According to a report this week by thescotsman.co.uk, a letter from consultancy partner Lynton Barker described low morale and internal unrest at the world's largest accounting firm. Barker, head of management consultancy services, has reportedly organized a meeting described as a "call to arms," the paper said. 

Barker's letter, which noted a "crying need for strategic direction," at the firm, was highly critical of senior staff communications, which it described as "haphazard, poor and inconsistent."

The 1998 merger with Coopers & Lybrand is also a source of strife among staff, who feel that there are two separate cultures. The merger may have been "more problematic and costly than expected," according to the report.

"We have fallen into the trap of pointing the finger elsewhere," the letter reportedly said. "We can produce a litany of things that have not happened ... but we are partners and owners of our business and we must take some responsibility for where we are."

The letter suggested a new leadership structure. Partners will vote on Barker's proposals this week, according to the report. Under the new structure, four client-service leaders would head the operation, while four non-executive directors would focus on accountability.

The Scotsman story coincides with a separate story by Consulting Alert, a management consulting newsletter, which reported that PwC is "actively working" toward a public offering of its consulting practice. In the article, Scott Hartz, the firm's managing partner of global management consulting, said PwC has not ruled out the possibility of a sale or partnership of its consulting practice as well.

"Since (Hewlett Packard) withdrew its offer, some of those potential partners have come back out of the woodwork," Hartz told Consulting Alert. "We are preparing an IPO and simultaneously talking to strategic investors. Even if we made an IPO, we would still want to have strategic investors."

PwC spokeswoman Sehra Eusufzai said Hartz' comments were "taken out of context." She said that an IPO is not the No. 1 option for the consulting practice and that a sale, partnership or IPO are "being pursued equally."

PwC announced last year that it planned to spin off one or more of its practice units into separate business units. The Big Five firm hoped to sell its consulting arm to computer giant Hewlett-Packard, but HP dropped its bid to acquire the unit in November amid torrid market conditions. Since then, rumors have been flying about the fate of the firms' consulting practice, but the firm has declined to comment on most of them.

Globally, PwC generated $19.6 billion in revenue last year. The firm's consulting practice, which generated $6.6 billion in revenue, is reportedly set to break off from PwC in August.

-- By Dan Engel

Send comments to dane@pro2net.com.

Back to NewsLine