Melbourne Herald Sun, Friday May 27, 2011
You don't have to go to Beijing to see the Great Wall of China. It flows down Collins and Pitt Streets and through the central business districts of all our cities. Whatever skyscraper you step into, you will encounter a Chinese wall.
I'm talking about a metaphor, not stones and mortar here. In our legal and accounting firms, advertising and PR agencies, the Chinese wall is as solid a structure as the one in Mongolia - or so they would have you believe.
You see, the problem is that there are too many clients and not enough suppliers. So, for example, a law firm might have a dozen companies on its books with one half suing the other half.
The firm does not want to lose any of these lucrative clients. So it crosses its heart and promises that not a word from one client will be whispered to a lawyer for the other client - they will be strictly segregated.
Records will be safely locked up away from prying eyes, the lawyers will be disciplined if they are found to be talking about more than the footy lineup at the water cooler.
It's serious business, there can be millions potentially lost through one stray comment. The Law Society lays it down thick: If there is any possibility of a conflict, the firm must appoint a compliance officer, anyone involved must be a "screened person", made to swear on a stack of Bibles and risk the wrath of ASIC should one word get out. All files must be securely locked away and policed.
Accountancy firms have similar restrictions - necessary because a firm like KPMG has 138,000 employees serving many thousands of clients around the world, and each cell in the beehive cannot know what the folks next door are doing.
Advertising agencies have solved the problem differently. The fact is, in the biggest league there are just four agencies. But how could they do business when every car manufacturer is jealous of all the others, when department stores live at daggers drawn with the competition, when every soft-drink maker wants to be the only kingpin in the agency?
Well they get round it by being lots of different agencies.
So Omnicom is really the world's biggest agency, with scores of companies headlined by BBDO, Doyle Dane Bernbach, and TBWA. In total their 70,000 employees handle 5000 clients. Lots of Chinese walls there.
Second comes the unlikely named Wire and Plastic Products Ltd. This was the holding company that Sir Martin Sorrell bought in 1985 to hold his agency acquisitions. We know it better as WPP. Its accounts are divided between 150 little shops - most of them not so small - like Ogilvy, Y&R, Dentsu, Grey and JWT. So they can handle 700 clients, neatly isolated behind their Chinese walls.
It holds PR firms too, like Hill & Knowlton and Burson-Marsteller. All in all, $66 billion in billings.
Number three is back to New York - Interpublic with 43,000 working for the likes of McCann Erickson and Lowe.
The Europeans also have their conglomerates, the biggest being Publicis. With 45,000 people it is number four. It includes the most revered names in the business: Saatchi & Saatchi and Leo Burnett.
Of course you can breach a Chinese wall the easy way - with money. The feathers flew this week when James Packer waved his wallet and hired former ALP national secretary Karl Bitar to manage his casino relations with the federal government. Could he be hoping for a peek behind the Great Wall?
ray@ebeatty.com
