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Pricewaterhouse to Buy Booz Consulting Firm

pr0ficient's picture
Rank: Baboon | 119

Sad day for the people at Booz...

From dealbook:

PricewaterhouseCoopers said on Wednesday that it had agreed to buy the consulting firm Booz & Company, bolstering its advisory business.

Financial terms of the transaction were not disclosed, though Booz & Company is expected to be PricewaterhouseCoopers's biggest acquisition in several years.

Still, the union of the two firms is likely to bring scrutiny from regulatory agencies around the world as it again raises the issue of an accounting firm's buildup of consulting businesses that could pose conflicts of interest.

PricewaterhouseCoopers and Booz & Company have taken steps to quell any concerns, according to people briefed on the matter. The two companies are expected to review client matters, with Booz partners expected to drop consulting assignments that conflict with existing auditing clients.

Booz & Company partners are expected to vote on the deal in December, with an update on the merger to come by the end of the year. The people briefed on the matter added that they expected PricewaterhouseCoopers to retain the vast majority of Booz's partners.

Both companies are expected to position the deal as a merger of two global players, with each operating on multiple continents. But PricewaterhouseCoopers reported more than $32 billion in revenue during its 2013 fiscal year, while analysts estimate Booz & Company's revenue at about $1 billion.

By purchasing the smaller firm, PricewaterhouseCoopers will hope to strengthen one of its faster-growing operations. While the firm's assurance arm, including its core auditing business, has reported relatively flat revenue over the last three years, its advisory arm has grown about 23 percent during the same period.

PricewaterhouseCoopers has been rebuilding its consulting arm over the last decade after having sold a previous version of the business to IBM for $3.5 billion in 2002.

Its assurance business now produces less than half of the firm's business, with tax and consulting work each providing slightly more than a quarter of the revenue.

"One of the real strengths of PwC is the scope and quality of our services, giving us the ability to work with a wide range of stakeholders to build trust and solve important problems," Dennis M. Nally, the chairman of PricewaterhouseCoopers International, said in a statement. "Today's proposed merger would only add to that strength."

At the same time, PricewaterhouseCoopers expects to use elements of the consulting business - its strengths in cybersecurity and data analysis, for example - to bolster its auditing operations as well.

The move comes amid what many in the consulting industry expect to be a growing wave of consolidation. Booz & Company had received several expressions of interest from potential buyers over the last year, according to a person briefed on the approaches. But the firm ultimately concluded that PricewaterhouseCoopers provided the right cultural and strategic fit.

"Our goal is to help clients identify and build the differentiating capabilities they need to win," Cesare R. Mainardi, Booz & Company's chief executive, said in a statement. "This potential combination would not only deliver on this innovative value proposition but would also help reinvent management consulting for the next century."

The deal will unite two of the oldest names in their respective businesses. PricewaterhouseCoopers traces its roots back to two London accounting firms founded in the middle of the 19th century, while Booz & Company was founded in 1914 as the progenitor of the management consulting industry.

The latter eventually grew into Booz Allen Hamilton, the government consulting giant that once employed Edward J. Snowden, a former government contractor who leaked classified data about national surveillance initiatives. Its corporate consulting arm was spun off as Booz & Company in 2008 after Booz Allen sold itself to the Carlyle Group, and the two no longer have any connection.

Still, both Booz & Company and Booz Allen Hamilton have increasingly stepped into each other's businesses over the last two years after a noncompete agreement expired.

PricewaterhouseCoopers and Booz & Company declined to give details on how the deal would be structured. But they indicated that various PricewaterhouseCoopers partnerships around the world would have stakes in Booz.

Accounting firms use similar names around the world but are legally separate partnerships in each country, an arrangement that helps them deal with varying national laws regarding firm ownership - and that they cite to avoid liability for the rest of the firms if one of the partnerships is sued because of a failed audit.

http://dealbook.nytimes.com/2013/10/30/pricewaterh...

Comments (206)

Oct 30, 2013

Just read this news on my dash this morning. Looks like PwC is trying to get competitive with Deloitte in the S&O consulting market space.

Is it really such a bad day for Booz though? They were already a tier 2 shop about level with Deloitte. They had no real chance of climbing to the tier 1 level. There's a lot more resources and potential for cross-selling under the PwC umbrella.

Oct 30, 2013
Auditor.John:

Just read this news on my dash this morning. Looks like PwC is trying to get competitive with Deloitte in the S&O consulting market space.

Is it really such a bad day for Booz though? They were already a tier 2 shop about level with Deloitte. They had no real chance of climbing to the tier 1 level. There's a lot more resources and potential for cross-selling under the PwC umbrella.

Having interacted with PwC (and Booz) through on campus recruiting, I feel that PwC is at the bottom of the barrel. I have never been so unimpressed by a group of consultants.

On a side note, I actually received an Associate offer from Booz on Monday. Luckily I had multiple offers and had already made up my mind to work at another firm, but it will be interesting to see what happens.

Oct 30, 2013

Would you mind elaborating on why do you feel that PwC is at the bottom of the barrel?

Nov 3, 2013

What school does PwC consulting and Booz recruit from?

Oct 30, 2013

sad.

Oct 30, 2013
animalz:

sad.

Oct 30, 2013
Discounted Cash Bro:
animalz:

sad.

Oct 30, 2013

Yes Auditor John. It is a terrible day. Do you think they have a chance of getting to "tier 1" under the umbrella and horrible culture of an accounting firm? They had a good brand as an independent, being part of a "tier 3" accounting / IT company doesnt help the people that are working there. Expect a lot of the top people leaving.

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Oct 30, 2013

I don't expect them to be on par with MBB regardless of whether they merge with PwC.

Deloitte is also an accounting firm, whose consulting practice is generally regarded as tier 2. Do you not think PwC merging with Booz has a reasonable chance of moving to parity with their competitor?

Oct 30, 2013

Sure it helps PWC. But all the good people at Booz are probably looking for jobs as we speak. Im interested in knowing how many top performers Monitor was able to retain too.

Oct 30, 2013

Disagree. In my opinion Booz was below the MBB but at the level of the ATK,OW,LEK (if not the best) all of which are a huge gap above the Big 4. I would be so annoyed if I worked at Booz right now. Guaranteed they have tons of jr. level employees leaving.

Here is a banking analogy for you. Booz is like a Moelis/Greenhill/Lazard/Jefferies etc. Its no BB but those boutiques are still legit. Its like Deloittes financial advisory services buying Lazard and saying its not a big deal. Its a huge deal and employees at Lazard would jump ship.

This will huge recruiting and employee retention. Mark it.

    • 2
Oct 30, 2013
ke18sb:

Disagree. In my opinion Booz was below the MBB but at the level of the ATK,OW,LEK (if not the best) all of which are a huge gap above the Big 4. I would be so annoyed if I worked at Booz right now. Guaranteed they have tons of jr. level employees leaving.

Here is a banking analogy for you. Booz is like a Moelis/Greenhill/Lazard/Jefferies etc. Its no BB but those boutiques are still legit. Its like Deloittes financial advisory services buying Lazard and saying its not a big deal. Its a huge deal and employees at Lazard would jump ship.

This will huge recruiting and employee retention. Mark it.

+1

Oct 31, 2013

Thanks for the analogy, because I was lost.

Nov 21, 2013
ke18sb:

Disagree. In my opinion Booz was below the MBB but at the level of the ATK,OW,LEK (if not the best) all of which are a huge gap above the Big 4. I would be so annoyed if I worked at Booz right now. Guaranteed they have tons of jr. level employees leaving.

Here is a banking analogy for you. Booz is like a Moelis/Greenhill/Lazard/Jefferies etc. Its no BB but those boutiques are still legit. Its like Deloittes financial advisory services buying Lazard and saying its not a big deal. Its a huge deal and employees at Lazard would jump ship.

This will huge recruiting and employee retention. Mark it.

Deloitte acquired McColl to boost its corp fin group and many of the top guys stayed. They seem to be doing well, thus far (though, if your hypothesis holds true, the Big 4 culture will drag on the performance more and more going forward).

Not saying Lazard is equal to McColl, but there is something to be said for security (less turnover in down years) and possibly higher up front salaries. That being said, the bonus structure is where IB and consulting firm mentality clashes w/the Accounting side.

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Oct 30, 2013

It sucks. We're steering towards having three types of firms: Mega-firms like PwC, Deloitte, Accenture, MBB, and ultra boutiques. Seems like that middle level, like Booz, Monitor, etc. are struggling to survive in the current market.

It makes it tougher to get a strategy focused job for those that want one. Sure, you can go work at PwC Booz, but have fun on the two-year implementation project between your two Booz partner sold strategy projects.

Can't imagine anyone taking a Booz offer this year unless it's all they have.

Oct 31, 2013
BGP2587:

It sucks. We're steering towards having three types of firms: Mega-firms like PwC, Deloitte, Accenture, MBB, and ultra boutiques. Seems like that middle level, like Booz, Monitor, etc. are struggling to survive in the current market.

It makes it tougher to get a strategy focused job for those that want one. Sure, you can go work at PwC Booz, but have fun on the two-year implementation project between your two Booz partner sold strategy projects.

Can't imagine anyone taking a Booz offer this year unless it's all they have.

Exactly the same conclusion a column at the Financial Times arrived at. Good one.

