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Which Big 4 Firm Makes More From Consulting Than Audit and Tax Combined?

Posted on by Adrienne Gonzalez

Did you wake up this morning and think "gee, I really would love to know how much Big 4 firms make from consulting as share of overall revenue!" Boy, are you in luck.

A recent report called Cheques and the City by the non-partisan but totally hater-y High Pay Centre looks at the top accounting and law firms in the UK, showing how an estimated 1,370 top lawyers and accountants were paid over £1 million (about $1.6 million US) in the UK last year.

It also tells us:

  • Of the 4,500 equity partners at the firms analysed (2,726 accountants, 1,774 lawyers), average pay in 2013 stood at £700,000 for the accountants and £1,100,000 for lawyers.
  • The ‘Big 4’ accountants are responsible for auditing 96% of FTSE 350 [the FTSE is a stock index, you xenophobic patriots afraid to learn about other countries] companies. 46 FTSE 100 Finance Directors are former employees of one of the Big 4, while five of the fifteen board members of the Financial Reporting Council, responsible for regulating auditing and accounting practices, as well the development and enforcement of the UK Corporate Governance Code, previously worked for the Big 4.
  • Lawyers and accountants face a potential conflict of interest. On the one hand, they have a quasi-regulatory role, ensuring that markets can have trust and confidence in accounts and contracts. On the other, the firms they scrutinise are their biggest customers and ultimately generate the multi-million pound pay packages for senior partners.

And then there's this (amounts in millions of £):

Do you see what I see? Not only does KPMG make more on consulting than any other service but consulting makes up more than audit and tax services combined (check my math, I'm no accountant). Didn't see that one coming!

The whole report is pretty interesting but that certainly stood out as, er, noteworthy.

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Deloitte, All Out of Cost-Saving Ideas, Launches Project JARED

Thumbnail image for salzberg-barry.jpgWhen we first received the tip about Project JARED we thought that Big D had struck a deal with Subway in order to help you lose those extra pounds you’ve been carrying around.
Unfortunately, “Project: Jointly Address Reducing Expenses at Deloitte” won’t be getting you sandies on the cheap; rather it’s a solicitiation of your ideas for saving the Firm money. Apparently Deloitte is plumb out and needs some help

This is your chance to help make Deloitte fitter and stronger — by contributing your ideas to Project JARED.
Project JARED was launched in the U.S. earlier this year to enable our organization to ‘shape up’ by building organizational muscle ― devoting maximum resources to our people and market opportunities. Hence, Project JARED: Jointly Address Reducing Expenses at Deloitte.
“Jointly is a key word here,” said Tony Forcum, Deloitte Consulting LLP, who leads Project JARED.
“More than 600 partners, principals and directors have already been involved in detailed discussions and input sessions, generating over 1600 cost-reduction ideas. We are certain that opening up the dialogue to all of our people will generate additional insights. We need transformational ideas if we are to reach our goal of permanently eliminating $750 million of costs by FY12. We have made a good start toward our goal. The team has validated more than $120 million in sustainable cost savings from the changes made in FY09,” he said.


Changes have produced savings and improvements in all kinds of ways ― for example, by using our telesuite facilities to reduce business travel, thus not only saving money but also reducing the time everyone spends away from home: a win-win for all.
The Project JARED team is looking for suggestions from those who know the organization best — its people. If you have often thought: “We could save a lot if only we…” now is the time to share your idea. It could be a day-to-day activity, a fresh approach to leveraging technology, an enhancement to a process, a way to change behavior that saves money―all cost-saving suggestions are welcomed.
Visit the Project JARED site to submit your ideas, learn more about the project and ask questions.

This latest plan struck at least one person as dubious and they asked the question on probably everyone’s mind:

Q: Is this just a fancy way of saying we’re going to be losing more jobs?
A: It is impossible to predict the future, but that is not the focus of the project. The organization is casting a wide net for cost savings, looking at tactical savings (printing on both sides of the paper), operational savings (streamlining the process by which work gets done from inception to completion) and transformational savings (transforming some of the ways we do business). All of the decisions we make about Project JARED will be consistent with our core values, brand and strategy.

So “not the focus of the project” should put your concerns to rest, no? And it looks like your bright idea of printing on both sides of the paper is already taken, so don’t bother submitting that one.
Let’s put our heads together gang and figure out how we can save Deloitte money. Should Barry Salzberg stop getting haircuts? Pull the plug on Deloitte University? Give up on training male employees to better understand their female colleagues?
Nothing is too crazy people. Get on this.

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Deloitte Is Super Proud of Their Presence on Linked In

Thumbnail image for Thumbnail image for DTa.jpgOh, and they finally released their global revenue numbers.

Deloitte ended the suspense today, issuing their global revenues for fiscal year 2009 and issuing their “annual review”. For the past couple of months, we were speculating about the holdup since they have historically been issued much earlier.


Most of the comments at that time were taking the under on the revenues and they were right, as Deloitte came in at $26.1 billion. This was down 4.9% but the firm kindly reminds everyone that in local currency, there was actually growth of 1%, thankyouverymuch.

This, despite all the charts on Deloitte’s website showing the drop of 4.9%. Jim Quigley, Global CEO, and going with the local currency figures:

“Achieving positive growth in this exceptionally difficult economic environment was the result of close attention to the needs of clients and a strong commitment to professional excellence by our member firm professionals. Despite the tough economy, we remain focused on our vision to be the standard of excellence and will continue to invest in pursuit of this vision”

In addition to JQ’s assessment, an explanation of revenues by functional area continue to refer to growth while the chart shows decreases in revenues when compared to the prior fiscal year:

Consulting was the fastest growing function at 7.3 percent. Reflecting the challenging economy, both audit and tax were relatively flat against the prior year. Financial advisory services decreased by 6.1 percent from the prior year, primarily due to substantially decreased merger and acquisition activity.

On the chart, consulting was shown to only grow 2%, tax decreased by 5.5%, audit by 6.4%, and financial advisory by 13.8%. So, yeah, a little confusing. Not to mention that all of the charts present this information in what appears to be Enron Beezlebub.

Deloitte presents a whole bunch of additional information that is much larger, including how awesome the firm’s social network presence is:

• Over 75,000 members on Linked In
• Over 11,000 fans of their Facebook page
• Over 2,000 followers on their Twitter feed

And since they knew you were wondering, Deloitte uses 2.59 MWh of electricity per person, which amounts to carbon emissions of 1.31 Mt CO2 per person. Again, since this information is in much larger font, we’ll go out on a limb and assume that it positive news.

Seems like the typical spin, so we’ll take it for what it’s worth. Discuss your thoughts on Deloitte’s numbers and what it’s Facebook status might be in the comments.