Category: Big 4

If it happens at a Big 4 accounting firm, we’re talking about it here.

Deloitte’s Ad Nails the Olympic Spirit

Every two years we go through the same ritual. Jingoistic flag waving, the non-stop talking head of Bob Costas, and a hyped-up athlete (Lindsey Vonn is this year’s model). Add a bunch of schmaltzy, sappy, million-dollar commercials.

Welcome to the Olympics folks, originally intended to celebrate pure (amateur) athleticism, and now unabashedly worshiping pure consumerism. The Olympics games party like it’s 1998. The commercials are out of step with the somber mood of the age, depicting faked optimism. The feel-good machine of Madison Avenue did not take a break even on the day that the Georgian luge racer died.

Perhaps that is why the commercial from Deloitte stands out among the cacophony of hyperbole for its sobriety and clarity. The commercial is straightforward and engaging: using imaginative line drawing to represent Olympics sports, it depicts the pure thrill of competing in the games. Delivering its message through titles only, it avoids embellishment with its almost haiku-like script: “combine perfect movement through time and space, with the heart and drive of a champion, and you are golden”. Simple, clever, to the point:


The spot does not try to draw a direct comparison between Deloitte and the athletes. The connection is implied, cleverly, by using the Deloitte “green dot” from its logo as the “athletes” in the spot. Brilliant. And of course the spot is made more effective because it is relevant to the games. Mark this commercial on the credit side of the ledger.

Bravo Deloitte.

Avi Dan is President & CEO of Avidan Strategies, a New York based consultancy specialized in advising professional service companies on marketing and business development. Mr. Dan was previously a board member with two leading advertising agencies and managed another.

Alexandre Bilodeau Is KPMG Canada’s Phil Mickelson

When our Olympic Fever started last weekend, we had no idea what would happen. Sure there would be torches, majesty and endless montages but if you had told us that we would discover that KPMG has got dibs on a marketing dynamo like Alexandre Bilodeau, we would have said NFW.

AB was the first gold medalist for Canada in the Vancouver games. He won the Freestyle Men Ski competition on Sunday and now he’s got people just throwing money at him.


However, Al has had KPMG as a sponsor since 2006 (longer than Phil!) when he competed in Turin, Italy (the old man is a tax partner). All these new companies that want a piece of Golden Boy are going to have to get behind T Fly and Co. because Al strikes as a loyal guy.

KPMG Canada nailed this one. This dude is young, handsome, and doesn’t have to worry about a slimeball rival returning to steal the thunder. Now if he could only win the U.S. Open…

A Lawsuit Seeks To Find Out How Old is Too Old to Become a Partner at PwC

[caption id="attachment_3069" align="alignright" width="260" caption="That's a good one Bob but you really shouldn't tell old people jokes"][/caption]

Or any firm for that matter. There’s probably some opinions on this but allegedly at PwC it’s 54 on the low end and if you’re approaching the firm’s mandatory retirement age of 60 then you’re definitely not getting the bump.

The reason we bring it up is that the U.S. Court of Appeals for the District of Columbia Circuit has granted new life to an age discrimination lawsuit against PwC. Two advisory professionals, Harold Schuler and C. Westbrook Murphy’s lawsuit alleges that P. Dubs de-nied their admittance because they were close to the Firm’s mandatory retirement age.


The partner track at accounting firms is a long and tough road the way it is and for partners to allege age discrimination seems like insult to injury.

The DC Circuit ruled that the plaintiffs deserve some closure on whether or not the bigwigs in New York really snubbed them based on their age:

Judge Douglas Ginsburg said a 2008 D.C. Circuit ruling involving Schuler entitled the plaintiffs to a “reasonable inference” that PricewaterhouseCoopers’ decisions not to promote them were made in New York, where the firm is based.

“PwC says (the earlier case) ‘does not control’ because it addressed only PwC’s adoption and maintenance of a discriminatory policy, not the ‘discrete decision’ not to admit (Schuler) to partnership,'” Ginsburg wrote. “To which we say: Pettifoggery and piffle!”

