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Leonard Paul Spacek

Spacek had been one of Arthur E. Andersen’s protégés, and he fully embraced the core values and work practices that his mentor had advocated. The vision he provided to the firm was his version of Arthur E. Andersen’s belief in integrity and fairness. He was an Arthur E. Andersen man and perfectly fit the profile that Arthur E. Andersen sought in his employees. In many ways, he was just like Arthur E. Andersen.

He came from the small town of Cedar Rapids, Iowa, where he had been born in 1907 to Paul and Emma Cejka Spacek. His father had bought a farm outside of town but Leonard’s mother became seriously ill and eventually was hospitalized for a number of years. His father’s income was not sufficient to maintain the farm or care for his three sons, 8 to 13 years of age. Leonard was taken in by local farm families, where he spent his mornings and evenings working for his room and board. He continued working while he finished high school.

In 1924, when he was just 17, he accepted a job in the accounting department of Iowa Electric Light and Power Company, a client of the firm. In 1925, he completed high school and continued his education, attending college at night, and working during the day in the accounting department while also holding down an evening job. Seven days a week for two years, he worked and attended college, leaving his home at seven o’clock in the morning and returning home after midnight.

His experience in the utility industry brought him to Arthur E. Andersen’s attention. He was brought in contact with the firm’s personnel as it was conducting Iowa Electric Light and Power’s audits. In 1928 he accepted a position as a junior accountant on the Chicago staff of Arthur Andersen & Co. and was put in charge of the firm’s public utility work. Joining Arthur Andersen and Co. gave him the financial security he needed to propose to Libbie Smatlan, and they married on January 19, 1929. In the years that followed, Libbie stayed at home to raise their two children while Leonard Spacek climbed the Andersen hierarchy, becoming a manager in 1934. After he finally received his CPA, Arthur E. Andersen made him a partner in 1940. He never finished his degree at Coe College but the college awarded him an honorary Doctor of Laws degree in 1962. At Arthur E. Andersen’s death, he had stepped in to save the firm from disbanding and, at 41, became the firm’s second managing partner, a position he held until 1963 when he moved to the newly created position of Chairman, which he held until 1970.

During his time as Managing Partner and Chairman, the accounting profession began to grow more and more complicated. Leonard Spacek, who had shown such determination in pulling the firm together after Arthur E. Andersen’s death, became a fiercely outspoken champion of shareholders rights. He wrote and spoke frequently on the subject of “fairness” in accounting, declaring in 1958 that “the man on the street . . . has the right to assume that he can accept as accurate the fundamental end results shown by the financial statements in annual reports.”[13] Other accounting firms did not always share this attitude and he had very difficult relations within the accounting industry because of the stands he took on professional issues. “Some accountants think his position is too rigid, and the feelings toward him of the seven other [major firms] range from cautious cordiality to simmering hostility.”[14]

On the 50th anniversary of the firm—December 1, 1963—Spacek stepped down as Managing Partner. He recommended Walter Oliphant to replace him after discussing with the advisory committee the merits of each of the 250 active partners who might also have been considered for the position. Oliphant was Spacek’s protégé and he steadfastly supported Spacek’s belief that the firm would never compromise on quality. “We all recognize that changes in the profession, the overall business environment, and now in the competitive marketplace can change a firm’s emphasis and approach. But any approach that does not focus heavily on quality of service is surely foredoomed to fail.”[15]

Although Walter Oliphant became Spacek’s heir apparent, Spacek did not turn the reins of power over to the younger man when Oliphant became Managing Partner. Instead, he stepped into the newly created position of Chairman, which “involved no operating responsibilities, but centered around ’maintaining and advancing the firm’s aggressive position in the establishment of sound accounting principles within the profession, the development of the firm’s special services . . . and firmwide promotional activities.’” Essentially, this meant responsibility for professional leadership, business development, and sales.[16] If Oliphant was disappointed, he never voiced it as Spacek continued to lead the firm. After all, Spacek was only in his mid-50s “and was still as exuberant as ever, so most of us just decided to keep on dancing with the one who brung us,” explained one partner.[17]

In his drive to achieve unbiased accounting standards, Leonard Spacek faithfully supported Arthur E. Andersen’s professional development program. Arthur Andersen & Co. poured 15–20 percent of the firm’s net revenue into its professional development program, to select and train exactly the right people and to make sure it kept only the right people. Andersen’s values, methods, and culture were instilled through centralized training and reinforced by local office apprenticeships. Every Andersen employee learned the necessary core values and work practices expected of all who worked there. Eventually, Andersen’s professional development program was ranked #1 among corporate training programs. Over the decades, these educational and career development mechanisms became central to the firm’s culture.

Spacek continued to advise and guide the firm as a Senior Partner until he retired in 1973.[18] Shortly before his departure, Fortune magazine declared that:

Arthur Andersen’s differentness can largely be traced to the personality of a strong partner, Leonard P. Spacek . . . who for many years has been the dominant figure in the firm. Spacek has become internationally famous, if not legendary, as a result of his attacks on the accounting profession. Although he stepped down as chief executive seven years ago, he remains intensely active, and his spirit and influence are unmistakably evident . . . . Top partners at other accounting firms, though they can’t abide his hell-raising, readily acknowledge that Spacek has a brilliant, creative mind.[19]

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