I was hired this past summer at a next tier firm to start fall 2010. But will not recieve my salary untill September…

they have me over a barrel

Sure. I think we agree. Everyone has accountability for their own actions. You express the sort of values that I like to live by. And I admire you for (presumably) espousing those values within a Big 4 firm where they’re not exactly fashionable, even now (in my experience, and from what my friends still inside say).

BUT. Those grads we’re talking about arrive (with whatever values their upbringing has resulted in) in a “working world” that is particularly all-consuming — the working world of the “Big 4 firms”. In this world the firm *is* the world and you spend at least 10-11 hours a day there, being fed continual rah rah about how great and valuable and significant PwC/EY/Greendot/KPers is. You are surrounded by people who outwardly espouse this groupthink and rigid set of norms.

As one of those grads you will notice the massive disparity between your salary and charge out rate. You will note your utilisation % and do some quick math. And when the Grange Hermitage starts flowing you may make an erroneous conclusion about who’s paying. You get used to a certain lifestyle. I read above about other peoples’ experiences with profligate and not-so-profligate partners. My experience: the latter was 1 in 20 of the former. And people didn’t like working for them because they didn’t turn up with a big team dinner once a month. Perversely, legendary dinners, paid for by clients, actually help the providing partners become more successful because they become the partners everyone wants to work for. Because they throw great team dinners.

5/6/7 years later you make manager and you realise who really pays for all of that (if you didn’t before). You figure out what’s been going on. And then you make a choice. One choice might lead you to partnership. And you know what it takes to be successful, and attract the “best” people to your jobs.

A lot of the people learning the ropes are kids still fresh out of university, who’ve done nothing much but grind through books their whole lives and are now having their own moral compasses set by the “real world” they encounter around them. Add to that the fact that, as we all must acknowledge, the majority of B4 partners get to be partners because they can sell work and deliver profit (and not much else).

We can all probably remember ethics briefings and ethics initiatives at the firms we work(ed) at. We all probably have different opinions about the degree to which they were “just lip service” and once again that comes down to the behaviours of the partners we worked for. They’re just people, and their personal set of ethics wasn’t the reason they made it. Surprise surprise really.

As Truman notes all over this site — it’s about greed. Greed is the oxygen of the firms. If it makes you feel a bit sick you need to get out. Just my opinion!

Any kind of extreme profligacy is inappropriate, especially on the audit side. It doesn’t fit with our image as accountants, financial professionals, trusted, independent and objective. As a partnership it may be flouting IRS rules. Spending money on a T&E basis on partners personal peccadillos rather than paying them out in partner profits that are taxed as partnership distributions is cheating the tax man. Excessive partying and activities that cause discomfort and feelings of pressure for some members of the staff put the firm in a precarious legal position and open it up to liability, which is not good for anyone. Finally wasteful spending translates into higher overhead, higher fees and eventually the kind of reactive cuts and layoffs we are seeing now. Don’t tell me that there wasn’t a lot of high on the hog living during the golden days of Sarbanes-Oxley.
Francine

I do not doubt that the strip clubs and outright improper expenses can and does happen — although I have never seen it. Maybe being female I wouldn’t. I was invited once, but I am confident that was on personal expenses. I did not go.

The only thing I have seen is expensive wine, expensive restaurants and expensive hotels — where there were better choices to be made. And even at that — I have seen this rarely and usually on the firm’s dime not the client’s. I still think people do not spend company and client money properly — but I haven’t seen it as outrageous as you have.

I agree that ethical and appropriate behavior starts with the individual. I could leave it there were it not for the fact that we are talking about licensed, accounting professionals who are supposed to operate under a code of ethics, especially with regard to relationships with clients, that goes above an beyond what any specific firm or partner in the firm requires. And then there’s the fact that the partners are the owners of the firm. As owners, their example goes a long way towards setting the tone for what is and isn’t appropriate especially for less experienced professionals who may not have a view to agreements and understandings and billing arrangements with clients.

Finally, if all of the firms had not been caught at one time or another with their pants down overbilling clients for T&E, especially government clients where it’s a big no-no, http://retheauditors.com/2007/08/ibm-pwc-settle-kickback-allegations/
I would be more forgiving of the “well, everyone does it” and each partner can set their own tone, approach. Add to that my experience where passing through inappropriate expenses to clients because the clients themselves can;t expense them any more, think strip clubs, and ‘Houston, we still have a problem.”http://retheauditors.com/2007/09/enron-the-beginning-of-the-end-of-accounting-scandals/

Francine

That said — people should be responsible to themselves. This means that just cause the partner is doing something wrong doesn’t mean you have permission to do so as well. I could not look myself in the face if I did a lot of the excessive spending that some people do around here. And using the partner’s behavior as an excuse for your own bad behavior can only go so far (and that is not very far at all). So while I agree and understand your point on tone at the top — I can’t say that I accept this gives permission or excuses staff from their behavior.

For similar reasons — can we blame the mortgage broker for steering so many people wrong. If a mortgage broker approves me for a $2M loan I am smart enough to know that I should not take out such a loan. Was this broker wrong — yes. But I would blame myself if I had taken the loan out. The analogy is similar. If a partner approves that I use a 5star hotel costing $500/night when there is a quality hotel nearby for $150/night (not a dive) — then the partner is wrong, but I am just as wrong (or worse if the partner did not know all the options and all) if I take advantage of that approval. It all comes down to the two wrongs not making a right thing.

If we, the employees see problems with the partnership (as are so often stated on the blog) then it is our responsibility to rise above it and do a better job than they do. This is how change is effected… not whining and blaming.