Andersens' future uncertain after key meeting is postponed

Andersen Worldwide pulled the plug this week on its much-heralded partners’ meeting to discuss the organisation’s future. After six months of wrangling, the firm said it needed more time to debate the various options. A spokesman revealed the decision had been postponed to a partners’ meeting in spring 1997.

Andersens, the largest professional services firm in the world, also announced end of year revenue figures up 16% to $9.4bn on 1995 levels.

But the pressing need to re-organise the firm is highlighted by the decline in its growth figures from last year, when revenues increased 21%.

In the run up to its partners’ meeting next year, chief executive Larry Weinbach wants groups of partners to meet in small, regional units ‘that will enable all the firm’s partners to participate in discussions about how best to organise the firm in the future’.

The regional meetings take over from the work of Andersen 21, a committee formed in January to discuss proposals put forward by partners. But the committee failed to agree on a preferred route ahead for the firm and was disbanded in July. Accountancy Age, which first revealed the existence of Andersen 21, understands one faction on the committee argued for a complete split between Arthur Andersen and Andersen Consulting, with Andersen Consulting possibly spinning off to become a public company. Executives in the Worldwide organisation were said to support splitting the structure into five units covering tax, audit, strategic consulting, outsourcing and technology implementation.

One source close to the company said the argument for letting Consulting go its own way was still popular. ‘The firms are more incompatible than compatible. You cannot underestimate how little there is for the consulting side to gain from being tied to audit. It might work for KPMG, which is still building its business, but Andersen Consulting has moved on.’

Arthur Andersen’s worldwide move into legal services took another step forward last week when its Spanish legal arm revealed it is seeking a merger with rival law firm A&J Garrigues. The combined firm of 57 partners and 330 lawyers would be the largest practice in Spain.