Andersen Loses L.A. Partners, Staff to Ernst & Young
By SAMANTHA LEE and DEBORAH BELGUM
Ernst & Young has hired nine partners and 91 professional and staff members from Arthur Andersen’s Los Angeles office as the hemorrhaging of the troubled accounting firm continues.
The move is the latest development at local offices of the Big Five accountants that have been hiring workers from Andersen over the past few months. Officials at Andersen competitors said they expect more defections to follow.
Eighty of the new hires at Ernst & Young will strengthen its media, entertainment, hospitality, financial and tax practices in Los Angeles, said company spokeswoman Nicole Thomas. Of the group, seven are Andersen partners in L.A.
Officials of the local Andersen office, which had 896 accounting professionals, referred all calls to its Chicago offices. Chicago officials did not return calls seeking comment.
The majority of the employees are expected to land in Ernst & Young’s downtown Los Angeles and Century City offices. “We’re dealing with on-going positioning and space issues,” said Thomas.
Deloitte & Touche’s L.A. office, which has hired 300 Andersen employees in the past several months from Southern California, Arizona and Nevada, announced on May 23 it would be hiring 11 new partners from Andersen to add to its Southern California tax-services operation. Most will work in the firm’s downtown L.A. offices.
“We expected good personnel to be available to us,” says Larry Stern, managing partner of Nanas, Stern, Biers, Neistein & Co., ranked 21st on the Business Journal’s list of accounting firms. “But it seems like Andersen’s employees have formed groups and gone on to other Big 5 firms, bringing their support groups with them.”
Personnel is not the only loss for Andersen. Culver City-based World Restaurant Concepts, operators of the Sizzler chain, recently named Deloitte & Touche as its independent accounting group due to uncertainty about Andersen’s staffing future.
“One of the issues we had is that Andersen has a lot of people who are thinking of moving to other firms,” said Kim Forster, the company’s vice president of strategic planning. “It’s not a function of their work but a state of their Woodland Hills office, which services our account.”