Nice touch, Judge Ginsburg. So this means the case goes back to the district so they can get to the bottom of this.

We left messages at the other firms to find out what their mandatory retirement policies were to get some context on the age issue but so far we haven’t heard anything back. We’ll update you with those if we hear back from anyone.

It’ll be interesting to see how this shakes out since we’re pretty confident that their is no document anywhere at 300 Madison that says Schuler and Murphy were just too old to become partners. If we were to take a wild-ass guess, we’d say that the firm will point to performance reviews, etc. to rationalize the snub even if these guys were rainmakers.

PricewaterhouseCoopers age bias lawsuit revived [Reuters]

PwC’s Oscar Partners Get Teased, Possibly Need Adult Diapers

As we mentioned earlier this week, PwC loves Oscar time. It’s easily the biggest display of Big 4 shameless self-promotion and no one — not even us, (sans Francine?) — can blame them.

The Carpetbagger has a chat with two of the partners, Rick Rosas and Brad Oltmanns that touched on a number of things, like exclusivity, “there’s only been 12 partners to do this” and secrecy, “we go to a very quiet, windowless room in an undisclosed location”. but just because they’re counting ballots don’t get the idea that they aren’t working:

During the telecast, Mr. Rosas and Mr. Oltmanns stand at either side of the stage, with the 24 sealed envelopes containing the winners’ names, ready to be handed off to the celebrity presenters just before they walk to the podium. “It is work,” he said. “We’re standing literally in one spot for three hours or so, no rest room breaks or anything, because we have to be ready when the presenters get on the stage.”

Jesus, no bathroom breaks? Sounds brutal. Does PwC front them for a bag or Depends or something? What if they make a Starbucks right before the show? That could be problematic. Plus, you’ve got puny movie stars that used to be funny giving you a hard time:

“We do get teased from time to time especially by some of the comedians,” Mr. Oltmanns said. “I remember one year Jack Black said he was going to come over and rip the briefcases out of our hands and give us a good beating.” Did he? “No. I think each of us are larger than him, so he did not.”

Seriously. Don’t fuck with these guys. They have to keep their cool when Halle Berry walks by and their bladders are about to burst. Could you handle that?

PwC Basks in the Oscar Gold

Man, PwC is on a tear this week. Along with the announcement of the three-peat yesterday for the Training 125, the firm also rolled out its press release on the upcoming Academy Awards.

The firm is proudly counting the ballots for the 76th year in a row but this year there are ten best picture nominations and that’s a new wrinkle for the vote counters at P. Dubs.

Now we’re not going to insinuate anything like Slate did back in 2007 where they somehow made a superficial connection between scandals at PwC to their ability to count ballots. That’s just foolhardy and we wouldn’t entertain such a notion here.


Quite the contrary, this should be the biggest slam dunk engagement that PwC has. Sure there are some archaic mechanical issues (e.g. the U.S. Mail) but at the end of the day they’re just counting ballots. The biggest risk that PwC faces is someone trying to rip their arms off with the briefcases still attached. Besides, we’re sure there is a security device on the briefcases that will destroy the entire contents if opened by anyone other than a PwC partner.

But we digress.

Back to the boilerplate press release, PwC drops all kinds of facts on us including that it takes ten total days (between the nominating and the final ballots) and approximately 1,700 “person-hours” for the team to count the ballots by hand.

This begs the question: could the Oscars be indirectly responsible for PwC being embroiled in the wage and hour lawsuits? Is our insatiable demand for red carpets and Brangelina driven the importance of this annual event beyond health care reform, financial regulation, and U.S. GAAP/IFRS convergence and thus, created the sweatshop engagement that is the counting of the Academy Award ballots?

This prestigious engagement may have its benefits (e.g. tuxedos, the opportunity for awkward sexual advances on celebrities) but at what cost, dear reader? What cost?

AIG Adopts Big 4 “Forced Ranking” Method

Good news servants of the capital markets! Remember how we talked last summer about forced ranking and how it’s rampant within the Big 4 performance ranking system? No? Put it right out of your minds? Had occurred to you because you’re delirious from the lack of sleep, poor diet, et al.?

