• PricewaterhouseCoopers Case Is A Game Changer

    By • Mar 19th, 2009 • Category: Audit Firm Management, Latest, PricewaterhouseCoopers, The Case Against The Auditors, Your Career

    No, I’m not talking about the BDO International case or the Deloitte Parmalat case, although those two are game changers also.  In those cases, the audit firms may lose their ability to hide behind the “global network” model as a way to avoid liability for what happens to one of their legal entities in a particular part of the world.  Stuart Grant, the attorney who’s bringing the case against Deloitte, agreed with me during a conversation we had a few weeks ago, that a trial loss by BDO International will probably not force a “Sophie’s choice” for the industry – either give up trying to control offices all over the world or accept responsibility for the global nature of their business, invest in quality and take complete legal liability for the whole firm wherever it is operating. He may be right.  If BDO International loses this case and their appeal in the original Banco Espirito Santo case, they will go out of business.  They can neither afford the original judgement nor any additional judgement against their international umbrella firm.

    Mr. Grant said during a webcast sponsored by SecuritiesDocket.com on February 24th, that a loss at trial by Deloitte in his Parmalat case may be the one that finally drives change, however reluctantly.  He hopes it’s good change via improved quality and accountability for what happens in any firm in the “network.”

    I’m less sanguine. Who knows? If a case against PricewaterhouseCoopers global firm for Satyam rolls in soon too, the risk of losing at trial in two Big 4 cases – and Satyam will go to trial – will weigh heavily, like a giant dumbbell dropped on their heads, heavy enough to force the breakup of the global firms as we know them.

    What I am talking about here is a case that has been lightly publicized, except in its own world and in the local California legal environment.

    That case is Campbell v. PricewaterhouseCoopers.

    I’ve mentioned it before.

    And I’ve mentioned the similar suits that were settled in Canada with very little fanfare in the US.  As a result of the upheaval being visited on the professionals in all the firms right now by the thousands of cuts and terminations taking place right now, I’m getting all kinds of reports and updates about what’s going on all over the country.

    One professional, on deck to join PwC after graduation this May in California, reports:

    PwC informed us of a conference call scheduled for Thursday. So far this is what I have heard:
    • New Hire salary reduced to $49k, my offer was for $52k.  I have heard that PwC recently lost a class action lawsuit in California about overtime and I am now thinking that lowering the salary now, while the reason given is the economy, may be a way of combating what seems to be the inevitable of paying associates overtime.
    • Annual review rankings changed from a scale of 1-5 to 1-3 with lower performers being let go.
    • No raises for people moving into their second or third year at the same position, only for those being promoted
  • So far no info about start dates being pushed back
  • On March 25, 2008, the law firm of Kershaw, Cutter & Ratinoff, LLP obtained class certification in a lawsuit brought on behalf of unlicensed associates who were employed by PricewaterhouseCoopers (“PwC”) in California from October 2002 through July 2008.

    The actual definition of the class certified by the court is: All persons employed by PricewaterhouseCoopers in California who, at any time during the period October 27, 2002 to the present, (a) worked as associates in the Attest Division of PwC’s Assurance Line of Service, (b) were not licensed as certified public accountants by the State of California for some or all of the period they worked in this position; and (c) were classified as exempt employees while working in this position (“Class” or “Class Members”).

    Both the plaintiffs and PricewaterhouseCoopers (PwC) recently filed competing Motions for Summary Judgment. The plaintiffs’ motion sought a court determination that all PwC attest associates were improperly classified as exempt and PwC’s motion sought a decision that all Attest Associates were in fact exempt and not eligible for overtime. If PwC had been successful, the Class would have received nothing. On March 11, 2009 the court granted plaintiffs’ motion for summary adjudication on the issue of exemption.  Class members are not exempt under the 2001 wage order. The court conversely denied in part PwC’s cross-motion, as it pertains to the exemption issue. However, the court granted in part PwC’s cross-motion for summary adjudication on the issues of waiting time penalties and punitive damages.

    But the court noted that the determination regarding exemption is one involving a controlling question of law, that there is substantial ground for difference of opinion, and that an immediate appeal from the order will materially advance the ultimate termination of the litigation. Therefore, Judge Karlton certified the matter for interlocutory appeal pursuant to 28 U.S.C. § 1292.

