Critical Perspectives on Accounting (1996) 7 , 339 – 363

‘‘CASINO CAPITALISM’’ AND THE RISE OF THE

‘‘COMMERCIALISED’’ SERVICE CLASS—AN
EXAMINATION OF THE ACCOUNTANT
GERARD HANLON
Institute for the Study of the Legal Profession , University of Sheffield

The central contention of this paper is that a new paradigm is emerging

within the area of professional or expert labour. This process entails a shift
from a ‘‘social service’’ evaluation mechanism to a ‘‘commercialised’’
mechanism. This change is but one element in a wider range of alterations
entailed in the change from a Fordist regime of accumulation to a Flexible
Accumulation regime. The paper examines these issues with regard to the
chartered accountancy profession. It analyses the socialisation processes
experienced by accountants and the evaluation criteria involved in the
promotional process to partnership. The evidence for this paper was
gathered from qualitative and quantitative research undertaken in the Big
Six accountancy practices in Ireland and the USA.
÷ 1996 Academic Press Limited

Introduction

There has recently been an increased interest in the working lives of

professionals. That professionals have altered, or been forced to alter, the way
in which they work appears to be quite well documented (Nelson, 1988;
Galanter and Palay, 1991; McNulty et al. , 1993; Walby, 1993; Hanlon, 1994).
The basic thrust of much of this literature has been that professionals are
increasingly exposed to the exigencies of the marketplace (Abercrombie,
1991) and that this has brought a change in the relationship between
professionals and their clients. There also appears to be increasing ambiguity
as to exactly who qualifies to be a client. For example, Walby (1993) has
highlighted that in the NHS reforms the consumer will be the GP fund holder
rather than the patient. Likewise, in accountancy the client for auditing
services is increasingly viewed as the company managers rather than the
shareholders, the public, or the state (Hanlon, 1994, pp. 131 – 4).
This paper seeks to examine how the changes that have impacted on the
professional workplace are interrelated to the society within which these
professionals operate. To do this the paper will examine from where these
changes originated, the effect these changes will have on professions, and the
effect these processes will have on the larger society? It will seek to do this by
an examination of accountancy.

Address for correspondence: Dr Gerard Hanlon, Institue for the Study of the Legal Profession,
Law Faculty, University of Sheffield, Crookesmoor Building, Conduit Road, Sheffield S10 1FL, U.K.
Received 24 February 1994; revised 1 May 1995; accepted 1 May 1995.
339
1045 – 2354 / 96 / 030339 1 25 $18.00 / 0 ÷ 1996 Academic Press Limited
340 G. Hanlon

A Shifting Regime of Accumulation—From Fordism to Flexible Accumulation

The changes witnessed in the labour market over the past twenty years have
their origins in the breakdown of the Fordist regime of accumulation. Fordism
was based on a compromise between labour and capital which achieved
stable growth and consistently high profits for much of the post-war period.
Such a compromise had a number of effects; it shifted industrial conflict to the
political arena, it gave consistent wage increases on the basis of productivity
increases, it became management’s prerogative to organise the production
process, and unions became more conciliatory. There were two other, and
perhaps more important, features to Fordism. One, it divided the labour
market into three areas; the independent primary labour market —essentially
middle class, career orientated labour, the subordinate primary sector—made
up of blue collar, trade unionised employment; and finally, the secondary
labour market—this labour market consisted of insecure, poorly paid employ-
ment and was the preserve of groups such as migrants, women, etc. This
latter area of the economy gave Fordism a degree of flexibility. The second
vital characteristic of Fordism was the development of bureaucratic control.
The Fordist segmentation of the labour market, the increasingly fine division
of labour implemented in mass production techniques, and the development
of internal labour markets allowed for the development of control through a
complex web of rules and regulations. This facilitated control because those
workers outside the secondary labour market were guaranteed job security,
improving living standards, and some long term promotion based on
seniority if they obeyed the rules laid down (Hanlon, 1994, p. 14). Such
industrial compromises paved the way for the post-war boom. These
industrial events were paralleled by a compromise at a political level and the
creation of the welfare state.
Professionals Were also a Party to this Compromise. Marshall (1939, p. 333)
has highlighted how professionals such as doctors, architects, etc. moved
away from what he called ‘‘individualistic professionalism’’ to a ‘‘social
service professionalism’’. The former was characterised by a hostility to any
state interference and by service to the individual client. In contrast, social
service professionalism meant working hand in hand with the state and all its
constituents to provide a service. Such work entailed obligations to the
individual client, the public and the state. In fact, Marshall goes even further to
suggest that this ‘‘new’’ professionalism was central to the creation of the
social services entailed in the Fordist Welfare State

‘‘The social services have lost, or are rapidly losing, their class character.
They are inspired by the spirit of professionalism, in the sense that they do
not design their work to meet an articulate and effective demand only, but
plan it in the light of expert knowledge of the social arts and sciences and of
fundamental principles of social welfare formulated on the basis of
accumulated human experience’’. (Marshall, 1939, pp. 334).

This version of professionalism had an uncomfortable relationship with

commercialism. Marshall (1939, p. 340) argues that a socialist society which
allowed these professionals to keep their middle class status would hold no
 Casino capitalism 341

terror for them and that it may even be preferential to a competitive capitalist
society. The reasoning behind such a statement is that these social service
professionals increasingly derived much of their status from administrative
and / or bureaucratic institutions. Such a professional ethos was compatible
with the welfare state under Fordism when areas such as medicine, education,
town planning, legal aid, etc. were all rapidly expanding in the way described
by Marshall. This expansion was an integral part of the Fordist compromise.
However, in the 1970s, this Fordist based expansion began to crumble. The
reason for the decline of Fordism relates specifically to the decline in
profitability in the late 1960s and early 1970s. Within the EC, the profitability of
capital fell by over 40% between 1967 – 75 (Commission of the European
Communities, 1989, Table 42). Harrison and Bluestone (1988, esp. chapter 1)
have also highlighted a similar process in the USA. Between 1965 – 73, US
corporate profits fell whilst wages and incomes continued to increase. There
were a number of reasons for this fall in profitability. One, the markets for
many products became saturated. Two, which is connected to one, with the
re-emergence of Europe and Japan as economic powers in the post-war era,
all the advanced economies were now selling similar products in increasingly
saturated markets, hence there was over-capacity and low productivity. Three,
labour was still powerful and militant. Thus, it could maintain, and indeed
expand, the range of concessions it had won from capital under Fordism. All
of this led to an economic crisis to which capital had to respond. This
response entitled a major reappraisal by capital which effectively entailed a
move to a new regime of accumulation. This new regime has been called
Flexible Accumulation (Harvey, 1989).
What exactly characterises this new regime? Elsewhere I have stated that
the shift from Fordism to Flexible Accumulation has

‘‘. . . . . basically entailed an intensifying of the process of labour market

segmentation so that the subordinate primary market has shrunk, the
secondary labour market, which gave Fordism a degree of flexibility, has
grown, and finally, there has been a significant shift within the composition
of the independent primary sector—the service class. This latter alteration
has been made up of three processes. First, an ideological upgrading of the
issue of commercialism so that profitability has emerged to be of para-
mount cultural importance. Second, the labour market changes outlined,
which in turn were grounded in the increased vigour with which the search
for profitability was conducted, have meant that numerically those service
class occupations most involved in the search for profit, for example
accountants, have grown the most rapidly, hence altering the shape of the
service class. Lastly, the intensified search for profit and the new, or
renewed, emphasis on commercialism has changed the organisation, the
control processes, and the ideological outlook of many service class
employees’’. (Hanlon, 1994, p. 32).