Oct 30, 2013

Realistically, I'm not sure what long-term benefit this even provides PwC. After all, consulting relies on consultants, and if the Booz employees leave, which I think they will (apparently this has been the case with Monitor as well), then pretty soon Booz will just be a name that PwC puts on its marketing material. After a while, the name won't mean much either.

So why buy and go through the issues of integration? I think it would make more sense to just poach senior people and build organically...

Oct 30, 2013

They're basically poaching the entirety of their senior staff at this point. The regulatory discussions are still ongoing in terms of separating current Booz clients from existing PwC audit clients, so I'm sure some of those guys will buck, but the other ones will stick around.

In terms of integration, PwC is giving their consultancy partners extreme freedom in terms of building their practices right now. It's not even remotely close to the kind of rigid structure you would expect from the tax or audit practices. The advisory guys are basically moving into undeveloped marketplaces and just being told to win business and given the freedom to do so.

Oct 30, 2013

Except most of the senior staff isn't going to stay. As someone else mentioned, that's exactly what happened with the Deloitte-Monitor buyout. A good portion of Monitor partners left to other firms, including MBB and LEK. In some extreme cases, LEK got to often new offices made up entirely of ex-Monitor partners.

A lot of the Booz partners (and entry level consultants) will not want to be part of PwC. There's even a bigger gap in prestige between PwC and Booz than there was in the Deloitte-Monitor case.

So it's far from clear what value this will bring to PwC.

Oct 30, 2013

I got a buddy who is with PRTM (acquired by PwC) and he said most of the guys he knew from PRTM stayed. He also says he works with a lot of great people from Diamond..so not sure everyone will necessarily jump ship but certainly some may.

Oct 30, 2013

Monitor people all scrambled and the people who stayed in consulting went to MBB or LEK and maybe one or two others. the same thing is probably gonna happen here, except PwC is much worse than Deloitte S&O was so this is most likely a lot worse haha. I would be furious if I'd just accepted an offer at Booz, sorry friends

Oct 30, 2013

Got passed up for PwC MC full-time offer a few weeks ago. At the time, I was pretty underwhelmed with the entire recruiting experience and the recruiters I interacted with. They persistently brought up the fact they PwC acquired Diamond most likely to attract the people who were interested in strategy. My interviewer was (somehow) a manager who seemed like he was more nervous than I was.

I would have been pretty happy with the offer considering my below average GPA. After this news and reading the rest of this thread, I'm really not sure how I feel about getting passed up.

Oct 30, 2013

Love all the butt hurt on this thread, most of which uses "just 'cause" as an argument, as all prestige arguments do.

Big 4 accounting firms have their commodities like audit, and their lucrative "advisory" lines (read: consulting in post-SOX world). So obviously makes sense for PwC.

Deloitte bought the gov't consulting arm of a larger firm a few years back, though the name escapes me. And smaller firms are gobbled up fairly regularly by the Big 4. In other words, they have some data points to work with and probably don't think the entire Booz headcount is going to jump ship, as many of you seem to think. Time will tell.

Oct 30, 2013

This is a big deal outside of the US, where PwC actually does real Strategy work and competes with Booz (somewhat). As for PwC US, this won't have much of an impact.. too much regulatory crap for Big 4 firms to ever really compete with real strategy houses, most will jump ship.

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Oct 31, 2013

From my understanding, the name "Booz & Co" will cease to exist - could anybody shed some light on this?

Oct 30, 2013

Huge win for PwC, at least from the perspective of vying to be top of the Big 4 game. PwC already kills Deloitte in Audit, and this seems like a counter to Deloitte's purchase of Monitor. The gap keeps widening between DT/PwC and EY. (KPMG is far behind).

Oct 30, 2013
rhen:

Huge win for PwC, at least from the perspective of vying to be top of the Big 4 game. PwC already kills Deloitte in Audit, and this seems like a counter to Deloitte's purchase of Monitor. The gap keeps widening between DT/PwC and EY. (KPMG is far behind).

you work at PWC Audit?

Oct 30, 2013
animalz:
rhen:

Huge win for PwC, at least from the perspective of vying to be top of the Big 4 game. PwC already kills Deloitte in Audit, and this seems like a counter to Deloitte's purchase of Monitor. The gap keeps widening between DT/PwC and EY. (KPMG is far behind).

you work at PWC Audit?

Actually no, but I am an auditor (for now) so I have to be objective :)

Oct 30, 2013

RIP Booz. Good move for PwC.

Oct 30, 2013

The value this will add to PwC is very clear. Pure strategy consulting is a declining industry. Even now about 65% of the work Mckinsey do is operational. Clients no longer want to receive a fancy leather bound report that doesn't cause any actual change to their business. They want the strategy to be executed as well.

PwC has good implementation consulting experience across a range of areas: operations, people & change, technology, finance, risk, deals etc. They can now offer their clients a one stop shop for strategy right through to execution. This means big wins, large scale transformations = big fees...a great strategy in my oppinion.

In the next 10-15 years or so the consulting industry is expected to consolidate into 4-5 major players. This is exactly what we're starting to see now.

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Oct 30, 2013

I agree with this. And truth is, although the prestige is higher at the MBB firms, there is ton of money/pipeline in not so exciting implementation/ops works and companies like McKinsey are losing out to some big 4 firms like PwC and Deloitte sometimes. I am in healthcare at a big 4 and specifically we have been winning against the MBB firms often because they just often can provide people with the experience in certain fields. You can have a Harvard MBA but if you have limited technical experience its pretty risky for the client to hire you...especially when lack of technical expertise is usually the reason they are hiring us.

Oct 31, 2013
HealthcareConsultant:

I am in healthcare at a big 4 and specifically we have been winning against the MBB firms often because they just often can provide people with the experience in certain fields.

you're probably a lot cheaper, too

Oct 30, 2013

I agree that strategy is a loss leader these days. But your argument rests on the assumption that they'll get to keep the majority of Booz partners. That's the majority of what they're paying for, and I'm not so sure PwC will be able to keep that many.

    • 1
Oct 30, 2013

At large firms, a large account has dozens of partners trying to sell work from all different angles. When they sell it, they staff it with people they know. That's what Booz people will do. It's not like partners will suddenly find themselves redundant and ex-Booz people working in Energy suddenly get force staffed on some people change initiative with Government next day.

Oct 30, 2013

I obviously can't give you a full run-down of how many partners left, etc. I don't know. But there are anecdotes from people who work at Deloitte S&O (who can speak to the status of the acquisition/integration) and people who work at other firms who've seen partners come from Monitor.

The extreme example I was talking about was LEK's Seoul office--basically all partners are ex-Monitor guys. (http://www.lek.com/offices/seoul). While this is by no means representative of all ex-Monitor partners, I do think there was a high number of Monitor partners who did not join Deloitte. I think same will happen with Booz.

And I agree that prestige isn't what's driving it. It must be driven by either:
a) Preference for strategy-focused firms; the pure strategy partners don't want to join a multi-disciplinary firm like Deloitte/PwC, who not only strategy but also tech/SI, etc.

OR

b) Preference for smaller firms

And I think prestige is correlated to both. More prestigious firms are more strategy-driven firms. And pretigious firms also tend to be smaller, especially when in comparison to Accenture/Deloitte/PwC.

Also although Deloitte "gave autonomy" to Monitor, they have to get used to the new firm. At least according to several Deloitte S&O friends of mine, there has been quite a clash of cultures between S&O people and Monitor people. The point being that there's only so much automony you get when your firm is getting bought out by another firm. The bottom line is that you still follow the rules of the new firm.

Finally, and this is more out of curiosity than anything else, but how can Tier 2 firms promise higher pay than MBB when MBB fees are much higher than the 2nd Tier firms? One partner can take on only so many projects at a time...

    • 1
Oct 31, 2013
pnb2002:

Finally, and this is more out of curiosity than anything else, but how can Tier 2 firms promise higher pay than MBB when MBB fees are much higher than the 2nd Tier firms? One partner can take on only so many projects at a time...

leverage.

e.g., more underlings per partner.

you can make a lot by:
(1) selling a few units at a high price
(2) selling many units at a low price

units, in this case, are your consultants/associates

Oct 31, 2013

But within strategy practies, consultants/associate salaries (i.e. costs to partners) are not that different. In fact, at the MBA level, some big4/accenture firms pay more than MBB to get them to take the over.

So, given that the unit price of one consultant/associate hour is similar, the only way a Big4 strategy partner can over come the differential in fees is by selling many times the project MBB guys do. But I'd imagine one partner can take on only so many projects before he's spread too thin. That's why I don't get it.

It makes total sense that Big 4 tech/implementation partners would get paid more because teams are bigger, and they can charge the clients more. But if we're talking strategy projects, the team structures would basically be the same across the firms.

    • 1
Oct 30, 2013

Partners can sell as many projects as they want. At Big 4 type they are not expected to sit down at client site 5 days a week. They can also get paid more thru bonus structure, etc. Not to mention implementation projects are longer, thus higher fee.

Also your Seoul example is similar to group poaching rather than people getting unhappy and jumping. PWC doesn't care much about the prestige concerned recent hires anyway. They all are sitting there cooking up their exit plans, whether they are in MBB or Deloitte or wherever.

Oct 30, 2013

PwC's issue is that they're trying to grow at way too fast a pace. In addition to the Diamond and PRTM acquisitions, they've done a number of smaller ones in the past few years (Ant's Eye, for example). And yet with each acquisition I don't see them going any further up the unspoken league tables, either in reputation or in the deals they're bringing in. It's a great place for some people who are happy to slowly climb the ladder by punching in their cards and going through the motions. Not so much for someone who wants to be a high-baller and definitely not a lucrative stepping stone for MBB-level consulting.

