What happened to Arthur Andersen after clients stopped using the firm?

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Enron scandal The Enron logo outside the company's headquarters, Houston.

Following the Enron scandal, Arthur Andersen faced a rapid collapse as clients abandoned the firm to assure investors of their financial integrity. This mass defection was quickly followed by the departure of employees and the closure of entire offices.1

As the firm lost its client base, the following events occurred:

Leadership Change: CEO Joseph Berardino was forced to resign.1
Mass Layoffs: Thousands of employees were laid off as the business disintegrated.1
Loss of License: On June 15, 2002, the firm was found guilty of obstruction of justice for shredding evidence and subsequently lost its license to engage in public accounting.1

Although the United States Supreme Court unanimously overturned the obstruction of justice conviction three years later due to faulty jury instructions, the firm had already effectively ceased to exist, leaving behind only about 200 employees to manage its remaining legal affairs.1