How all of this has affected the independent primary labour market and the
socialisation of professionals, in particular chartered accountants, is the focus
of this article.
This paper is primarily based upon the training and socialisation of
accountants in Big Six auditing departments. These articled employees are
numerically the most important labour source within a Big Six firm, although
342 G. Hanlon

there is evidence to suggest that this will change in the future (Jack, 1992).
Upon completion of their training the majority of these people leave to join
industry. Hence, the Big Six are a training ground for future industrial and
commercial accountants and senior managers. This makes them exceptionally
interesting to study.
What is presented is based upon 55 semi-structured interviews with
accountants at various levels within practice (roughly 15 of these were based
in the USA and the others were based in Ireland) and a survey of 650 Irish
accountants within practice and industry. The response rate to the survey was
approximately 35%. Where interview quotes are given the interviewees
names have been changed to protect their identities.

Flexible Accumulation and the Homogenisation of Economic Space

With the economic restructuring involved in the transition from Fordism to
Flexible Accumulation two simultaneous processes have taken place. The first
is that, today, capital is increasingly international in nature. This had led to the
homogenisation of economic space. As capital sought to side-step powerful
labour movements and the falling rate of profit it expanded spatially. This
weakened the core working class which, as the subordinate primary labour
force, was so powerful under Fordism. This geographical expansion allowed
capital to play one geographical area off of another by threatening to move if
labour made ‘‘unreasonable’’ demands. Increasingly, working class jobs were
feminised, made part-time and / or subject to new and less attractive working
conditions. The response of many regions was to make themselves more
attractive. They did so by increasing capital’s share of the total product
through diminishing their own (Harvey, 1989, pp. 295 – 6).
This spatial expansion also enabled capital to extract a whole series of
further concessions from labour. For example, capital moved towards bar-
gaining at plant level rather than at the more typically Fordist national level
during the 1980s (Tolliday, 1991, p. 97). This enabled capital to pit one plant
against another and to use the ‘‘efficient’’ plants as benchmarks to lower the
demands of others or to increase their productivity. Capital also began to use
sub-contractors to carry out work that had previously been done in-house.
Often these sub-contractors were former employees—part of the new self-
employed—whose standards of living had deteriorated with the change in
their employment status (Harrison and Bluestone, 1988, p. 45, Murray, 1988,
p. 274). There was also an increase in the use of part-time workers and
temporary workers, and probation periods were lengthened so that there
emerged two tier wage structures whereby people were getting different
wages for the same work. All of this has been highlighted elsewhere (Harrison
and Bluestone, 1988 esp. chapter 2; Harvey 1989, esp. chapter 9). These
processes entailed a move towards a flexible management strategy (although
this is not to say that all of these policies were implemented with equal rigour
across different industries or different states, see Hakim, 1990; Lovering,
1990). These tactics negatively affected the working class. With this increased
internationalisation, increased flexibility, and increased global competition
came a need for greater control. This is the second process of the recent
 Casino capitalism 343

economic restructuring that is of interest to us. Capital required new methods

of controlling a spatially dispersed production system and it required new
mechanisms to manage a global financial system (Sassen, 1991, p. 23). This
latter system is a control mechanism in itself as it allocates surplus value to
those geographical regions and / or economic sectors that give the highest
return to capital. It was the producer services sector that provided these new
control mechanisms, hence, this sector has expanded rapidly in the past
twenty years (Gershuny and Miles, 1983, p. 101; Rajan, 1987; Sassen, 1991,
p. 131). This sector entails a wide variety of professional occupations e.g.
accountants, lawyers, banking, management consultancy, insurance, stock-
broking, marketing, advertising, engineering consultants, etc. In short, it
entails those organisations that sell to corporate rather than individual
consumers.
The producer service sector, especially its internationally orientated prod-
ucts, is concentrated in a handful of ‘‘world cities’’ such as New York or
London (Friedmann and Wolff, 1982; Hanlon, 1991; Sassen, 1991). It is from
these cities that the world economy is increasingly run. The service class
employees who work in this section of the private sector have provided the
bulk of the new recruits to the service class in the past ten to fifteen years
(Savage et al., 1988, p. 459). These people experience different control
mechanisms and socialisation processes to the ones experienced by their
social service professional counterparts or their counterparts in the private
sphere who experienced something akin to Edwards’ (1979, pp. 130 – 62)
bureaucratic control techniques. It has been argued that because these people
have different experiences of work, control, career enhancement etc. they
have a different attitude to how society should be run, and, hence, a different
political orientation than their service class counterparts in other sectors of
society (Hanlon, 1994; pp. 207 – 15). All of these processes have led to a split in
the service class and to a polarisation of the class structure. If, as suggested,
the growing areas of the service class have a different experience of work and
career structures then how is one inducted into this segment of society and
what values is one encouraged to develop? It is to the issue of socialisation
into the producer service professions—namely accountancy—and hence into
the commercialised segment of the service class that we now turn.

Accountancy: A Glimpse at Future Change in Professional Work?

With the recent economic restructuring that emerged out of Fordism’s demise
accountancy’s economic base has been transformed. The move by capital
towards achieving greater flexibility brought many opportunities for certain
sectors of the labour market. The sectors that benefited most were those
connected to controlling an increasingly complex global capitalist system.
Accountancy was one such sector (Armstrong, 1985, 1987). These oppor-
tunities expressed themselves in the form of increased profits and in a rapid
expansion. The UK Big Six have witnessed a massive increase in fee
income—it has risen by roughly 700% in the 1982 – 94 period, up from £370
million to £2554 million (London Economics Ltd., 1994; Table 9). But what is
more significant than this is that the growth of producer services as a control
344 G. Hanlon

mechanism is to be found in the alteration in the Big Six’s market structure.

