Andersen & Co. Will Upgrade Consulting Unit

CHICAGO — Arthur Andersen & Co. announced plans Monday to put its consulting practice on an equal footing with its better-known accounting business in hopes of stemming a flow of defections to other consulting firms.

“More equal is probably a good way to put it,” said Duane R. Kullberg, managing partner and chief executive of Chicago-based Andersen, the largest U.S. accounting firm and a leader in information-management consulting.

The announcement of the proposed corporate restructuring ended speculation that Andersen would split off or sell its consulting practice, a 40-year-old unit that is the fastest-growing segment of the 75-year-old firm.

Kullberg told a news conference that Andersen’s 2,200 partners would vote in early January on a task force’s recommendation to restructure the company along two lines: consulting and audit-and-tax accounting. Each line would be headed by a chief operating officer who would report to the CEO.

Andersen currently has one chief operating officer overseeing three divisions--consulting, auditing and tax accounting--with each division headed by its own managing partner.

Consulting partners have complained of being relegated to second-class status by the accounting partners who traditionally have controlled the company--and the purse strings.

Dispute With Ex-Partners

Kullberg said a new incentive program offering substantial bonuses for exemplary work would increase the pay of Andersen’s best consultants and help to keep them from looking elsewhere.

“It is intended to be an incentive system that will address that particular question,” he said.

Of the company’s $2.8 billion in revenue in fiscal 1988, audit and consulting work each brought in 40% while tax work accounted for 20%.