As EY continues to hammer out the details of the audit and consulting split, PwC has set its sights on adding EY partners to The New Equation. Lots of EY partners.
In October, PwC Global Chairman and 2012 Going Concern Hottest Accounting Firm Leader winner Bob Moritz told the Financial Times in no uncertain terms that his firm would be stealing as many senior managers as they can get from EY, an extra disrespectful move given the critical talent shortage at that level.
In case EY leadership didn’t read that article in October, PwC is talking to the Financial Times once again and putting EY on notice:
The PwC partners have been urged to help win over executives from rivals, with a particular focus on EY, which is in the middle of a tumultuous decision over whether to split the firm. PwC’s US leadership has told them it wants to attract EY partners with expertise in tax, cloud services, financial crime and environmental, social and governance advice among other areas, one of the people said.
Although PwC has not set a target for the number of people it wants to poach, it has said internally that there is “capacity” to bring in 500 people at partner level in the US in the next 18 months, the people said. Partners brought in from outside, rather than promoted internally, are known as “direct admit” partners.
An EY spokesperson — likely the same one who told FT “they should be worried about us poaching from them” back in October — called bullshit.
“We are hiring more than ever and we are also targeting direct admit partners from other firms,” including from PwC, an EY spokesperson said, adding that 20 US partners had come from PwC in the past 18 months. “Our partners are excited about being leaders of the profession and leaders of their sector, and we are seeing no attrition, period.” [X]
Hilariously, a partner who spoke to FT suggested that if PwC can’t poach, they are happy just to troll EY with the threat of poaching:
One partner said the effort to poach staff from EY extended beyond the US to areas including Germany, France and the Middle East, and even if it failed, it could force EY to pay more to retain the partners that were approached.
“All’s fair in love and war,” the person said. “There’s a concerted effort by us to unseat EY partners, and if we don’t unseat them then at least we disrupt them and push up their cost base.”
Although it hasn’t gone to vote yet, EY Israel has already rejected the very idea of a split, Managing Partner Doron Sharabany told FT that from their point of view “the split will not create benefits.” We haven’t heard much dissent from current partners other than that, though 150 former partners did write a three-page, strongly-worded letter to the firm’s board warning that a split would undermine audit quality and weaken both sides of the business. “The bifurcation could result in neither practice having the size, scale and competence to be truly viable in the marketplace,” it said.
This beef is heating up. Who will win?
PwC targets rival EY in bid to expand partnership [Financial Times]