FTI CONSULTING: A MODERN-DAY KING'S COUNSEL

In April this year, FTI Consulting launched a new forensic practice in South Africa, with the ‘Father of Forensics’ in South Africa, Petrus Marais, heading up the division. The practice works closely with the Economic and Financial Consulting segment, which was established in SA in 2015 and which is led by Managing Director, John Lisle.

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The Enron scandal in early-2001 forever changed the face of business. What made the scandal so compelling was the fact that it brought down the accounting giant, Arthur Andersen too. Its impact shook the U.S. economy and reverberated throughout the globe, touching the tip of Africa’s business landscape right down to South Africa.

With the passing of the Sarbanes-Oxley Act in the United States—post-Enron legislation that tightened the nature of relationships between auditing firms, consultants and their clients— big auditing firms were dramatically restricted in terms of the non-audit advisory services that they could provide to audit clients.

This opened a window of opportunity for advisory companies that would prove to be a game-changer for what was only a niche industry at the time.

“It meant there were thousands of companies around the world that could no longer rely on the big auditing firms and that needed independent and transparent expertise. FTI Consulting saw the gap, acquired significant business from the Big 4 accounting firms in the United States and has been rapidly branching out and expanding its global footprint since then,” says Petrus Marais, Senior Managing Director and Head of Forensic and Litigation Consulting in South Africa.
Global, independent, multi-disciplinary

FTI Consulting, which originally stood for Forensic Technologies Information, was founded in the United States in 1982 as an advisory firm that provided expert witnesses in litigation and the visual presentation of complex data in court cases—a niche service in the market at the time.

In 1998, it rebranded to FTI Consulting and listed on the New York Stock Exchange a year later. Today, it has over 4 600 employees in 28 countries and is an advisor to 97 of the world’s top 100 law firms and the world’s top 10 bank holding companies. Its client list includes 56 of the Global 100 companies.

Dedicated to helping organisations manage change, mitigate risk and resolve disputes, the firm operates in the financial, economic, operational, political and regulatory, reputational and transactional advisory sectors.

Collectively, FTI Consulting offers a comprehensive suite of services designed to assist clients across the business cycle—from proactive risk management to the ability to respond rapidly to unexpected events and dynamic environments.

The company generated US$1.81-billion in revenue during the 2016 fiscal year.

Growing footprint

Today, FTI Consulting is the only independent, boutique advisory firm in South Africa that offers a multi-disciplinary advisory service with a global footprint.

“We have worked in South Africa with many leading global and local organisations, such as SAB Miller, Coca-Cola, Shell, Chevron, Sasol, Distell, Comair, Airports Company South Africa, the Johannesburg Stock Exchange and various major banks and insurance companies to name a few,” says John Lisle, Managing Director of the Economic & Financial Consulting practice in South Africa.

FTI Consulting has had a strategic communications practice in South Africa since 2005 when it acquired the global operations of a UK-based strategic communications company called Financial Dynamics. Max Gebhardt is the Managing Director for the Strategic Communications practice, which assists companies to achieve discreet business objectives through a variety of communications strategies and tactics.

“From about 2011 onwards, the team in London had increasingly been working on a number of high-profile enquiries and disputes in South Africa on a fly-in basis. The feedback from clients and their legal advisors was that they saw an increasing demand for the services, which FTI Consulting’s Economic & Financial Consulting practice offers and that they would prefer to be able to access this through a local presence linked into the global network. On the back of this momentum, in 2014, the firm decided to set up an economic and financing consulting team in South Africa,” says Lisle.

Lisle moved his family to Cape Town in 2015, four years after joining FTI Consulting.

“Coming to South Africa to establish a practice was a new challenge and the opportunity to build something from scratch is difficult to do within a large established office such as the one we have in London. It was also an opportunity for my children to live in a different culture and to enjoy the wide range of activities and experiences on offer in South Africa that they would not get back in the UK,” explains Lisle.

The company then started looking at other platforms to further its value service offerings in South Africa, which led to discussions about expansion in 2016.

A new era for forensics in South Africa

FTI Consulting surprised the local market on the 3rd April 2017 with the launch of a practice in South Africa and the appointment of five senior forensic professionals, strengthening its depth of service and expertise in a region of increasing strategic and commercial importance.
The Forensic & Litigation Consulting practice expanded FTI Consulting’s service offerings in the South African market and saw the country’s crème-de-la-crème of the legal and forensics industries leave the Big 4 consulting environment to join the firm; a much more agile and lithe market participant. FTI Consulting’s expansion into South Africa reflects a growing demand for local specialist knowledge in complex cases of fraud, financial disputes and corruption.