This latter alteration has entailed a shift away from their traditional auditing
role to services which are seen as more proactive and value added by the
clients and deemed more profitable by the Big Six (see later).
At the start of the 1980s, the audit provided roughly 70% of the total fees
generated by the UK Big Six firms. In 1993, it had declined to slightly less than
40% (London, Economics Ltd., 1994, p. 25). Similar trends were highlighted in
other EU states. Between 1984 – 89, the audit’s share of total fees for the Big
Six fell from 67% to 57% in Denmark, 73% to 58% in Greece, 77% to 62% in
Italy and 92% to 76% in Luxembourg. The audit declined in importance in all
the EU states over the course of the 1980s (NERA, 1992; Table 3.7). Such a
function is theoretically for the benefit of shareholders and, as such, may be
perceived as a control function. However, it will be argued in this paper that it
has been replaced by other areas such as management consultancy, corpor-
ate finance, etc. which are orientated towards senior management (now
perceived to be the ‘‘real client’’, see later). These growth areas are intimately
related to controlling organisations and / or increasing profitability. Manage-
ment consulting and corporate finance grew by roughly 100% and 1500% in
terms of their contribution to the UK Big Six total fee income between
1984 – 89 (NERA, 1992; Table 3.7). Similarly, dramatic figures could be
presented for many fo the EU member states. As stated, Sassen has argued
that Flexible Accumulation by its very nature creates the ‘‘control industries’’
which are provided by the producer services sector (Sassen, 1991, p. 23). It is
this paper’s contention that the Big Six have been some of the main
beneficiaries in this process.
As capital restructured it began to demand more and more services from
accountancy firms. This has led to the relative stagnation, if not the decline, of
the audit market. This is not to say that the audit is unimportant, merely that
the growth areas are in producer services such as management consultancy
or tax. These growth areas are more likely to be control orientated and to be
more closely related to organisational strategy or structuring, both of which
have become more important in the 1980s given the industrial / corporate
changes alluded to earlier. Big Six management consultancy in the EU is
primarily located in four areas—information technology, strategy, human
resources and market studies (NERA; 1992, Table 3.9). All four areas expanded
in the 1980s and are primarily concerned with controlling and / or influencing
organisations, personnel and the market—hardly surprising in an increasingly
global economy dominated by disparate and dispersed industrial empires.
Information technology has tended to decline in terms of its overall market
share over the 1984 – 89 period. Market studies has been mixed, expanding in
five of the twelve states. Strategy has expanded quite significantly in a
number of countries—it grew from 0% to 11% of total Big Six management
consulting income in Greece and from 1?8 to 7?0% in Italy, for example (NERA,
1992, Table 3.9). These four areas (there is a fifth miscellaneous category) are
all control or value-added orientated. Hence, the expansion of management
consulting is an expansion of control and / or profitability. This trend appears
to have been reinforced between 1990 – 94 as Europe was the fastest growing
market for business advisory services in the world (London Economics Ltd,
 Casino capitalism 345

1994, p. 30). The fact is that the growth areas within accountancy lie outside
the audit department’s domain. Other producer services are also control
and / or profitability based e.g. lawyers seek to control contracts, marketing
and advertising attempt to control the market, banking and stockbroking
attempt to control the financial system.
Because of this altered economic base, the practices have developed a new
relationship with clients. Unlike under Fordism the Big Six today tender for
business. They now regularly bid on audits and other work, thus introducing
price competition. Under Fordism, clients largely used accountancy practices
for auditing. Competition was restricted in this market by both the practices
themselves and because the relationship between the accountancy practice
and the client was different in that clients were not as interested in price
competition for accountancy services. Instead it appears they were more
interested in spatial spread and their long term relationship with the firm
(Jones, 1981; esp. chapters 8 and 9).
However, this situation appears to be changing. Despite the fact that today
being a member of an international network with a wide geographical spread
and / or being one of the Big Six are the most important characteristics of
auditors according to the largest clients, cost competition is increasing (NERA,
1992; Table 3.13). This cost competition takes two forms. One is the changing
of auditors. At present this is relatively rare, only 4% of clients change their
auditors in any one year (NERA, 1992; 89); however, this switching of auditors
appears to be increasing (NERA, 1992, p. 89; London Economics Ltd., 1994;
43). But there is also a second issue here. The increase in auditor competition
need not necessarily involve the switching of auditors. At present, 56% of the
EU’s largest firms spend 80% of all their expenditure on accountancy firms
(i.e. audit, tax, corporate finance etc.) with the firm that performs the audit
(NERA, 1992; Table 3.10). This increases the power of these clients over the
auditors as the threat of withdrawing such a large degree of expenditure (and
the non-audit work is deemed to be the most profitable (NERA, 1992, p. 77))
from the accountancy firm is enough to ensure that these firms remain
competitive in terms of cost (NERA, 1992, p. 95). As we shall see, accountants
within practice feel this competitive pressure.
There is also another way in which these practices must appear to be
competitive and that is by providing economically profitable advice to the
client. This is not independent advice in the sense of being objective or
neutral (if ever such advice was or could be given), rather it is advice that
enables the client management to operate more efficiently i.e. profitably,
regardless of the compromises this may entail (Reynolds, 1994). This implies
a much more blatantly commercial relationship with the client than existed
under Fordism. Today, to be successful in accountancy, one has to be cost
competitive, commercially aware and biased in favour of the paying
customer—increasingly ‘‘the customer’’, I would suggest, means the senior
management rather than the shareholders although it does not necessarily
follow from this that the relationship is fraudulent. This idea is further
developed later on.
In response to the increased commercialisation of accountancy, senior
management in the large practices have begun to alter the idea of what it is
346 G. Hanlon

to be a professional. They appear to be shifting this idea away from the old
notion of performing a task for the ‘‘public good’’ towards the concept of
somebody doing their job ‘‘well or expertly’’ (although the professional
associations still argue that there is a social service function for the audit; see
Callaghan, 1992; McNeill, 1992; Colquhon, 1993). To do your job ‘‘expertly’’
implies that the client, i.e. the person who pays for the work, is content.
Hence, these large practices reject the idea that they should discover
fraudulent activity and they are increasingly reluctant to perform their ‘‘public
watchdog’’ role (Humphrey et al., 1991). This has expressed itself amongst the
management of accountancy practices in the need to be commercial. Profes-
sional now means the same as being a professional manager or a profes-
sional footballer etc., one does a good job for one’s employer or client.
‘‘There is not a great deal of movement of clients and we’d argue that the
best source of new work is to do your existing work well. The best way of
getting new work is to have a reputation of doing work well, giving good
advice, being technically sound, commercially aware whatever. . . . . .’’
(Peter O’Neill, Big Six Director)

Clients are looking for the best advice plus the qualities of discretion on behalf
of these practices. These ‘‘professional’’ qualities are used for the benefit of
the client, not the public nor the state. This altered professionalism may be
emerging in a number of sectors (Nelson, 1988; Dezalay, 1991; McGovern,
1992; McNulty et al. , 1993).

Accountancy’s Hegemonic Ideology in the 1990s

Functionalists portray professions as homogeneous communities unam-

biguously sharing the same values, interests, world views and so forth. This,
however, is not the reality. There are always a number of different segments
within a profession, these share different and sometimes conflicting values
(Strauss, 1975). Accountancy has such segments e.g. the major firms versus
the small firms, the industry based accountants versus those in practice, the
‘‘commercialists’’ versus the ‘‘professionals’’ etc. It is this last conflict that is
of interest to us. What follows is based on the imaginary creation of ideal
types.
There are a number of dimensions upon which the commercial and
professional segments of accountancy differ. For example:

— Sense of a mission: The new growth areas feel that it is important to

‘‘give sound managerial advice’’ as one director in a Big Six firm put it, to be
profitable, and to work vigorously for one’s client to fulfil their needs.
‘‘One, I suppose, and one should never ignore it, a firm like ours is a
commercial organisation and the bottom line is that. In other words unless
an individual is going to be able to contribute to enlarging the cake they
really have little or no chance . . . . first of all the individual must contribute
to the profitability of the business. In part that is bringing in new business
but essentially profitability is based upon the ability to serve existing clients
well.’’ (Peter O’Neill; Big Six Director)
 Casino capitalism 347

In comparison with this, the social service segment stress the need to serve
the public (McNeil, 1992). Dezalay (1991) and Nelson (1988) have highlighted
that similar segments operate within law.
—Work Activities: The way in which work is experienced in accountancy
often depends upon exactly what one is doing. Many accountants and clients
view auditing as a waste of resources whereas providing tax minimisation
skills or working in industry are seen in a positive light. The audit is not seen
by these accountants as a public crusade to ensure fair play merely an
expensive exercise in futility.
‘‘. . . . . . . . in the end as well you don’t really feel like you’re fulfilling
anything (by performing an audit). All you’re doing is fulfilling a legal
requirement. You’re not actually, there is very little benefit to the client (i.e.
managers not shareholders!) all he is doing, like he has to do it by law
whereas maybe if you’re in industry you’d feel money is actually being
made and you’re helping to make it. You’re actually doing something that is
real as opposed to just going in there and annoying someone for two or
three weeks and giving them a whopping bill at the end of it.’’ (Jean Devoy,
Big Six Senior).