Well as soon as busy season
is over, we’re sure it’ll come back to you; in the meantime, you’ll be happy to know that everyone’s favorite ward of the state, AIG is now joining you in implementing what might be the worst possible method of rewarding its employees.

American International Group Inc. is rolling out a plan to revamp how it doles out annual incentive pay to its employees, as the government-controlled insurance giant moves away from retention bonuses that have proved controversial over the past year.

The new initiative, called a “forced distribution” system, is being pushed by Chief Executive Robert Benmosche. Under the plan, thousands of AIG employees will be ranked on a scale of 1 to 4 based on their performance relative to their peers, and their annual variable compensation, which may include bonuses, will be determined by their rank. Individuals ranked in the top 10% will get far more relative to their peers.

Yes! The 1 to 4 ranking scale. That’s not quite as shrewd as PwC’s 1 to 3 scale and it’s at least simpler than KPMG’s 9 box but AIG employees have every right to be concerned about this arbitrary ranking system.

Warden Robert Benmosche doesn’t care though, there were too many rock stars, “Mr. Benmosche said performance-appraisal systems previously in place at AIG weren’t discriminating enough. In one case, he said, there was a ranking system with four categories, but about half of the people got the highest rating, and half got the second rank. ‘You can’t have 50% in the top,’ he said.” Bobby B also said that AIG is “unlikely to impose a requirement that underperformers leave.” Write that one down.

Our contributor Francine McKenna who has written both here and on her blog about forced ranking told us, “Investors will get contrived ‘performance’ enforced by cutthroat atmosphere that further encourages excessive risk taking.”

In addition, Ravin Jesuthasan a “talent-management” consultant (not involved with AIG’s change) who was quoted in the Journal (our emphasis), ” [Mr. Jesuthasan said] the approach can work in turnaround situations by helping to foster more accountability, but could be risky if not communicated well or “if links to consequences like compensation and employment are not properly thought through.”

Any of that sound familiar?

AIG Plans Revamp on Pay [WSJ]

(UPDATE) PwC Did Not Foresee the Sexting Phenomenon

We heard a rumor today that PwC is currently renegotiating their cell phone contract because, yes, they underestimated the amount of texting that would be done by employees on work phones. Foiled by Gen-Y again!

We realize it’s hard to believe that the numero uno Trainer would somehow not educate its people to avoid sending hundreds of sexually explicit messages to the person in the next row when they simply could have pull together some instructions on cubicle sex. This would have alleviated at least some of the problem.


Well it’s too late now, you randy fools. You’ve no doubt cost the firm millions in charges because you couldn’t compose yourselves.

On the other hand, who were the geniuses sitting around 300 Mad trying to figure out what the texting plan was right for P. Dubs? We know Bob Mortiz wasn’t in on it. Did they consider the fact that PwC employees might be a bunch of savages that would be spending every waking hour sending photos and dirty limericks to their spouses and FWBs?

We understand that firms are trying to save money these days but jesus, it’s common sense to spring for the unlimited texting plan.

UPDATE, Friday, Feb. 12th: We heard back from a source who shared this:

I think they give us something like 100 a month (not positive) which doesn’t affect me, but some people in my office laugh about how much they go over.

Let’s say it is 100 a month. Depending on your prowess, one sexting encounter could conceivably use up a whole month. Someone tell PwC Ops (or whoever is in charge of these things) to go for the unlimited plan.

PwC Achieves Dynasty Status on Training Magazine’s Top 125

Did you think that the Big 4 domination of all magazine lists was over? Jesus, were you wrong. Not only is PwC numero uno on Training Magazine’s Top 125, they’ve been in the top spot for three years running. Clearly this is solidifies the dynasty for P. Dubs.

Personally we don’t think it would be that hard to get on this particular list. You fly everyone to a relatively large city that has bars, casinos, and strip clubs near the hotel and you’ll get some positive feedback regardless of the boring topics discussed.

