important from a cultural perspective for WMS which rails against the attitude that long hours by staff are a “badge of honour”.
“That has been the case at WMS for four or five years now so to grow we really need to be more efficient at the coalface,” says Lavell.
Looking ahead, the managing partner anticipates that WMS will bring on more partners, among them women who have been with the firm for some time.
“Every time you bring a new partner in you get fresh voices and challenges to conventions,” he says.
WMS also sees opportunities Australia wide, with its second-largest client currently based in Sydney.
“We are very strong with the inbound market, so a lot of the larger clients coming from China, Vietnam or Hong Kong there is a fair chance we will act for them and that really goes back to our Ernst & Young days,” says Lavell.
“I worked in the Japanese division when I first started so we are very strong in areas such as transfer pricing and capitalisation issues that are very specific to inbound clients.”
Lavell lists the business growth of clients among the highlights for the firm.
“We’ve had some clients go all the way through to listing, such as PWR Holdings (ASX: PWH) – a long-term client that has grown from a well-run local business to supplying Formula 1 and NASCAR,” he says.
Lavell also cites GemLife which was founded by the Gold Coast’s Puljich family and has grown from a couple of retirement villages around Beenleigh south of Brisbane to a business that is among Australia’s fastest-growing over-50s lifestyle resort operator.
However, it is the very growth of the Gold Coast that presents one of the firm’s most immediate concerns.
“While the Gold Coast provides lifestyle and professional opportunities, high residential rents have emerged as a key challenge in recruiting staff,” says Lavell.
The high cost of rents has at least one staff member living in Brisbane and commuting to the Gold Coast in response.
However, Lavell sees the potential that the firm has ahead, particularly with a third generation of partners on board.
“When I first started at WMS, the Gold Coast was a boom-bust economy but in recent times we have matured as a city that some forecasts say that by 2050 it may even surpass Adelaide in scale,” says Lavell. “Now it’s a fully-fledged city that offers lots of opportunity.”
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