Marco Consulting Group

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A handful of Taft-Hartley pension plans fired Marco Consulting Group after four of its top consultants left in 2003 - "a sign that famously loyal union pension plans might be concerned about continuing turnover at the premier union consulting shop."

Founders Jack Marco and Thomas A. Mitchell Sr. insisted that such concerns are groundless. "The turnover that we've had was our idea, and we've fixed what needed to get fixed, said Mr. Marco, the chairman of MCG.

Whether the people exiting MCG were pushed or pulled, the departures are once again focusing attention on long-discussed plans by Messrs. Marco and Mitchell to sell their majority stake to employees over time.

At the time Marco Consulting had 140 union clients with a combined $75 billion in pension assets in a market segment renowned for sticking by its service providers. But the departures in 2003 of consultants Ivory Day, Stacy Letts, John Elliot and David Erfort, as well as long-time research chief Signe A. Murphy, left some clients nervous about the company's future.

In a letter to clients and money managers, Messrs. Marco and Mitchell said their firm had "just completed a program started in 2001 to expand our management team, rewrite our internal performance measurement systems, recruit, train and enhance our consulting professionals, and broaden our research and manager search capabilities.

David Erfort declined to comment on the situation, citing a lawsuit that Marco Consulting filed against him in November. Mr. Mitchell said the suit was filed because Mr. Erfort violated an agreement he had signed not to solicit any of his Marco clients in the event he left the firm. Cary E. Donham, a lawyer for Mr. Erfort with Shefsky & Froelich, Ltd., Chicago, said Mr. Erfort didn't sign any non-solicitation agreement, and he has filed a motion to dismiss the suit.

The lawsuit revolved around a program Marco Consulting instituted in 1996 to reward long-time employees with a modest distribution of equity for every five years of service. In their motion to dismiss, Mr. Erfort's lawyers argue that non-solicitation language "buried in MCG's stock redemption agreement should not be binding simply because Mr. Erfort accepted an automatic distribution of 10 MCG shares, or less than 0.25% of the company's stock.

All of the ex-Marco consultants found new jobs. Mr. Day works in the Chicago office of consultant Gray & Co., Atlanta; Ms. Letts joined money manager Voyageur Asset Management Inc., Minneapolis; Mr. Elliot joined New England Pension Consultants, opening an office in Las Vegas; and Mr. Erfort worked in the Chicago office of Consulting Services Group, Memphis, Tenn.

Even critics conceded that Mr. Marco is tremendously respected in the field, with more than one going so far as to describe his following in Taft-Hartley circles as a "cult of personality. Mr. Mitchell, President and Chief Executive Officer Ian W. Jones and Senior Consultant Michael D. Joyce are also highly regarded. The critics, however, say many of the remaining consultants, though solid professionals, are younger or less proven. Among the industry veterans who had left over the past decade are Lauma Griffin, Chris Wallace, John Fitzpatrick, Chris Holmen, Monty Tarbox, Todd Davis and Nancy Kaszak.

Some plan executives say service has suffered. Larry Wilson, controller of the $250 million California Correctional Peace Officers' Association, Sacramento, said the CCPOA stuck with Marco after the fund's consultant, Mr. Elliot, left last August. But Mr. Wilson said the CCPOA wasn't satisfied with the service it got subsequently and opted to hire New England Pension Consultants, Mr. Elliot's new employer, instead.

Mr. Elliot said CCPOA is one of seven clients he worked with at Marco that have moved to New England Pension Consultants. The others are the $285 million Construction Industry Laborers pension fund, Las Vegas, which voted to hire NEPC Feb. 18; the $250 million IBEW 357 fund, Las Vegas; the $75 million IBEW 191.[1].


  1. [1] Pensions and Investments Title: Marco Consulting Group: Top union consultant loses clients when staffers leave February 23, 2004