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KPMG sets high consultancy target as accountants rebuild advisory roles

Post a Comment February 4, 2010 – 2:16 pm | Permalink |  Print This Post |

KPMG, the professional services group, plans to treble its consulting revenues to £600 million in the next four years as it attempts to make up ground on its “Big Four” rivals.

The accounting firm, which audits 25 of the FTSE 100 companies, has poached 24 senior consultants in the past three months from competitors such as PricewaterhouseCoopers (PwC) and Deloitte, The Times has learnt. It aims to recruit a further 300 consultants over the next 12 months.

Among the new recruits are Jacky Ross, a former partner in PwC and founder of Counterpoint, a boutique management consultancy, and Peter Willats, a senior adviser for McKinsey. Mark Britnell, a former senior director in the NHS and once tipped to run the health service, joined KPMG as a partner in October.

KPMG sold its original consulting practice to Atos Origin, the IT services group, in 2002. It was one of three of the Big Four — along with Ernst & Young and PwC — to pull out of consulting at that time amid concerns over conflicts in the wake of the Enron scandal and internal disagreements over strategy. Only Deloitte kept its consulting group.

However, the accountants have been rapidly rebuilding their consulting divisions and now are seeking to win work from both top-end strategy advisers, such as McKinsey, and big technology-services and outsourcing suppliers, such as Accenture.

Scott Parker, head of performance and technology for KPMG, said that it began to rebuild its consulting division four years ago and has expanded it to 1,000 staff and annual revenue of about £200 million. However, clients were demanding further growth. “Clients have been asking us to do this,” Mr Parker said.

KPMG expects a rise in demand for consultants as the economy begins to recover from the downturn, particularly for advising companies on restraining costs and improving technology systems. A cost-cutting drive in the public sector is also likely to lead to a boom in fees for consultants, especially from health providers and local authorities.

KPMG’s ambitions mirror those of PwC, which aims to treble consulting revenues to £1.3 billion over the next three years. PwC plans to hire 2,000 new consultants, including 100 partners. Deloitte is also expanding into new advisory practices. Last week it made a surprise move into commercial property by buying Drivers Jonas, one of Britain’s oldest real estate firms.

The accountants’ growth of their advisory divisions will intensify a long-running debate about the independence of their audit practices.