— Client Relationships: Different specialisms within accountancy have

different types of relationships with clients. The auditors appear as an
expensive ‘‘policing’’ nuisance to the client whereas those in other areas such
as tax are seen as experts bought in by management to increase profitability.
The auditors have tried to move down this commercial road by presenting the
management with a management letter indicating possible improvements to
the accounting and accountability systems. This recent phenomenon is
carried out at the end of the audit to make it appear more ‘‘worthwhile’’.
‘‘. . . . . it (the audit) is very much an after the event situation. You’re
constantly hassling people to do something. An audit is not something that
anybody (not even shareholders nor the public!) wants but they have no
choice in the matter. They have to have it and the attitude of the client can
be, I mean they can really get it across at all levels, they can take that
attitude with the partner down and by the time they reach us it’s sometimes
impossible to deal with them.’’ (Jane O’Driscoll, Big Six Senior).

This comment and the previous one highlight the accountancy profession’s
withdrawal from viewing auditing as a means of fraud detection and / or a
social service. Humphrey et al. (1992) trace the history of this withdrawal over
the past century or so. However, they suggest that despite the wishes of the
auditors, especially the largest firms, the public still view the primary function
of an audit to be the detection of fraud.
As shall be highlighted, on all of the above issues there appears to be a
divergence between two groups: the traditional ‘‘professional’’ auditors, who
are supposedly social service driven, and the commercialists, who are more
client driven. What the changes of the past decade or more have meant is that
there has been a decisive shift in terms of money, prestige and status towards
those commercial areas like management consultancy or corporate finance
and away from the supposedly social service audit. This movement is
economically driven and reflects the declining role of the audit within practice
348 G. Hanlon

and the fact that the audit, by its very nature, is less ‘‘commercially aware’’
than a specialism such as management consultancy. In the 1990s, the
commercial segment is in the ascendancy. The same situation is emerging
within law (Galanter, 1983; Nelson, 1988; Dezalay, 1991).
With any increased emphasis on commercialisation and profitability comes
an increased need to supervise and control labour. Profit orientation requires
a co-ordinating of the labour process at a hitherto undeveloped scale (Marx,
1976, p. 447 – 51). Hence, it demands some means of ensuring that labour
performs its duties adequately and produces some type of standard product.
Because of the increased importance of profitability within accountancy there
is an increased need to maximise labour’s output. This latter point implies the
need for a hierarchical patterns of supervision. Smales and Davis (1989, p. 4)
have suggested that such a pattern of supervision in a professional service
firm leads to a conflict of interest and to the diminishing of professional
independence. This professional independence has been replaced by a more
aggressive commitment to the paying client rather than the ultimate con-
sumer of the audit i.e. the public both investing and otherwise and / or the
state. One manifestation of this commitment to the paying consumer has
been the emergence in the 1980s of a new response by the auditors to the
‘‘expectation gap’’ i.e. the public feel the audit should detect fraud whereas
the auditors have sought to avoid such a responsibility. Traditionally, auditors
attempted to counteract such pressures via the use of public education i.e.
informing the public as to the ‘‘unreasonable’’ nature of such expectations
and / or reassurance via attempting to maintain the image of the selfless,
disinterested auditor (Humphrey et al., 1992; pp. 145 – 50). However, in the
1980s, auditors developed a new response. In line with the transition towards
Flexible Accumulation and the increased emphasis on commercialism, the
upgrading of profitability and the new ideological shift referred to earlier,
auditors argued that the existing product was basically fine but that they
would provide added services to clients who wished them at a price. These
extra services were explicitly aimed at corporate management, not the
shareholders or any other audience. Added to this, Humphrey et al. (1992, pp.
152 – 4) also suggest, in line with my arguments, that the audit, more
generally, came to be aimed at senior management rather than other
interested parties. I would argue that the emergence of such a narrow
professional focus on the paying customer rather than a broader social
service form of professionalism would have proved very difficult under
Fordism. Thus, although the audit’s function has long been an issue of
dispute, it was only in the new environment of Flexible Accumulation that the
rhetoric of social service could be replaced by a blatantly commercial view. As
suggested, this commercialism also implies some coherent form of
regulation.
There are three forms of such regulation within accountancy—technical,
commercial and social. By technical what is meant is the actual physical
performing of the work itself, i.e. the defining of the audit scope, assessing the
reliability of internal controls etc. Commercial competence relates to function-
ally important skills that are not instrumentally learned, i.e. they are not
specific to one workplace or one set of work practices; examples are ability to
 Casino capitalism 349

get on with clients, to get fees in on time, to communicate well. One is

socialised into learning many of these skills. Lastly, social skills. These are
functionally irrelevant but nevertheless important when promotion is being
offered. Examples of these traits are a commitment to the firm, ability to bring
in new business, general educational background, class background and so
forth. The categories commercial skill and social skill are derived from a
refining of Offe’s normative skills (Offe, 1976). Throughout the paper the three
sets of skills are somewhat artificially separated, i.e. one’s ability to communi-
cate will obviously affect one’s ability as an accountant because the job entails
assessing and analysing information. Having stated this, the three areas,
although they overlap, are not interchangeable. Within the paper it is argued
that these commercial and social competencies are more important than
technical skills when promotion is being offered. This is a well established
argument within sociology (Offe, 1976; Edwards, 1979; Jenkins, 1986; Collin-
son et al., 1990; Crompton and Sanderson, 1990).

Technical Skill—Is that it?

The socialisation process within accountancy starts from the moment one
joins the profession. The first thing communicated to the new recruits within a
Big Six practice is the fact that someday they may make it to partner level
provided they perform to a certain standard. Thus, promotion for those who
are ‘‘good’’, i.e. commercially aware, is stressed. Admittedly, promotion to a
partnership level has become increasingly difficult but nevertheless it is an
attraction. Even for people who do not want a career within practice there is
the attraction of becoming a manager before leaving to join industry. These
factors lead to competitive individualism and, hence, to certain behavioural
norms. These norms increasingly revolve around commercial and social
issues.
Many of the standards advocated within practice are normative and include
things such as the type of suit one wears, the haircut one has, the condition of
the car one drives, the impression one gives to clients, the ability to reach the
‘‘right’’ conclusions, the ability to control budgets, etc. If we take conformity
on such areas as dress, haircuts and so on as given, and the evidence appears
to back up such an assumption (Harper, 1989; Hanlon, 1994, pp. 134 – 8), then it
becomes interesting to examine what other, less obvious traits distinguish the
successful from the unsuccessful accountant in the race to partnership.
It seems fair to comment, on the strength of discussions with the
interviewees, that within accountancy those promoted beyond senior level are
technically good. However, technical skill on its own is not important enough
to guarantee one promotion (Hanlon, 1994, pp. 118 – 123). Technical skill or
technical rigour can actually prove to be a disadvantage in certain circumst-
ances. McNair (1991) has suggested that within practice much is left as
‘‘undiscussible’’. Thus, trainees and seniors must constantly make choices.
They must decide which choices are correct and which are not despite the fact
that these decisions are made on the basis of informal communication and
peer comments. Very often these choices conflict between two areas—cost
and technical stringency. To choose the wrong one will damage one’s
350 G. Hanlon

career—increasingly, as we shall see, the wrong one is to opt for technical

correctness.