    What all this legalese means is that the plaintiffs and their law firm are winning so far. But if the Ninth Circuit Court of Appeals accepts the appeal it could take as long as a year to get a ruling either affirming or reversing the lower court decision. It is clear, however, that PwC is feeling the impact of this most recent decision.  Which is why PwC may be preparing themselves by modifying new hire and Associate compensation packages to include an overtime component if required.  But you’ll never hear that from PwC.

    According to Bill Kershaw, the lawyer for the plaintiffs, PwC is currently declining to negotiate, and has signaled their intent to pursue all remedies available to the firm on appeal.  I suspect they are very nervous about being the ones who kill the golden goose laying the golden eggs – uncompensated overtime in the US for the whole industry.

    Granted, if this particular case is successful for the plaintiffs, it will cover only a specific limited set of professionals (Associates in the Attest practice in PwC in California.) But the pattern and precedent that will be set, both legal and moral, will definitely have a ripple effect throughout the firms – all the firms, everywhere in the US.

    You might recall that the Big 4 accounting firms have already caved, without going to trial, in Canada.  As I said to Mr. Kershaw, what happened in Canada stayed in Canada and was barely noticed here, had no effect on the firms’ policies in the US.  This is for two reasons, in my opinion.  The first is the popular notion amongst many conservatively-minded business people in the US that Canada is a socialist country. What happens there in the employment law arena is an anomaly.

    The second is that the audit firms will never give up their sacred super-leveraged model without being dragged kicking and screaming to do so. And PwC is, probably based on my experience with them, deathly afraid and embarrassed to be the one that will make them all have to do it.

    The summary judgement decision is a great read, if you are curious at all about how the firms say and do what they need to do to avoid admitting liability, that they’re plain defenseless and wrong.  I reminded Mr. Kershaw of the bonehead move PwC made earlier in the case of allowing their lawyers to say they did not know who was licensed.

    Take a look at this response to one of the most important points of fact in the complaint and tell me what you think is wrong with this picture…

    “Answering paragraph 4 of the Complaint, PwC admits Plaintiffs are individuals and residents of the State of California. PwC further admits that Plaintiffs were employed by PwC as “associates”in PwC’s Assurance Line of Service. PwC is without knowledge or information sufficient to form a belief as to the truth of the allegations concerning Plaintiffs credentials or degrees, licensing status by a state or federal agency, test status or “Certified Public Accountant” or “CPA” designation from the State of California, and on that basis denies such allegations. PwC admits Plaintiffs bring this action as a proposed class action on behalf of themselves and certain current and former California employees of PwC. Except as so admitted, PwC denies each and every allegation ofthis paragraph in the complaint. “

    Hey Jude Curtis, PwC Chief Ethics, Risk and Compliance Officer: Shouldn’t you guys know who is licensed in each state, each and every state where your professionals work and travel, and whether a particular person has proper credentials and degrees to be an auditor?

    The March 11, 2009 decision also has a really funny, PwC-kind-of-quirky part.  You have to have been there to appreciate the richness of this argument especially as it relates to a limited class of staff consisting of only Associates, the lowest level of staff other than interns.  I take that back. Maybe PwC is not so unique amongst the firms in making most moves lately, both internally and for clients, for an ulterior, liability-paranoid, partner-self-interested reason.  However, while I was at PwC, I told a lot of folks that the practice described below was a crock of shit, an abdication of responsibility on the part of the PwC partners for running their own practice. It’s not some kind of enlightened form of participatory, inclusive management.  I was branded a troublemaker, even by some staff, and a “consultant” who just didn’t get it.

    Defendant identifies a limited range of purportedly administrative work class members perform on behalf of PwC.  This includes supervising junior associates, participating without authority in hiring and recruiting, participating in internal committees, such as the “great place to work” committee, evaluating the performance of people class members supervise, and proposing draft engagement budgets…PwC’s argument is that these tasks, coupled with performance of other exempt work, warrant exemption.  This argument fails because the court has held that class members are not engaged in any other form of exempt work. Class members are therefore not exempt under the administrative exemption.  Accordingly, class members are not exempt, and plaintiffs’ motion for summary judgment is granted.