Currently: future psychiatrist (med school =P)
Previously: investor relations (top consulting firm), M&A consulting (Big 4), M&A banking (MM)

    • 1
Oct 31, 2013

PwC has been climbing up the rankings in Vault ever since it started investing in it's consulting practice back in 2009. It's now at no. 5 in the 2014 rankings. Since it now has bought Booz this would make it number 4.

Whether the Vault ranking system is as a reliable source is debatable though. It seems to be widely used. Would be interesting if anyone has any other rankings?

Also - I can't comment on the US practice but I am aware of several people in the UK who left PwC to join MBB.

Oct 30, 2013

My experience was PRTM and Diamond integrated well, and their methodologies have been implemented now. I'm seeing their work show up. Part of me believes this is because PwC's practice is relatively new and open to integrating the best practices from these firms. I hope Booz & Co is the same way.

Bit of a rant, but something people should keep in mind (along with my biases).

TT

    • 1
Oct 30, 2013

What does this mean for Ernst & Young Advisory? Will they look to make a purchase to keep up? Are Deloitte and PWC going to end up being the big 2?

Oct 30, 2013

thats such a slap in the face. imagine having to put on your resume "formerly known as booz"

"The cheaper the crook, the gaudier the patter"

Oct 31, 2013

oh how terrible it must be to loose all that presteej

Oct 31, 2013

If I were a student in college, I'd be hesitant about joining a tier 2 management consulting firm. First Monitor and now Booz. Companies like Booz / Monitor have difficulties competing with the Big 4 because they don't sell annuity / long-term implementation projects. At the same time, new consultants join Booz / Monitor to partake in strategy projects and to avoid monotonous ERP implementations. I'm really starting to believe that corporate strategy at the F500 is the better option if you can't get into MBB. The whole appeal of consulting, i.e., a diverse array of projects across multiple industries, doesn't necessarily apply with most Big 4 consulting.

Oct 31, 2013

Based on the tone of this thread, it sounds like Booz Allen's name will be phased out to PwC. Is this confirmed? Is the name going away, too? Booz Allen is huge here in the D.C. area, especially in Tysons Corner. The news is kind of shocking--I've had dozens of clients who worked at Booz Allen and the firm is a staple of our area.

Oct 31, 2013
DCDepository:

Based on the tone of this thread, it sounds like Booz Allen's name will be phased out to PwC. Is this confirmed? Is the name going away, too? Booz Allen is huge here in the D.C. area, especially in Tysons Corner. The news is kind of shocking--I've had dozens of clients who worked at Booz Allen and the firm is a staple of our area.

Wrong Booz

Oct 31, 2013
Black Jack:
DCDepository:

Based on the tone of this thread, it sounds like Booz Allen's name will be phased out to PwC. Is this confirmed? Is the name going away, too? Booz Allen is huge here in the D.C. area, especially in Tysons Corner. The news is kind of shocking--I've had dozens of clients who worked at Booz Allen and the firm is a staple of our area.

Wrong Booz

Ah thanks.

Oct 31, 2013

unfortunately I can't confirm where I'm getting my figures (trust that it's a very reliable data source) but for reference in the past ~11 months since Deloitte acquired Monitor ~150 of Monitor's 1,200 employees have jumped ship. At least 25 have gone to each of the MBB and another 25 or so to LEK. The rest are spread over OW, Booz and then other small boutiques (Parthenon, Mars, etc.).

I would expect that the rate of departures will be greater at Booz given it's PwC.

    • 1
Oct 31, 2013
harvardgrad08:

unfortunately I can't confirm where I'm getting my figures (trust that it's a very reliable data source) but for reference in the past ~11 months since Deloitte acquired Monitor ~150 of Monitor's 1,200 employees have jumped ship. At least 25 have gone to each of the MBB and another 25 or so to LEK. The rest are spread over OW, Booz and then other small boutiques (Parthenon, Mars, etc.).

I would expect that the rate of departures will be greater at Booz given it's PwC.

In not sure that number is significant. You need to compare that number to the previous years 11 months attrition rate at monitor. Another good number to compare would be delottes 11 month attrition rate.

Also if you look at the math.
150/1200= 12.5% over 11 months

Assuming the per a month attrition is the same,
12.5%/11= 1.14% per month

Therefore the average time before leaving would take
1/1.14%~ 88 months= 7.333 years

I think the average consulting firm's turnover is around 5-10 years since most people besides the junior staff stick around for a while. If those numbers are correct, I might conclude the merger didn't affect retention.

Oct 31, 2013

double

Oct 31, 2013

totally right about needing to compare vs. prior years for significance...while i don't have the comparison number for previous years the above numbers are ONLY for people who left to go to other consulting firms...they don't include people leaving for corporate jobs, MBAs, etc. ~150 people leaving to go to other consulting firms is actually quite meaningful...that's primarily people jumping ship. In most years at any consulting firm while there are sometimes partners and some mid / senior level folks that move to other consulting firms it's actually not that common. So ~150 people leaving Deloitte Monitor for MBB, LEK, OW, et al is significant.

    • 1
Oct 31, 2013

One thing I will say about the Monitor acqusition by Deloitte was the lack of intregation between the two groups. I have heard there is a brick wall between the Monitor projects and Deloitte which has kept Monitor people doing the kind of work they enjoy and less in the Deloitte politics.

Do you think the same will happen with this Booze acqusition? or is the work between Booze and PWC to similar where keeping a wall would be very difficult.

Oct 31, 2013

Hi - long time lurker on WSO here. This is the first time I've felt I could add significantly to the community, so here goes.

Background: Ex PRTM consultant that was part of the acquisition by PwC (non-US office). FWIW, I've moved on to other things.

Almost everyone at PRTM joined PwC when we were acquired. There were a few reasons for this, the main one being the fact that PwC offered generous retention bonuses to all employees (especially the partners). Another reason was the fact that its very easy to claim that you can just move to another firm with more prestige - in reality this move takes some time to execute. Finding a new job is one issue, but more importantly, as you move higher up, you care a lot less about prestige and more about the kind of work you will do and whether the team you are joining is the right fit. I agree with @moosen - at the partner level, most people are more worried about flexibility and pay than prestige.

PwC is a different animal to strategy firms. I think most of the junior Booz team will be frustrated by day to day issues like bureaucracy and paperwork required while approaching clients and executing projects, restrictions on flights (no more business class) and oddly enough email (PwC still uses Lotus Notes). They will however still stay for at least a year because of reasons highlighted above.

Once the retention bonuses are paid out, I expect most people to try to move and by then they would have had enough time to source another job. At the partner level, a lot of the partners will be pissed off by restrictions, have territorial fights over common clients but in spite of all odds still stay because at the end of the day, money talks.

If you are still in school, all I would say is apply to as many firms as you can and make the best of what you have on hand at the end of it. Life isn't linear and you will have more opportunities as you progress through your career. As an anecdote, one of the senior partners in the territory where I worked who will probably end up being king of the consulting castle as a result of this acquisition didn't go to a target school and didn't have the greatest job starting off.

Best of luck to all job aspirants out there.

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Oct 31, 2013
DesiBandar:

Life isn't linear and you will have more opportunities as you progress through your career. As an anecdote, one of the senior partners in the territory where I worked who will probably end up being king of the consulting castle as a result of this acquisition didn't go to a target school and didn't have the greatest job starting off.

Best of luck to all job aspirants out there.

This is gold. Thanks for sharing your insights on this. Thou it may take some time for the younger members to digest and comprehend your message here.

    • 1
Oct 31, 2013

it's a competitive move against the acquisition of monitor by Deloitte and the fast growth of EY in the core activites of Big4. Having a strong consulting arm also brings a lot of synergies for the rest of the practices (e.g. leveraging the experience of an operational expert in a specific industry ca help you win a due diligence project for example)

    • 1
Oct 31, 2013

Those synergies are the exact reason Booz ppl will not want to be with PwC. S&O is on another level than PwC and now with Booz&Co, PwC is closer but not much since their strategy is still Big 4 focused. Also EY is a joke in consulting.

Oct 31, 2013

Ok Im happy to give you an opinion of PwC as I am now a former employee of their Consulting group (M&A/Strategy specifically). PwC is a confused company that has just made acquisitions over the years and no one knows anything about what the company offers (including employees). If Booz&Co is fully integrating with PwC this is not going to end well b/c most of the Booz ppl are in for a rude awakening with PwC. The company is much larger and PwC believes their success lies in integrating their consulting and accounting groups together (e.g leveraging consulting and tax ppl to help a client's accounting/back office). This is not Booz&Co strength and with PwC still being audit, a full MC strategy is hard to implement.

The company as a whole is going to see alot of turnover in the near future based on the direction they take this acquisition. If they move toward more strategy, the bulk of PwC Advisory will not fit with that model since 95% of PwC Advisory is currently IT integration, operational efficiencies for back office, and finance/tax reorg.

Just my two cents and ask any questions you want.

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Oct 31, 2013
hockey1316:

PwC is a confused company that has just made acquisitions over the years and no one knows anything about what the company offers (including employees). If Booz&Co is fully integrating with PwC this is not going to end well b/c most of the Booz ppl are in for a rude awakening with PwC. The company is much larger and PwC believes their success lies in integrating their consulting and accounting groups together (e.g leveraging consulting and tax ppl to help a client's accounting/back office).

