Headhunters target staff at Andersen

Last week, Andersen was fighting to retain its credibility as an auditor. It admitted it had not acted on concerns about the finances at Enron, the bankrupt former energy giant, as long as 11 months ago. It also fired the head of the Enron auditing team and the management of its Houston office.

Headhunters have been quick to seize on the dip in morale at the firm and said they are working on brokering team moves to other Big Five accountancy firms.

One recruitment professional at a large New York firm said: 'We could see wholesale departures from areas such as restructuring consultancy, which is a hot area right now and good people are in demand.'

Joe Berardino, Andersen's chief executive, tried to turn the tide of negative publicity surrounding the firm by writing an open letter to its clients explaining its role in Enron. A spokeswoman for Andersen said Berardino had been just as active in addressing morale inside the firm through webcasts, e-mails and voicemails.

But morale is still low and senior partners are already scouting the job market, recruiters said. Two partners from the financial restructuring group are said to have left last week to set up their own consultancy.

Alan Kramer, president of Kramer Executive Resources, a recruitment firm that concentrates on the accounting industry, said: 'I have been approached by a number of Andersen partners and managers since last week.

'They realise that the negative publicity is going to be around for some time and they are actively trying to get out of the firm. They are having problems selling services in competition with boutique firms and the other Big Five firms.'

Staff are also worried about their pay, which is largely dependent on Andersen charging much higher fees than other big four firms. Andersen charges up to $525 (€588) per partner per hour. Rivals do not charge more than $400. Industry sources say that Andersen has more $1m-a-year partners than many of its rivals.