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April 14, 2008

E&Y to integrate firms in EMEIA and Asia

The world’s third largest professional services network is to combine the operations of its member firms across Europe, the Middle East, India and Africa (EMEIA) into a single business unit.

In a major and unprecedented global restructure, Ernst & Young (E&Y) has approved the combination of 43 European firms into a single legal entity and will further integrate operations in the Middle East, Africa and India where legally possible.

In a separate move, 700 E&Y partners in Asia have also approved the integration of 15 firms in the Far East Asia region.

E&Y Global said the restructure was motivated by a desire to mirror the globalisation of clients and industry in general. The EMEIA practice will be an $11.2 billion organisation and comprise of about 60,000 people. It will be led by a single executive team implementing a shared strategy. Within EMEIA, there will be 13 sub-areas that will have parallel management and governance structures. Costs and investments will be shared across the region.

E&Y added: “All 3,300 partners across EMEIA will have the same approach to performance evaluation and compensation. The partners will be employed in the local legal entities and the profits will be earned and people paid by those local entities”.

E&Y UK chairman Mark Otty has been nominated to lead EMEIA. Partners within EMEIA will vote on the integration by the end of May and the new practice could become effective as soon as July.

The integration of the Far East Area creates a $1.2 billion organisation, with more than 20,000 people.

The new structure will also be effective from 1 July 2008. David Sun and Jim Hassett have been confirmed as Far East co-area managing partners.

E&Y said the integration will allow it to better risk manage practices in the hope this will prevent any large-scale lawsuits affecting firms across the region.

E&Y said: “The separate legal nature of each member firm in the area will be respected and clients will continue to do business with local country legal entities. Each member firm will also continue to maintain its own professional indemnity insurance.”

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