If they move toward more strategy, the bulk of PwC Advisory will not fit with that model since 95% of PwC Advisory is currently IT integration, operational efficiencies for back office, and finance/tax reorg.

Can also attest to this, especially the statement about PwC being confused. Don't want to go on a rant about internal protocols but some of the BS I've heard spewed at office-wide meetings have not gone over well for my impression of the US practice at least. Overseas it might be a different beast, and I'm not in a position to speak to that. Also agree with the fact that most of their "advisory" is a mishmash of their other LoS as opposed to pure management consulting, which is the big reason why they will never be quite what Deloitte S&O is + despite their size, will never touch MBB.

Also, you'll notice that many Diamond/PRTM consultants (plus their other acquisitions) will stay for 1-2 years after the acquisition to get their retention bonuses (and it does say a bit about their adaptability in new situations). Then they'll leave for greener pastures. Especially juniors who may have been hoping to use the PRTM/etc. name as a launchpad for better jobs....

Currently: future psychiatrist (med school =P)
Previously: investor relations (top consulting firm), M&A consulting (Big 4), M&A banking (MM)

Oct 31, 2013
chicandtoughness:

Also, you'll notice that many Diamond/PRTM consultants (plus their other acquisitions) will stay for 1-2 years after the acquisition to get their retention bonuses (and it does say a bit about their adaptability in new situations). Then they'll leave for greener pastures. Especially juniors who may have been hoping to use the PRTM/etc. name as a launchpad for better jobs....

People like this who pretend to know (but don't) need to stop posting. Greener pastures? Use PRTM as launching pad for "better" jobs?

How can you "agree with the fact that most of their "advisory" is a mishmash of their other LoS as opposed to pure management consulting" while putting down you were in management consulting at Big 4 in your signature?

A current ex-PRTMer (now PwC) here. Do not pay attention to what this guy says. As some other people (who actually sound like they know what they are talking about) pointed out earlier in this thread, most people stayed after acquisition. And no, there won't be a massive exodus after 1 - 2 years as this person claims.

Oct 31, 2013

Agree with PRTM. I worked at PRTM / PwC for 4 years after my MBA and left last summer for a new opportunity.

PwC kept PRTM and Diamond separate from a lot of the Advisory activities that many have discussed here (IT implementation, back office improvements, etc). Retention was and is quite good. Of course the retention bonuses helped initially but those have been over for a year now and retention is still quite good.

There are quite a few different niches within Advisory. Salary, qualifications, type of work, etc. vary greatly across the different work areas. The confusing part lies in the fact that titles are often the same across functions. For instance, in some Advisory areas, Sr. Consultants are 24-26 years old without MBAs or advanced degrees. However, when PRTM joined PwC, most of our Associates (recent MBA grads) came over as Seniors. The pay, types of projects and level of responsibilities was not in the same ball park.

Undergrad consultants who worked in M&A, Financial Services, Technology, etc at PwC are probably not in the best position to comment on what the PRTM/Diamond and ultimately Booz pieces of PwC Advisory do. There are no hard fire walls but unless things have changed radically, most of the PRTM and Diamond work is separate from other Advisory areas.

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Oct 31, 2013
PRTM:
chicandtoughness:

Also, you'll notice that many Diamond/PRTM consultants (plus their other acquisitions) will stay for 1-2 years after the acquisition to get their retention bonuses (and it does say a bit about their adaptability in new situations). Then they'll leave for greener pastures. Especially juniors who may have been hoping to use the PRTM/etc. name as a launchpad for better jobs....

People like this who pretend to know (but don't) need to stop posting. Greener pastures? Use PRTM as launching pad for "better" jobs?

How can you "agree with the fact that most of their "advisory" is a mishmash of their other LoS as opposed to pure management consulting" while putting down you were in management consulting at Big 4 in your signature?

A current ex-PRTMer (now PwC) here. Do not pay attention to what this guy says. As some other people (who actually sound like they know what they are talking about) pointed out earlier in this thread, most people stayed after acquisition. And no, there won't be a massive exodus after 1 - 2 years as this person claims.

White Knight DickFuld:

Leave her alone tough guy. She is the hottest woman on WSO and is smarter than your dumbass. Did you go to the best engineering school in the world? Didn't think so.

Nov 3, 2013

Ok lets talk. 1) I just left PwC and worked with PRTM ppl on a # of projects and also worked with ppl who worked on the PRTM integration. Many PRTM people left and those that stayed are yes now absorbed in PwC for the most part (yes some firewalls are up).

2) What group you work in b/c you cant honestly believe PwC Advisory is anything more than tech implementation and DD for tax clients on finance projects with a little sprinkling of operational projects that usually handcuff the aforementioned projects. I was in the strategy group specifically and we spent most the time on these type of projects hence why I left.

3) Learn not to discredit someone's opinion just because you are currently stuck at PwC waiting to fill out your next PFF hoping you get promoted to manager so you can get your bump to 100K salary at the ripe old age of 28-30 if your lucky and get to travel M-Th and leave your friends and family far away.

Oct 31, 2013

C&T is some first year analyst who quit consulting cause she couldn't cut it (or in her words, didn't do enough important work).

Oct 31, 2013

There are other reasons I left besides not doing enough important work. One of the reasons being not given any work at all due to shitty dealflow, but anyways.

I was recruited by and worked with PRTM guys on quite a few (if not most) of my assignments. There's some firewall there but (depending on your office/LoS) not entirely separate. I may have painted with too large of a brushstroke but I definitely know people who stayed a year and then left.

PRTM:

How can you "agree with the fact that most of their "advisory" is a mishmash of their other LoS as opposed to pure management consulting" while putting down you were in management consulting at Big 4 in your signature?

Would it make you feel better if I put down "mishmash of advisory services at a Big 4" instead? While I'm at it, I'll put down "glorified copyeditor/number-cruncher at a boutique i-bank" as well.

Currently: future psychiatrist (med school =P)
Previously: investor relations (top consulting firm), M&A consulting (Big 4), M&A banking (MM)

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Nov 3, 2013
chicandtoughness:

There are other reasons I left besides not doing enough important work. One of the reasons being not given any work at all due to shitty dealflow, but anyways.

I was recruited by and worked with PRTM guys on quite a few (if not most) of my assignments. There's some firewall there but (depending on your office/LoS) not entirely separate. I may have painted with too large of a brushstroke but I definitely know people who stayed a year and then left.

PRTM:

How can you "agree with the fact that most of their "advisory" is a mishmash of their other LoS as opposed to pure management consulting" while putting down you were in management consulting at Big 4 in your signature?

Would it make you feel better if I put down "mishmash of advisory services at a Big 4" instead? While I'm at it, I'll put down "glorified copyeditor/number-cruncher at a boutique i-bank" as well.

Miss you chic

Oct 31, 2013

I'm a former consultant now working in PE. Monitor and Booz resumes have been flowing in at an incredible rate (mostly for analyst and post-MBA positions). People are desesperate to jump ship....

Oct 31, 2013

Just want to say, this is a really interesting thread - thanks for the comments all, especially those who have worked at or with these firms.

Nov 3, 2013

Any day where some arrogant 23 year olds get knocked off their prestige tower and actually have to find happiness in their own lives and not just in the firm name they work for - that's a good day.

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Nov 3, 2013

The Booz guys are in for a rude awakening with this since PwC's prestige is not even close to as good.

O well

Nov 3, 2013

For undergrads PWC also seems to recruit from top places. C&T and someone else I know are good examples.

Nov 3, 2013

Didn't know about MBA, thanks for that insight. I was speaking solely about undergrad.

@abacab - PwC didn't recruit at my target and hasn't for many years. I applied online.

Currently: future psychiatrist (med school =P)
Previously: investor relations (top consulting firm), M&A consulting (Big 4), M&A banking (MM)

Nov 4, 2013

AeroAg do you know PwC partner comp?

Or time at each level as compared to PRTM?

Nov 5, 2013

So...if you hypothetically had an offer out of undergrad from Booz & Co, what would happen? What do you put on your resume? PwC? Do you even mention you work for Booz?

By three methods we may attain wisdom: Reflection - which is noblest, Imitation - which is easiest, and Experience - which is bitterest.

Nov 5, 2013

For one year after the acquisition, PRTM was called "PwC's PRTM Management Consulting" (totally confusing acronyms). Many people put that on their resume for the one year transition period, and them changed their resumes to something like "PwC Advisory | Management Consulting"

Nov 6, 2013

The Booz & Co name will be retired within 3-4 months of approval of the purchase due to the nature of the Booz & Co name with Booz Allen Hamilton. As for PRTM, I still seem to see "PwC PRTM" on various profiles. but I believe they are integrating slowly more and more.

For anyone concened, Booz & Co is finishing their hiring cycle at this time as both PwC and Booz need to support their growth.

TT

Nov 12, 2013

And the acquisitions continue. Parthenon approached by big 4. LEK up for sale. Deloitte buying Roland Berger. Stay tuned........

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Nov 12, 2013

@udkeudke - What are your sources for Parthenon, LEK, and talks restarting between Deloitte and RB? Any word on ATK?

Nov 12, 2013

I am connected through family to senior people at almost every major consulting shop.

Nov 12, 2013

@dondestanlaschicas: also Bain consulting are quietly shopping themselves too Deloitte. Deloitte has ambitions to compete head to head with McKinsey. Anyone else want some gossip.