The magazine lists its criteria for measurement (and, shockingly, our criteria wasn’t mentioned) so we can understand how this index of companies was cooked up:

• Training tied to business objectives

• Demonstrable results

• Number of trainers

• Employee turnover and retention

• Leadership development

• Tuition assistance

• Training technology and infrastructure

• Certification

• Training budget and percentage of payroll

Because we know you’re wondering, only two other firms made it on to the list: KPMG at #5 and Grant Thornton at #103. So this begs the question: WTF E&Y and Deloitte? Completely SHUT OUT? Are your efforts being expended elsewhere? Deloitte’s diversity trainings don’t count? What about the Deloitte University plans; doesn’t that count for something? Sorry, E&Y; the donuts and secure bathrooms obviously don’t help you on this list.

Never mind those losers; back in Titletown, you had better believe P. Dubs put out a press release. Our favorite part being the last paragraph before the “About” section where it catalogs every list the firm has ever been on for the past decade and a half. We get the picture P. Dubs. You can make it on to lists. Good job. Please feel free to notify us directly for the next one.

Digitial Issue [Training Magazine]

Ex-Ernst & Young Partner Sentenced to One Year and a Day for Securities Fraud

James Gansman, a former E&Y partner in transaction services, was sentenced to one year and one day in jail on Monday after being convicted on six counts of securities fraud last year.

Gansman had provided his mistress, Donna Murdoch, with tips on mergers that Ernst & Young were advising which she subsequently traded on. Despite the help, Murdoch needed more money and she began an affair with another man who used the tips to make trades.

To add insult to injury, Murdoch ultimately cooperated with investigators and testified against Gansman. She is still awaiting sentencing after pleading guilty to fifteen charges of securities fraud, obstruction of justice, and making false statements.

Beside making bad relationship choices, Gansman’s hot tips were in violation of E&Y’s “written policies and the duty of trust owed to the firm’s clients.” That extra day in prison should give him just enough time to study better decision making.

Ex-Ernst & Young Partner Gansman Sentenced To 1 Year, Day In Prison [WSJ]

(UPDATE) Was Deloitte’s Warning to Merrill Lynch Lacking Urgency?

– Updated to included statement from Deloitte

By now you’ve heard that Ken Lewis and former BofA CFO Joe Price are in a bit of pickle, thanks to NYAG Andy Cuomo.

Long/short is that Drew has filed civil charges claiming that these two ignored advice to disclose information about the losses at Merrill Lynch and went ahead with their plans that ended up screwing just about everyone in the entire world.


According to the complaint, Deloitte was right in the middle of the action back in December of ’08 as the auditor of ML and from the sounds of it, they kinda-sorta encouraged ML’s counsel to disclose the losses saying:

given the losses through what it looks like will be November when it closes, given the fact that you have another couple of billion of dollars coming down the road in goodwill impairment, we believe it’s prudent that you might want to consider filing an 8K to let the shareholders, who are voting on this transaction, know about the size of the losses to date

Okay, so “prudent that you might want to consider” sounds like a “you can disclose the losses if you want to but we’re not making a BFD out of this” but Andy’s complaint sure presents it as a legit warning. We’re not saying that Thomas Graham, the Deloitte partner on Merrill, needed to be hyperventilating while telling ML’s Chief Accounting Officer David Moser that they “might want to consider” the disclosure but Moser was worried enough to tell in-house counsel about it.

Maybe Moser didn’t bring it up because he knew that lawyers don’t take anything auditors say too seriously. If everyone who claims to be worried, was legitimately concerned, perhaps they should’ve considered some double exclamation point usage. Oh well; next time!

We haven’t seen a statement from Deloitte anywhere and they haven’t gotten back to us at this time. Deloitte provided us with the following statement:

Deloitte personnel have testified as part of the New York attorney general’s investigation. Some of that testimony is cited publicly in the attorney general’s complaint. Deloitte is not a party to this proceeding, and due to professional standards, we cannot comment further on confidential client matters.

At the end of the day, BofA’s own general counsel tried to tell KL what’s what and he ultimately got fired so Deloitte ends up being a small fish in this whole situation (i.e. “not a party to proceeding”). Cuomo wants to be governor for crying out loud. Voters don’t give a shit if you file civil complaints against auditors.

