A San Francisco tax firm founded by a group of former Arthur Andersen partners has taken the questionable step this week of renaming its firm from WTAS to Andersen Tax.
Arthur Andersen became one of the most high-profile casualties of the accounting scandal wave of the early 2000s, having served as auditor for Enron, WorldCom, SunBeam, Waste Management and other infamous accounting disasters. As partners began deserting the former Big Five firm for its competitors, Andersen essentially collapsed in 2002. The firm’s conviction on obstruction of justice charges was eventually overturned by the U.S. Supreme Court in 2005 after its attorneys argued that the jury had not received the proper instructions, but by then it was too late.
In the years since, the firm has mainly focused on resolving various shareholder lawsuits. Ownership of the partnership was transferred to four limited liability corporations known as Omega Management I, II, III and IV.
Still, a number of firms did emerge from the ashes of Arthur Andersen as it imploded, including WTAS, Huron Consulting Group and (before the Enron scandal) Accenture, which was formerly Andersen Consulting. In the case of WTAS, it was founded in 2002 by CEO Mark Vorsatz and 22 former Andersen partners with a focus on tax (see WTAS Revives Arthur Andersen Name as Andersen Tax).
The firm has since grown internationally, but it faced some trademark restrictions on using the WTAS name in Europe. The firm hopes to expand in Europe, and Vorsatz wondered whether the firm should revive the Andersen name. The firm conducted a survey, according to The Wall Street Journal and Bloomberg, and encountered decidedly mixed reactions. In some countries, such as the United States, the United Kingdom and France, over 60 percent of the respondents perceived Andersen as a tarnished brand, while in China the figure was 40 percent. However, among the corporate executives surveyed, many of whom were former Andersen employees, more than half of them reportedly had more positive impressions of the name and said they were more likely to work with a firm that took on the Andersen name.
In any case, the rebranded firm plans to concentrate on providing tax services and avoid the audit work that got its predecessor into such deep trouble a dozen years ago.
There is something to be said in favor of a rebranding effort and taking on a more familiar name than WTAS. Many firms seem to be moving in the opposite direction, though, rebranding themselves with initials such as EY instead of Ernst & Young or PwC instead of PricewaterhouseCoopers. While a set of initials may be slightly easier to say for anybody who knows their ABCs, firms that change their names to an abbreviation are taking the risk that the public will start to blur all those initials together and have trouble distinguishing one set of letters from another. Though some abbreviated brand names have been around long enough to imprint themselves thoroughly in the public’s mind (think of IBM and HP in the tech industry), too often firms end up making themselves almost interchangeable by giving up the goodwill built up by their founders over the course of decades.
WTAS’s initiative to rebrand itself as Andersen Tax is a gutsy move, but given the fact that the Arthur Andersen name now has such negative connotations in the minds of so many potential clients, it could end up backfiring in the end.
Do you think it’s a good idea for WTAS to change its name to Andersen Tax?