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Anyone taking off for Passover?
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I find it interesting that we see this as a new thing. People forget where Accenture came from or where most of Cap Gemini came from?
I think the biggest impact will be the culture and DNA of the spun out consulting business. Going to a publicly held shareholder model from a partnership model is a huge shift. Profits are no longer just shared amongst Partners, but to a much broader base of owners. Behaviors could shift more towards long term accretive value (increase shareholder value) as opposed to near term profitability. However, the winners in that shift are shareholders and not necessarily staff or partners (and particularly not those on partner track now).
It does feel like a money grab by current partners at the expense of the earning potential of the future generation of leadership.
What I can say is that there are a lot of EY leaders and “near” leaders who are actively shopping a move to another firm. The change in RACI model, the change in incentive model, the change in culture and autonomy all add up to a much larger impact than just a simple reorganization of capital structure.
Being a tax partner who was at EY when we spun CG, consulting firms will not invest in the education and development needed to perform these types of transactions. For a tax pro the career path won’t exist and that will hinder the ability to deliver tax services across the spectrum.
Lots of reasons to look at it in todays environment . Executing it will be complex . Tax clearly most complex aspect. Differentiator for consulting; needed for assurance
Some chat circulating that the other B4 have larger pension liabilities in the US which make it harder/impossible to do a similar deal right now.
I want to see and learn from it. Don’t have a position at this point. I like where I am despite challenges, but we already lost first mover advantage (if that will be a thing), so at this point there is nothing else to do but be smarter and wiser.
As an assurance partner that works at EY, I have a bit of ambivalence. I can clearly understand the growth potential of separating the firms but there will be some practices within the firm that will have to be split up, and that will be difficult to manage through. In the current regulatory environment, both in the US but also abroad, the trend is to limit other services provided by "audit firms" so in many ways, it makes sense to go with the tide on the earlier side.