“The quickest eight years of my life,” says Feargal O’Rourke of his time as managing partner of Big Four professional services firm PwC Ireland.
We are sitting in O’Rourke’s corner office in PwC’s impressive offices on Dublin’s north quays, where he has had enviable views up and down the river Liffey. He has just 11 weeks left in charge before handing over the baton to Enda McDonagh and taking his leave of a firm he joined in 1986. PwC has effectively doubled in size over the course of his two terms, with revenues of €436 million in the Republic last year.
That was in spite of the challenges posed by Ireland’s emergence from the financial crash, the fallout from Brexit and the Covid-19 pandemic, which locked down large parts of the economy for the guts of two years from March 2020, and the current cost-of-living crisis.
“In the last couple of years,” O’Rourke says, “one of the focuses we have had was growing our revenues faster than our headcount. The traditional model in professional services was that your headcount and revenue grew in lockstep. We’ve put a huge premium on achieving the gold standard on being digitally-enabled. And in the last 18 months, we’ve begun to see that come through in terms of rate per hour, so our revenue growth is greater than our headcount growth.”
So what’s the rate per hour, now that PwC’s Irish operation is digitally enabled? “That would be too sensitive to give out, but it’s increased,” he says with a nervous giggle. He does reveal that the increase in rate over the past 12 months has been “around 10 per cent”.
I was playing around with ChatGPT myself the other day and the level of base work that it can produce is pretty incredible
O’Rourke adds that about four years ago, PwC moved all of its operating systems to the cloud. “So we switched to Gmail, we put all of our HR management and client management system on the cloud. At the start, everybody in the organisation, no matter what grade you’re at, got a mobile device. We started developing apps then for activities around expense claims and time recorded. When it came to Covid, it meant we didn’t have an issue. I was really surprised, at the start of Covid, talking to one or two companies who I thought were very advanced in technology, and I remember one of them saying to me that two-thirds of their computers were desktops and they were caught out.”
He cites an example of how a repetitive process was automated to make it more efficient. “There was a young woman here who was managing a funds audit, and a first year graduate would spend two weeks checking figures between a spreadsheet provided by the bank and one by the fund. They would tick and bash to align them all. She developed a [tech] programme and got those two weeks down to 9.6 seconds.”
On the day of our interview, PwC announced a global alliance with artificial intelligence (AI) start-up Harvey, which is backed by the OpenAI Startup Fund, and is built on OpenAI and Chat GPT technology. O’Rourke expects ChatGPT to be a “game-changer” for firms by automating a lot of processes, by doing them “quicker, faster, smarter”.
“I was playing around with it myself the other day, and the level of base work that it can produce is pretty incredible. If you type in something like ‘Give me a summary of the Irish R&D tax credit provisions’, within a second it will produce a document for you that heretofore a trainee would have produced. Now, someone has to review it to see if it’s correct, and add the grey matter bit ... but in terms of delivering the first cut, it can do it in microseconds.
Business is politically agnostic and recognises that you’ve got to deal with the powers that be when they get there
“So do you need that wide bottom of the pyramid with lots of trainees? Maybe not. Maybe it becomes more of a cylinder, because we found that clients will pay for subject matter expertise. We’re on the cusp of this. It’s like getting on the internet in 1995. It’s new frontiers and the direction of travel is really interesting.”
Hailing from Westmeath, O’Rourke’s life could easily have taken a different path. His mother, Mary O’Rourke, was a long-serving Fianna Fáil TD who held many ministerial roles. His uncle Brian Lenihan snr, also Fianna Fáil, was Tánaiste and a presidential candidate in 1990, while his cousins, the late Brian Lenihan jnr and Conor Lenihan, held ministerial office.
O’Rourke himself is a sharp political operator. Hard-working and a brilliant networker, he was Mr Corporate Tax in Ireland during the many debates on the global stage over the past decade about our 12.5 per cent headline corporate tax rate and Ireland’s reputation (totally unwarranted, in his view) as a tax haven for large multinationals. He used the political skills picked up from his family over the years to successfully campaign to become PwC’s managing partner eight years ago.
His brother Aengus O’Rourke is a Fianna Fáil councillor for the Athlone-Moate municipal district and Cathaoirleach of Westmeath County Council. Did he ever seriously consider a career in politics himself?
“I was the chairman of Fianna Fáil in college, and was on the national executive after I left college,” he says. “I have to thank Tom Grace for that. He was a partner in here, played for Ireland [in rugby] on the wing, and in 1989 I was tapped [by Fianna Fáil] to see if I was interested in running as a sweeper somewhere in Dublin. I wouldn’t have got elected, but it would have put me on a path.
“I was working with Tom at the time and was junior in the organisation, and I told Tom about the opportunity. I always remember him saying to me: ‘You could go very far in politics and you could go very far in here, but you can’t ride two horses’. In fairness to him, he saw something in me, and I decided I’d give up the politics and focus on the job, and it paid off.
“A lot of my peers were going into politics at that stage – my cousins, Beverley Flynn, Brian Cowen, Michael Martin. There was a natural opportunity there but I’ve no regrets. It’s a tough life. At least in here it’s a meritocracy. If you’re good, you’ll rise to the top. Politics doesn’t work like that. You could be in the wrong party, in the wrong cycle of the right party, you could be on the wrong side of the right party in the right cycle. So I’ve huge admiration for people who do go into politics.”
