Making a Name in Consulting

Since the new year began, gigantic advertisements have been appearing in the Wall Street Journal and the New York Times, touting the arrival of something called Accenture. According to the Times’ advertising column, we can also look forward to four Accenture ads during the Super Bowl.

Accenture is not a new firm; it’s just a renamed one: It used to be Andersen Consulting. The new name reads as a mushing together of “accent” with “future” into a word that rhymes with “adventure” and features, hovering over the “t” as though it were a pronunciation mark, a “greater than” symbol or angle bracket (see it here) in a usage that I believe is unprecedented and apparently has no actual impact on pronunciation. It just looks cool, I guess.

In some ways this is just another silly name switch, something that happens all the time. For instance, you may also have noticed big ads in the papers announcing that Thomson-CSF has switched its name to Thales–after the Greek philosopher–“a change reflecting the profound transformation of our group,” etc. Accenture is not even the dumbest new name I’ve seen recently–I’d have to give that to Cingular Wireless, born of a merger between SBC Wireless and Bellsouth Mobility.

But the reason for Andersen Consulting’s name change is pretty interesting. It’s also not really addressed in the assorted P.R. hooey that accompanied the Accenture announcement. (“The change to the new name expresses not only what we have become as an organization but also what we hope to be. Our aspiration is to transcend …” blah blah blah.) The change to the new name is actually the end result of what the Wall Street Journal once described as a “bitter global brawl” between and Andersen Consulting and its former companion firm, Big Five accountant Arthur Andersen. And therein lies a tale.

Founded in Chicago by a guy named Arthur Andersen in 1913, the accounting firm had included a consulting unit since the 1950s. By1989, consulting was developing into a lucrative line, and some Andersen practitioners, who were tired of playing second fiddle to a bunch of bean-counters, started quitting. To hang onto this profitable niche, a new structure was devised: Andersen Consulting became a sort of quasi-independent spinoff, which allowed the consultants to make more money but linked them to Arthur Andersen (the accountants) through a partnership called Andersen Worldwide.

But while the at times vague business of consulting–which can mean anything from very specific help implementing technology to broader notions of strategy and advice–was on the upswing, the less mysterious business of performing audits and so forth was not. And so it came to pass that the consultant partners in Andersen Consulting soon generated more profits, some of which were redirected to the (larger number of) accounting partners at Arthur Andersen. And it also came to pass that Arthur Andersen began selling some of its accounting clients advice on technology and strategy issues–consulting, in other words. The consultants seemed to find this development rather annoying.

This all started to come to a head in 1997, when the partners failed to agree on who the umbrella firm’s new chief executive should be, and ultimately the Andersen Consulting crew–led at the time by George Shaheen, who later famously left to head up Webvan, which is another story–announced its intention to bolt. A legal battle ensued and was perhaps most notable for the comedic spectacle of the consulting consultants complaining about certain aspects of the accounting consultants’ consulting.

An odd footnote is that in mid-1998, in the middle of this mud fight, the consulting crew launched a $100 million marketing campaign that included a newly redesigned Andersen Consulting logo. “We want the world to see us as pragmatic visionaries,” Shaheen explained.

Right. Anyway, the Andersen-against-Andersen dispute was thrown before an international arbitrator, who finally ruled late last summer: The consultants were free to wriggle away from their old agreement with the accountants and would not have to cough up anything like the $14 billion corporate divorce payment that the accountants had sought. Instead the consultants would have to pay their former partners a $1 billion fee. And they would have to give up the name Andersen Consulting by the end of 2000.

Now, I’ve managed to make it all the way through this sorry saga without a single joke about consultants handling a corporate crisis in such an absurd manner, so insert your own here. The good news, I guess, is that firms are likely to keep fiddling with their identities. And if there’s any consulting firm that can fairly claim to know thing or two about how to spin a new name, it’s Andersen Consul–. Whoops. I mean Accenture.