    PwC was claiming, amongst other things, that the Associates’ participation in the internal committees is an example of how they participate in the management of the firm.  If it was not so ludicrous as to make me laugh out loud and nearly spit my latte at the screen of my black MacBook, it would be pathetic.

    Counsel for PricewaterhouseCoopers in this class action law suit: Orrick, Herrington and Sutcliffe, a Global Law Firm.

    Great.  Maybe they can use them in the Satyam suit against PwC global that’s on its way.

    Internal photo courtesy of IMDB.com.

    Main page photo courtesy of this site, on behalf of this cause.

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    40 Responses »

    1. If PwC were lowering starting salaries in expectation of paying overtime, the reduction would be more around $6k – $10k off of a $50k start salary, as they bake between 200-300 hours of OT into the base salaray as it is. If this lawsuit makes the firms pay OT to associates, I imagine the start salaries going forward would be significantly reduced. Once the staff get promoted to an exempt position, then they would probably have a lower salary in that position too, as their promotion raise would be calculated on a lower base salary, not including the OT. In the end, it won’t be financially better off for the associates.

    2. Will be very, very interested in the outcome of this case as well as that of the Deloitte Tax Assoc overtime case in CA. There are multiple implications for the results of these trials – not only in CA, but rippling well outside of state borders. Even the non-client service org within DT demands ‘minimum’ hours above + beyond 40/week – but will you find those hours stated clearly by level on the intranet? Or in the promotion letters / agreements? No. It’s primarily verbal, transmitted by oral mythology and enforced by anxiety. Hopefully that will end soon.

    3. Thank you for contacting Mr. Kershaw and getting the most recent update. According to the California Labor Code , it appears that some associates may be misclassified and should be paid overtime. As this would dent a very profitable business model, I’m guessing that the Big 4 Political Action Committees have already taken action to ensure a favorable outcome.

    4. PwC is not cutting the starting salaries of new hires nationwide. However, it is freezing salaries of all staff that it not getting promoted in response to the current economic conditions (revenues are down for the year as clients everywhere are laying off their own people and are cutting costs, I believe it has little to nothing to do with the overtime lawsuit). The firm’s chairman also promised there will not be layoffs (it will be the very last resort), even as competitors have resorted to laying of its staff to make up for lost revenues. This creates the problem that those with one year of experience will be paid the same as new hires since they wont be getting a raise. The way that PwC has solved this issue is by cutting the base salaries of the new hires, and made up the difference with a bonus. For example, if initially your base salary was $50,000 PwC could determine that your base salary is now $46,000. The difference of $4000 dollars would be paid as a bonus (in two equal installment, one immediately upon start, and the other after 6 month at the firm). This way, youre still paid what you were promised, but when the issue of raises comes up again in 2010, the new hires who would now have a year of experience would have a lower base salary that the current one year associated, who would then have 2 years experiences (and who did not receive a raise last year). Should the economy recover, by the next time raises are evaluated in September, 2010 the base salaries will be adjusted accordingly to the market (if PwC is the only firm that cuts the base salaries and does not give raises, then their best associates will likely leave the firm to work for their competitors with the higher base salaries). This was all explained to the new hires in a conference call today.

      PwC makes offers for graduates usually 12 month prior to their start date, and a lot has changed in the market since the summer. A lot of students graduating right now (especially business majors) have trouble finding jobs after graduation and many that have found jobs have had their offers rescinded. The impact of the recession is easily felt amongst college seniors right now since they are nearly all in a terrible job market. The fact that PwC has held a conference call with the new hires to assure them that their jobs are safe and their salary sum and benefits are staying constant despite the market storm is commendable to say the least. PwC could have done nothing, and just held new hires salaries constant during next raise period and given a raise to first years. Or if could have just taken back offers and layed off more staff. However, instead they have chosen to be transparent and open with the new hires. With how difficult is it to find a job for college graduate, they should be happy if they land a job anywhere, let alone a big four. I know I am. After all, the all the big 4 firms take up the top 5 slots in business weeks top places to launch your career http://bwnt.businessweek.com/interactive_reports/career_launch_2008/index.asp despite the grueling overtime.

