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Here'sCG EY! In May 2000, the purchase of Ernst & Young Consulting Services by French consulting giant Cap Gemini was finalized. The combined firm has pver 57,000 people in offices around the world. The product of a succession of mergers that started in the 1950s, Ernst & Young is more than a century old. The firm's most recent incarnation was created from a 1989 merger of two members of what used to be called the Big Eight professional services firms - Arthur Young and Ernst & Whinney. The rising star of consulting Growth at Ernst & Young Consulting has far outstripped that of the consulting industry as a whole - the consultancy has enjoyed a 35 percent increase in annual revenue for the last few years. While enjoying this success, it has remained a progressive employer, being named to Working Mother's list of the "100 Best Companies for Working Mothers," as well as to Fortune's 2000 list of the "100 Best Companies to Work For." The firm also tries to stay on the lighter side of things with a minister of comedy in charge of quarterly SuperFriday Broadcasts, which provide company-wide updates to E&Y's consultants. The 90-minute shows are broadcast live from a different city each quarter, and can involve anything from a game show to a musical extravaganza. No Bert No doubt the firm's strong growth is influenced by innovations like "Ernie," a popular online consulting service for small businesses. Ernie members pay a membership fee, and then can submit their queries to official Ernst & Young consultants via e-mail. Ernst & Young draws on its consulting expertise, and Ernie-users soon get a reasoned and usable answer. Ernst & Young Consulting also uses Ernie to feature "Trend Watch," a survey of most common concerns and questions. Another of E&Y's consulting innovations is the Ernst & Young Middle Market Consulting group. While most of Ernst and Young's clients are big bruisers that earn over $100 million yearly, Middle Market Consulting takes on smaller businesses hungry to grow. The TaxOmeter was introduced in 2000, and may be the world's first mult-jurisdiction, interactive income tax calculator. People thinking of moving from England to, say, the Isle of Man can plug in their numbers and find out the difference in income tax they would have to pay. Darn Ernst & Young tried to grow bigger in 1998 by merging with competitor KPMG Peat Marwick (as the currently-named KPMG was then called). The planned merger, however, foundered on the shoals of European regulatory concerns. (It didn't help matters that the merger of competitors Price Waterhouse and Coopers & Lybrand was also pending at the time.) The firm brass hopes that the acquisition by Cap Gemini will fare better, but the publicity surrounding the merger so far has been mixed. Both companies have been quietly shedding employees since the fall of 1999. The firm announced in January 2000 that it would lay off 400 people, or 5 percent of the firm's consulting practice, ostensibly to help focus its e-business practice. Company insiders, however, grumbled that the number was closer to 1,000, and that the cuts came in response to Cap Gemini's displeasure at E&Y's bloated payroll. The deal is anticipated to close by October. Cap Gemini currently has two separate subsidiaries doing consulting in the U.S.: Cap Gemini America and Gemini Consulting, whose service industries are beginning to overlap. It remains to be seen how their parent company will integrate the E&Y family into its own. Legal interferences Ernst & Young is engaged in several legal battles, charging the firm with fraud, negligence, and breach of contract. For now, the firm is fighting them but may settle, as it did in 1999, paying $335 million to Cedant Corp. shareholders. In an unrelated move, in 2000 E&Y formed a law firm which, despite its name McKee, Nelson, Ernst & Young, and the funding it receives from the consulting firm, pledges to operate independantly. In July 2001 CEO and chairman Philip Laskawy will step down, to be replaced by Jim Turley.
Ernst & Young Consulting Services has identified five "mega competencies," which include service, culture, people, knowledge, and sales. Each interviewer, insiders tell us, focuses on one or two of these competencies. The typical format to identify these skills goes as follows - "Tell me about a situation where you used your (competency) skill. What was your role? What did you do? What happened? What did you learn from this experience?" Some candidates are also taken to lunch and evaluated during the meal on cultural fit and interest in Ernst & Young, but not everyone. Case interviews are typically used for candidates for Ernst & Young Consulting's Services strategy practice. Neither brainteasers nor guesstimates are employed, insiders tell us. Following the interviews, interviewers meet to discuss the candidate and whether or not to extend an offer. Apparently, the group must reach a consensus, or else no offer is made. In rare circumstances, a candidate will be telephoned if an interviewer has further questions, but the likelihood of this is reportedly slim. Better make a good first impression!