Nov 12, 2013
udkeudke:

@dondestanlaschicas: also Bain consulting are quietly shopping themselves too Deloitte. Deloitte has ambitions to compete head to head with McKinsey. Anyone else want some gossip.

Would love to hear more on this gossip? What's the likelihood of the RB, Deloitte deal happening?

Nov 12, 2013

@Myron Gainz: The Deloitte/RB merger is about 95 percent of the way there. I would be shocked if the merger is not announced before Christmas. The reason why these second tier consulting shops are throwing themselves at the Big 4 like they are a cheap drunkerexic is because they simply can't compete against the McKinsey and bcgs of the world and the big 4 have too many resources. Nobody wants to be the last second tier shop to sell themselves off. This is why I think AT Kearney will fail to exist in a year. The senior guys there fail to see the writing on the wall.

As for Bain, it is no secret that they have been losing market share to McKinsey and bcg. They face the choice of either falling to a second tier or partner with a firm with resources to compete with McKinsey and bcg. I expect this merger to be completed by the end of 2014. This will probably force pwc or ey to make a bid for bcg. It is going to be an exciting next two years in consulting.

Keep the questions coming my friends.

Nov 13, 2013
udkeudke:

@myron Gainz: The Deloitte/RB merger is about 95 percent of the way there. I would be shocked if the merger is not announced before Christmas. The reason why these second tier consulting shops are throwing themselves at the Big 4 like they are a cheap drunkerexic is because they simply can't compete against the McKinsey and bcgs of the world and the big 4 have too many resources. Nobody wants to be the last second tier shop to sell themselves off. This is why I think AT Kearney will fail to exist in a year. The senior guys there fail to see the writing on the wall.

As for Bain, it is no secret that they have been losing market share to McKinsey and bcg. They face the choice of either falling to a second tier or partner with a firm with resources to compete with McKinsey and bcg. I expect this merger to be completed by the end of 2014. This will probably force pwc or ey to make a bid for bcg. It is going to be an exciting next two years in consulting.

Keep the questions coming my friends.

So you believe Deloitte will end up getting Bain, as well? Deloitte is becoming hyper-competitive...this is great.

Why has Bain been losing market share to MB?

Where do you think LEK and AT Kearney will end up?

Thanks--pretty interesting insight!

Nov 13, 2013
udkeudke:

@myron Gainz: The Deloitte/RB merger is about 95 percent of the way there. I would be shocked if the merger is not announced before Christmas. The reason why these second tier consulting shops are throwing themselves at the Big 4 like they are a cheap drunkerexic is because they simply can't compete against the McKinsey and bcgs of the world and the big 4 have too many resources. Nobody wants to be the last second tier shop to sell themselves off. This is why I think AT Kearney will fail to exist in a year. The senior guys there fail to see the writing on the wall.

As for Bain, it is no secret that they have been losing market share to McKinsey and bcg. They face the choice of either falling to a second tier or partner with a firm with resources to compete with McKinsey and bcg. I expect this merger to be completed by the end of 2014. This will probably force pwc or ey to make a bid for bcg. It is going to be an exciting next two years in consulting.

Keep the questions coming my friends.

It's some interesting conjecture - and I do agree with some of your assessment on the T2 firms. But Bain and BCG selling themselves to compete with McKinsey's pedestal?

Yes, there are certain economies of scale that comes with more capital and resources. But the biggest economy of scale a consulting firm can get is its reputation - and Big 4 mergers (with their restricted clients as well) just don't seem to have much synergy with firms that are increasing in market share and doing well on their own (McKinsey and BCG especially).

Nov 13, 2013

I can't believe people are believing the shit udk spouts. Bain is growing the fastest out of mck and bcg. You have to be retarded to think they will sell. Atk is for sure not going to sell "before Xmas" or whatever idiotic conjecture was proposed just because other people are selling. What's most annoying is that this guy literally makes statements as if they are fact without any data or rationale to substantiate.

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Nov 13, 2013
entropy_increases:

I can't believe people are believing the shit udk spouts. Bain is growing the fastest out of mck and bcg. You have to be retarded to think they will sell. Atk is for sure not going to sell "before Xmas" or whatever idiotic conjecture was proposed just because other people are selling. What's most annoying is that this guy literally makes statements as if they are fact without any data or rationale to substantiate.

This is correct, Bain is growing the fastest of the three year over year.

Nov 13, 2013
Mike22:
entropy_increases:

I can't believe people are believing the shit udk spouts. Bain is growing the fastest out of mck and bcg. You have to be retarded to think they will sell. Atk is for sure not going to sell "before Xmas" or whatever idiotic conjecture was proposed just because other people are selling. What's most annoying is that this guy literally makes statements as if they are fact without any data or rationale to substantiate.

This is correct, Bain is growing the fastest of the three year over year.

Neither of you consider two very important things - YoY growth %'s have to be considered over time and you can have positive YoY growth while still not making long strides in market share (the dominant player can have less relative growth but continue to take a larger portion of the market in the short run).

All three firms like to show Excel charts that somehow puts them at the top. McKinsey obviously dominantes both Bain and BCG in market share and size, and has been doing quite well. BCG's track record has been pretty consistent, with the strongest relative performance in the past decade as far as I know. Given that Bain is the newest, they might post the strongest YoY growth when you consider it over a long period of time (but they also started the smallest as well), but this isn't indicative of much, especially as the US market saturates (Bain is very behind the other 2 in international opportunities).

Nov 13, 2013

Lolololol. Even if all these firms were considering selling, I can't imagine they'd be dumb enough to let this info leak. I also can't imagine that anyone has partner-level connections at all these firms yet has nothing better to do than post rumors to this forum. What a troll. Guarantee that a few idiots out there take his comments at face value tho.

Nov 13, 2013

@humblebot: Why don't you get a job at a top tier consulting shop before you start in with the ad hominens. I can guarantee that with your attitude you will have a tough time even getting a job at H&R Block and will be resigned to wacking off to my Rolodex.

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Nov 13, 2013

@PRTM & @ AeroAg03 - can yall speak as to how the PRTM/Diamond engagements were staffed after the acquisitions? I.e. were they staffed with legacy folks, did people from other areas of advisory move under the MC umbrella, or both?

Nov 13, 2013
the_stig:

@PRTM & @ AeroAg03 - can yall speak as to how the PRTM/Diamond engagements were staffed after the acquisitions? I.e. were they staffed with legacy folks, did people from other areas of advisory move under the MC umbrella, or both?

Can only speak about my particular group, and everyone we staff on our projects are legacy PRTM folks.

For Diamond, it seemed a bit different. Granted, Diamond partners and directors still tend to prefer people they've worked with at Diamond, but I've seen a lot more integration / collaboration between legacy Diamond and PwC people.

Just my observation...

Nov 13, 2013

I recently accepted an offer with pwc for 14 class post mba.

I am happy with the acquisition as i was dinged at Deloitte and Booz and now PWC is basically on par with those firms. lol

Nov 16, 2013

Yep, totally agree here. PRTM projects staffed only PRTM consultants. Some groups in PwC are 99% PRTM people thus I consider myself working for PRTM not PwC. We run our own processes; culture and expectation are also different from PwC projects.

Nov 13, 2013

pretty sure bain is struggling more than bcg/mck

i heard staff bonuses weren't fully funded this year

Nov 13, 2013

Seems most people's troll radars are broken nowadays :(

Currently: future psychiatrist (med school =P)
Previously: investor relations (top consulting firm), M&A consulting (Big 4), M&A banking (MM)

Nov 13, 2013

@entropy_increases: lol you think that I am a troll. It is obvious that you have no fucking clue how the upper echelons of the consulting world work.

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Nov 13, 2013

@sav: Finally someone with a clue. SB for you my friend.

Nov 13, 2013

Sav isnt validating your gossip on Bain being acquired udk you moron, he is just making the point that a high % growth makes sense in Bains case because of its smaller size...that still doesnt mean that they would consider being acquired when there is no clear indication that the growth will taper before they reach BCG / Mck scale.

Nov 13, 2013

@entropy_increases: lol you butt hurt because you work at H&R Block?

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Nov 13, 2013

@entropy_increases: Again you are showing that you have no fucking clue what you are talking about. Bain's growth is about as relevant as your fifth grade Halloween costume. They are not gaining market share. This is why senior Bain partners are quietly looking into the possibility of merging with Deloitte. Please stop embarrassing yourself.

Nov 13, 2013

BCG is not going to get bought by E&Y or PWC. Ain't happenin.

Nov 13, 2013

1) If any of MBB gets acquired, it will be Bain. udkeudke may not be perfectly accurate (he is making predictions, afterall), but I think his is more accurate than you guys are giving him credit for. For example, I think Booz+BCG were fairly deep in talks before it fael apart, and Booz decided to go with PwC.

2) a312chi -- Non-competes don't affect people below partner level. Also, even some partners are not bound by non-competes depending on their geography, or how they vote during the acquisition. I definitely do not think that PwC+Booz will be as reputable as standalone Booz.

Nov 13, 2013

Udk is spouting bullshit. There is no validity to anything he is saying. It's probably accurate to say that Bain's largest competitive advantage is their incredible work culture. They're able to attract top candidates away from other top firms by emphasizing how fun and close-knit the firm is. All that goes straight to hell if they were to get absorbed into an accounting firm like Deloitte that is known for having a very impersonal, bureaucratic culture. It's a textbook example of a negative synergy.