The Father of Forensics

Those who know the forensics landscape in South Africa call Petrus Marais the ‘Father of Forensics’ in the local market.
Marais established KPMG’s South Africa Forensic Division in 1993, and had been the global leader of KPMG Forensic since 2011. He previously served as the regional leader of KPMG Forensic in EMEA and the Chairman of KPMG Forensic for South Africa and Africa.
He has experience with a range of major clients—many of whom have filled our front pages for decades—from government departments to financial institutions and investment houses in the area of fraud investigation and fraud risk management.
Prior to joining KPMG, he was a founding member of the Office for Serious Economic Offences of the Department of Justice, which was the prototype and predecessor of the Scorpions and based on the UK Serious Fraud Office model. He is also an advocate of the High Court of South Africa.

Looking for a change, Marais resigned from KPMG. He was approached by FTI Consulting to build a forensic practice in South Africa. “I spoke to some of the people who have been on this journey with me over the years and were interested in the opportunity,” says Marais, who loves the thrill of solving a good challenge.
“FTI Consulting is internationally recognised as a truly independent investigations and litigation practice focused on the large and complex challenges and disputes which clients increasingly face. Its entrepreneurial spirit and ambition to grow, both regarding its geographic footprint as well as its range of specialised service offerings, was the key attraction for me in joining,” says Marais.

Leaving KPMG after 23 years as the founder of the firm’s forensic practice was never going to be easy. Having been the main founding member of the forensics practice and having taken it to the position as the premier forensic service provider in South Africa, Marais’ departure set off a ripple effect in a small and elite South African forensics industry that no doubt shook KPMG.

Looking back over his pre-FTI Consulting forensic career, Marais sees his contribution to the establishment and growth of the forensic profession in South Africa and globally as something he is proud of. “When I joined KPMG in 1993, there was no forensic profession in South Africa and globally, KPMG had only a handful of start-up practices. When I stepped down from my role as Global Leader of KPMG Forensic in 2016, we were a network of 42 practices globally and in South Africa, the profession had grown to the point that all sizeable accounting firms, many law firms and numerous large companies had dedicated multi-disciplinary forensic teams. It was great to have played a part in this” he says.

A head above the rest

As a firm, FTI Consulting is fiercely protective of its independence and largely free of the conflicts of interest and the independence issues that plague the Big 4 consulting firms. Its “market disrupter” brand is paying off.

Among the firm’s competitive advantages is the senior expertise within its employ.
“We don’t pull in an army of juniors. Our teams are highly experienced, with deeper skillsets than those of our competitors, we believe,” says Marais. “We work very differently from some of the traditional go-to providers who operate in the same sectors as we do. Our clients have a high degree of access and involvement of senior people on the accounts. We also use cutting-edge technologies to be efficient rather than an army of junior staff being trained at the client’s expense,” explains Lisle.
Lisle and Marais both stress that the FTI Consulting service segments work together seamlessly when addressing the client’s challenges.

With offices in 28 countries, the team reaches out across the FTI Consulting network to find the unique skills needed for the challenge. For example, a major dispute will require economics and expert witness expertise, forensic factual determination, digital evidence extraction, analysis and presentation, and strategic communications with key stakeholders. “We bring this all together for our clients,” they say.

On the cards for 2018

FTI Consulting is growing rapidly in South Africa in terms of the breadth of its offering and its staff numbers. The firm plans to commence 2018 with 21 forensic employees and 40 employees in total, growing from 14 employees in 2015.

“This growth is quite substantial in terms of headcount and capabilities in the marketplace and it affirms the belief of our global management that South Africa and the region are a worthy investment,” says Lisle.

According to Marais, FTI Consulting will kick-start 2018 with service segments in economic and financial consulting; a strategic and communications team that is well-established and growing; and a strong forensic and litigation consulting capability with an embedded technology team.

“We are applying our minds to corporate finance and restructuring, given the opportunities in these markets. This will be one of our focus areas in 2018,” confirms Lisle.

As the advisory market in South Africa, Africa and globally continues to evolve and grapple with ever-increasing regulatory pressure and issues such as mandatory audit firm rotation; cyber threats; corruption; cross-border disputes; and the like, Marais and Lisle believe that that there is a growing opportunity for globally networked, truly independent, multi-disciplinary advisory firms.

“It is our intention in South Africa to look to Africa for opportunities. We see abundant natural resources that attract the extractive industries, and we see a large and predominantly young population with a rapidly growing financial middle class that demand infrastruc ture; telecommunications; financial services; healthcare; and consumer goods. All these factors are attractive to investors who we see as potential clients.

“The current market conditions in the region excite us and we are convinced that now is the time for FTI Consulting,” concludes Marais. 

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