PwC: ten years on

Ian Powell, chairman of PwC LLP

If a week is a long time in politics then a decade in our sector probably
counts as an eternity. In the ten years since PricewaterhouseCoopers came into
existence we have seen some seismic changes across the business environment and
the profession.

The ten years have seen challenges associated with globalisation, new
business models and the rapid expansion of China, India and other developing
nations. There have also been the challenges of economic slowdown, concerns
about climate and international security, vast technological advances, threats
of pandemics, and the UK, emerging as a largely knowledge based economy.

But as is often the case, with challenges come opportunities and with the
emergence of China and India, the two goliaths, we’ve had huge in-flows of
companies listing in the UK, foreign direct investment flows and of course rapid
emerging market development. All of which, alongside regulatory change, have
brought huge demands for services, and an increase in these territories and
beyond for support in dealing with the complexities of international business.

I focus on the globalisation aspect of the last ten years because that is
precisely why the merger took place.

Clients were at the heart of the decision, we believed better global coverage
was essential for their and our success and stronger industry focus would lead
to a better choice of resource for our clients.

Ten years ago I was a (relatively) youthful partner working in Manchester on
complex turnarounds. I vividly recall the passion that the proposed merger
generated. Partners and staff had huge loyalty to their respective firms.
However, partners went in to the process with eyes wide open.

Each of the two firms had a strong presence in parts of the world and certain
industry sectors, but neither had the kind of global reach or critical mass to
be able to serve truly globalised clients, and that point alone convinced many
of us of the necessity for merger.

My own thoughts at the time were that the process carried risks but also
massive potential for the firm and our clients.

I also felt that the alternative course of action had far greater downsides.
Our priority was demonstrating clearly and quickly to our clients and people
that there were real tangible benefits and over the last ten years these have
been delivered.

In some ways, and with the benefit of hindsight, the way my own career has
developed over the past ten years demonstrates the logic of joining the two
firms together.

Immediately after the merger I was asked to develop the new firm’s
Continental European Restructuring practice and there was a sense of genuine
partnership in the newly combined team. So have we achieved what we set out to
do? Judging by the case we put forward to our clients, regulators and
stakeholders at the time I think the answer is yes.

I recently re-read an article published in Accountancy Age in
September 1997 when Ian Brindle, then Price Waterhouse UK Senior Partner,
bravely set his stall out and asked that the success of the merger be judged
within 12 months. I say bravely because he was talking about bringing together
two firms with more than 8,500 partners and 135,000 staff in over 140 countries
worldwide.

Last year PwC firms provided services for 368 of the companies in the Fortune
500
and 422 of the companies in the FT Global 500. This pattern is largely
replicated outside the UK and US and PwC firms served significantly more than
half of the largest companies in each of our regional markets during the year.

Within the firm we were also aware of the needs of our UK focused clients. In
the UK today companies outside the FTSE 250 constitute the largest single
component of our client base but our range of clients continues to grow and
includes private and public sector clients, entrepreneurial private clients and
not for profit clients across all networks.

Our merger goal in 1998 was to create a world leading and successful firm
that was at the vanguard of being a truly global business. Many competitors seek
to emulate our market leading position and it is to the testament of many
predecessor partners that they were brave and forward thinking in pursuing these
ambitions.

We continue to build on their innovation and I’m proud of the achievements of
the last decade, not least the many thousands of qualified PwC trained
professionals that operate in the global capital markets and who have emerged,
or are emerging, as the next generation of business leaders.

While a lot of things have changed in PwC’s first decade the rationale for
creating the firm is as strong today as it has ever been. I look forward, with
relish, to leading the firm.

The word on PWC

‘Global is a word you are going to hear a lot of in the coming months.’ Ian
Brindle, PW senior partner, Sept 1997

‘We don’t see any pressure from the clients or the market for this merger.’
Colin, now Lord, Sharman, Sept 1997

‘If Coopers & Lybrand and Price Waterhouse succeed in merging, the top
partners who initiated the scheme will have pulled off a deal little short of a
miracle. Like some immutable law of physics, the bigger professional service
firms become, the harder they are to stitch together.’ Peter Williams

Ian Powell is chairman of PricewaterhouseCoopers
LLP