    5. @ Anonymous 5:32

      Thanks for the input. However it would carry much more weight if it was an official statement. PwC has been the least open with me in that regard. I would be glad to talk to one of your PR/Corp Communication folks and print an official statement with no embellishment.
      Please email and we can set up a tiem to talk on the record.
      fmckenna@mckennapartners.com

    6. Im speaking on behalf on myself and not any behalf of any firm so setting anything up would be impossible. However, anyone would was on that call could confirm what I heard.

    7. “@fm”‘s comments would jive with the Canadian experience – O/T didn’t affect base pay.

      The fact that the economy has something to do with the current situation, while quite a coincidence, makes sense.

    8. The same is true of the US IT at PwC.

      A while back they had a releveling where IT Associaltes and Senior Associates were moved from salary to hourly, this inclluded moving a number of level 1 managers down to senior associate level.

      The appears to have been based on years with the firm and pay rate, with the level 1 managers making the most left as level 1 managers. Level 1 IT managers at PwC normally have no direct reports and a managers in name only.

      There were also a number of level 2 managers that had no management duties.

      When questions were asked about levels, the response in writing was that levels are based on pay bands, not on duties.

    9. I have been connected to PwC in a number of ways. To say that PwC has not laid anyone off due to the economic downturn is naïve, and the firm’s chairman is, at best, parsing words. I know for a fact that PwC has implemented a lay-off policy as the economy slows and there are too many employees for the amount of work. I am not trying to throw stones, but the situation is what it is. As any firm would, PwC is trying to keep profits high enough to maintain its owners/stockholders.

    10. @ Anonymous 5:32. The same message has been communicated to PwC employees internally.

      New hire salaries will be adjusted down but the original offer amount will be made up for in the form of a bonus. This is being done because salaries have been frozen for all except promotees this year. Without doing this, new hires would make the same as a second year associate next year. I have not heard anyone worrying about the overtime issue, and am confident this is in response to current economic times. Its unfortunate for a new hire, but I think considerate of the concerns of existing employees. And frankly, the new hires should be glad they have a job coming out of college in this market.

      As for the issue of layoffs, I can say that in Advisory, nationally, we have hired more people than we have fired in 2009.

    11. Email from Dennis Nally.

      PwC put in a bid for Bearing Point (select areas).

    12. - Sent on behalf of Dennis Nally and Juan Pujadas –

      Economic downturns often present attractive opportunities to strengthen a business and to sprint ahead of the competition. In fact, we’re in front of one right now….one that could — if it comes to fruition — help us advance our PwC strategy and position us to emerge from this downturn stronger than we went in.

      Yesterday, we reached an agreement in principle and signed a non-binding letter of intent with BearingPoint and its secured lenders to acquire selected U.S. contracts, assets and key employees of their Financial Services and Commercial Services practices. We expect to receive contracts with a $200 million revenue stream. At the same time, PwC Japan has reached an agreement in principle to acquire BearingPoint’s entire Japanese consulting practice, with a $175 million revenue stream.

      This transaction, if it closes successfully, represents one more step among many that collectively advance our strategic agenda — namely our commitment to help clients create and sustain lasting change. In short, we expect to strengthen our credentials to help our clients successfully undertake large-scale business transformation projects by expanding our strength in areas such as strategy, planning, operations and technology — particularly with respect to SAP and Oracle expertise. While we are not getting back into the large-scale IT implementation business, those IT credentials are essential, in some cases, for PwC to advise our clients on their successful undertaking of large-scale business transformation projects. In addition to gaining new talent, top-tier clients and a broad new portfolio of contracts, we are also acquiring certain intellectual property, including proven methodologies, templates and thought leadership that will help our overall Advisory business.

      We emphasize that this is just a bid at this point — not a completed transaction. And there’s no guarantee that our bid will be awarded. In fact, in many respects, the process is just beginning.

      Highlights of the process ahead
      The transaction is subject to execution of a definitive asset purchase agreement and Bankruptcy Court approval. It is anticipated that, consistent with normal bankruptcy procedures and prior to approval of the definitive agreement by the Bankruptcy Court, the Court will require the initiation of a process to market the business to third parties. BearingPoint will support our bid during this process based on our agreement in principle. During this phase, however, other bids may emerge. The final decision will be made by the Court based on the highest and best offer. As you can see, there are a number of procedural thresholds needed to close this transaction and this process is expected to take several weeks.

