The Big Four are rivalling global law firms

By Yves Faguy September 27, 201727 September 2017

The Big Four are rivalling global law firms

 

Last week, PricewaterhouseCoopers announced it is opening a U.S. law firm in Washington, D.C. The firm will operate as an affiliate, ILC Legal, and will work primarily on international corporate restructuring matters. Its lawyers are being sold as “special legal consultants”, there to advise on foreign law, not U.S. law. It’s hardly the first time a member of the Big Four has made a push into the legal services space (Deloitte, E&Y and KPMG all have legal arms). But Nicholas Bruch writes that PWC seems to have dropped any pretence about keeping things on the low:

PwC’s decision to launch a US office focused on legal services is not a quiet move. The Firm has US offices. In fact, they already have two offices in Washington D.C. They could have easily built legal marketing and business development resources in their existing offices. Instead they established a US law firm. The company knew such an announcement would draw the attention of the legal press – this is almost certainly why they announced it in the manner in which they did. They also knew it would draw attention – from law firms and regulators. They clearly believed the benefits outweighed the costs.

Such boldness is new from PwC and from the Big Four. If PwC’s new office signals anything, it is that the period of cautious expansion has come to its natural end. Law firms should expect more “major announcements” from the Big Four in the future.

Bruch also co-authored an ALM Intelligence report with James Mayer on the Big Four’s accelerating expansion into the legal market worldwide – much of it in Asia, and mostly operating as operated as multidisciplinary practices (MDP) – and noting that their legal arms now average 2,200 lawyers in 72 countries, which puts them in the same league as the largest global law firms. The authors note that the focus of the Big Four in legal is increasingly targeting the delivery managed legal services to corporate clients:

While the Big Four are unlikely to abandon the MDP Model, they have signaled, through a series of investments over the past several years, that they are adopting a second operational model focused on delivering a range of managed legal services to corporate clients. This model combines technology, process management, and talent to deliver legal services at a lower cost than traditionally offered by law firms. Importantly, the services delivered through this model are likely to look more similar to those offered by alternative legal services providers than traditional law firms.

 

An example of the Big Four’s adopting of the managed services model is Deloitte’s Margin Matrix service. This service, which was developed through a collaboration with Allen & Overy, simplifies the regulatory burden associated with derivatives trading by leveraging technology. The Head of Strategy of a leading global law firm told ALM Intelligence that “Margin Matrix is a game changer” adding that his firm is forecasting “a significant reduction in revenue next year” due to the growing adoption of the service by corporate clients.

Deloitte has made other managed legal services moves in the past several years. In 2014, Deloitte purchase of ATD Legal, one of the few providers of managed document review services in Canada. In 2016, Deloitte purchased Conduit Law, a Canadian firm which operates on a secondment model similar to Lawyers on Demand. This model effectively rents contract lawyers to law departments at lower fees than those offered by law firms. Both of these investments were made in Canada but could easily be exported globally.

Filed Under:
Comments
No comments


Leave message



 
 Security code