Deloitte Legal Chief Sees Opportunity in GCs’ Need to Modernize

The new global head of Deloitte’s legal services arm said he’s focused on delivering more integrated consulting to general counsel while acknowledging the Big Four’s entry into legal services has gone slower than many anticipated.

Richard Punt took leadership of Deloitte Legal in June, a division comprised of nearly 3,000 legal professionals in 75 countries. He previously was chief strategy officer at Thomson Reuters and CEO of Allen & Overy’s flexible resources arm Peerpoint.

In an interview with Bloomberg Law, Punt said he is optimistic about growing the accounting giant’s market share for the proactive services Deloitte calls “business transformation,” arguing general counsel need to deliver more value to their businesses through streamlined processes.

GCs have historically been reluctant to embark on proactive consulting projects to modernize their operations and Punt is upfront about the fact that Deloitte and the other Big Four firms have been slow to mature their legal businesses. But he also sees his organization’s size and history delivering big changes as a winning recipe.

“Part of what will encourage GCs to move is confidence in the service offering and in particular the service provider,” Punt said.

Deloitte Legal offers legal advisory services for corporate law departments including support on M&A, contracts, regulatory and compliance issues, employment law and corporate law. Punt says he’s getting particular traction on employment law services, contract management solutions, and helping clients implement generative AI.

As for his focus on helping general counsel implement new work processes and getting their outsourced work business, those lines account for about 40% of the firm’s revenue today, according to Punt, but he’d like to grow the figure toward 60%.

The Competition

The consulting and outsourcing services represent bigger changes for legal departments, and bigger market opportunities for those vying to provide them, namely the Big Four, law firms, ALSPs (alternative legal service providers) and tech companies.

The Big Four have beefed up their legal services businesses over the past decade or more, and at times stoked fear they would take a bite out of law firm revenue.

But Punt said law firms are less concerned about competing with the accounting giants than they once were, and he sees his business as a complement to what some elite law firms do for clients.

Richard Punt

Credit: Firm handout

“Part of the fact that we’re not quite as frightening to them as we might have been five years ago is it does take us a while to get going sometimes,” he said. “And it’s completely fair to acknowledge that we along with our peers have been a bit slower than we might have imagined.”

Nevertheless, Punt sees now as the moment for legal departments to embrace the sales pitch, saying “there is something existential” about the risk to GCs of remaining stagnant. He said the introduction of generative AI has added momentum to legal departments’ interest in updating their workflows.

“What’s most important is we prove the case that this is for real and that the market change is something that’s really happening and we’re backing that up by demonstrating we can add huge impact for clients,” Punt said. “And a big focus for me is making sure that we’re building the portfolio of evidence. That’s the thing that supports continued investment and development.”

Deloitte does not break out its legal revenue, but Law.com last year reported the company’s UK legal arm is nearing the size of the 50th largest UK law firm by revenue, around 75 million pounds.

Legal department budgets are tightening as demands ratchet up, he said. And he sees corporate leaders looking to the legal department to embrace AI and embed lawyers’ solutions directly into the workstream, rather than seeking out lawyers’ advice as a separate input.

As an example of the risk to legal departments, Punt pointed to compliance and risk functions inside financial services companies. Companies first sought solutions from lawyers but eventually were sold solutions from other providers, including technology companies.

“So either legal gets with the project, or you get the question which is: ‘Why do we have a legal department?’” Punt said.

Punt said most law firms have by now realized consulting for legal departments is “not really their business,” and ALSPs “haven’t engendered a huge amount of confidence with clients.”

“Lots of GCs will point to supply-side weakness in why they’ve not been more radical in how they run their function,” Punt said. “They’ve been looking for better supply. And some of the things around how we manage, they’re quite big changes for them. They’re looking for people with scale and track record that they can have confidence in.”

He views his competition as the other Big Four accounting firms, Accenture, and portions of large firms like DLA Piper, Baker McKenzie and Dentons.

Geographically, Punt said GCs in advanced economies like the US, UK and Western Europe are the most receptive toward implementing new legal processes, including tools to better understand their contracts.

Interest in generative AI tools has been strong in the Middle East and Saudi Arabia in particular, Punt said. Companies there have a “real ambition to leap forward” and are among the most aggressive at experimenting with generative AI applications, he said.

“They’re not going to work their way up to that, they’re going straight there,” he said.