According to Nick Land, the UK chairman of Ernst & Young, they were not as important a factor in the decision to hive off the consulting business as the trends within the information technology and consulting fields. Although the business made a lot of money, the management of the firm reached the conclusion that in the medium to long term it was likely to be hit by the continuing convergence of hardware and consulting firms.”We realised we would have to link it in some way. Also, we took the view that we were not the only people thinking like this, so if we could come up with the right solution there was a lot to be said for being the first mover,” he says.And, indeed, it was not alone. But it is in the fortunate position of being the only one that has so far been able to pull off a deal KPMG announced its intentions first. But more than a year after the internet company Cisco Systems spent several hundred million dollars acquiring a 10 per cent stake in its US consulting practice, the accounting firm has still not been able to achieve its aim of floating the business.The fates have been hardest, though, on PwC. Last month in the very same week that it was being credited with an important role in bringing about that famous compromise with the SEC, it saw the planned sale of its consultancy business collapse.The firm had been expecting to pick up as much as $18bn (£12.4bn) by selling the operation to Hewlett-Packard, the revered US computer and electronics company that – under new chief executive, Carly Fiorina – was seeking to make a giant leap into consultancy. But lower than expected earnings from HP against a background of general unease about technology stocks led to the transaction being abandoned.The result was that the firm was back where it was in February – when it announced it was examining its options for restructuring the business “to respond to the evolving needs of its clients in the networked economy”.

Officially, anything remains possible, but insiders still expect either a flotation or trade sale, possibly to a rival of HP, such as IBM, which was rumoured to be interested earlier. James Schiro, the chief executive of PwC, said: “We remain committed to developing a structure that will allow all our businesses to flourish while maintaining the professional independence and objectivity necessary to ensure healthy capital markets.”Only Deloitte & Touche claims to be committed to remaining as a single entity. But its rivals suggest that it, too, is looking at the options for restructuring the business.At the same time, the firms are still smarting from the decision earlier in the year of the American Bar Association to vote against plans to allow lawyers and accountants to set up in partnership. The firms point to moves to allow such a move in the UK as indicating that the US legal profession will eventually cave in. But for the moment, their legal ambitions are being held back by their inabilities to offer partnerships to the lawyers they want to recruit.All of this is in marked contrast to the situation only a year or so ago, when the received wisdom was that increasingly global companies required advisers who could combine a whole range of professional services under one roof.

Cynics would suggest that the trend also had a lot to do with consultancy and the other fields into which accountants increasingly moved, such as law and corporate finance, being intrinsically more profitable than the core audit role, which had been devalued, particularly in Britain, by a spate of corporate collapses in the late 1980s and early 1990s.The big firms have always rejected such suggestions, and last week Philip Laskawy, E&Y’s global chairman, attributed the growth in his firm’s total revenues to $9.2bn to the separation of the consulting unit because it allowed the firm to focus on its core business of assurance, or audit, and advisory business, as well as corporate finance, tax and law.But this could just be a challenge to those of its rivals that have not yet succeeded in separating the two parts of the business. Certainly, KPMG can be expected to come up with some kind of rejoinder at its results announcement at the end of this week. The firm’s UK senior partner, Mike Rake, is still said to be irritated by the role played by PwC and E&Y in arranging the compromise with the SEC. His view is that the SEC could still make life difficult for international companies and he is in favour of stronger pan-European regulation of the accountancy profession to counter the influence of the US body.But, since the European authorities have long been concerned about the activities of the small band of international firms, the big names of the accountancy profession should not necessarily see that as a safe haven.. When Ivan Seidenberg took a job as a lowly cable splicer for New York Telephone more than 30 years ago, he could not have imagined the size of the company he runs today. Now, sitting at the top of a business worth some $70bn (£48bn), the co-chief executive officer of Verizon Communications can appreciate the size of the operation that has emerged over the last five years, during what has arguably been the most exciting time in telecommunications since a certain Mr Bell invented the telephone.

When Ivan Seidenberg took a job as a lowly cable splicer for New York Telephone more than 30 years ago, he could not have imagined the size of the company he runs today. Now, sitting at the top of a business worth some $70bn (£48bn), the co-chief executive officer of Verizon Communications can appreciate the size of the operation that has emerged over the last five years, during what has arguably been the most exciting time in telecommunications since a certain Mr Bell invented the telephone.
One of Mr Seidenberg’s favourite words is scale. It’s a mantra that the thoughtful New Yorker has been fond of expounding from his offices in downtown Manhattan, as he helped build this one-time regional phone company into the dominant US wire and wireless communications provider. This philosophy also helped drive Verizon to take its US wireless business to the next stage by linking up with the world’s biggest wireless company Vodafone The desire to be big is central to Mr Seidenberg’s strategy. “As we look at the US market, we’ve been focused on growing into a super-regional player,” he says. “We don’t feel we can win customers and business in the European market or the Latin American market or the Asian market unless we’re a more important player in the North American market.

This is because our strategy is to leverage our networks and our customers.”In the US the “bigger is better” strategy has so far worked well: Verizon Communications is the largest provider of both wireline and wireless services. But there are challenges, not least of which will come from the changing shape of the business.About 65 per cent of Verizon’s revenues come from its traditional wired services, but looking ahead three to four years this will be turned on its head with 60 to 65 per cent of all revenues coming from the faster-growing businesses of mobile and data networks and services. This shift in where the growth and value of the business lies puts pressure on all traditional telecoms players to, in Mr Seidenberg’s words, “go from being a local telecommunications company to being a global player”.This is not news to the telecoms sector, where companies from BT in the UK to NTT Communications in Japan and AT&T and MCI Worldcom in the US are all struggling to adjust their business models. But the shift could prove problematic for the relationship between Verizon and Vodafone. It’s been a little over a year since Verizon and Vodafone agreed to co-operate in the US in Verizon Wireless, but there are growing questions marks over just how they will expand this partnership, both in America and internationally. For example, both companies are developing data portals that will eventually carry multi-media services to their mobile subscribers for a fee. Vodafone has a portal partnership with France’s Vivendi Universal – Vizzavi – but Verizon Wireless has its own mobile portal business with its own brand name.Vodafone’s global-branding strategy is also difficult to square with the US brand Verizon Wireless.