      Why this makes sense for all of us
      So, what exactly are we seeking to acquire? Why are we are pursuing this transaction in this economic climate? What, precisely, would the impact be on your work, your job and your opportunities here at PwC? Again, it’s still early in the process, but since it’s natural to feel some anxiety about any type of change when the economy is in difficult straits, let’s speak to these questions directly.

      Advancing Advisory’s ability to help clients create and sustain change. Here’s what we’re seeking to acquire: key contracts and new clients — primarily in energy, utilities, insurance, pharmaceuticals, and life sciences — along with key people and certain intellectual property critical to meet these new contractual obligations. Helping clients “anticipate, create and manage change” is the mission that drives our entire Advisory consulting practice. If we close this transaction, we gain valuable assets and an exceptional range of expertise central to this mission.
      Emerging from the downturn stronger than we went in requires savvy and opportunistic investments. As we have said before, we are in difficult times and are feeling the impact of the economic headwinds on our business. So it is critical that we continue to be judicious with costs, cautious about our compensation policies, and focused on delivering the PwC Experience to our clients. It is also critical to continue investing in our people, looking ahead and making the right long-term decisions for the Firm. This transaction allows us to address each one of these priorities. How? Because, informed by our due diligence findings, the bid we are presenting is only for the assets that are directly aligned with our strategy, valued at what we believe is a fair economic price. In other words, if we close this transaction, it will be on our own terms — strategic, financial and economic.
      This opportunity is about acquiring complementary new talents. As with prior Advisory acquisitions in 2008 (Entology, NDS), this transaction is overwhelmingly about acquiring new talent, capabilities, contracts and client relationships that specifically advance and enhance our Advisory and Firm strategy. We view the key people and talents we may be acquiring as strategically complementary to the goals we are all working to achieve. And with greater bench strength in key areas — such as strategy, planning, operations and technology — we can strengthen the PwC Experience for our clients and expand opportunities for ourselves, not just now but later, when markets come surging back.

      Undoubtedly, you will have many additional questions. We ask that you be patient with the process we must go through to bring this to what we hope will be a successful conclusion. As we mentioned above, since the Bankruptcy Court must go through the process of marketing the business to third parties, you may see our competitors or other organizations bidding for the same assets. While we await the next steps, we hope that you are enthusiastic about what this transaction will bring to our clients and our Firm alike. We will continue to provide you with updates as substantive events unfold.

      Regards,

      /s/ Dennis and Juan

    13. FM: Do you think that this BearingPoint deal demonstrates the “commitment” the firm says to sticking with the people or do you think layoffs in assurance/tax will be looming? I think this may explain why advisory laid off a while back.

    14. @Let the Speculation Begin
      I think cuts at PwC in audit and tax are coming, probably in April in anticipation of year end reviews. (You’re just not going to get promotion/a good review/assignment, secondment you wanted. Maybe you should start exploring other opportunities…) Then once they digest BearingPoint especially the FS part, they will cut the excess Bearing POint folks just like IBM cut excess PwC Consulting folks when they bought PwC Consulting Version One back in 2002.
      Francine

    15. Heh…you can tell it’s busy season—so many of us were working when Nally sent out the e-mail!

      Glad to hear your opinion FM—pretty much in line with what I think is going to happen. I’m kind of hoping that they will let first years finish out the year, but it doesn’t look like that meshes with their timeline for performance reviews.

    16. There was a discussion on another thread about unions.

      I spoke with someone at the Teamsters – 50% + 1 of a specific class (i.e. associates, or associates & seniors) need to vote to start a union. State Attorneys in some states are unionized – so it can’t be all that bad. And I don’t think CPAs would be dumb enough to think that lifetime health benefits or pension (like Big 3 Auto) would be realistic. I think we would rather control our retirement.

      Maybe a blog about starting a union may appear soon…

    17. Personally, I would be for it, but I don’t think it would ever happen. Too many people have bought into the idea that “someday, all this will be yours.”

    18. 16 – We don’t work for Safeway so I’m thinking there will be no thread re: unions. nice try.

    19. Anonymous @ 3/24 12:47 —

      Why don’t you ask professional aerospace engineers — you know, the guys who design rockets & airplanes — whether they think unionionization and professionalism can be compatible?

      http://www.speea.org/

      — Tenacious T.

