Only a year ago, Arthur Andersen LLP still looked like it had a chance. Despite threats by the Department of Justice and rumors that major audit clients like Delta Air Lines and News Corp. were jumping ship, the venerable 89-year-old firm seemed as unlikely to sink as the Titanic. “We will survive,” intoned then-CEO Joseph Berardino at a late-January press conference. “People know us. People respect us.”
The “us” quickly dissolved when Justice Department convictions forced the firm to give up its auditing licenses over the summer, leaving companies around the world scrambling for new auditors while a skeleton crew at Andersen juggled the inevitable lawsuits. Perhaps the saddest aspect of the whole debacle, though, has been its impact on Andersen’s respectable employees as they try to move into new jobs.
Overall, about half of Andersen’s 26,000 U.S. employees were swept into deals with other firms, including some 750 partners and 7,000 staff members who joined other Big Four accounting firms. Hundreds of others are finding out what it’s like to work at a start-up, with ex-Andersen partners heading up new specialty practices like Avail Consulting in Houston or Chicago-based Huron Consulting and hiring scores of former associates.
One former partner, Scott Taub, is on the other side of the table as deputy chief accountant for the Securities and Exchange Commission. A few others became CFOs, most notably Melvin Dick, the partner once in charge of the WorldCom account; he became retailer Coldwater Creek’s finance chief in early June.
But many ex-Andersen employees are unaccounted for. “A lot of people clipped out of there because they didn’t want to be associated with the past,” says Allan D. Koltin, president and CEO of the Practice Development Institute. While some have set up Web sites (Andersenalumni.com and Andersenalumni.net, for example) to help foster links among alumni, no comprehensive, updated database of the firm’s erstwhile staff seems to exist. Traditionally, each office kept its own alumni records, according to former employees, and few were concerned with updating them in the haste to shut down.
In general, employers are more than willing to look past Andersen’s unfortunate finish when making hiring decisions. “There’s no taint,” says Gordon Grand, head of Russell Reynolds Associates’s financial officers practice. “On the contrary, people feel very, very badly for them.” Adds Christina Robinson, a Houston-based executive recruiter for ProStaff Finance & Accounting: “Even people who worked on the Enron account have had tremendous success finding new work.”
Atlanta-based Atlantic American Corp., a holding company for four insurance companies, lavishly detailed former Andersen partner John Sample’s various insurance industry assignments in an April 2002 press release announcing his hire as CFO. Sample, who had spent his entire career at Andersen, had worked with Atlantic through 1999. As a result, “there are few people who know more about Atlantic American, its business, and its people, than John,” said CEO Hilton Howell.
ChoicePoint Inc., Ernst & Young LLP, and Ilex Oncology Inc. made similar disclosures when they hired former Andersen partners to fill their CFO positions. “I have no problem with the Andersen association,” says Brian Rye, an Ilex analyst at Raymond James. “What would have given me greater pause was if they’d gotten someone completely outside the industry.”