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The Chicago Tribune Gets All Weepy for Arthur Andersen

Posted on by Caleb Newquist

Last week the Chicago Tribune got all emotional about the ten-year anniversary of Andersen being indicted with an obstruction of justice charge. A charge that, effectively, destroyed the firm. Oddly, the Trib made it sound like the end of Andersen was some sort of professional services employer apocalypse:  

The obstruction of justice charges against Andersen unveiled on March 14, 2002, put 85,000 worldwide employees out of work in short order. The vast majority of them had nothing to do with Enron Corp., the lucrative Andersen client that turned out to be a cesspool of financial fraud, but they were sent to the unemployment line.

COMPLETE UNMITIGATED DISASTER, I TELL YOU! Jesus, you'd think those 85,000 hopeless souls were unable to pick up the pieces of their lives and move on. This is, of course, bullshit. At my first job out of grad school, I worked with someone who came from Andersen's Boston office. At KPMG, I worked for several former Andersen senior managers and partners. Former Andersen partner Deb DeHaas runs Deloitte's central region from Chicago. Former CEO Joe Berardino makes appearances on CNBC calling everyone stupid. Former global managing partner C.E. Andrews just got millions in severance from H&R Block. There wasn't mass hara-kiri. People moved on for the better. But the Trib gets sentimental, like it's remembering a fond member of the family: 

The greatest tragedy of Andersen's fall? It fell for nothing. What a loss for Chicago, and what a disservice to all those like Arthur Andersen himself who never would sell their integrity, at any price.

Yes, Arthur Andersen. The epitome of integrity in professional services….until it wasn't. Dave Albrecht doesn't appreciate how the CT completely forgets that Andersen broke bad and, accordingly, doesn't share the sorrow:

Andersen deserved its punishment.  I shed no tears for it.  Its death was not a tragedy.  Its forsaking the public trust was the tragedy.  There ought to be a special place for those who violate the public trust. Andersen’s death means only that it was not allowed to continue making the world a worse place. The Chicago Tribune errs in labeling Andersen employees as victims.  The employees were part of a seedy culture, and it was the culture that supported the actions which merited the punishment. 
I half-agree with Dave. Andersen's death was not a tragedy. It was something that regularly occurs in business. A company made mistakes. Those mistakes resulted in the company going out of business. That's all. I do think it's a bit unreasonable and unfair to extrapolate Andersen's "seedy culture" to the employees. Forgetting about the idiotic debate about whether corporations (or huge professional services partnerships) are people for a minute – when Dave refers to "culture," presumably part of that includes "vaules." If that's true, then I can easily tell you that I think Monsanto's values and culture are definitely seedy, but are all of the people that work there similarly awful? Of course not. They're just scientists doing a job. Just like many people at Andersen were simply accountants doing a job. 
 
But back to the Tribune. Spare us with your delicate sensibilities for a firm that made huge mistakes and deserved what it got. No one is having PTSD-induced nightmares filled with industrial sized shredders operated by puppets with strings being pulled by a maniacal Jeff Skilling (but what a frightening thought). Everyone has moved on in one way or another. Instead, everyone should be grateful.
 

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KPMG Partner Doesn’t Understand Why People ‘Are Dropping Like Flies’

From the mailbag:

Hey Caleb,

Was with a [Midwest city] KPMG Advisory partner this weekend. She said that employees are dropping like flies because KPMG finally unveiled raises after 2 yrs without. Only EP’s were awarded (less than 5%). She said the numbers were in the double digits. What the hell did they expect?


If this sounds a little confusing, it was. We asked our tipster to clarify:

[A]re you saying that she’s under the impression that people are just now leaving because they are upset that they didn’t get raises for two years? And she’s surprised because the raises in the double digits when they were actually in the single digits?

And their response:

[S]he is surprised that so many are leaving especially given the unemployment rate in [midwest city] regardless of how long it’s been since raises were given. It’s not a secret that the other big four have not only given raises but as you report, awarded mid-yr bonus/raises as well.

We went back to some of this year’s KPMG comp threads and the 5% sounds a little suspect, as those rated as “exceptional” were pulling much better increases than that but then again, maybe there were some exceptions that weren’t reported. Also, it seems a little strange that a partner would be so clueless about raises but anything is possible, s’pose.

And as far as the gnashing of teeth because mid-year raises and bonuses are being handed out at other firms, keep in mind that KPMG isn’t even out of their first quarter yet. The rest of those firms have fiscal years that end prior to KPMG’s and they know how the first half of the year is shaping up. Expecting KPMG to start throwing money at people with less than three months in the books is a little ridiculous. At this point, the rumors around the idea of a mid-year surprise should keep you hopeful (but don’t go expecting anything).

It’s been no secret that people have exiting the House of Klynveld (and other firms) – regardless of the unemployment situation – prior to the end of the year (as is typical this time of year). Frankly, people we talk to are pretty optimistic about the job situation for most Big 4 types looking for something new, so this partner may be even more clueless than we thought.

Whatever the case, only 17 shopping days until those left will likely settle for sitting tight through another busy season. If we’re way off base here (or right on the money), feel free to jump in.

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