Big management consulting firms wax while L.A.'s economy wanes.

Despite Los Angeles County's slumping economy, the county's three largest management consulting firms beefed up their local professional staffs significantly in the past year, according to the List of the 25 largest management consulting firms in Los Angeles County.

Taken as a group, No. 1-ranked Andersen Consulting, No. 2-ranked Ernst & Young and No. 3-ranked Price Waterhouse increased their combined management consulting ranks by more than 10 percent in the past year. Some industry observers said growth was surprising in light of L.A.'s economic contraction.

Andersen Consulting, headed by Managing Partner A. Barry Patmore, easily retained its top spot as the largest management consulting firm in L.A. County by reporting it employs 440 consultants locally.

No. 2-ranked Ernst & Young posted the sharpest increase in local consultants. Its 300 management consultants in L.A. County represented a 17.6 percent increase from the 255 it employed here a year ago.

Arthur Thomas Jr., managing director of Ernst & Young's management consulting practice in L.A. County, attributed his firm's growth to its ability to "bring an integrated solution to businesses that are having problems or undergoing change."

"In difficult economic times, many enterprises need fast tactical change, like reducing costs," Thomas said. "But in the long run, they need strategic change. We're able to go in on a tactical basis and work through strategic planning, developing a long-term relationship."

Thomas said Ernst & Young's growth is being fueled by increasing demand from a number of industries, most notably: manufacturing, health care and financial services companies.

While the professional staff sizes of the largest firms increased dramatically in the past year, their respective rankings remained stable. In fact, the top seven firms on The List held the identical spots last year.

Six firms on this year's List are newcomers, never having appeared on The List in years past because they did not participate in the survey.

On the flip side, six firms from last year's List did not reappear this year. Four of those six were too small to qualify. The other two -- Coopers & Lybrand and Theodore Barry & Associates -- declined to participate this year.

Coopers & Lybrand was ranked 11th on last year's List, far below the consulting divisions of its rival Big Six accounting firms. Theodore Barry & Associates underwent a downsizing during the past year and is now probably too small to qualify, according to William Kaffer, that firm's managing director.

The firm that dropped the furthest in the rankings since last year was A. Foster Higgins & Co. Inc., which dropped from 10th place last year to 14th place this year.

Joe Salzillo, principal in charge of that firm's L.A. office, said the drop was due to misreporting by the firm last year. A. Foster Higgins reported last year that it employed 90 management consultants in L.A. County, and reported this year that it employs 60 consultants here.

But Salzillo said his firm now employs roughly the same number of consultants in L.A. County as it did last year. "We must have mistakenly reported all our (L.A. County) employees last year, rather than just our consultants," he said.

Salzillo conceded, however, that his firm has been struggling. "We are basically an employee benefits firm, and health care reform is really affecting our business," he said. "Companies aren't looking at altering their benefits packages until after they see how the reforms will impact them."