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The sibling rivalry Ever since 1989, Arthur Andersen has been the stodgier sibling to the sleeker, sexier Andersen Consulting. But now, Arthur Andersen must stand on its own. Arthur Andersen seems to be headed for an inevitable confrontation with Andersen Consulting - once its subsidiary, then a fully fleshed-out sibling, and now an adversary. The roots of the split go back to 1952, when Andersen accountants first helped General Electric install an electrical system. Arthur Andersen's consulting subsidiary continued to grow, until, in 1989, the firm was split into two units - Arthur Andersen, which was expected to concentrate on accounting business, and Andersen Consulting, which would do consulting, especially computer consulting. The agreement contained a proviso that the more profitable side would transfer money to the other. The birth of Arthur Andersen Business Consulting However, Arthur Andersen soon found that Andersen Consulting was passing up smaller-niche consulting projects, and mobilized its own business consulting units to take advantage of them. Arthur Andersen became more and more adept at consulting - much to the displeasure of Andersen Consulting. The consulting boom of the 1980s had swollen AC's profits beyond those of Arthur Andersen, and the consulting arm was now transferring money to a sibling it viewed as competition. While in 1997 Andersen Consulting was the world's biggest consulting firm (with revenues of $5.7 billion), Arthur Andersen came in as the 14th-largest ($953 million in consulting revenue). In December 1997, Andersen Consulting filed for arbitration with the International Chamber of Commerce, intending to split off from Arthur Andersen. Arthur Andersen has rejoined that Andersen Consulting, under the partnership agreement, must pay $14.6 billion in penalty fees and a royalty fee for the continued use of the Andersen name. Andersen Consulting claims that, by developing consulting capabilities, Arthur Andersen has voided the 1989 agreement. Changing clientele In the meantime, Arthur Andersen has been buffeted by the winds of change in its home city, Chicago. Many of Arthur's longtime corporate clients have merged or been sold. For example, Arthur Andersen was the longtime auditor for First NBD, from which it received $5 million annually in audit fees. But when Banc One merged with First in June 1998, Andersen was forced to outbid what was then still called Coopers & Lybrand for the hefty audit fee - cutting into Arthur's profits. Out-of-state companies have descended on several other corporate biggies who used to stop by Arthur Andersen annually for their auditing pleasure. These clients include Ameritech, which was snapped up by SBC Communications, and Waste Management, taken over by Waste Services USA (based in Houston). An online future Today, Arthur Andersen, though hardly puny at a size of 70,000+ employees and revenues of over $7 billion in 1999, is surpassed by its erstwhile subsidiary Andersen Consulting. In the meantime, Arthur Andersen hasn't been sitting on its hands. The company has introduced KnowledgeSpace, a gateway to online business information, tools and resources designed to make the Internet more efficient and productive for business users. Online subscribers receive access to many of the formerly proprietary diagnostic tools and insights from Arthur Andersen's "Global Best Practices" knowledge base as well as many other business performance enhancement tools. In June 2000, the company announced its new ProAActive Solutions designed to run on J.D. Edwards OneWorld enterprise software. The new web-based solution brings clients the deep industry knowledge of Arthur Anderson, including the Global Best Practices knowledge base, and more than 15 years of J.D. Edwards' extensive engagement experience. Arthur Andersen is venturing further afield in cyberspace. In January 2000, the company announced plans to form a $500 million venture capital fund called Arthur Andersen Ventures to invest in Internet startups worldwide. While this is the first VC fund in the Big Five to take equity stakes in clients in lieu of fees, it comes at the heels of Andersen Consulting's formation of a $1 billion VC fund in December 1999. Coincidence? Probably not. Though Arthur Andersen partner Jim Wadia admitted that the feuding siblings will likely go after the same companies, he maintained that they will do so for different reasons. As he told The Wall Street Journal, Andersen Consulting is "more into technology services, we're more into advisory services, such as helping start-ups create their own web site." In conjunction with its brand spanking new VC fund, Arthur Andersen unveiled a new logo for the company. The logo features the words Arthur Andersen in bright orange with a sun-like image before the word Arthur. In addition, the company announced that it will devote $100 million to support its new business strategy. Keeping Employees Happy Arthur Anderson was built on strong client relationships. Now the company is learning to be equally committed to its employees. The Growth and Retention of Women (GROW) is new national program designed to recruit, retain, and advance women through integration, career advancement, networking , mentoring, and strategic alliances. On-going programs like these have won Arthur Anderson the recognition as one of the top 100 best companies for working mothers, as listed by Working Mother's Magazine. GROW was iniated with hopes to improve Anderson's own cultural dynamic, as well as client relationships. As a result, partner admissions of women were up 14 percent in 1999 from the previous year.
