Category: RSM

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McGladrey Is Glad to Have McGladrey Back, Says McGladrey Partner

Back in August, we learned that 1040 factory H&R Block was putting RSM McGladrey (aka McGladrey) out to pasture. By all accounts, H&RB was pretty excited to get rid of RSM (aka McGladrey), as the business was a bit of a drag on the rest of the company.

Crain’s reports that the deal finally closed today and at least one McGladrey (aka McGladrey) partner is equally excited to have their old RSM (aka McGladrey) back:

The move means the reunited McGladery, which has 6,500 employees—600 of them in New York—should be better positioned to compete against such industry-leading firms as PriceWaterhouseCoopers and Deloitte. “We are a great alternative to the Big Four,” said Tom Ferreira, who heads McGladrey’s Northeast practice. […] “We’re happy to be independent again, all together under one roof,” he said.

Your loss, H&RB (not aka McGladrey).

Accounting firm escapes from soured H&R Block deal [Crain’s

H&R Block Was Pretty Eager to Dump RSM McGladrey

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This morning we learned that H&R Block would be selling RSM McGladrey to McGladrey & Pullen for $610 million. This reunion of the two firms is interesting because just a couple of years ago they couldn’t stand the sight of one another. These days, you might conclude that since they opted to rebrand under the name “McGladrey” that everyone has kissed and made up but we all know better.

In all likelihood, there are partners on both sides who would rather set their CPA certificates on fire than work with the other side. The problem for the partners in these firms is that they probably had little choice in the matter, as H&RB seemed intent on cutting off the weak link:

[T]he top U.S. tax preparer looks to jettison the underperforming division and focus on its core business. H&R Block will finance about $65 million of the deal value as it looks to push through the sale of RSM McGladrey.

[…]

In June, H&R Block’s new Chief Executive William Cobb told analysts that RSM’s falling profit and revenue were a drag on the company’s earnings, and that the unit and its troubles were on his “radar screen.”

“(The sale) should improve overall corporate margin, as Tax Services margin in FY11 was 27.1 percent and RSM McGladrey’s was 9.3 percent,” Oppenheimer analyst Scott Schneeberger said in a note to clients.

And despite the Blockheads eagerness, the gang at M&P seems perfectly okay with it. From the firm’s press release:

“The Board’s objective is to reunite the assurance, tax and consulting practices under an integrated McGladrey & Pullen partnership structure,” said Jerry Bourassa, Chairman of McGladrey & Pullen’s Board of Directors. “The anticipated transaction will not impact the quality and timeliness of services to our clients. Our partners and employees remain focused on meeting and exceeding client expectations.”

[…]

“This is all about what we believe to be in the best interests of our clients, our employees and our partners. We see great opportunities for success and growth for McGladrey & Pullen as a firm reunited in a traditional partnership structure,” said Joe Adams, Managing Partner of McGladrey & Pullen. “Our relationship with H&R Block has served us very well but we both agree that it is time to move on.”

So it sounds like there may be cake and punch but it probably won’t be a lively affair.

Of course we’d rather hear from the people on the ground (i.e. the McGladrey partners, employees, Natalie) about what they make of this shitstorm. I can’t imagine anyone missing the used car dealership of the tax prep world but is this reunion going to work? Will C.E. and the gang now be able to turn Mickey G’s into the next accounting powerhouse? Can we get one name for the combined firm, for crissakes? All important questions. Please enlighten us below.

H&R Block to sell consulting unit for $610 mln [Reuters]
McGladrey & Pullen, LLP signs letter of intent to acquire RSM McGladrey, Inc. [McGladrey]

*Dustin Bradford

(UPDATE 3) McGladrey’s Giant Putting Green Cake Will Ensure That Everyone Gets to Celebrate Their Rebranding

Webcam chat at Ustream

In the best example that we’ve seen of accounting firm make-up sex, today the RSM McGladrey and McGladrey & Pullen announced that they will now be branded under one name…McGladrey. Since the deciders on the name checked imagination at the door, the firms make it up to all of us with the best possible solution – building a giant putting green cake.


One of the duffers sponsored by McGladrey, Chris DiMarco, will attempt to chip in on the green later today and with any luck you’ll be able to watch it above as it happens.