Nov 13, 2013

@humblebot: lol you just keep proving what a naive little college student you are. If you think Bain partners actually care about bullshit such as "close-knit work culture" then I don't know what to tell you. Partners care about being able to compete on a global level. A merger with Deloitte can give them that. People who actually work in consulting at the high levels do not give a shit about prestige. Keep wacking it to MBB in the hopes that your fanboydom will get them to even sniff your resume. It is starting to look like H&R Block is going to be a reach for you.

Nov 13, 2013

If you think culture is irrelevant, I don't know what to tell you. As someone who is currently deciding between MBB offers, I can tell you that culture is definitely going to be a big deciding factor when making my decision, if not the biggest.

Yes, the $$$ is what matters at the end of the day, but prestige and culture are huge reasons Bain (and McKinsey and BCG for that matter) are able to succeed. You're clueless if you think otherwise.

At the end of the day, McKinsey, Bain and BCG are able to charge much higher consulting fees than Deloitte because of their prestige. Deloitte occasionally wins RFPs over those three by charging less, but when a Fortune 500 company has a top-level strategy issue, they're not calling Deloitte.

Nov 13, 2013

Udk's predictions are not going to be 100% accurate, but at least they're backed by logical rationale, much more so than the random bs that most of you guys are spewing.

Bain is certainly known for having a strong culture, but attracts a specific crowd and it certainly does not given it a significant recruiting competitive advantage - if at all - at least at the MBA level. In fact, Bain's very distinct cultural sell actually turns off some of the top candidates. (I go to a top MBA and recruiting for consulting)

You guys knocking on Deloitte also have no idea what you're talking about. They're making huge strides right now and most who are going through the MBA recruiting process are gunning for MBB + D whereas previously it used to just be MBB.

Nov 20, 2013

You can say that about any of the MBB. Each firm is known to have very distinct cultures (which, to some degree they are). I know plenty of top MBA candidates at HSW, Booth, and Kellogg that get turned off by the McK and BCG culture (much more so with McK than BCG).

Also, people might be gunning for MBB+D, but Bain almost never loses a candidate to D unless location comes into play. I would still not consider them in the same group.

Nov 20, 2013

Yea, I wasn't completely clear. I dont think anyone will choose D over any MBB, but at least D is on their radar where before it would only be MBB.

It was in response to the comments in this thread trashing on D and refusing to acknowledge them to be an up and comer.

Nov 13, 2013

I really want to believe udk, even despite his ridiculously inflammatory bullshit...

But there are two things I don't really understand about this merger, and mergers with the Big 4 in general, that theoretically seem like they would make this PwC deal a terrible one:

1. In the US, one consultancy cannot do both advisory and audit work at the same company. This seems pretty damning - assuming for simplicity equal and 100% market share, each Big 4 should have about 25% market share. Maybe that's actually only 10-20%. Still, that is a substantial # of companies that their advisory arms can't consult to, and it limits growth severely.

2. The Big 4 are national partnerships, making each country's office pretty autonomous and distinct. Because of this, I've heard that they are actually significantly less global than the strategy firms (MBB) that have global partnerships, and that it's actually pretty rare for, say, Deloitte S&O US to work with S&O Japan (turf wars, different rates, major cultural and even quality of work differences, etc.)

And yet despite this, Deloitte has a sizable consulting arm, and PwC has a decent-sized one that is now quite bigger. How are they growing when 10-20% of the market is cut off from them? What is the benefit of 'scale' if they can't leverage their audit expertise on strategy engagements and vice versa, and if each national partnership is limited in its ability to do international engagements?

Am I missing something? The news articles all mention at least point #1, but tend to downplay it. Does this mean that the law is smudged in practice, or does it mean that the PwC and Booz partners have some sort of inside information about the law being changed in the near future?

Nov 13, 2013

@entropy_increases and @humblebot have no fucking clue what they are talking about. It is scary that we have people on the boards like this giving out advice and attacking people who are actually connected in this industry and can add value to these boards.

Nov 13, 2013

1. In the US, one consultancy cannot do both advisory and audit work at the same company.

2. The Big 4 are national partnerships, making each country's office pretty autonomous and distinct. Because of this, I've heard that they are actually significantly less global than the strategy firms (MBB) that have global partnerships.

3. Deloitte has a sizable consulting arm, and PwC has a decent-sized one that is now quite bigger. How are they growing when 10-20% of the market is cut off from them? How can they leverage international scale?

1. It depends on the nature and scale of the advisory work (at least in my country). There is some overlap between the Booz & Co clients and the PwC Audit clients. The firm will carefully evaluate those cases and determine whether or not it is better to provide audit services or consulting services to the client in the long run baed on what is best for the client and the firm. In other Big 4 mergers the acquired firms partners who held the relationships with the audit clients deemed too important to lose generally left to other firms with their relationships.

2. Absolutely true, however the Big 4 recognize this and have been working globally to offset some of the inherent issues in being a multi-firm network. This means aligning global advisory services to be common across all countries (already done in Deloitte I believe), transfer agreements that enable the local firms to utilize the best global talent - Deloitte already does this quite well, and I have seen a significant shift in how my firm staffs projects to use this approach, the best people for the client project. Lastly, there have been articles about larger partnerships acquiring smaller ones (i.e. Deloitte USA acquiring smaller Caribbean practices, PwC UK acquiring smaller European practices), not sure if this is true or not.

3. According to Kennedy research, for Management Consulting (Strategy, Operations, Human Capital) Deloitte has the largest revenues globally, followed by McKinsey, Accenture, PwC, Mercer, BCG. This category excludes IT Strategy or Systems Implementation. I remember seeing a graph that shows how all the firms compared to each other in these segments, and while MBB naturally dominated pure strategy plays, Operations was very close between the firms and Human Capital was Deloitte / McKinsey. While Kennedy isn't definitive, A BCG partner mentioned that Change Management was a big focus of their growth and named Deloitte as the main competitor in it. Discussions with friends at MBB and a former partner gave the impression that there is less and less differentiating any of the firms as MBB comes "down" the spectrum towards implementation and Big 4 continue to invest (organically and acquisitions) to try to compete at the upper end of the spectrum.

Lastly, the total consulting industry had approximately 4.5% growth year ove year. So losing a few clients to "audit" is acceptable when the cost/benefit allows it, as the reoccuring revenues from audit can be funneled into things like purchases or growing the consulting practice.

Hope that helps,

TT

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Nov 13, 2013

@moosen: You are correct in saying that Big 4 are loosely confederated partnerships rather than fully integrated international corporations.

Bain's big issue going forward is that they are not even close to being competitive with BCG and McKinsey when it comes to consulting work outside the US. Thus McKinsey and BCG are drifting further and further away from Bain. If this trend continues MBB will soon become MB with Bain sliding to the second tier. This is where Deloitte comes in. They have both the resources (cash) and ambition to help Bain build out a competetive international practice. Senior Bain partners (two of whom are relatives of mine) recognize this which is why the firm is engaged in very early stage talks with Deloitte.

It is arguable that a Deloitte/Bain merger would vault the firm past BCG and put them at the eye level of McKinsey. This would put BCG in the position of potentially having to look at merging with a PWC/EY to avoid sliding to the second tier(conjecture).

Deloitte is definetly on the ups. Once the Roland Berger merger goes through shock waves will be sent through the industry and it will be merge or die. Anyone who thinks Deloitte is not an up and comer has no fucking clue about this industry and should submit their resume to H&R Block. I heard that they are hiring.

I hope that this post proved enlightening and that it cleared up some questions.

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Nov 13, 2013

@humblebot - udk only said that culture isn't the primary concern of Bain partners. Whether or not it matters to you or other entry level/post-mba hires really is secondary to the main question of what is necessary for the business.

At the end of the day, a smart organization is going to do what is right for its future success. What matters for a college kid deciding between MBB is FAR down on the list of what the actual decision makers are thinking about when such significant trends are happening in the industry.

Nov 14, 2013

You're absolutely right. The bottom line is what matters. And MBB are able to make huge profits by successfully recruiting top talent. The reason they're able to recruit top talent is by selling them on their prestige and culture. Being acquired by Deloitte would dilute both. Virtually nobody would ever accept a Deloitte offer over MBB coming out of undergrad or b-school.

Bain currently competes with McKinsey and BCG for talent. If they were to get acquired by Deloitte, that would stop being the case and the value of the firm decreases.

I also fail to see how Deloitte's financial resources would help Bain grow overseas. A) Bain is hardly cash-strapped themselves. B) Consulting is hardly a capital-intensive industry. Bain doesn't have great market share overseas because they don't have the reputation that McKinsey does internationally (BCG is well behind too). Being acquired by Deloitte won't change that.

Nov 14, 2013

As someone that actually works at an MBB firm I think it makes sense to set the record straight. Conflating MBB with firms like Booz and Monitor is just patently incorrect. At my MBB we look at who we compete against for projects and Booz, etc. has been non-existent for a number of years. Booz has been exploring mergers because they have been non-competitive with MBB for the past 5-6 years, since they split off. They also have a massive amount of debt on their balance sheet which none of the MBB firms do. MBB have very much distanced themselves from everyone else over the past five years to a decade on the strategy side of things. The angry 'insider' guy is correct, consulting is changing; it is diverging between strategy and implementation shops very quickly. The middle tier strategy shops, Booz, Monitor, ATK, have been getting squeezed and are no longer viable as standalone strategy shops. The next firm to merge will be ATK, they really dont have another option. MBB will continue to do all of the strategy projects that matter in the near future. All three of them are expanding into other things and all three continue to grow as does the industry at large. No one at an MBB firm considered Booz, Monitor, etc. to be an actual competitor. If they ever won projects it was due to undercutting fees to a point that MBB couldn't stomach them.