‘‘It is the thing I detest about my job and it is the thing that is going to drive
me ultimately away from public accounting. The constant pressure to do
things in less time and although we have what is supposedly an iron clad
rule which requires all of our staff people to put all of their time on their
time sheets, they quickly learn that that is not going to help their careers at
all so our staff people don’t put all their time on their time sheets. Managers
more or less explicitly encourage them not to do so.’’ (Brendan Cardiff, Big
Six Manager).

As one moves to the pinnacle of the practice ladder this orientation towards
the market is more blatant. If one is a partner one is assessed by how one’s
department performs, how the people beneath you perform, and by the work
you bring into the firm. These three criteria are all directly connected to the
issue of profitability. If a partner performs badly on one of these features it
will be reflected in the declining profit margin. This can affect the future of a
partner who may be forced to leave the firm. In the early 1990s, KPMG
announced the imminent redundancy of three hundred of its US partners.
This was an unprecedented step which was taken in response to changing
client needs and a desire to ‘‘get rid of the dead wood’’ whose skills had been
outdated (Accountancy, 1991).

‘‘I doubt if a partner could be sacked using that term but he can be
encouraged to leave’’ (Steven Flanagan, Big Six Partner).

Thus, to be a partner one needs more than just good technical accounting
skills, one needs to be able to display commercial and social qualities.
Commercial skills are required in order to control budgets, bring in fees on
time, charge the correct amount so a profit is made without the audit
appearing overpriced etc. Social skills are increasingly needed as one
becomes a partner. They entail social traits such as background, business
contacts or club membership.
This selection process, based on commercial skill and conformity, is
understood by all. As we shall see the things in which conformity is sought
concern areas such as presentation, the ability not to antagonise clients,
capability to reach the ‘‘right’’ conclusions, ability to uphold the practice’s
‘‘good name’’ by giving ‘‘sound financial advice’’, or ability to get fees in on
time. All of these issues are directly related to the need to be ‘‘commercial’’. A
large part of an accountant’s training concerns these factors. Conformity in
such areas is encouraged from early on because conformity may well be
rewarded. This conformity is fundamentally about increasing profitability.
Such commercial controls are internalised in much the same way as Offe’s
normative controls (Offe, 1976, pp. 31 – 8). Thus, commercial issues play a very
major part in promotion especially at the beginning of one’s career. However,
later on, because much of the work entails the search for new business, at
partnership level the social resources and contacts that partnership work
requires are very important. At this point, social skills come into play along-
side the commercial ones already mentioned.
As stated, much of the new business is located in the growing commercial
 Casino capitalism 351

sector of accountancy, such as tax or management consultancy, which

demands a different ethos and attitude on the part of a practice.
‘‘We actively go out and seek new work and we try to get our people out
and we do public profile things and jobs so we’re known.’’ (Steven
Flanagan, Big Six Partner).
‘‘There is not a great deal of movement of clients and we’d argue that the
best source of work is to do your existing work well. The best way of
getting new work is to have a reputation of doing work well, giving good
advice, being technically sound, commercially aware or whatever.’’ (Peter
O’Neill, Big Six Director).

These facts surely lead to a pressure within practice to limit the influence of
partners who do not enlarge the cake via demotion or explusion? Audit
partners who are intent upon antagonising clients by presenting a set of
accounts in a true and fair yet unpleasant light would be a liability rather than
an asset. The long list of recent ‘‘naive’’ auditing oversights by large practices
leads the author to conclude that this pressure exerts real force (see Sikka et
al., 1989; Appendix One). Nelson (1988) has exposed the extent to which such
a process has emerged within US law firms. He documents how the
commercialists have all but swept away those law partners more concerned
with ethics and justice than profit. Not all techncially good accountants will
have these extra commercial and social necessities and, therefore, not all will
make partner. These commercial and social skills, the importance of profitabi-
lity, enlarging the cake, seeking new work, getting fees in, not upsttting
clients, have led to a situation wherein the commercial areas of the profession
have increased status amongst young senior accountants because they make
increasing amounts of money. All of these processes stress the importance of
commercialism rather than a more benign notion of social service. The more
social service audit is deemed to be of less status and of less relevance to
what being an accountant in the 1990s means.
‘‘Consulting is perceived as value added by the client so you can bill, your
billing won’t be challenged necessarily because the client sees what they’re
getting. Whereas on audit, the audit is perceived as a necessary evil and
there is no value, there is no perceived value added to the client, I think
that’s why there are big pressures on our fees. People are saying you know
I pay you guys $125 000 and what do I get? I get a piece of paper that says
my books are in good shape. You know do I really have to pay $125 000 for
that? You know I could have a machine that would crank out six months of
inventory for me for the same cost! And so I think companies are now
questioning our costs. Whereas if you get in there with consulting you can
bill, you can invoice them a lot more because there is some value added.’’
(Mike Sinclair, Big Six Manager).

This is in contrast with evidence from the late sixties and early seventies.
Sorenson et al. (1973) argued that there was an increasing generation gap
emerging within accountancy. They suggested that partners in practice were
becoming more profession than firm focused, however, they were doing so at
a slower rate than trainees and seniors thus a gap was being created and,
indeed, widening. Younger accountants were less inclined to accept work
standardisation, adherence to firm rules, organisational loyalty or hierarchical
arrangements, than partners and that, within this latter group, younger
352 G. Hanlon

partners were less inclined to accept such things than older partners. Younger
staff were more inclined to gravitate towards professional loyalty and they
had a greater professional, rather than firm, ethos. These feelings increased
between 1965 and 1970. The development of this social service professional
ethos in the 1960s is in line with the argument put forward by Marshall thirty
years earlier (Marshall, 1939). As outlined, Marshall (1939, p. 335) has
suggested that, as part of the emerging social consensus of the welfare state,
professional labour would increasingly become socially driven and that this
form of professionalism was in conflict with commercialisation. Sorenson et
al.’s work appears to lend weight to the Marshall thesis. Elsewhere (Hanlon,
1994) and in this paper I have argued that, with the breakdown of the Fordist
consensus and the shift to Flexible Accumulation, professional labour is
moving from a social service to a commercialised ethos. One element of this
process is the focusing on the requirements of senior management rather
than other groups, a process which has apparently increased over the past
fifteen years (Humphrey et al., 1992).
Hence, in the 1990s, the people who are technically outstanding but lack
commercial and / or social capabilities are deemed to be oddballs or misfits
who cannot really get on in the profession (this is a slight exaggeration as a
few of these people are made partners and become key figures in the
technical and taxation departments where detailed knowledge is valued). Yet,
if the profession was solely concerned with auditing and guaranteeing the
accuracy of financial information and if the profession operated in an
environment wherein practices were not dependent on their ability to serve
their clients, it is a moot point whether this would be the case. It would also
suggest that accountants would be loyal to their profession over and above
their firm. But as highlighted they are not. Accountancy today had become
increasingly commercial in response to increasing business opportunities due
to the increasing complexity of the economic system and in response to
‘‘client pressures’’.
‘‘Nowadays you see a lot more pressure on fees from the client, and again I
am only speaking six years back, but six years ago it seemed that more or
less we determined what the fee would be. Now what I see is that clients
are saying, at least some clients are saying to me, keep your fee intact or
don’t forget we’re going out to bid next year and they always seem to bring
that up to me and people are, companies are now challenging fees and
making sure we’re competitive where six years ago I would say there was a
lot less of that and it was common to grow your fees at 10% or more a year
unchallenged. Now you can’t do that.’’ (Mike Sinclair, Big Six Manager)

These commercial and social pressures are directly implicated in the bud-
getary process. Budgets are increasingly central to the operations of the Big
Six.

