Andersen Spin-Off Opens Doors to Fortune 500 Clients
A group of 25 partners and 250 staff has left the remains of Big Five firm Andersen to start a new company, Huron Consulting Group. The group reached an agreement with Andersen earlier this month, making a cash settlement to release the partners from employment and non-compete agreements. The group has taken 75 consulting clients with it, including Beth Israel Medical Center, Chevron Corp., Harvard Medical Institute, Comdisco, Inc., and Global Crossing Ltd.
Headed by President Gary E. Holdren, a 29-year veteran of Andersen who helped build the firm's worldwide financial and economic consulting business, Huron opened its doors on May 13, with corporate headquarters at 550 W. Van Buren Street in downtown Chicago and other offices in Boston, New York, Houston, San Francisco. The firm plans to expand rapidly both within the United States and internationally, according to Mr. Holdren. Expansion plans include an office in London in the near future. About 150 people in total will be based in the Chicago office.
"After the unfortunate events at Andersen, a group of 20-plus consulting partners who had worked together for years decided to do this," said Mr. Holdren. "We want to be a smaller, more nimble, entrepreneurial-type organization."
The firm has 34 directors, made up primarily of the 25 former Andersen partners as well as members of other accounting and consulting firms who have joined Huron. None of the former Andersen partners performed work for Enron Corp.
Huron will provide business and litigation consulting services and corporate advisory services, including dispute and damage analysis, economic consulting, regulatory consulting, accounting and special investigations, and higher education, legal business and strategic financial consulting. The firm will specifically stay away from handling any tax or audit-related tasks.
Chicago-based equity firm Lake Capital made a "very substantial" investment in Huron, according to Mr. Holdren, and the funds were used to pay the settlement with Andersen and to purchase equipment and supplies for the new offices.
Mr. Holdren estimates that Huron will be able to generate revenues of about $30 million in 2002, averaging between $250,000 to $350,000 per professional, said Mr. Holdren.