Did his mother try to sway him?
“I know she would have been delighted if I’d gone in. She would have encouraged us, but not in a way you felt you were being pushed.”
Mary O’Rourke is now 86. “She’s in a nursing home now up near us in Dublin, so that’s a change for all of us. But she gets a lot of visitors, is still very interested in the world, and when this interview is published, I know I’ll get a call as soon as her Irish Times is delivered to her.”
A lot of my peers were going into politics. There was a natural opportunity there but I’ve no regrets. It’s a tough life
Feargal O’Rourke is a keen political watcher and is also well plugged into the community of multinational investors here. What is the view of the business community about Sinn Féin, given that it is riding high in the polls and may well be in government following the next general election?
“I’ve met Sinn Féin here, and Sinn Féin up the North,” he says. “They are very keen to put out that they understand the importance of foreign direct investment, they understand the importance of employment and while I don’t agree with some of their economic policies and some of their arithmetic, they are very up-front.
“So they will say they’re in favour of 12.5 [corporate tax rate], they’re in favour of the OECD process, and the R&D tax credits but then they will say, ‘Now you’re earning more than €140,000 a year, you should be paying 3 per cent more tax and you shouldn’t be getting tax credits and we need to increase employers’ PRSI.’ To be fair to them, they’re laying out their stall in terms of tax.
“In terms of business, I’ve probably noticed a lot more engagement now. Business is politically agnostic, and recognises that you’ve got to deal with the powers that be when they get there. I assume that will continue. Business would be watching and engaging and listening. All business wants is predictability and certainty. Sinn Féin is trying to do that outreach to give that predictability and certainty.”
One of the big items on O’Rourke’s agenda as managing partner of PwC was the litigation surrounding its work as auditor to Quinn Insurance, the insurer founded by Sean Quinn that was placed into administration in 2010 by the Central Bank of Ireland. The case was settled last year with the joint administrators for an undisclosed fee.
O’Rourke admits that it was an “existential threat” to the firm, given that it was being sued for €1 billion by the administrators, a multiple of its annual revenue. “We always felt that the case didn’t have merit, and we were delighted to settle it and I was delighted not to leave it for my successor,” he says, adding that it’s the first time in his career with PwC Ireland that the firm had been sued for its audit work.
PwC’s rival EY has just abandoned a plan to split its audit and consulting units globally after months of internal dissent. One reason put forward for the split was that it would end potential conflicts of interest in providing consulting services to audit clients.
“That was no real surprise for those of us watching it, as the air had been slowly going out of that balloon for the last couple of months,” he says. “It was just the wrong transaction at the wrong time. None of the other Big Four had any intention of following in my view and, in a Brexit comparison, they certainly will have been put off following it now.”
Do you need that wide bottom of the pyramid with lots of trainees? Maybe not. Maybe it becomes more of a cylinder
The clock is ticking on O’Rourke’s time with the firm. “I hand over on June 30th. I’m taking six weeks off and come back then to bring the new man round for six weeks, and then I’m taking early retirement on the 8th of October, which sounds like a strange date, but it will be the 37th anniversary of the day I joined.”
He will then head to the Rugby World Cup in France to cheer on Ireland in their tilt for the title. “I’ll then take a few weeks off and see what 2024 will bring,” he says. “I’m not ready yet to retire-retire. I’d like to stay active. A couple of companies have come to me, but I’ve said come back to me in the summer.
I still have a good-sized ‘to do’ list of things to get through here. I’ve used the metaphor with partners that this is a 4x400m relay and I’m passing the baton at full speed. I’d like to do something where I can add value and something that I would enjoy. We’ll see.”
Going back to politics, Senator Feargal O’Rourke has a certain ring to it. “Yeah, there was a time,” he muses. “We’ll see, ha ha.
“I’ve had the best job in town for the past eight years. I work with brilliant people and brilliant companies. I’ve travelled the world with PwC, I’ve been to the White House twice, met tons of people and every day has been different. If you’d offered this to my 21-year-old self when I joined in 1986, I would have said: ‘Where do I sign my soul away?’ I haven’t had to, thank God. It’s a brilliant organisation and I’ve loved it.”
CV
Name: Feargal O’Rourke
Job: will step down as managing partner of PwC Ireland in June
Age: 58
Lives: Sandycove
Family: Married to Maeve Barry with two adult children, Jennifer and Sam.
Hobbies: A big sports fan, plays squash and golf, and supports Leeds United.
Something we might expect: “I think Ireland can win the [rugby] World Cup this year.”
Something that might surprise: He will be publishing a book on the era of professional rugby for the Irish rugby team “at some point in the next 12 months. I’ve been working on it on and off for the last six years.”
Leadership style: “I’d like to think I’m pretty transparent and I try to be authentic and be myself. I would be a positive optimistic person by nature.”
Leaders he admires: “I love when I meet Michael O’Leary of Ryanair. He’s brilliant on the big picture and also on the details, too. And he’s a good Westmeath man.”
