Big Law firms and the Big Four accountancies benefit most when they find ways to work together, representatives of two of the Big Four said.
The discussion at the Legalweek conference in New York comes in the wake of proposals in several states to loosen or scrap law firm ownership rules.
If that happens, law firm leaders have expressed concerns about new competition from EY, KPMG, Deloitte, and PwC, which dwarf the largest American law firms in revenues and have built large legal operations in other countries.
“To focus on the market share we might take (from Big Law) is not the pertinent question,” said Nicholas Bruch, lead knowledge analyst of EY’s legal and tax division. He said the central question is how much can they both benefit when working together?
Several panelists said that in fact, some large law firms and leading alternative legal service providers could become virtually indistinguishable within a decade, given in part that each, to a degree, covets the other’s expertise and business models.
“In five to ten years, how many of these companies and firms are going to look the same?” asked Karl Kong, senior vice president of product for Axiom, a legal staffing company.
Recognizing the growing competitive threat from alternative legal service providers, also known as law companies, several law firms in recent years have bolstered their legal tech innovation teams and have forged new relationships with the Big Four. They recognize what they see as the value they can bring in helping to speed document and contract reviews in large mergers and acquisitions, and other matters.
“EY does not practice law in the U.S.” said Bruch. Deloitte’s representative on the same panel, Spain-based Luis Fernando-Guerra, used similar language regarding his company and the fact that state bar rules and federal regulations have prevented them from opening standard law practices in the U.S., including traditional law firm focuses like litigation.
But in the related field of legal managed services—tech tools that can help handle high-volume, repetitive work—"there’s still a lot of room to run on that” in the U.S., said Bruch.
Law firms increasingly recognize that there’s money to be made in legal managed services. While cooperative relationships between Big Law are on the rise, so are efforts by some firms to build out their own tech-driven operations to compete for similar work from corporate legal departments, said Zach Abramowitz. He’s the CEO of the online conversation startup ReplyAll, and founder of Killer Whale Strategies, a consulting company that advises law firms and law departments on legal tech issues.
“What firms have found over the last few years is, there’s no need to leave this work to the EYs and Deloittes and Axioms of the world,” said Abramowitz. “There’s room for us, too.”
In an earlier panel, which focused on the state bar debates over law firm ownership rules, state supreme court justices from Utah and Arizona spoke of the progress of their task force-driven efforts to effect regulatory changes to advance access to justice for lower- and middle income civil family court litigants who often cannot afford attorneys.
Utah Supreme Court Justice Deno Himonas, a co-chair of that state’s task force, said rule-change language could be approved by the court and be open for an extended public comment period by late March.