    20. Partners and Staff:

      Our Performance Coaching and Development, ARC, and Compensation processes are key drivers of the PwC Experience. Recognizing how important these processes are to shaping the development of our people and building a high performance culture, we continuously look for ways to make improvements and enhancements.

      After the completion of the last performance cycle, we gathered feedback from LOS leaders, partners, client service and IFS staff, and HR. All agreed that PC&D, ARC, and Compensation are integral to the PwC Experience, but that the processes could be enhanced and streamlined. Using their feedback, we have identified several changes to ARC and PC&D that are focused on spending less time on process and more time on feedback that is thoughtful, meaningful and helps our people to grow. These new ideas include:

      a streamlined ARC process for client service Associates, including piloting a unique rating scale for client service Associates (Exceptional, Performing, and Less than Expected) with compensation protocol reflecting that scale;
      additional PC&D guidance around developmental feedback and use of Performance Notes; and
      a more streamlined Periodic Feedback Form (PFF).

      The ARC process for Associates and most of the PC&D enhancements will be implemented during FY09 while the new PFF will be implemented for the FY10 performance cycle.

      ARC Process Changes for Client Service Associates
      For our client service Associates, we are piloting a new idea that grew out of the feedback from past ARC cycles. Starting with the upcoming Associate ARC Meetings, we will use a unique rating scale which will place our Associates into one of three groups: Exceptional, Performing and Less than Expected. We expect that most Associates will fall into the Performing group, with small numbers who stand out as either very high performers or as falling below the standard set by their peers. Additional guidance regarding ratings distributions for FY09 will soon be provided by the Lines of Service.

      This change reflects the feedback we have heard many times — that it is difficult to assess client service Associates on the four-point scale that has been used in the past. The reason this is difficult is that our Associates have limited work experience and their rating may depend more on their initial client assignments than their dedication or capability. In past years, this has contributed to a large portion of ARC meeting time spent in debating ratings rather than focusing on how to provide feedback to help our Associates grow and develop at PwC.

      Regarding compensation adjustments, the performance rating will continue to be the primary predictor of compensation decisions, where like rated people will be treated consistently.

      The ARC process for the Associate group will also be streamlined. Where Market Teams are in place, for example in Tax and Assurance, the ARC will be structured by Market Teams. Where Market Teams are not in place, a similar process will be followed as facts and circumstances allow. In all lines of service, the coach for each Associate will serve as the file reviewer for the ARC process. The coaches for each Associate on the team will present a brief assessment of the Associate’s performance, propose the appropriate rating, and review the high performance messages that are to be communicated to the individual with a selected group of partners and/or other leaders on the team. This means Associates will be represented in the ARC by the person who should know them best and who coached them throughout the year. Together with the simplified rating scale, these changes should result in a more efficient process and one that will help our Associates grow into high performers.

      Additional PC&D Enhancements
      In addition to the ARC changes for Associates, we are putting in place some guidance for the FY09 PC&D process that will be applicable to all of us. In April, you will receive more information on these enhancements to the process which include:
      Requiring at least one developmental point in each PFF.
      Clarifying the use of Performance Notes as an alternative (in certain circumstances) to preparation of the PFF.

      Revised PFF Available for the FY10 Performance Cycle
      I also want to provide a preview of the new PFF forms that we will be using Firmwide in the next cycle. As you know, the PFF is a core component of our Performance Coaching and Development evaluation process. It requires the reviewer to assess performance against our Four Behaviors to help each of us live them better. Consensus feedback indicated that the current PFF encouraged repetitive and often excessive narrative, took too long to complete, and focused many reviewers on selecting the right Behavior in which to place comments rather than the feedback itself. We have retained the focus on the Four Behaviors as the key feature of the form. However, we have collapsed the previous form’s twelve boxes (three for each Behavior) into one section for Behaviors with two subsections (one for a reviewer’s observations of the demonstration of the Behaviors and related impact, and one for coaching and input regarding areas for growth and development). In addition to the changes described above, you will notice the following changes:

