Consultants Face the Lure of a Listing
Financial Times (08/22/00) Vol. 5, No. 17 p.17; Skapinker, Michael

In the wake of the decision by an international arbitrator that will allow Andersen Consulting to separate from Arthur Andersen, the path is cleared for the consultants to list their business. Andersen Consulting is not the only firm thinking about listing, as KPMG's consulting arm has applied for the right to list, and PricewaterhouseCoopers is contemplating listing its consulting business, while Ernst & Young has sold its consulting business to Cap Gemini. By listing, the consultancies hope to match the riches accumulated by their clients in the software and Internet industries. The accounting firms also believe that listing will make it easier to attain and retain staff, as workers become more and more enamored by share options at dot-com companies. However, there are some professionals who believe that consultancies should not list, because it breaks up the camaraderie of a partnership. For example, Jon Moynihan, chairman of PA Consulting, said his consultancy almost fell to pieces after listing. Joe Nemec, a consultant with Booz Allen & Hamilton, said his company endured a terrible period as a publicly listed company, and that he learned from the experience that "public ownership of a professional services firm did not work." Meanwhile, Vernon Ellis, Andersen Consulting's international chairman, said that no decisions have been made, and that one definite option is to stay just as they are, as the partnership has been good to them. Rivals of Andersen Consulting think Andersen partners will not be able to resist the great wealth that could result from listing. Meanwhile, KPMG moves forward with its effort to list, as a means to attract the best people to the firm.

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