Also, the idea that senior partners at these firms all tell udekeu, whatever he calls himself, sensitive internal information is laughable. I'm sure if I wan a senior partner engaged in negotiations that would rock the business world I would definitely tell the guy that posts about about where to find big booty sluts in Houston about our plans (check his posting history).

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Nov 14, 2013
T22221111:

As someone that actually works at an MBB firm I think it makes sense to set the record straight. Conflating MBB with firms like Booz and Monitor is just patently incorrect. At my MBB we look at who we compete against for projects and Booz, etc. has been non-existent for a number of years.

Talk about patently incorrect. This differs so much by industry, geography, client-type and which of the MBB you're talking about. Of my 10 assignments in the past year, 7 were those won against BCG or McKinsey.

T22221111:

Booz has been exploring mergers because they have been non-competitive with MBB for the past 5-6 years, since they split off. They also have a massive amount of debt on their balance sheet which none of the MBB firms do.

Debt? Sorry, Booz has been debt-free since the split-off. You may be thinking of Roland Berger or Monitor.

T22221111:

MBB have very much distanced themselves from everyone else over the past five years to a decade on the strategy side of things. The angry 'insider' guy is correct, consulting is changing; it is diverging between strategy and implementation shops very quickly. The middle tier strategy shops, Booz, Monitor, ATK, have been getting squeezed and are no longer viable as standalone strategy shops.

This is an overly simplistic view of the world and quite opposite to what we see in the market. There's no such thing as a standalone strategy shop at the scale of MBB anymore. Go examine the % of revenues from "strategy" work at any of MBB and you'll observe:

1. Strategy has been declining as a share of total revenues over the past two decades
2. Strategy today contributes to less than 30% of the revenues.

T22221111:

The next firm to merge will be ATK, they really dont have another option. MBB will continue to do all of the strategy projects that matter in the near future. All three of them are expanding into other things and all three continue to grow as does the industry at large. No one at an MBB firm considered Booz, Monitor, etc. to be an actual competitor. If they ever won projects it was due to undercutting fees to a point that MBB couldn't stomach them.

Can't speak categorically to this but one of the benefits of MBB scale is that you can "invest" in client relationships to keep competitors out. I've been in several situations where an entrenched MBB has bid work for free in order to keep us out.

And again, this varies so much by geography. No one in the Middle East business at Booz considers BB to be an actual competitor and is clearly in the market leadership position against McKinsey

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Nov 14, 2013

I will agree with U whatever that Bain is definitely way behind Mck internationally and somewhat behind BCG, although it depends on the region. However, domestically, BCG has really been struggling and it is becoming much more Mck and Bain in the US.

Full disclosure: I work for McK

Nov 14, 2013
T22221111:

However, domestically, BCG has really been struggling and it is becoming much more Mck and Bain in the US.

Full disclosure: I work for McK

It's interesting, I've heard this sentiment from a lot of McK guys, and only McK guys. I guess the best way to reinforce the A-type is to have propaganda shitting on number 2 :D.

Amusingly enough, I've been having to research consulting firms as part of one of my internal projects in banking. The fact is, BCG revenues have more than tripled in the past 10 years (it's stated right on the website). This is a much higher growth rate than the overall market. Granted, some of this growth was due to international expansion, and yes, BCG loses a lot of engagements to McK and does sometimes compete on cost. But they are expanding some of their weakest practices (P/E for example), and pulling away from Bain internationally.

This is just to say - be careful interpreting the bull shit fed to you internally. Plenty of Booz kids got blind-sighted by this - best not to end up like one of them.

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Nov 14, 2013

@sav

Yeah I'm currently cross-offered between McK and Bain and a Mck partner told me he views Bain as a cut below and that he usually competes with BCG for most work. I wonder if that's just a recruiting tactic; it sounds too arrogant and biased to say McK is alone at the top, but saying there's a Top 2 and the other firm you're considering is clearly behind is a little more believable.

Then again, it's very industry-dependent. I'm sure there are sectors where it's either McK and BCG alone at the top or McK and Bain alone at the top (private equity stands out) and some where it's more balanced between the three. Also gonna be some spaces where one (usually McK) dominates, like McK in public sector work.

@udkeudke I'm damn good at keeping papers from blowing all over the place so suck it

Nov 14, 2013

Its weird that udk mentions HR Block repeatedly...wtf kind of jab is that...Its highly possible that he is a butt hurt Deloitte/PWC auditor or "consultant". Most of the people on here making somewhat rationale arguments are actual consultants at non-accounting firms, myself included.

Nov 14, 2013

Yeah seriously. What did HR Block do to this guy?

Nov 14, 2013

@humblebot: if you think that you are anything more than a fucking paper weight to MBB partners then I don't know what the fuck to tell you.

@T22221111: The fact that you think that my family members give a shit about what I post on WSO is what is fucking laughable.

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Nov 14, 2013

A+ trolling job. Very impressive.

Nov 14, 2013

I'm sure no one in your family does care what you post on WSO because they most likely have never heard of MBB, Booz, Deloitte, etc., let alone work there. Solid effort here.

Nov 15, 2013

Agree Karot.

T22221111 comes off as McKinsey new meat that's still marinated in b-school recruiting messages.

Nov 17, 2013

For the kid / girl that mentioned that he got rejected by Booz and got the offer from PwC: Sadly for you, the next two years, Booz kids will have "Booz" in their resumes and then the company will be renamed to PwC. So in your next interview you will be asked whether you was hired by Booz or PwC. It sucks.

Nov 17, 2013

I'm not in consulting, so correct me if I'm wrong, but it doesn't seem like a sad day to me for Booz. At least for the partners who are probably getting a pretty nice pay day.

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Nov 18, 2013

Yup...the proxy dick measuring contest has escalated quickly in this thread.

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Nov 21, 2013

Just a few followup thoughts on PRTM.
1) Definitely true that PRTM primarily continued to staff projects with legacy PRTM personnel. However, even with moderate attrition and no dedicated PRTM backfills, this approach eventually ends.
2) Attrition/Comp - the attrition rates for PRTM and Diamond were dramatically lower than I expected during the first two-three years, largely due to the retention bonus. However, I think that the departures will accelerate this fall. PwC conducts annual assessments in May, provides comp adjustments on July 1 and pays bonuses in late September. In some sectors, ~60% of staff earned a 3,4,5 rating which gave them an annual bonus of 3-5%. Many PRTMers didn't know how to play to the utilization and non-delivery criteria and disproportionately received bad reviews. For a group of people accustomed to ~20-30% bonus, 3-5% is grounds for an immediate career search.
3) Partner Attrition is accelerating - PRTM lost seven of the leading technology/software partners this summer, four to McKinsey and three to ATK. Relative to a partnership of 110, that isn't huge, but it demonstrates that the leaders may be inclined to move on.

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Nov 21, 2013
Johnny Fontane:

In some sectors, ~60% of staff earned a 3,4,5 rating which gave them an annual bonus of 3-5%. Many PRTMers didn't know how to play to the utilization and non-delivery criteria and disproportionately received bad reviews. For a group of people accustomed to ~20-30% bonus, 3-5% is grounds for an immediate career search.

Do you know what performance measurement PRTM used pre-merger? I feel like "utilization" is such heavily emphasized in all of the Big 4; curious how it compares.

Currently: future psychiatrist (med school =P)
Previously: investor relations (top consulting firm), M&A consulting (Big 4), M&A banking (MM)

Nov 22, 2013

PRTM had a set of relatively nebulous criteria. Only the partners participated in the semi-annual reviews and ultimately it was their commentary that made the difference. For senior-level Managers (M3) and Principals (PwC Director equivalent) the criteria had some firm business development thresholds. The PRTM results typically clustered a large portion of people around ~20%. At PwC, the portion of people making ~20% bonus is dramatically smaller.

Part of the problem with the PwC process is that it is conducted by the market with little regard to functional offering. So, you have someone working strategy or deals who is evaluated against the utilization of someone doing a one-year IT PMO project. Another issue is the firm's silly reliance on things like community service as differentiators.

