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December 17, 1997updated 03 Sep 2016 7:20pm

ANDERSEN CONSULTING CALLS FOR ARBITRATION

By CBR Staff Writer

The artificial veneer of tolerance which once existed across Andersen Worldwide has now vanished completely amid bitter allegations between the firm’s two rival divisions of staff poaching and breach of contract, and now the consulting division has voted unanimously for independent arbitration to settle the firms increasingly public internal disputes. At a meeting in San Francisco on Tuesday evening, attended by 90% of Andersen Consulting’s 1,124 worldwide partners, the world’s third biggest computer services organization demanded that both Arthur Andersen & Co, Andersen Consulting’s less dynamic accountancy and tax- based sibling, and the two firms joint co-ordinating body, Andersen Worldwide, be forced into binding arbitration to sort out some long running problems. The call for arbitration cites numerous dirty dealings on the part of Arthur Andersen & Co, including the hiring of Andersen Consulting personnel, the use of funds originating from the consulting division to set up a rival business consulting practice within Arthur Andersen, and an aggressive sales and marketing campaign designed to win business for this very unit on the back of Andersen Consulting’s success. Andersen Consulting’s managing partner, George T Shaheen, says that these are all breaches of the formal internal agreement drawn up when the consulting division was formed in 1989. It seems likely, however, that these complaints are merely the wedge with which Shaheen hopes to split the firm, something which the accountancy practice has always been able to prevent with its majority of voting power amongst the 2,700 strong worldwide partners. Shaheen is merely looking after the interests of his own fellow partners who have been consistently more profitable over recent periods than their accountancy practising brethren, but who, under the current set up, have to share their success with the rest of the firm via an annual transfer payment. Andersen Consulting claims to be growing revenues at 20% compared to just 8% for Arthur Andersen & Co. But the accountancy division has always attributed this success to its own initial investment and support. Andersen Consulting’s claim for arbitration has been submitted to the International Chamber of Commerce and the other parties named in the dispute now have 30 days to reply.

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