Budgets and the Assessment of Accountants

The strongest commercial feature of how accountancy work is tightly
controlled is to be found in the budgeting process. Budgets and, therefore, the
amount of time available for a job, are decided by the manager. The senior,
when doing the preliminary work on the audit, puts in a draft budget and this
 Casino capitalism 353

is accepted or rejected by his or her superior. There is a strong pressure to do

the audit with less resources every year and to come in under budget and
make more profit. This pressure affects the manager in particular although it
also has an affect upon the seniors. If one makes the practice money and is,
therefore, a good asset, promotion is more likely. Thus, there is an incentive
to come in under budget, however, if one does so, one makes it harder for
those following
‘‘Well it depends on your personality and how strong you are to force it.
Budgets here are the exact same as they are in industry you’re going to
build slack into your own. Not unless you’re extraordinarily ambitious and
want to do it say in two weeks and bust yourself. If you do a job in two
weeks this year and it was four weeks last year, for the guy coming along
next year he is going to have to do it in two weeks as well.’’ (Philip Carey,
Big Six Senior).

If the person coming up next year does not do it in two weeks then s / he will
look poor in comparison to the person gone before.
‘‘It (eating time, i.e. not recording all the hours one has worked on a job in
order to keep costs down) is one of those problems that is really hard to
identify and really hard to stamp out because some people don’t do it and
other people do do it, but even then they do it for different reasons. It is
definitely something we hate. I always hated it, following somebody who
had eaten time is horrible because suddenly you like an idiot, maybe I am
an idiot, but you just couldn’t win.’’ (John Barnes, Big Six Senior Manager).

It is important for managers to be able to control budgets. Managers are the

people really held responsible for making the money once the partners have
attracted the clients. They are supposed to know which people to assign, how
many people to assign, and how much to charge so that a profit can be made
without the fees appearing exorbitant. If managers cannot do this then
partners question their suitability for partnership. The key feature in proving
your capability if you are a manager is not to run over budget (this leads to
people effectively not billing clients for time, a process called ‘‘eating time’’).
However, the partners interviewed did not seem to be as concerned with
budgets as their staff.
‘‘They (budgets) would be one of our concerns but on the Green Forms or
the Six Monthly Forms (these are employee assessment forms) budgets are
never mentioned but every job has certain things to be done and the
person responsible for the job is accountable for the budget. But it’s not
wrong to say that most jobs would tend to go over budget slightly. In most
cases it probably isn’t the fault of the manager, very often it’s a case that
more work had to be done. Certainly, if a senior was consistently over
budget and we felt it was unreasonable we would question his ability to
manage but it’s not a major problem. What would be a lot more important
would be his ability to reach the proper conclusion and get along with
clients and be able to get the right information.’’ (Steven Flanagan, Big Six
Partner).

Despite the comments of Steven Flanagan, the seniors feel somewhat

differently about budgets. They believe budgets are crucial to one’s career.
Seniors think that managers check budgets and costs regularly—most prob-
ably due to the implication these have for the managers’ careers.
354 G. Hanlon

‘‘Yeah managers are constantly monitoring budgets and costs. You know if
you’re getting so much time and you’re going over it they do notice’’. (Paul
Devine, Big Six Senior).

Budgets will have a trickle down effect. A manager will be more favourably
disposed to a senior who comes in under budget and will, therefore, support
him or her when the candidates for promotion are put forward. Budgets also
have an impact upon the quality of the work and many would say it makes the
work more ‘‘unprofessional’’. Practices, however, are in business to make a
profit and only those who make money for them i.e. tightly control their
budget will be promoted. The Cohen Commission in the USA found the same
(Stevens, 1984, p. 87). This process effectively puts everyone under some
pressure. McNair (1991) has argued that the pressure of budgets is now so
great that seniors often under report the amount of time really spent on an
audit in order to adhere to an unrealistic budget and, hence, an unrealistic
time scale set by a manager. Thus, the pressure to be ‘‘cost effective’’ has
direct consequences, including unpaid labour, on auditing staff. If one rejects
the budget laid down by management one is effectively ending one’s career in
practice (McNair, 1991, p. 664). Hence, whether or not one is promoted is
directly related to one’s capacity to manage budgets. Those accountants who
will go on to be partners are increasingly the ones who can control budgets
and successfully manage clients and market the practice. Accountants today
felt that this was not always the case or that it had at least intensified.
‘‘. . . . . . because the industry has really matured, the profession has seemed
to mature, we’re not growing like we used to and there is a real premium
on bringing in business. I think ten years ago you could make partner
without any business development as long as you were technically
competent, you were here for fourteen years and you got along with your
clients. Now if you’ve been here fourteen years, you get along with your
clients and people generally like you I don’t think you’ll make partner.’’
(Mike Sinclair, Big Six Manager).

Much of the assessment to become a partner is based upon commercial

issues e.g. ability to relate to clients’ needs (and presumably recommend
services the firm has to offer which the client ‘‘should’’ buy); client comments
also allow a direct commercial influence in the sense that the senior’s
recommendations were based upon sound financial judgement or his or her
management letter was enlighteninig.
Farmar (1988, p. 171) has shown that in the past these practices did not
require a formal structure because their small size ensured that the partners
knew all the staff personally. What is interesting about the changes that have
taken place is not that the large firms moved to a more formal assessment
procedure, which was perhaps inevitable given their increased size, but the
type of formalised system they have adopted. As has been outlined, the
present system appraises people on openly commercial issues, at least until
partnership level when social issues come to the fore. At the end of the day
the most important questions asked about a person’s ability to do the job
relate to the area of profitability rather than to their ability to find fraud or to
be innovative technically. Thus, Debra Heinz, a Big Six Manager, felt that in
order to make partnership business qualities were essential.
 Casino capitalism 355

‘‘I am guessing but what I see is making sure the service to the client is a
business. That you are handling a block of business that supports you and
all of the people underneath you, you’re supporting your pyramid, that
you’re maintaining a stable book of business, that the clients in it are
revenue producing on a continuous basis, and you’re able to bring in
sufficient new long term business so that you’re able to support the people
underneath you. It is not good enough just to be selling enough business
just to be supporting yourself, you have to be supporting all of your
subordinates, and your secretary, and your file cabinets and rent. I need to
be managing my business almost as an entrepreneur would.’’

Everyone in the Big Six realises this and is aware that profitability is of para-
mount importance to an individual’s career. This is significantly different to
the past where assessments were carried out in an altogether more informal
and ‘‘gentlemanly’’ way (Farmar, 1988, p. 188) and it is also different to what
one would expect from a social service, non-commercialised profession.