      An overall simplified format that will be available at the beginning of FY10.
      A new section titled “What I learned” designed for staff input (preferably brief and concise “bullet point” type format).
      A new section titled “Areas for Improvement” designed for staff input. This section is intended to allow staff to demonstrate self awareness and focus on higher performance.
      An optional section for a LOS specific supplement (designed to address technical and LOS specific assessment and developmental items). Not all LOS will choose to have this section.
      Replacing the current assessment of Accomplished/Developing/Insufficient by a section for the reviewer’s overall assessment with a choice of performance assessment levels: Exceeded expectations, Met expectations, and Below expectations.
      Coaches will also have access to the PFFs written by their Coachees. PFFs should be reviewed by each reviewer’s coach with an eye toward the quality of the coaching and feedback that is being provided. If we are to improve the coaching and direct feedback that occurs in this PC&D process, then transparency to the PFFs is essential.

      On behalf of the process review team, we are excited about these changes. We believe that they will both streamline and enhance the existing processes, while maintaining their value as drivers of our PwC Experience, our Behaviors, and our high performance culture. We will provide additional specific guidance when we roll out the new PFF and prior to this year’s ARC process. We welcome your comments and questions.

      Regards,

      /s/ Scott Duncan

    21. Tenacious T. – Lets ask the Auto industry instead.

    22. Anonymous @ 3/25 12:29 PM —

      Your last point is as invalid as your prior point. It is only the most superficial of reasoning that ties the current problems of the U.S. auto industry solely to unions. I’ve been to Detroit, I’ve consulted to the auto industry. Yes, the cost of union retirees is a burden that impacts cost competitiveness, but that’s not the only problem, nor is it the biggest problem, the industry has. There are a number of serious issues, among them the quality of management and the cumbersome decision-making process inherent in a globally outsourced, multi-level bureaucracy. For example, management’s decision to continue to use batch manufacturing in order to capture “economies of scale” versus the Toyota Production System and use of lean manufacturing principles and the concepts of continuous flow and demand pull has had catastrophic effects.

      You may not like unions; you may think unions are a problem rather than a solution. But don’t blame them for all the problems facing the auto industry. Stop parroting somebody else’s talking points and do some research — preferably first-hand research — of your own, for a change. You might start by researching Toyota’s NUMMA facility in Fremont, CA.

      — Tenacous T.

    23. The auto industry is blue collar: I don’t know what firm you work in but I am not blue collar.

    24. reads to me like “Whatever we can think of to lay off some more people so my job is secure and I can be or remain partner”

    25. The individuals on this site who post internal company emails are definitely looking to get themselves fired. I know for a fact that HR monitors this site frequently. Unless you are copying and pasting the emails from your Lotus Notes to your Gmail, you can assume that your navigation and activity to this site has been monitored and documented.

    26. @25 – please please explain how this matters….maybe if you give it a think, you will realize your own folly….fire me for visiting a blog….me and my lawyer need an early retirement….

    27. Anyone with the slightest bit of intelligence probably doesn’t post on here from their work computer.

    28. @26, if you’re currently with PwC, and the contract you signed with them is anything like the one I signed in Australia you’ll find that they may well have a case to dismiss you for forwarding internal emails to public fora. Of course, in the US such a clause might violate your 1st amendment rights and I’d be interested to know if anyone knows for sure whether that’s the case or not.

      In Australia (and elsewhere) I think such terms are more enforceable, especially if a case could be made for their comercial harm to PwC. I think #25 is right: be careful out there!

    29. KPMG’s internal response to wage & hour suits:

      Notice to Personnel Regarding Wage and Hour Lawsuits
      A Message from Sven Erik Holmes, Executive Vice Chair, Legal and Compliance
      10:30 AM ET, June 5, 2009

      As some of you may already know, a number of “wage and hour” or overtime lawsuits have been filed against all of the major accounting firms. I am writing to share some information with you about the wage and hour lawsuits that have been filed against KPMG.

      The Lawsuits

      These lawsuits were filed by several of our former professional employees (“Plaintiffs”) and allege that all of KPMG’s associates and senior associates were improperly classified as salaried, or “exempt” employees (who do not receive overtime pay), and that they instead should have been classified as “non-exempt” employees and paid overtime. Among other things, the Plaintiffs are seeking back overtime pay and other monetary awards.

      I want you to know that we work very hard to be an employer of choice and believe we have classified and paid our professional employees appropriately. Consequently, we have denied the claims asserted in the lawsuits, and we are actively engaged in defending against them.

