GOLDMAN SACHS

Goldman Sachs

Goldman Sachs

Taking a look at the variety of their services and spots, the '5' '1' firm, firms are now almost unidentifiable compared to what they had been in 1985 (Goldblatt 1997). Goldman now highlights proprietary trade — a change from its principally advisory roots; Hewitt and Accenture have moved into business process outsourcing; and both McKinsey and Latham have expanded their service offerings and global coverage (Serwer 1998).

According to most press reports, McKinsey experimented with some significant changes as the impact of technology on consulting was felt. An early countercultural attempt to acquire and integrate an IT firm was generally considered to be a failure (Creswell 1999).

In the late 1990s, the technology bubble led the firm to expand at a faster pace, rapidly increasing the rate of hiring new juniors. It opened offices in many more locations around the world and reportedly cut back on training. As did other professional firms in that era, McKinsey stretched its compensation system to pay more to stars in order to keep them.

Then, when the bubble burst, the relative economics dropped and the firm had to let a lot of people go. A “capital call” on the partners was issued. According to most reports, the new managing partner who took over in 2003 has reoriented the firm on a more values-driven, one-firm firm approach.

Goldman Sachs has also been through significant policy and cultural changes, particularly during the late 1990s, leading up to the decision to go public (Creswell 1999). As with much of Wall Street, the traditional reliance on long-term relationships to build the firm has been significantly influenced by a move toward a “transactional” approach, pursuing fast-moving market opportunities.

Most observers would concede that Goldman is still, by far, the most collaborative, team-based banking firm. But this may now be a relative rather than an absolute description.

Latham has also stretched the boundaries of the one-firm firm approach. As we discuss below, it has relied, like most of the one-firm firms, on an increasing use of laterals. It has also introduced a greater individual component into its reward scheme. And it has acquired some sizable groups over the course of its expansion. (For example, it added a firm of more than 90 lawyers in France in 2001.)

Hewitt has also experienced dramatic changes. A few years ago it acquired a large firm which it had some difficulty integrating. It has gone public and has shifted from mainly an advisory firm to primarily a human resources business processing outsourcer.

Hewitt often acquires the client's HR department in order to do this, which is contrary to the one-firm firm approach of stringent, selective recruiting from the bottom.

Accenture has also migrated to the profoundly different business of outsourcing, along with the concomitant less stringent hiring practices (Serwer 1998).

In spite of all these changes, something essential remains in most (if not all) of these firms. They are still, observably, institutions designed much more committed than most of their competitors to emphasizing ...