Coopers 'hit list' provokes furore: Sixty partners forced to leave after review of accountant's needs

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The Independent Online
A BITTER row has erupted over the publication of a confidential 'hit list' of up to 60 partners who are being forced to leave Coopers & Lybrand, Britain's biggest accounting firm.

At least 15 per cent of Coopers' 690 UK full partners are to go following a comprehensive review of the firm's needs by the recently appointed chairman Peter Smith, although some are leaving voluntarily.

The plan to slim the partnership was revealed by the Independent on Sunday in July.

The publication in Accountancy Age, the trade weekly, of a list of 90 partners who are leaving, culled from an internal Coopers briefing, has prompted accusations by the firm of 'particularily vindictive and malicious journalism'.

The report caused consternation in the firm, according to Coopers sources, as it listed a number of people who did not know they were leaving. But the firm said the position of a number of partners on the list was still under consideration.

Roughly two-thirds of the partners on the list will be forced to retire or leave within the next year, while a further 17 are listed as retiring anyway, for reasons unconnected with the review. These include high-profile figures such as the former Lord Mayor of London and ex-head of audit, Sir Brian Jenkins, and the government consultant and Railtrack director, Sir Christopher Foster.

The firm is refusing to comment further on the list, but insists that some of those listed as leaving are not doing so.

However, it is understood that John Arnold, one of the profession's best-known VAT partners, is leaving, while the position of the company car expert Clive Tulloch is still under discussion.

Another seven partners on the list have announced their intention of resigning to go to other jobs. Clive Pyne, for instance, is to become finance director of Laura Ashley.

According to a Coopers spokesman, a number of partners are considering legal action against Accountancy Age, although none has been launched yet. Mr Smith has written to the magazine's editor accusing the paper of 'invading the privacy of the relationship between the firm and its partners'.

Mr Smith also wrote that the position of a number of partners on the list had not yet been determined. It is understood that the list was part of an internal briefing that was to be circulated to all UK partners.

Coopers' unprecedented cut in partnership numbers represents an acceleration of a trend already affecting all accountancy firms. The top five firms, plagued by huge law suits and the near-impossibility of obtaining professional indemnity insurance, have cut their professional staff on average by 15-20 per cent over the past three years.

Intense competition has also taken its toll, as the practice of 'low balling', or underbidding for audit contracts has destroyed the profitability of the key audit sector.

The only big firm to buck this trend and keep adding staff has been Arthur Andersen, the aggressive Chicago-based group that has led the accountants' expansion into management consultancy and information technology.

Coopers itself has already cut its UK professional staff including partners from 8,562 in June 1991 to 6,942 in June 1994. Coopers' total fee income rose last year by 1.3 per cent to pounds 560m.

A large portion of partners leaving Coopers are former partners in Deloitte Haskins & Sells, which merged with Coopers at the end of the 1980s. One area which has been left relatively unscathed is the Coopers insolvency practice, formerly named Cork Gully, the biggest of its kind in the UK by a big margin.

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