Monday, April 21, 2008

E&Y Shakes Up The Landscape Overseas

Ernst & Young will integrate its 87 national practices in Europe, the Middle East, India and Africa into a single unit, which it calls the "EMEIA Area." At the same time, its Far East partners have approved a similar integration of units in 15 countries and territories.

The Financial Times calls the reorganization "the biggest shake-up of the professional services industry since the collapse of Arthur Andersen."
The 3,330 partners in the affected firms must agree on the changes, and votes are scheduled in May following a roadshow by senior executives. E&Y plans fully to merge its 45 European partnerships into a single legal entity – a practice made possible by recent changes in European regulation but still subject to voting by each partnership. Firms elsewhere will be formally combined where laws permit.

Jim Turley, global chairman and chief executive, said: “The moves reflect the increasingly global nature of our borderless business environment, which is changing the expectations of both our clients and our people – and which requires nothing less than a truly global approach.”

The change will also lay down a challenge to rivals PwC, KPMG and Deloitte to step up their own integration efforts or devise alternatives. Although they are global brands, the four are, in fact, networks of largely autonomous national firms, which has sometimes led to patchy quality.
The head of E&Y's UK practice, Mark Otty, has been nominated to be the EMEIA Area managing partner. David Sun and Jim Hassett will be co-managing partners in the Far East Area.

Here's E&Y's press release, and the story from the FT.

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