As exciting as that is, it isn’t entirely clear whether or not this also serves as a tasty distraction from the layoffs and restructuring that is going on McGladrey. Kick that around if you like but also consider the fact that Natalie Gulbis doesn’t seem to be jumping out of this thing at any point in time, and that is a travesty that cannot go unnoticed.

UPDATE: We’ve been assured that the cake’s tastiness or lack thereof will be communicated to us later today. Whether or not there will be pre-cake jays, gallons of Vitamin D milk to wash it down or couches to pass out on has not been determined. Discuss and keep us updated. Spare no details – flavor, frosting, texture, etc.

UPDATE 2: Okay you guys – who witnessed this sorry-ass display? Natalie wouldn’t have disappointed the crowd like these losers. And then someone skulls one right into the camera? Video is completely gone right now. Unbelievable. Get back to us on this cake.

UPDATE 3: The report on the cake is in:

1) The cake is, actually, pretty big. And, it’s all cake, except for the part of the logo, which is made of rice krispie treats.
2) As for a slice of that cake…quite good, actually. The cake part is marble, and very soft and tasty. I nabbed what might be a corner piece with the “rough” frosting. It’s a lot of frosting. A lot.

I’d give the cake a solid A-. There will be a lot to save in the next few days!

Two minutes later we got his follow-up:

I had to stop eating it halfway through — I think I’d go into diabetic shock if I ate any more of it. The grade gets downgraded to a B+.

RSM McGladrey and McGladrey & Pullen, LLP, Launch New “McGladrey” Brand [McGladrey]

Layoff Watch ’10: McGladrey Makes Nationwide Cuts

Over the past month, we have heard lots about layoffs at RSM McGladrey/McGladrey & Pullen but we didn’t have much for details.

Frankly, we still don’t know a lot but we’ll go with what we’ve got. So far we know about reductions in the New York, Chicago, Quad Cities, Florida and Seattle offices and everything we’ve been told indicates that they are occurring elsewhere.


First the Emerald City:

I was ample. There is a new geographic restructuring going on. Instead of multiple “economic units” there will be only three regions. Many HRs and CFOs from different offices are losing their jobs. Consulting people talk about 100 positions that will be eliminated across the country. 10 people were let go from Seattle Economic Unit which includes Seattle, Tacoma, and Olympia offices. We were informed about the reorganization somewhere around 04/12 and laid off at the end of the month. I think everybody received severance.

We’re not that familiar with past cuts in the RSM/M&P world but the big cuts in consulting seem to trail the Big 4’s by a year or two, although if some of these smaller clients are giving into the Big 4 lowballing then perhaps this is the natural progression.

Meanwhile:

Their Florida Private Club operations group closed the Club IT Consulting Group and layed off the staff. Some of the staff have been part of the firm for more than 20 years and were profitable.

Chicago just layed off the Operations Consulting Staff yesterday, [approximately] 10 people. This group was left to dangle in the wind, sink or swim on their own without marketing or sales assistance or access to the firm’s client-base Naturally it failed.

This firm’s actual layoff numbers are always reported low because they chase people out prior to layoffs in an attempt to camouflage the numbers. Their tactics to accomplish this include poor performance evaluations for staff, unreasonable margin requirements, constant peer pressure meetings regarding performance and head to head comparisons. This creates a dysfunctional relationship between groups and actually motivates groups within their own company to compete with one and other. Only so much people can take and then they leave. Just what the firm wanted.

Considering the economy in Florida, the demise of RSM’s private club operations in that corner of the over-leveraged world wouldn’t come as much of surprise. That being said, you might expect that veterans of the firm would be accommodated somehow with other internal opportunities.

As far as the “chasing” this is Jack Welch’s magical forced ranking method that the Big 4 has accepted like its own creation.

We reached out to both RSM’s corporate spokeswoman and their general counsel, both of whom have not responded to our request for comment. We also contacted an H&R Block spokesman to see if they could elaborate on these layoffs from the parent company level but again, our requests have gone unanswered. H&RB had their own layoffs last month however, there is no indication at this point whether cuts at H&RB would have anything to do with those at RSM/M&P.

We’re still accumulating details on these cuts, so get in touch with us about details on your office or discuss below. And don’t be shy, we know you McGladrey types been hesitant to call on us in the past.