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The mood at Connolly's Bar on East 47th Street was bleak. Hours before, a federal grand jury in Houston had indicted Arthur Andersen for obstructing justice by allegedly shredding thousands of documents relating to Enron Corp.
In the dimly lit watering hole, though, advertising audit leader Kathie Eagan already had a game plan. She told the 20-odd Andersen accountants and support staff present that together they had a bright future and that they should keep working hard while a deal could be found. Andersen might be on the way down, but by sticking together, they would survive, even if it meant "hanging out a shingle and becoming a boutique."
Ms. Eagan's words hit their mark. The panic of sinking as individuals had been put behind them, and now they could look forward as a team. "Her priority was to make the best deal for everyone," says Alex DeVincenzo, a former senior associate at Andersen.
Two tense months later, she delivered on that promise. On May 28, nearly the entire team, consisting of four audit partners, a tax partner, 34 nonpartner professionals and four administrative support people, became part of a 332-person New York area Andersen contingent that signed on at Ernst & Young.
Such tales of successful escape from the imploding erstwhile giant, which until recently boasted 28,000 U.S. employees, have become increasingly commonplace. just last week, KPMG hired 27 former Andersen partners and 174 Andersen staff members in metropolitan New York. Grant Thornton tapped five Andersen partners and 32 other Andersen staffers for its New York office.
In the case of...