A Closer Examination of Partnership

As outlined, accountants from the senior level and above are increasingly
evaluated on commercial issues. I have also suggested that social factors
come into play when the promotion is to partnership level. This penultimate
section will suggest that increasingly the social and attitudinal attributes of
the middle class are required to attract new, non-audit, business and hence to
achieve partnership. It is to this area, in particular social and educational
background, that we now turn.
As one would expect today, accountancy in Ireland is a middle class
profession. However, it is the dominance of the upper middle class which is
the most striking feature about accountancy. The class backgrounds of the
surveyed population are highlighted in Table 1. Of those accountants
surveyed only 10% had fathers who were manual workers of any description.
In comparison with this manual workers made up 29% of the total working
population in Ireland in 1985. A similar picture emerges when intermediate
non-manual workers are examined. They comprise 22% of the Irish labour
force but only 10?5% of the accountancy population surveyed. This means that
68?6% of those accountants surveyed had fathers who worked either as
self-employed / employers or professional / managerial. This compares with
only 29% of the Irish labour force. Table 1 appears to suggest that managers

Table 1 . The occupational background of fathers within Ireland

Irish Accountancy
population population Managers Partners
(%) (%) (%) (%)

Professional
Employer 29 68?6 61?7 86?8
Intermediate 22 10?2 10?5 7?2
Manual 29 10?0 11?6 0?0
Other 20 11?2 16?2 6?0
Total 100 100 100 100
356 G. Hanlon

come from backgrounds that are no more or no less exclusive than for
accountancy in general.
The same, however, cannot be said of partnership where 86?8% of partners
had fathers who were professional / managerial or employer / self-employed.
There is a higher concentration of elite backgrounds to be found within
partnership when compared to the rest of the accountancy population. What
is also very striking is the poor showing of the manual working class, not one
partner had a father in this occupational background. Thus, although the
numbers involved within the partner subgroup are small (n 5 42) and should
be treated with a degree of caution, it appears reasonable to assume that
class background has a significant impact upon whether or not one makes it
to partner level.
This social exclusiveness is currently being reinforced via the use of third
level education. A degree is now more or less a prerequisite before joining a
large accountancy practice. A university education is now part of the
screening process. Practices pick candidates who will be controllable at the
recruitment stage. This is one factor in explaining why the Big Six have
moved towards recruiting graduates rather than school-leavers. This is
despite the fact that 60% of degree holders within the sample stated they
made no current use of their degree and Lovell’s (1992) suggestion that
universities merely replicate the professional exams. Presumably, graduates
will be more middle class, professional in outlook and appearance, and
therefore less difficult. Jenkins (1986) has argued that the most important
feature within recruitment is to employ somebody who will be easy to control,
will take orders and will fit in with the existing workforce. Within the area of
professional work it is more likely that the middle class will fulfil these
functions. Hence, recruitment comes directly from the universities. Jenkins
also suggests that even though at a formal level candidates may have the
same qualifications i.e. both are equally ‘‘suitable’’ to use Jenkins’ terminol-
ogy, a whole range of informal criteria will be used to select someone who is
viewed as more ‘‘acceptable’’ i.e. fits into the world view of the selector as a
responsible employee. It is plausible that the informal criteria within accoun-
tancy recruitment work to the disadvantage of the working class graduate.
The fact that the large practices will recruit people with a ‘‘non-relevant’’
degree merely highlights the importance attached to issues of acceptability
rather than suitability.

‘‘As far as we’re concerned we’re not overly worried about the background
of the person—the educational background of the person. We’re not overly
concerned if they’ve studied zoology or accounting and finance. What we’re
looking for are the qualities in the person rather than the academic course
they’ve taken. We’d be looking for characteristics like intelligence, well
read, high degree of motivation, articulate people who are capable of
mixing that are not loners. People who would be able to work in a team,
people with a level of maturity and independence and obviously people
who have a track record of achievement as well—academic and other
things.’’ (John O’Grady, Big Six Partner)

Many of the above are social not technical criteria. They are all traits which
the middle class would obviously fulfil a lot easier than people from a working
 Casino capitalism 357

Table 2. Education levels within accountancy

Total accountancy sample (%) Managers (%) Partners (%)

Non-degree 32?3 29?2 33?3

Degree 55?6 60?4 59?5
Post-graduate 10?8 10?4 7?1
Total 98?1 100 89?9

(n 5 223)

class background Thus, the actual relevance of a degree is open to question.

This is not to say that working class graduates will not be hired by the Big Six,
rather the argument is that these people will have to prove themselves
acceptable i.e. exhibit middle class traits. The education system helps to foster
such characteristics (Bowles and Gintis, 1980, pp. 190 – 99).
Education is also used to distinguish people once they get into practice.
Table 2 highlights the educational qualifications of the total accountancy
population and our managerial and partner subgroups. The reason for the
slightly lower educational attainment for partners is due to the fact that they
are on average slightly older than the other populations. If one breaks the
partners into two groups, Ú40 years of age, one finds that some 80% of those
under forty have a university education (see Table 3). The corresponding
figure for those over forty is 55%. Hence, educational attainment is of growing
importance. Managers under forty are not as well educated on average as
their counterparts in partnership, only 67% of managers have a degree (the
number of managers over forty is too small to be of any significance). Hence,
third level education appears to be playing a greater role than previously in
determining who makes it to partner level.
When compared with the Irish population as a whole accountants are
exceptionally well educated—only 19% of the Irish school population reached
third level in 1980 / 811. As one would expect these were overwhelmingly
middle class (Breen et al., 1991, p. 132). Education is used to ensure that those
entering the profession are desirable and then, as suggested, other commer-
cial and social factors come into play.
The evidence concerning the differences between partners and managers
indicates that to make it to the very top of the promotional latter it is of great
help if one is from an upper middle class professional / managerial or
employer / self-employed background with a university education. This is not

Table 3 . Education levels of accountants under forty

Total accountancy sample (%) Managers (%) Partners (%)

Non-degree 24?8 33?0 20?0

Degree 62?2 54?0 70?0
Post-graduate 15?0 13?0 10?0
Total 100 100 100

(n 5 223)
358 G. Hanlon

surprising as it is this group that would most likely have the necessary
commercial and social skills required e.g. business contacts needed by a
partnership seeking new business and indeed the necessary financial re-
sources, should these be required, for buying in, for example. Without all of
these credentials one faces an uphill struggle.
‘‘Bringing in new clients, I think its a matter of being well connected, of
being networked, and to be that you have to be involved in outside
organisations, most likely in a leadership role, on a board of directors of a
non-profit organisation or maybe your alumni association. You have to be
out there and interfacing with people.’’ (Mike Sinclair, Big Six Manager).
‘‘. . . . . . you don’t have diversity, you certainly don’t have ethnic diversity or
racial diversity, you have almost no women. It’s very much the old boy
network and beyond that if you don’t play golf you’re out of
it . . . . . . because people become so focused on getting their numbers to
look good and getting out there and golfing and networking with clients
and, because that is what is valued by the people in the highest positions,
that’s who is promoted.’’ (Frank Rogers, Big Six Manager).
The gaps in terms of class background and education between partners and
managers are quite large, suggesting that practices use these social criteria
when promoting people from management to partnership level. Education
levels are being used here as an incomplete proxy for social criteria which
embrace areas such as club membership, public profile, world view, contacts
and so on. This ensures that the practice is dominated by an elite upper
middle class fraction. Technical skill will only allow one to rise as far as senior
level. Technical and commercial competence is requires to raise as high as
manager level. But the author would suggest technical, commercial and social
skills are needed to make partnership. If what has been outlined in this paper
is true then what are the implications for the social structure?

