My last post recounted McDonalds’ creation of its own ad agency and posited the question whether bespoke law firms could be far behind. Enter GE. Yes, that GE.
According to CFO.com, GE is transferring about 600 of its tax professionals to PwC:
Reacting to what it sees as increasing uncertainty about tax rules in the United States and the rest of the world, PwC will hire more than 600 lawyers and public accountants from General Electric’s tax team and incorporate GE’s tax technologies and processes. In exchange, GE will get to shed salaries while still benefiting from the expertise of its legacy team.
The deal was further described:
Although GE declines to say what costs it will shed in the deal, Gosk said in the release that the company is “pleased to advance our longtime relationship with PwC in a way that provides an opportunity for other leading companies to tap into the world’s best tax team while providing outstanding career opportunities for those legacy GE professionals.”
Under the five-year agreement, which is slated to take effect April 1, PwC will be adding accountants, lawyers, and other tax professional from GE’s corporate division and the company’s other businesses, including GE Capital. About 20 corporate tax employees will stay on at GE to work on consolidated financial reporting, mergers and acquisitions, and other strategic efforts, along with managing the PwC relationship. An additional 250 tax employees will remain with company to service GE’s individual businesses.
The arrangement was struck after GE “looked to reevaluate the optimum delivery of these critical global tax services now and into the future,” the PwC press release said. “The new Global Enterprise Tax Solutions team will sit within PwC Tax and will provide managed services not only to GE but also to other PwC clients as well.”
So we have lawyers and others going to PWC. The interesting part is that PWC plans to leverage the GE professionals to provide services to other clients, and GE will share in the revenue stream.
In the space of a week, we see two examples of major companies designing solutions to address ordinary corporate needs that involve custom designing a solution outside the company. Shedding headcount is a positive for most companies and the idea of better leveraging what were corporate assets has to be enticing. The question remains, when do law departments dip their toe in this trend.