E&Y opens the books but excludes liability details
Ernst & Young’s 12 per cent increase in UK net fee income in the year to 30 June to #424m was fuelled by a 40 per cent rise in gross fees to #77m in its consultancy arm. Demand for consultancy services proved particularly strong in the insurance, manufacturing and energy sectors.
The firm published details of earnings in December for the first time as part of a drive towards greater openness.
All areas increased gross fees over last year, though insolvency and recovery services were slightly down, falling 7.4 per cent to #31.2m.
Corporate finance grew strongly, rising 19.3 per cent to #38.3m.
Senior partner Nick Land predicted a further strong performance in consultancy this year. He added: “We predict that it will grow between 10-12 per cent a year and we’ll be very disappointed if we don’t outstrip that.”
Ernst & Young is now spearheading moves to set up a limited liability partnership in Jersey, along with Price Waterhouse. A final decision on whether or not E&Y will move to the island is expected to be announced in April.
Land, who earned #426,926 last year, insisted that “nothing had been hidden”, but admitted that the firm had deliberately excluded details of its professional liability insurance cover. He explained: “It seemed hypocritical to go on about best practice if we weren’t going on about it ourselves. But we’re not keen on disclosing our insurance cover because in today’s litigious society it’s like showing a red rag to a bull.”
Other major earners at E&Y included Andrew Jones, the firm’s UK managing partner, whose income was given as #386,289; Donald Turner, managing partner for the regions, #305,683; and Clive Williams, managing partner for client services, who earned #380,108.
Net fees per partner broke the #1m barrier, and the partnership as a whole made a profit of #75m, up 21 per cent – #189,000 per partner. E&Y partners shared average partnership profits and interest of #200,000 each.
Staff costs, however, rose by over 10 per cent, though Land said this reflected the changing mix of employees, including the recruitment of a greater proportion of senior, more experienced staff.