Best Response
Dec 21, 2013

Very late to the game here - came over w. the Diamond (600 employee) deal, below are my perceived +/-

Plusses:
- Incredible new client access - PwC's rolodex is stacked
- PwC had a local presence everywhere, which helped smaller market employees go after local clients and cut back on travel
- Firm seemed very open to adopting methodologies, and giving senior Diamond folks key roles in the practice
- Integration was well managed and not rushed (fast for systems/processes, slow for client/team/go-to-market work)
- Compensation was very fairly handled (and the net $ have been comparable although raises have slowed down)
- Top-end compensation for high revenue partners can be very lucrative (our biggest rainmaker would be making 3x what he made under Diamond's non-revenue driven pay model if he kept up his numbers/performance)
- Negotiated hotel rates were incredible (for teams managing to a fixed expense budget)

Minuses:
- We lost about 30% of our clients due to audit conflicts, but all of the new access kept our revenues up (and growing fast) within our legacy practice as we were integrated
- The firm has a form/policy/procedure for everything, requiring us to learn new T&E tools, travel tools, and a whole bunch of new client/project approval processes
- Many of the prior advisory processes were geared towards high leverage long-term projects, making getting small strategy projects off the ground a bit slow
- Lotus F***ing Notes
- Our old partner process was much less formal (as we were public, so it was mostly a title without tenure benefits), and although folks who became partners at the time of the acquisition have succeeded, the bar for making the jump from Director is significantly higher
- The prior PwC advisory brand was a bit inconsistent/unknown (accounting brand is very strong, advisory was mostly made up of either ex-bearingpoint, or poached staff who couldn't cut it at their old firms, leading to significant variance in quality of resources - both good and bad)

Re retention: Retention was extremely high for us (and much higher than our internal turnover rate prior to acquisition) for four reasons.
1) Limited retention bonuses (probably more psychological than financial, but good to give us an excuse to stay through the acquisition)
2) PwC recognized that the bonus processes differed, so they changed our salary structure to keep us whole, which locked more salary into our base comp, and made it very hard for people to walk away from higher guaranteed base numbers
3) PwC doesn't "up-or-out" as high of a % of the workforce, leading to both less involuntary attrition, less voluntary attrition (in advance or under the threat of an up-or-out departure), and comfort from the workforce around the reduced threat of attrition (i.e. you can stay at director/manager indefinitely at a decent salary if you don't want to kill yourself)
4) Diamond tended to recruit really friendly, nice, smart, but hard working folks without too significant of an attitude/ego around prestige/reputation, so any perceived brand differences (real or perceived) didn't bother us too much

Regardless, given the size of Booz, and lessons from PRTM/Diamond, I suspect it'll be a relatively painless transition beyond the technical pains (new laptop/lotus notes), and administrative headaches (new terminology, new forms, new project startup administrivia, and the initial drop of key audit clients).

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Dec 22, 2013

thejimmy24,

You said that business has been "growing fast" due to PwC's rolodex, yet "raises have slowed down".

How has growth picked up but raises slowed down?

Jan 1, 2014

Bit of a complex question.

The comment was more of a comparison of legacy firm non-partner pay raises (10-15%/year) vs. PwC's current annual review process.

Also, most non-partners ended up at the high end of their pay ranges for their title, so without a promotion, raises were capped due to pay grade mechanics.

Partners are seeing some big bumps though, as the PwC partner ownership structure moves pay further up the pyramid vs. distributing to rank and file employees (Diamond was public, so strong performance rewarded stock ownership moreso than employees).

Dec 24, 2013

It is official as of last night PwC agrees to acquire Booz. Talks between Deloitte and Bain have fallen apart. KPMG has emerged as the new front runner to acquire Bain. EY is engaged in final round negotiations for Roland Berger. Stay tuned.....

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Dec 24, 2013
dukebluedevil:

It is official as of last night PwC agrees to acquire Booz. Talks between Deloitte and Bain have fallen apart. KPMG has emerged as the new front runner to acquire Bain. EY is engaged in final round negotiations for Roland Berger. Stay tuned.....

Another udke here? You just created an account just to post this...

Dec 26, 2013

Great comments on this thread and would love to add my two cents. I currently work at Monitor Deloitte (joined before the acquisition) and am going to be one of the many people who are jumping ship to MBB (MBB offer in hand, about to sign the offer and turn in my notice). Don't get me wrong, I've met some truly fantastic colleagues and learned a great deal at Monitor, but I actually want a longer term career in consulting (as opposed to my original plan of 2-3 years and then something else). It's very clear to me that Deloitte makes Monitor even further away from MBB in terms of culture, investment in its people, compensation.. etc. It seems like it's going to be a LONG time before they'll catch up. In fact, in some ways, Deloitte is taking a step further back. For example, in my office, Deloitte S&O is going to stop sponsoring people to do their MBAs.

So okay - yes, Deloitte may be on the 'up', but I really struggle to see how they can compete against MBB. I've seen all the 'official communication' they're feeding us on how disruptive Monitor + Deloitte will be and how we'll tackle MBB in a few years.. and, after sticking around for a year to see how things pan out, I still don't buy it, and I struggle to find anyone in the office (even some of the partners) who actually buy that stuff. While some of the partners will stay on because they're earning more money with Deloitte, a lot of people who aren't on that partner track: a) have left already, or ; b) will leave once the time clause on their retention bonuses run out, or ; c) will stay for another

Similar to PwC, I think Deloitte is a bit confused or at the very least, has very little clue on how to run an integration successfully. This is why I couldn't help but shudder when I read the comments above about Deloitte buying RB and/or Bain. I'm not saying that because it's unlikely - I dont have definitive knowledge and internally it's unclear what's happening, but seeing how Deloitte botched up the Monitor integration (in some geographies more than others), I am very skeptical as to what value the integration will really bring about. @"udkeudke", you're right in saying that partners look for what will help them compete globally, but, if anything, Deloitte's country member-firm structure makes it a nightmare to operate globally. Monitor's global operating model was the first thing that went out the window, and it's one of the things that our Managing Partners will admit 'needs the most work' in this whole integration process.

@"Nasir" - I'm quite surprised about your comment, from what I heard internally about recruiting this year, we really struggled to get applicants in the first place and the caliber of candidates we got this year was a big notch below previous years.

Dec 26, 2013

@MuddledMint Quick question, how does a single office decide that it is no longer sponsoring MBAs? Isn't it a national process? Were you in a very small office or something? Just trying to understand how that'd work.

Dec 26, 2013

If your comment is true about not knowing how to run/manage the integration that is so unbelievably amazing because its major fee generating services is M&A integration. What a joke.

Dec 26, 2013

I don't think the big4 consulting practices do much PMI

Dec 27, 2013

Which one is better at consulting from the point of view of pre and post-merger: Monitor or Booz?

Dec 27, 2013

Thanks for the reply, ke18sb and The Sour Patch Kid. I had interacted with recruiters from two of the other big 4 consultancies, and both were heavily involved in the finance / due dilligence side of deals, but not much in the integration.

good to know Deloitte is different. sorry for my mis-statement

Dec 28, 2013

the PwC partners i talked to said companies would use them for due dilligence / financial analysis before a deal, but would turn to someone more like MBB for the integration.

it sounded like they thought one of the upsides of getting booz was being able to win this work. they're often already involved in the deal, and with booz they have more credibility to continue to do the integration

who knows maybe they were just BSing and PwC already wins a lot of this work

Dec 29, 2013
BigPicture:

the PwC partners i talked to said companies would use them for due dilligence / financial analysis before a deal, but would turn to someone more like MBB for the integration.

it sounded like they thought one of the upsides of getting booz was being able to win this work. they're often already involved in the deal, and with booz they have more credibility to continue to do the integration

who knows maybe they were just BSing and PwC already wins a lot of this work

It would probably depend on what partners you were talking to...Deals vs. Consulting, and in what countries as well. There is a substantial difference between PwC in the marketplace in my region vs. the US region.

Dec 30, 2013
TylerT:

It would probably depend on what partners you were talking to...Deals vs. Consulting, and in what countries as well. There is a substantial difference between PwC in the marketplace in my region vs. the US region.

consulting, US.

these were fairly senior people e.g. US head of consulting for the practice i'm in, head of the practice i'm in across all services (tax, audit, consulting), etc.

Dec 28, 2013

I'm "legacy" PwC.

1) There are clearly Diamond and PRTM projects that are staffed by almost exclusively legacy Diamond and legacy PRTM people, there is very little co-mingling going on. For new people they kinda fall in with either PRTM, Diamond or PwC partners and that's how they keep getting staffed
2) PwC does a lot of PMI work (in fact I am on a project doing PMI work right now).

In general with a large firm like PwC ymmv.. Working with different partners is almost like working for different companies.

Dec 30, 2013

Will employees/interns working at Booz henceforth have to identify themselves as part of PwC, and not Booz?

Jan 2, 2014
bunter23:

Will employees/interns working at Booz henceforth have to identify themselves as part of PwC, and not Booz?

Bump?

Jan 2, 2014

If you're thinking about it specifically in the context of full-time MBB recruiting, I don't think anyone will have a problem with it.

Jan 2, 2014

Prestige usually correlates with high level assignments. For this reason, I am also very concerned with prestige.

My question would be Deloitte vs. Booze (now Strategy&?).

Jan 2, 2014

delete

Jan 2, 2014

As long as it's not a complete no-name company, it won't make or break your application to MBB.

Jan 2, 2014

Consulting recruiters understand the relative merits of other consulting firms at a deeper level than a single digit ranking on some arbitrary scale of prestige. Additionally, whatever real KPI's prestige is a proxy for won't change overnight. Nothing is fundamentally different about Booz/Strategy& than it was 10 months ago. That may change over time, but for now, the name change won't affect how your internship is viewed.

Jan 2, 2014

It'll probably be similar to what happened to Monitor when they were acquired. They still did the usual recruiting (because the deal wasn't 100% finalized and finished yet), and then those offers were carried over into the new firm. I had several friends that got Monitor offers, and interned as a part of Deloitte S&O.

Jan 2, 2014

Curious to see if Monitor employees in the BA to Senior Consultant range got pay bumps due to the acquisition. I'd imagine all Managers and above would have gotten pay bumps to retain their network, but wasnt sure if the BAs to Sc would as well.

Jan 2, 2014

Avoid Booz like the plague!! People are abandoning ship like crazy. Do yourself a favor and stay away from that company and anything to do with it.

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