      The Plaintiffs are seeking to certify the cases as class actions, on behalf of all current and former associates and senior associates nationwide, as well as within certain specified states. If the courts grant the Plaintiffs’ request that the cases be certified as class actions, then some of you may be potential class members, in which case you would have the right, at a future date, to determine whether you want to participate in the cases.

      What it Means to You Now: You May Be Contacted by Counsel

      As part of these cases, the lawyers for the Plaintiffs made requests for the names and contact information of many of our employees, and we have responded by providing certain information identifying some current and former employees. As a result, some of you may be contacted by counsel for the Plaintiffs.

      You may also be contacted by counsel for KPMG. We want to assure you that you are free to speak to either side’s counsel, both sides’ counsel, or neither side’s counsel. The choice is entirely up to you. Your job will not be affected, and you will not be penalized or retaliated against in any way. In addition, you won’t be rewarded by KPMG based on any information that you do or do not provide.

      Of course, if you decide to be interviewed, please be sensitive to your professional obligation to refrain from disclosing confidential information about KPMG’s clients.

      We also want to remind each of you that service to our clients is among our most important goals and for that reason, while we will work hard to defend the Firm’s positions and interests in the litigation, we will also work hard to avoid letting the pending lawsuits become a distraction.

      KPMG remains committed to the principles and actions that have made us an employer of choice. We appreciate the efforts you expend on behalf of our clients.

    30. All paying overtime will do is bring down the salary. I lived and worked in Ireland for a Big 4 frim that payed overtime until you made manager. The base salary for seniors and associates (the ones getting overtime) was about 35% less then it was in US, and you got no bonus at the end of the year. The non-ot paying salary for a manager was about 15% less then you US but you got a bonus worth 20% of your salary so it brought the amount up alot. I’m sure this is what they will do here if this case goes against them. They will pay less and take away bonuses and it will be a net-net wash in the end.

    31. Has anyone heard any updates on the PwC case lately? KCR has had no updates since March and there is no other news out there that I can find. Just curious. Thanks.

    32. Hi there – just wanted to let everyone know the link to Mr. Kershaw’s bio has changed with KCR’s new website (the one referenced above is a broken link). His bio is located at http://www.kcrlegal.com/William-Kershaw.aspx and you can keep up with the status of the PwC case on KCR’s site at http://www.kcrlegal.com/class-action-certified-against-pwc.aspx – last update was posted last month (7/6/10).

    33. @Taryn

      Thanks! I will change links to new ones.

    34. A letter asking to join the class action overtime lawsuit for PwC in California was just received. If one is no longer an employee of PwC,and does not aspire to work for PwC in the future, are there any repercussions for joining the suit? The only one I can think of would be that it would be necessary to disclose it on a future job application, if asked to do so. As apparently many letters were sent out, I have found several people asking this question on the forums, no one seems to have a good answer.

    35. @SusanSwanson

      Why would you have to disclose it in a future job application?

      Keep in mind that being a part of a class in a suit like this is public information. So like anything else that ends up on the internet, anyone searching for info on you for any reason can find it. It may not be the easiest thing to find, but it will be there.

      Anyone else have any other comments on this question?

      fm

    36. The lawsuit question was not on an application, but I seem to remember it being on a previously completed extensive background check.

    37. @SusanSwanson

      Interesting. Tell them next time to Google it. Ha.

    38. […] Big 4 are subject to class action wage/overtime suits in the US.  In the California suit still pending against PwC they’re expecting a final decision from the 9th circuit appeals court early this year. In arguing […]

    39. […] But the court noted that the determination regarding exemption is one involving a controlling question of law, that there is substantial ground for difference of opinion, and that an immediate appeal from the order will materially advance the ultimate termination of the litigation. Therefore, Judge Karlton certified the matter for interlocutory appeal pursuant to 28 U.S.C. § 1292. […]

    40. […] But the court noted that the determination regarding exemption is one involving a controlling question of law, that there is substantial ground for difference of opinion, and that an immediate appeal from the order will materially advance the ultimate termination of the litigation. Therefore, Judge Karlton certified the matter for interlocutory appeal pursuant to 28 U.S.C. § 1292. […]

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