Conclusion—The Service Class and Casino Capitalism2

Lash and Urry (1987) have suggested that the changes we are witnessing
within capitalism today are disorganised. They argue that central to capitalism
now is the demise of labourite power and the emergence of a situation
wherein the service class increasingly serves capital on its own terms. Both of
these trends can be traced back to the development of Fordism. With Fordism
came the rapid expansion of the service class through a growth in white collar
work in management and supervision, expansion of state services such as
health and education, for example. It is also the case that with Fordism came
increased prosperity for the working class encouraging it to become factionist
rather than class based. This weakened the core working class as did the
series of economic changes outlined in the first half of the paper. All of this
effectively meant that the working class lost a large degree of its ability to
influence capitalism. Lash and Urry (1987, p. 194) suggest that in the late
twentieth century the service class sets the social and political agenda. The
service class has inherited this power due to the demise of the labour
movement, the growth of careers and credentialism, the appropriation of
knowledge by the service class through the professions, universities and
 Casino capitalism 359

science, and all of which allows the service class serve capital on its own
terms. That many of these changes have taken place is not why I wish to
criticise the thesis. Rather my criticism is with the contention that it is the
service class which currently drives social change.
There are a number of flaws in Lash and Urry’s challenging thesis (Hanlon,
1994, pp. 207 – 13). This paper will, at this point, only develop one and that is
that whilst the working class has been reshaped by the recent economic
restructuring it is also true to say that so too has the service class. The service
class does not serve capital on its own terms. It serves capital on capital’s
terms. With the fall in profitability in the late ’60s and early ’70s has come an
alteration in the areas of growth within the service class. Those professions
most closely associated with the partial accord of Fordism have not provided
the bulk of new recruits into the service class (a fact which Lash and Urry
ignore). It is the areas of the service class most closely associated with
controlling capitalism on capital’s terms that have grown most rapidly in the
1980s. The private sector professionals like accountants have benefited from
the restructuring, at least in the Anglo-American world, because they can
deliver increased profitability. To deliver this they have, however, had to alter
so that any consensual or social service role they may have had has been
downgraded.
Why has this change emerged within the professions? Some of the
occupations concerned have had a long tradition of ‘‘professionalism’’ within
the Anglo-American world e.g. accountancy, law (see Nelson, 1988; Dezalay,
1991), engineering (see Causer and Jones, 1990; McGovern, 1992). It is my
contention that this shift has been relatively painless due to two factors: one,
the labour market position of many of these workers; and two, the traditions
of the professions concerned. In relation to the former point there has been a
large increase in the opportunities for many of these workers due to the
restructuring of capital. This brought with it the move towards the flexible
firm and a growth in demand for producer services, both of which have been
documented earlier. This growth meant that these professionals could take
advantage of the labour market and achieve high pay, high levels of
responsibility, and / or self-employment quite easily. The second point is that
for some of these professions the degree of antagonism between their
professional outlook and that of managers was not that great in the first place.
Hastings and Hinings (1970) highlighted this second point as regards accoun-
tants over twenty years ago. Child (1982) also points to this fact in the case of
engineers. He documents how they are more labour process orientated than
accountants yet they can still develop a managerialist ideology quite easily.
Thus, they can move into senior management given the opportunity. Child
found that scientists, on the other hand, have greater difficulty as their
professioal ethos runs deeper and they can feel restricted in private firms as
they may not be able to publish findings and so forth. Thus, for scientists,
control and autonomy are issues of greater concern. The same would appear
to be the case with doctors (Parkhouse, 1991; Table 3.21). The poorer the
labour market position of a profession and / or the more dearly autonomy in
the work process is valued by a profession the more painful this com-
mercialisation process is likely to be. (McNulty et al. (1993) have argued that,
360 G. Hanlon

although there is evidence to back up this professional – managerialist / market

conflict, the picture is far from straightforward, with many doctors and
engineers welcoming the commercialisation process.)
The extent to which professions are affected depends upon market changes,
government policy, capital restructuring and the traditions of those profes-
sions concerned. On this basis, commercialisation is a contested terrain within
professions such as medicine, academia and so on. The emergence of new
appraisal systems within the UK’s NHS and university sectors appear to be
broadly similar in their thrust to those that have emerged within accountancy
i.e. the central issue or at least one of the central issues is commericalism.
This paper suggests that a new paradigm is emerging within professional
work. This paradigm is based around the notion of commercialism. The
accountancy profession is the prototype within this new environment and
other professions should be evaluated by how near or how far they are
located from this ideal type. The further a profession is from accountancy the
greater the distance the state under the current governments and other
organisations will seek to change them and move them in accountancy’s
direction.
These professionals depend directly on creating profit for their clients in a
way that did not exist before. Their success or failure at this determines their
career prospects and thus their social mobility. This was not the case in the
public sector which burgeoned under Fordism. Because of the close affinity
between the new growth areas of the service class and profitability it seems
fair to suggest that this segment of the service class will be less favourably
disposed to a return to Fordism, or some similar social compromise, than
their social service counterparts. A return to Fordism implies an expansion of
the public sector, an increased say for labour, etc., all of which entails a
lessening of capital’s power and a downgrading of the issue of profitability. It
is precisely these latter features which brought the commercialised sector
many of the gains it has enjoyed in the past ten to twenty years. Because of
this the commercialised service class has different interests to both the
working class and the public service / bureaucratised sector of the service class
(this is not to say that these latter two groups have the same interests). All of
this refutes the idea that the service class is now the dynamic force in society.
As argued, at the centre of these new control mechanisms within accoun-
tancy is profitability. In order to improve one’s career one needs to convince
one’s superiors of one’s profitability potential. This involves skills which are
increasingly commercial and then social as one rises up the hierarchy. These
accountancy controls are in many ways hegemonic in the 1990s as regards
professional work. There appears to be a new paradigm emerging within
professional employment which has as its central tenet commercialism rather
than autonomy and / or social service. This is not to say that all professions
will end up with the same control processes as accountancy, it simply argues
that the emphasis today is on commercialism. How far any particular
profession goes down this path depends upon a variety of factors and is thus
an area of struggle between the segments and parties concerned. It is
conceivable, although unlikely, that if the older and more bureaucratic
professionals react to the emergence of commercialism in the same way as
 Casino capitalism 361

accountants then the service class could be a lot more dramatically altered in
the future. This could further alter the shape of an already polarised class
structure in the UK and elsewhere.

Acknowledgements

The author would like to express his thanks to Professor Peter Armstrong of the
Management School at the University of Sheffield for his generous support and
encouragement in the writing of this paper. He would also like to express his
appreciation to the reviewers for their perceptive comments.

Notes
1. Ireland is not particularly unusual in this regard. In the mid 1980s, 39?6% of Irish 18 year olds
were in full time education, the figure for the UK was 33?1%, 14?3% of which were part-time
(OECD, 1990, Table 4.2).
2. ‘‘Casino Capitalism’’ refers to the emergence in the 1980s of an economy characterised by
financial speculation on a grand scale, fictitious capital formation, personal aggrandisement,
large scale indebtedness, yuppie culture, close attention to symbolic capital, etc. (see Harvey,
1989, pp. 329 – 35).

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