As Deloitte continues to post remarkable growth, the network’s
chief executive Jim Quigley is, understandably, in a buoyant mood.
He speaks to Arvind Hickman about the credit crisis, the network’s
strategy and another solid performance across core service

Uncertainty about the health of the global economy has failed to
dampen the performance of the world’s second largest accountancy
network over the past year. Deloitte recently revealed the combined
revenues of its 69 member firms in 142 countries will hover above
the $27 billion mark in the 2008 financial year.

Global chief executive Jim Quigley, who celebrates a year in the
top office this month, tells the International Accounting
Deloitte’s near 17 percent growth is the result of a
strong advisory arm, stable core service lines and booming growth
in the BRIC countries and other emerging markets.

“I believe the results validate our
business model that we’ve got excellent diversification from a
geographic point of view,” Quigley says.

“We are a strong presence in the
emerging markets, where we have growth well in excess of those
overall growth rates, and a good diversity of our business model
with a very balanced view of the audit, tax and our consulting and
advisory services. Each of those businesses are performing well but
our advisory business is performing particularly well this past

Quigley believes Deloitte’s advisory
line has prospered by being able to offer what he describes as a
“strong business case” for services such as financial advisory or
assistance in setting up new business models. This is especially
the case in times of financial turmoil where clients draw on the
expertise of financial advisors to steer them through troubled

“The credit crisis has caused a
tempering of growth and has caused our clients in some cases to not
have the liquidity that they want to be able to complete some of
those transactions,” Quigley says.

“We are assisting our clients as they
work forward with the challenges they face themselves and in some
cases we would be redeploying some resources to service offerings
that are experiencing stronger growth than others that are more
directly impacted by those trends.

“The M&A would be a prominent
example because some of the very large deals that have been a
significant contributor to our growth aren’t being done with the
same pace that they once were.”

One service line that hasn’t exceeded
the firm’s expectations is audit, although it is just about on par
with planned growth.

“It was very, very close to the plan
that we laid but the other businesses have exceeded those plans and
its just the impact of a little bit of a slowing in the economy and
the way that it rippled through our businesses,” Quigley says.

“There have been some changes in the
audit business in terms of new audit standards and the impact that
has on the volume of work that we are required to do. Audit
Standard 5 in the US, related to Sarbanes Oxley, has reduced the
amount of work that we are required to perform in connection to
those audits, that’s just one example.”

Building BRIC

Like most firms, Deloitte has prospered in the emerging markets and
further investment in these areas remains a core strategic focus of
the network. Quigley tells the International Accounting
that Deloitte firms in the BRIC countries of Brazil,
Russia, India and China are being injected with resources to
service the burgeoning demand.

“The levels in the BRIC countries for
expansion is significantly higher [than developed markets]. We’re
on our way towards 10,000 people in China. We will definitely cross
that 10,000 person mark within the next three years. We may even
get to that benchmark sooner. We are already there with respect to
the number of professionals in India.

“In Russia, we’re at 3,500 and we’re
heading towards 5,000 to 7,000 people in the next two years,” he
says, noting that Deloitte’s network wide workforce grew from
150,000 to 165,000 employees in the past year.

“Those BRIC areas will continue to be
a focus for us as we watch their contribution to projected GDP
continue to expand. One of the data points that we’ve brought into
our strategic planning activity to emphasise the point is if you
look forward at projected GDP over the next five years, 40 percent
of the projected growth is expected to come from the BRIC countries
themselves. So with that comes the need for capital. Then services
associated with the stewardship of capital and services related to
the very efficient and effective deployment of capital.

“There’s an opportunity for
professional services firm like ours that is driven by the growth
and the expansion of capital markets. So those are very important
markets to us and will continue to be.”