BearingPoint files Chapter 11. Consultant needed.

Update: Reuters today reported that Accenture is eyeing BearingPoint's Asia operations. Still unconfirmed.

In the category of "physician heal thyself" the big management consultancy BearingPoint filed for Chapter 11 bankruptcy protection on Wednesday. The New York Times covers the filing for the company that has more than 15,000 employees.

In all the news about financial failings, I had missed the story of how the company originally spun off from KPMG in 2001 suffered its financial hangover largely as a result of a several years acquisition spree. The bankruptcy filing was described as  "pre-arranged" and the company's chief executive stated in a press release,“Our day-to-day operations will continue uninterrupted and we want to assure our employees and customers that we remain committed to serving our clients and to providing world-class consulting solutions,” said Ed Harbach, CEO of BearingPoint. “This restructuring is an important step to secure a better and stronger future for BearingPoint and we expect to emerge from this process in an expeditious manner,” Harbach continued."

Okay, good enough. But aren't management consulting companies supposed to help you avoid the kind of difficulties in which they find themselves? 

I couldn't help but notice that on the BearingPoint press site that last December they won a $260 million Department of Defense "Thought Leadership and Change Management" contract. That contract is labelled a IDIQ contract which translates into an indefinite delivery, indefinite quantity contract. Maybe the DOD staffers might want to change that to a definite delivery, definite quantity. 

Update: When I asked someone I know (not to sound mysterious, but he wanted to remain unknown) in the consulting business about the current state of the industry, he gave BearingPoint and Satyam as examples of the downside but also emailed to me that, 

" IBM and Accenture appear to be the best managed services companies in 2009, owing to some degree to their emphasis on emerging markets for growth. There also is heightening demand for IT infrastructure services, which should benefit Cognizant, HP, Infosys and others.

I am waiting for the first pure-play "cloud computing" consultant to emerge. Given the momentum behind the trend, I expect to see one or more players in this space ."

BTW, he is not connected with any of the companies mentioned.