Insiders who've been through the Arthur Andersen interviewing process say there are a multitude of slots open, from audit to business consulting to financial services. To apply, contact the Director of Recruiting in the office of interest to you. For job listings and office locations, see the firm's web site at http://www.arthurandersen.com under the "career" section. Resumes for these positions are generally accepted on-line, by fax, or by regular mail. The firm tends to shun hard questions, preferring to give behavioral interviews to its prospective consultants and auditors. Typically, Arthur Andersen gives one (sometimes two) screening interviews on campus, conducted by partners. Staff auditors or analysts (depending on whether it is a tax/audit or consultant interview) typically mill around, answering any questions that candidates waiting might have. "They usually don't ask anything stupid," said one recent interviewee. The firm does two-interview rounds on campus for MBAs. The rounds are either with managers, who have been with the firm for five years, or partners, who have been there at least seven, the junior partners. "By the time you have an office visit you already have an offer," says one insider. MBAs say the firm is assiduously recruiting them for its business consulting practice – "just don't screw up and call them Andersen Consulting by accident."
Harsh travel "The travel can be brutal," says a business consultant. "In the interviews they'll tell you three days a week, or four max, but that's just [not true]. Consultants at every level are very much virtual. If you're thinking of taking a job [at Arthur Andersen], don't even bother to get your own apartment. Just keep your stuff at your partner's and save what you'd pay in rent; you're going to be living out of a suitcase. From what I've seen, people often fly out Sunday night and don't leave the client site until Friday at 5, and that's if you're staffed at a city with airport connections." Thank goodness for Brooks! "We keep Brooks Brothers in business," says one consultant. "There is very much a dress code in business. But three years ago they finally started doing business casual Fridays." Another insider mentions that "for the summer in some offices, they've made it a business casual summer. Of course, this screws everyone up, because most of us only have one or two outfits to wear - three at the most, so everyone ends up wearing the same stuff. But it was a nice effort, I think." No bad blood The Arthur Andersen/Andersen Consulting split is the topic of some conversation at Arthur Andersen, though less than you might expect. "Certainly all the people at the senior level, the managers, were watching [the long, slow, painful descent toward arbitration] with interest, and everyone else was talking about it a bit." "We knew it could cost the partners a lot of money," comments one insider. "Basically, they would lose about $100,000 a year, which I think for them is nothing much. At our meetings, the [split] would be discussed, and we would get voice mails on recent developments. We knew the partners were concerned, but to be honest, after a while, the rest of us were sick of the topic." One contact credits firm management with "being very classy about the whole situation. We see articles in the Wall Street Journal and I think we come off very well." "There is no bad blood between Arthur Andersen consultants and Andersen consultants," confirms one insider. "All that stuff is at the partner level." The slowly changing consulting firm The firm is "very old school, which also means that advocacy of minority and female leadership are kept to a minimum." "As a huge firm governed by a smallish elite of profit-sharing partners, AA can be slow to adapt to prevalent trends in the marketplace," advises one contact. "There is definitely a strong sense of hierarchy. While we pick up on trends and sell them on the revenue generating side, on the operations side it seems we seldom practice what we preach." All in all, say insiders, "Arthur Andersen is a great place to get a start on your career. You acquire great skills, both technical and interpersonal, and a great name on your resume." "The firm invests a lot in training and education," says another insider, "which means that they value us, and it's something you can take away with you."
Director of recruiting at office of interest DC
American Management Systems;Ernst & Young Consulting;KPMG Consulting;PricewaterhouseCoopers More Company Profiles For more career information, go to Vault.com ©2000, Vault.com Inc
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