E&Y are back in consulting

Business E&Y aims to earn $2bn from consulting by 2010 Liz Chong 325 words 3 May 2006 The Times 43 English (c) 2006 Times Newspapers Limited. All rights reserved ERNST & YOUNG'S new consultancy arm aims to attain global revenues of $2 billion (Pounds 1.3 billion) a year by 2010, according to Nick Land, the firm's outgoing UK chairman. The ambitious target has emerged less than a year after the Big Four accounting firm lured Steve Varley from Accenture to lead its return to the consultancy business. In the UK, consulting is expected to yield annual revenue of Pounds 150 million by 2010, Mr Land said. At present the consulting arm has no revenues, although the entire firm earned $17 billion in revenue last year. E&Y is one of three big accounting firms mocked for returning to consulting after a careful exit a few years ago. In 2000, E&Y sold its consulting arm to Capgemini for $11 billion, netting each of its partners Pounds 390,000. At the time, the business had global revenue of $4 billion annually. The sale was prompted by pressure over alleged conflicts of interest in the sale of non-audit services to audit clients. Accounting firms then came under greater scrutiny after the Enron scandal, prompting PricewaterhouseCoopers and KPMG to dispose of their consulting arms, too. Deloitte was the only firm to stay in the business. A crackdown by US regulators did not materialise and KPMG, PwC and E&Y have returned to consulting in the past year. However, the firms avoid using the dreaded term and describe their new arms as "business advisory". They say that they are focused on selling services to audit clients of rivals, neatly sidestepping any worry about conflict of interest. E&Y's targets, if achieved, will catapult it into the top tier of consultancies. Only a few firms, such as McKinsey, Capgemini, Deloitte and Mercer, have annual revenue exceeding $1 billion. Commentary, page 37 (c) Times Newspapers Ltd, 2006