Tough conditions spell good times for consultants.

Andersen Consulting retains place as Southland leader

Dollars generated by the companies with the 25 largest management consulting operations in Los Angeles County increased 28 percent from approximately $6 billion in worldwide revenues to $7.7 billion between 1989 and 1991, according to this week's List.

The current List of management consultants, which was last published in 1990, shows Andersen Consulting still dominating the area market with 405 consultants locally. The company reported worldwide revenues of $2.25 billion last year. These 1991 revenues were a staggering 61 percent higher than companywide totals in 1989 -- $1.4 billion, when it had 350 consultants locally.

The company also showed marked improvement in the Southern California as business here is "up 70 percent," remarked Managing Partner A. Barry Patmore.

He attributes the firm's success to the increasing focus on restructuring companies to compete in the world market. Over the two-year period, he has watched consulting demands in the aerospace and defense sectors dwindle, to be replaced by "enormous demand" in the commercial manufacturing industry and consumer products areas such as auto distribution and food processing.

Typical changes for these industries include adjusting the flow of goods and inventory control.

"We don't run a company of this size by just giving advice," Patmore emphasized. He figured that the average project takes 10-20 people and lasts 6-18 months. The bulk of the work, he said, is in guiding companies toward world-class competition by making "fundamental changes" in corporate structures.

Also, the company has done a significant amount of work in training companies "to do increased volume with the same size staff."

Though the firm does not currently aid in job creation, keeping jobs in Southern California is "one of our underlying objectives," he said. "The biggest contribution we can make is to help them (area companies) to become world-class competitors."

Beefing up its local staff over the two-year period, Ernst & Young's 255 consultants pulled it up to the No. 2 slot from its last ranking at seventh place with 180 consultants. Though the company declined to reveal last year's revenues, it posted $475 million in U.S. revenues and $815 million in worldwide revenues two years ago.

Rounding out the top five are Price Waterhouse with 228 consultants locally, William M. Mercer Inc. whose local staff of 184 put it in the No. 4 position, up from ninth in 1990, and Towers Perrin Forster & Crosby, whose 170 consultants in both years' tallies put them at No. 5 this year and No. 8 in 1990.

KPMG Peat Marwick's ranking at No. 7 on The List with 161 consultants gives the appearance of downsizing from when it placed second in 1990 with 295 consultants, but that is a bit misleading, according to Eric Openshaw, partner-in-charge.

"We reorganized the consulting practice about 18 months ago," he said, with the mergers and acquisition specialists being placed in the audit practice and the employee benefit gurus moving to the tax practice. "Those people are still consultants," he confirmed. They are just not tallied as part of the general consulting staff.

Openshaw attributed the movement to trends in the industry. "The days of the renaissance consulting practice are over. Either you specialize or you're gone." Of the firm, he said, "we're still a broad and robust practice, except now we're organized by industries instead of geographically."

Some companies have seen harder times and have dropped off The List since the 1990 ranking. Laventhol & Horwath, whose consultants numbered 130 then, filed for Chapter 11 bankruptcy protection in November 1990. It still ranked No. 10 in terms of local manpower, and the company posted $150 million in consulting revenues. Also, Arthur D. Little Inc. and Handley-Walker Co. disappeared from The List due to reduced staff size.