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April 30, 2008

Deloitte rules out E&Y-style integration for now

Deloitte has formed regional clusters of member firms but is unlikely to adopt a large-scale Ernst & Young-style integration, according to the network’s global chief executive.

Jim Quigley said Deloitte’s regionalisation approach has been underway for a number of years, including in Latin America where it has a 13-member group called Latco.

The Big Four firm also has clusters in the Middle East, Central Europe, Southeast Asia and the Commonwealth of Independent States. Quigley stressed the importance of ensuring integrated member firms had a similar cultural approach.

“We believe the ties that really bind an organisation together and enable cross-border behaviour are those that are defined by culture and strategy. But at the same time we remain open-minded to look at any other [organisational] options that we think might help enable [growth],” he said.

When asked whether merging firms across vastly different cultures and economies could cause operational problems, he responded: “That’s one of the reasons why you move at a measured pace that the network wants to move, you don’t simply rush into it.

“[Our member firms] have a common vision. We’ve got a common set of values, we practice under a single brand and we also deal with a regulatory and litigation environment that is very different border by border – the organisation structure that we are working under today recognises those things.”

About 3,300 Ernst & Young (E&Y) partners across Europe, the Middle East, India and Africa approved the proposed integration of E&Y separate country practices into a single business unit earlier this month.

The new unit will be an $11 billion organisation with more than 60,000 people and led by a single executive team. It will be effective from 1 July 2008.

E&Y chairman and chief executive Jim Turley added: “This announcement, together with the recent integration of our Far East practices, and that of our Americas practices in 2006, differentiates us in the marketplace as the most globally integrated professional services firm.”

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