An improving economy helped spur growth for Orange County management consulting firms during the past year.
The big story on the local consulting scene: Former No. 2 Capgemini shuttered its local office, though the company continues to be active in OC.
Overall, management consultants boosted local employment 14% to 550 workers in the past year, according to this week’s list of the county’s 10 biggest firms.
All but three of the consultants posted gains or kept staffs flat. In all, management consulting firms added 68 workers to their staffs.
Paris-based Capgemini, which would have been No. 2 on this year’s list based on its 2004 numbers, recently closed its Irvine office.
Capgemini folded its OC unit into the company’s El Segundo operations. The move affected about 100 workers and came as part of a companywide consolidation effort, said Kevin Poole, the consultant’s Western area director.
He’s not worried about the impact on clients.
“It’s not that we’re abandoning the Orange County market,” he said. “I would say 95% of our consultants are actually on client sites. There certainly is little need for them to come to a physical office for them to get their work done.”
Nevertheless, Capgemini has had its share of changes. The firm, which ran two Irvine offices at one time, had laid off about 60% of its OC workers by the middle of last year.
Poole blamed the pullback on the completion of a big onetime project. The firm’s results put the 2004 list of management consultants in negative territory.
One of the biggest gainers this year was No. 1 McLean, Va.-based BearingPoint,by far the largest on the list.
BearingPoint added 50 people in Costa Mesa for a 22% increase in the past year.
“I think our growth is consistent across all of our lines of businesses,” said Michael Surface, vice president in charge of the OC office. “What’s fueling that is the turnaround in the economy. When our clients do better, they tend to use more services.”
BearingPoint dwarfs the rest of the list’s consulting firms.
With 275 employees, BearingPoint represents more than half of the list total and is larger than the next eight companies combined.
One of the big focuses for BearingPoint is technology consulting. Surface said it has been helping companies upgrade their enterprise resource planning systems, among others.
BearingPoint also has seen growing demand in supply-chain management that helps companies become more efficient to cut costs, among other things.
And BearingPoint,formerly part of Big Four accounting firm New York-based KPMG LLP,has seen some growth from helping companies get on board with Sarbanes-Oxley legislation. The 2002 reform has been a boom for accounting firms and others who help public companies comply with stricter rules.
“We do a tremendous amount of work in compliance,” Surface said.
Aliso Viejo-based Cerius Consulting Group Inc. climbed one spot to No. 2 after posting a 7% drop in local employees to 56.
Cerius focuses on consulting for small and midsize business in healthcare, technology and financial services industries that are looking to grow.
“We really concentrate on the areas where there’s not a lot of competition,” said Pamela Wasley, chief executive of Cerius.
The consulting company’s decline here came as it grew elsewhere. Cerius recently opened offices in Los Angeles and San Diego and is looking to open in the Inland Empire. It moved workers from OC to the new offices in the past year.
A growing area for the firm is its “interim practice,” which provides top-level executives in areas such as marketing and finance, on a part-time basis.
New York-based McKinsey & Co. came in at No. 3, up from No. 6 last year after adding five workers for a 13% gain at its Irvine office.
Irvine-based Xroads Solutions Group jumped three spots to No. 4 with 12 new workers.
A big driver of growth was its business improvement group, said Xroads President Dennis Simon.
The eight-year-old company focuses on small and midsize businesses. It helps companies improve their financial results, among other services.
The biggest decliner on the list was No. 5 Towers Perrin, which posted a 33% drop in employees at its Irvine office.
Stamford Conn.-based Towers Perrin folded its OC retirement consultants into its Los Angeles office, said Michael Fox, managing partner at the firm’s Irvine office.
Those employees still serve OC, Fox said. He expects to hire five or six people to handle consulting work in healthcare and human resources.
Another firm to post an employee decline was No. 10 Right Management Consultants Inc. in Irvine. The Philadelphia-based company cut a couple of workers.
Right Management is looking to hire more independent consultants rather than full-time employees, said Steve Shipley, regional managing partner.
The list saw a new addition to OC’s management consulting scene.
Newark-based Macias & Ryan Inc. opened an office in November with seven people. It since has added a dozen workers at its Irvine office, said Mike Ford, vice president at Macias & Ryan.
The new office was part of the company’s expansion into Southern California,its first venture outside of its headquarters in Northern California.
Macias & Ryan also has opened an office in San Diego, which now has about 15 people.
The company provides consulting for small and midsize technology and life sciences firms, which made OC a good choice, Ford said.
Like other firms, the company has seen growth related to Sarbanes-Oxley accounting reform, he added.