Size does matter With 85,000 employees worldwide and robust growth rates, it comes as no surprise that Ernst & Young's size influences perceptions of firm culture. Says one contact: "I think the takeaway is that the firm is constantly evolving. If you're in a small specialty group, within a year you might find yourself in a totally different organization." The same contact describes moving between working within three different divisions, but "in reality it made not one bit of difference. So things are sort of tongue-in-cheek: 'oh no, here comes another reorganization.'" Ernst & Young's size brings both advantages and disadvantages. On the less positive side, some consultants opine that Ernst is a conservative place. "I think it's a very conservative firm in terms of the way management acts, in the way projects are handled," says one consultant disapprovingly. Another contact notes: "It's a large firm, and if you're ambitious, it can be tough sometimes." The same contact continues, "[Ernst is] great if you want to settle down, but if you want to be making the most money of anyone your age, or if you want to do everything that interests you, you might get frustrated. It's more structured. You get assigned to something and that's your project - hopefully you'll like it, because that's what you'll be doing for a while." Note, however, that the rigid structure reported by those working in U.S. offices doesn't seem to exist in overseas E&Y offices. "In Canada, people do a mix of everything," says one insider, who adds, "In general, U.S. people are much more segmented." Pretty tech Regarding technology, Ernst & Young certainly practices what it preaches. "Technology-wise, they spare no expense, no matter what area," says one. Another agrees: "Technologically, it's extremely advanced. Every time there's a new technology it's on your desk." Another adds: "E&Y is known as having the leading management system made up of huge Lotus notes, and now it's web-based. It's all home grown - it's cool stuff." Going abroad? E&Y insiders tend also to comment on the firm's increasing international outlook and encouraging attitudes towards going abroad. One contact notes that 30 to 40 percent of his office actively chose international assignments, and explains, "It's really encouraged, I guess because of globalization, and they know that a lot of these people would just leave if they couldn't go abroad. It's very easy to transfer between countries." One contact marvels: "On my first business trip ever, I went to Rio!" Another contact recalls an extraordinary assignment: "I went all over the world - you name it, I was there." Lesser pay Pay doesn't seem to be one of E&Y's strong suits. "As for compensation," one contact tells us, "the general pattern is that you make a fair salary, but nothing spectacular." The same individual notes however, that the pay is "good lifestyle money," and that "you'll never have to beg on the floor of a car dealership for a loan." One former E&Y consultant, however, notes that "[for me] to get a big jump in pay, it just would have taken too long." Another ex-consultant says, "The pay was not going to do it for me." Note that, in consulting, there is no overtime and working all night "comes straight out of your salary." E&Y seems to be taking steps to increase its compensation package. The firm, it is rumored, plans to institute a better bonus system to lure candidates away from bonus-happy jobs in investment banking and elsewhere. One contact reminds us: "[E&Y is] recruiting at the top business schools, so they must be willing to pay more." As of 1998, however, the firm has increased salary; E&Y considers itself competitive with other Big Five firms. Consulting festivities Insiders report frequent lunches and regular soirees with colleagues. When asked about firm-organized activities, one consultant responds with a rather unsettling comparison: "There aren't as many as Andersen. I've talked to people there, and it almost seems like they want to make their employees a bunch of alcoholics." While perhaps more subdued than its competitors, Ernst & Young has its moments of frolic. "There's the training and that's a blast," reports one consultant, who elaborates: "Every division has their own form of training. Basically you try and stay awake all day during some kind of class, and then you go out and drink all night." Billables are a drag One object of complaints from consultants is Ernst's "utilization" goals, targets that require consultants to bill 80 percent of all hours to clients. The goals are particularly pertinent for individuals at the lower levels, who focus more on project work and less on business development. While not as rigid or demanding as billable hours targets at law firms, consultants still feel the pressure. "They want you to bill those hours!" gripes one consultant. Another consultant levels particular criticism at the utilization goals: "If you're in consulting, when you're working on projects, there's a lot of down time, and then there's the recruiting and other non-chargeable time. Basically, the expectation is that you'll bill out eight hours a day and then do all the other stuff later, and the fact is that the people with the highest utilizations get noticed."
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