How a ‘bulls--t jobs' boom captured the Big Four accountants

Telegraph

a day ago

Working as an auditor at one of Britain's top accounting firms was once one of the most prestigious jobs in the City.
In return for scrutinising the accounts of major companies to spot any potential fraud or irregularities, accountants were rewarded with good pay, long-term stability and steady progression.
But today, jobs at the leading firms are viewed differently. Instead, in the words of one former 'big four' consultant, the roles are now about 'making money from bulls--t by pretending to be an expert in front of large corporate clients'.
Critics say the decline is emblematic of the transformation of the so-called 'big four' from traditional audit and accounting businesses to sprawling sellers of consultancy services.
All four of Britain's top accountancy giants – KPMG, Deloitte, EY and PwC – now have huge consulting arms that generate billions of pounds in revenue each year and employ thousands of people throughout Britain.
Prof Atul Shah, of City University, London, says the pivot to consulting has fundamentally transformed the 'culture and mindset' of the big four.
'I trained with Peat Marwick [now KPMG] in the early 1980s. It was mainly an audit firm then, and the culture was one of public interest and professional scepticism,' says Prof Shah.
'Consulting has become at least a third of the revenue for the big four and this has made them highly commercial firms, with strong revenue generation incentives for partners.'
He argues the firms' prioritisation of their consulting businesses has ultimately led to their involvement in a series of high-profile audit scandals involving major firms ranging from BHS to Carillion.
When the big four first made a move into consulting, the market was not a new one.
The consulting industry traces its origins back to the early 20th century with the emergence of companies such as McKinsey & Co, which aimed to bring a scientific approach to running businesses.
The big four started building their own consulting businesses in the early 1990s, before pursuing a renewed push in the wake of the 2008 financial crash as they looked to capitalise on widespread economic volatility.
Critics say this shift has locked the big four into selling increasingly broad advice in order to keep growing their revenue figures and maintain their partner payouts.
It has worked so far, with the revenues of the big four being boosted and annual partner payouts at firms such as Deloitte rising to more than £1m.
For these firms, there are strong incentives to keep their consulting businesses growing.
Prof Laura Empson, of Bayes Business School, says: 'One of the challenges is that if you start slipping down the rankings, you can no longer rely on the loyalty of the partners to stay. They will be poached, and they will move. No one wants to work for the losing team.'
Tamzen Isacsson, the chief executive of the Management Consultancies Association (MCA), says the consulting industry's recent growth is evidence that their services continue to be 'valued by clients for the independence, the transformation, and efficiency they deliver'.
'The British consulting sector has doubled in revenue over the past five years, exports have trebled and MCA member firms have supported clients in the UK and across the world with critical services during a period of unprecedented global economic disruption,' Isacsson says.
However, insiders argue that accounting giants' reliance on revenues from their consulting business means they have filled their ranks with people carrying out nonsensical tasks.
'It's just educated people making PowerPoint slides of nonsense for companies,' one former big four consultant says. 'People would be working 13 hours a day to just stay slightly ahead of their clients.'
He says meetings could be painful. 'We famously did one project on new laws facing the car industry. The whole time we were going: 'What are we doing?' We just really didn't have a clue.
'In the final showdown meeting with the client, we were just rambling off laws, and the clients kept saying, 'Oh yeah we know that one.' We'd basically spent hours trying to do this project and the client kept telling us, 'Oh yeah, we knew about that'.
'But there was this one really obscure law I'd found from Arizona,' the former consultant says. 'I'd found it after hours of searching and we mentioned that one, and the client said, 'Oh we haven't heard about that one yet'.'
For those still in the industry, it is an increasingly rare occurrence. They say it is becoming more difficult for consultants to outsmart their clients, threatening to call time on the 'bulls--t jobs' boom.
'At one time, clients hadn't been as well educated as the consultants, they hadn't thought about strategy,' one ex-big four partner says.
'You can't pull the wool over the clients' eyes any more because they're just as smart and educated as you are. A lot have MBAs of their own.'
'Glorified outsourcing'
Critics say the big four now risk falling into the trap of competing for increasingly low-level work by cutting their costs and tightening their margins at the expense of the quality of their work and their broader reputations.
One Deloitte partner says the situation could see a race to the bottom in which the big four are undercut further by firms including Accenture or Tata Consulting Services, which now outsource much of their low-level work to places such as India.
Already, at some accountancy giants, the consulting businesses have started to become problematic. One former HR executive at KPMG says the consultancy divisions now increasingly operate like glorified outsourcers.
They say the pursuit of more low-level work has contributed to poor morale inside these divisions.
The mood is only becoming more sour. Consultants have repeatedly been targeted for lay-offs during economic downturns, further damaging morale and undermining the firms' reputation for stability.
McKinsey recently made some of the biggest layoffs in its history, and has cut more than 10pc of its staff over the past two years in response to the slump in the consulting industry.
Luke Johnson, the chairman of Gail's Bakery and entrepreneur, says things are only heading in one direction. 'This is just the start,' he wrote in response to the McKinsey cuts. 'AI is eating these professions alive.'
Widespread backlash against consultants now threatens to make the situation worse. In the UK, Labour is currently seeking to cut back government spending on consultants with the aim of saving taxpayers more than £1bn by the end of next year.
The Trump administration in the US has gone even further under the leadership of Elon Musk's Department of Government Efficiency, which has slashed billions worth of consulting contracts. Trump's cuts have already led to redundancies in firms including Deloitte and Accenture.
The problem the big four face is that they seem stuck with their so-called 'multidisciplinary models'.
EY's own attempt to separate its audit from its consulting division by splitting itself into two failed dramatically in 2023, amid a clash over which side would take control of the accounting firm's highly profitable tax division.
The failed 'Project Everest' split initiative cost the firm more than $600m (£445m) in advisory fees.
Since then, all of the big four firms have ruled out future split plans, even as questions remain over the extent to which the model works.
Lisa Fernihough, the head of KPMG's advisory unit, says: 'We're committed to the multidisciplinary model because it's right for our people, our clients, and our business ... This model also gives our people exciting and varied careers across the firm, including in audit.'
More broadly, with consultants holding major power over the way the accounting giants work and operate, executives may have little choice but to keep pressing on.
Insiders at the accountancy firms may agree that their ranks are filled with nonsense roles. But, for now at least, the big four are likely to keep the 'bulls--t jobs' boom going for as long as possible.