Biglaw

Can The Accounting Firms Unseat Biglaw?

Times are changing. Are law firms in trouble?

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A hot conversation started around the legal industry — an industry where the bar for the term “hot” is apparently pretty low — is if and when the Big 4 accounting firms will force their way into the American legal market. They have some built-in advantages, especially when it comes to pre-existing relationships they can leverage into legal business. They’ve made strides in Asia and have started — haltingly — to make forays into the American market.

Of course, the accounting firms are prevented by existing ethical provisions from practicing law in U.S. jurisdictions. But how long will those rules hold up when the Big 4 decide to start throwing their weight around? Today, the behemoth entities set up “strategic partnerships” with existing law firms, agreeing to send their stockpiles of business to a partner firm. All the happy talk about “synergy” rests atop the idea of a proof of concept test run right under our noses.

Epstein Becker Green is the most recent strategic partner, joining up with Deloitte, but it’s just the latest in the line. From Bloomberg Big Law Business:

This is not the first “strategic alliance” pairing a law firm with a Big Four firm. Last June, immigration law firm called Berry Appleman & Leiden entered into an alliance with the British arm of Deloitte, allowing the firm access to Deloitte’s worldwide customer base.

Three months later, PwC and the immigration firm Fragomen announced a partnership to provide tax and immigration services to clients and their employees.

[Adam Smith Esq.’s Bruce] MacEwen said deals like this are indicative of the fast changing nature of legal work as it expands outside the scope of traditional legal practices.

With a broad network of client relationships and decades upon decades of goodwill built up in other professional service sectors, the Big 4 appear an existential threat to a lot of law firms out there. Indeed, if the accounting firms entered full-fledged legal practice, they’d instantly be among the largest firms in the world. On the other hand, some industry insiders think size might not be a virtue. With competing stakeholders across other service sectors, they think a Big 4 legal practice would buckle under its own weight and fall behind more nimble, dedicated law firms.

It’s impossible to say how this will all turn out, but at this point, law firms don’t seem worried about the Big 4.

[Chuck Baldwin, a managing director with Ogletree Deakins] said he’s not concerned that Ogletree will be affected, as the firm has 950 lawyers located in 53 offices throughout the U.S. as well as international lawyers.

“We still feel really good about our competitive position,” he said. “For them to compete with us, they’d have to open 30 other offices in the U.S. alone.”

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Fair enough. Yet, the above quote reminds me of the conclusion of Arthur C. Clarke’s short story, Rescue Party. At the end of the tale of an advanced alien civilization taking pity on primitive humanity with our quaint nuclear-age technology:

“I wonder what they’ll be like?” he mused. “Will they be nothing but wonderful engineers, with no art or philosophy? They’re going to have such a surprise when Orostron reaches them—I expect it will be rather a blow to their pride. It’s funny how all isolated races think they’re the only people in the Universe. But they should be grateful to us; we’re going to save them a good many hundred years of travel.”
…
“Something tells me they’ll be very determined people,” he added. “We had better be polite to them. After all, we only outnumber them about a thousand million to one.”

Rugon laughed at his captain’s little joke.

Twenty years afterward, the remark didn’t seem funny.

Big Four-Big Law Alliance Could Spur More Partnerships [Bloomberg Big Law Business]

Earlier: Twilight Of The Law Firms: The Big 4 Are Poised To Conquer The Legal Landscape
Asia Becomes Ground Zero In Big 4 Effort To Take Over The Legal Market

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