NYAG_Complaint

Plaintiffs File Brief in Big 4 Overtime Lawsuit

Last summer we initiated our coverage on the wage and hour lawsuits against the Big 4 and other firms that have been filed in California. As you may remember, the case that is currently before the 9th Circuit Court of Appeals, Campbell v. PricewaterhouseCoopers, is the key case as it may decide how the rest of the cases proceed.

Just a quick refresheramicus (i.e. friend of court) briefs following in early November.


The plaintiffs’ amicus briefs are scheduled to be filed tomorrow and while Mr. Kershaw would not share any names with us, he did inform us that there were some notable supporters that will be filing briefs. Parties claiming support via web (though it is not clear whether they are expected to file as amicus) include among others, labor union UNITE HERE.

The briefs are under seal at the request of the defendants who are claiming proprietary privilege.

In the past, the 9th Circuit has been accused of having a liberal bias which could be perceived as an advantage to the plaintiffs. While Mr. Kershaw agreed that the 9th Circuit was more “worker friendly” in the past, he told us, “After eight years under the Bush administration, the court has considerably more conservative justices.”

According to the 9th Circuit’s website, former President George W. Bush appointed seven justices while in office. Of the 47 justices currently serving, 21 were appointed by Republican Presidents and 26 by Democratic Presidents.

Despite the political makeup, Mr. Kershaw believes, as he did when we last spoke with him on the matter, that the evolution of the law of the exemptions (i.e. who, among other things, is and is not eligible for overtime) will demonstrate that the plaintiffs were not “learned professionals,” and will prevail in case.

Lead counsel for PricewaterhouseCoopers, Norman Hile of Orrick, Herrington & Sutcliffe LLP did not respond to our request for an interview.

We reached out to all the firms; receiving responses from only BDO, who provide the following statement: “We believe that the employee in this case was properly classified as exempt. This case has been stayed pending resolution of the PwC appeal. As is our policy on matters of litigation, BDO does not intend to comment further until this case is resolved.” We were also informed that in the BDO case that the class certification was denied by the trial court and the appeal was also denied.

In the case of Hood & Strong, LLP, we were referred to their attorney, Jonathan R. Bass of Coblentz, Patch, Duffy & Bass, who we spoke with briefly about his case, Kathleen McFarland v. Hood & Strong LLP.

Mr. Bass indicated to us that the lawsuit against his client is only one of four that is being tried in state court and would not necessarily be affected by the ruling in Campbell. He further indicated that these lawsuits are something that his client, and most likely all the defendants, did not anticipate, “it is not likely that any of these firms considered the possibility of their employees being treated as anything other than exempt.”

No other firms listed as defendants responded to our request to comment.

Ultimately a decision in Campbell may not be known until 2011 at which point the litigation could actually proceed or be settled. We’ll continue to follow these cases as they progress.

KPMG Boston Is Sprucing Up the New Headquarters, Sans Sign

This morning we shared with you the news about Deloitte’s new nightlight in San Jose. Back on the right coast, KPMG Beantown is getting a little redecorating done themselves although it sounds a little more substantive than a sign that can’t send morse code to San Fran in case someone needs an extra intern.

KPMG bestowed Jones Lang LaSalle with the honor of designing the interior of the new digs at Two Financial Center and it sounds like all Klynveldians will be infinitely more productive at the new HQ. 96,000 square feet of pure auditing, tax, and advisory bliss:

The interior will enhance workflow efficiency and accommodate KPMG’s growth requirements, which include capacity for 692 employees. Highlights of the build out, valued at $5.8 million, include: a central reception area on floors one and two, a large conference center with full media capabilities, an employee café, dedicated Human Resources suite and open office areas.

By the sounds of it they’re implementing some sort of Feng Shui strategy that will result in robotic efficiency.

We’re thinking that less than $1 mil a floor sounds like a decent deal but no sign? How the hell is that worth it? It probably wasn’t up to the gang at JLL but they could have at least looked into it. If the British invade again, a warning from the four blue squares would go a long ways towards KPMG’s national security cred.