EY: Legal is growing by 20 per cent oeppoulssen
The accountancy firms are gaining ground on law firms and could reshape the marketplace, new research from American Lawyer reveals. With over two in three law firm leaders regarding the legal arms of the Big Four as a major threat, the research revealed that in terms of revenue, the Big Four all reported double digit year on year growth. With PwC reporting $500 million in legal earnings and Deloitte $250 million, they have a way to go to catch up with the top law firms but are growing at pace each year with EY reporting 20 per cent growth last year and 10 per cent in the last five consecutive years. Two in three law firm leaders believe that the Big Four are well positioned to take over moderate to high value work whilst nearly 70 per cent believe they could take marketshare in areas such as merger work. The research also points out that by leveraging the practice areas they already serve, the Big Four is gaining legal market share at a rapid pace by providing legal services in tax, finance, M&A (for lower value deals) and labour. The report also reveals that emerging markets are the key to Big Four success in the legal space with 76 per cent of their lateral hires in Asia or Latin America.
Not just another competitor
The report, 'Elephant in the Room: The future of the Big Four in the legal marketplace,' warns law firms not to dismiss the accountants as just another new competitor. It points out that the Big Four come to the market with a unique combination of strengths, from size, global presence and existing relationships with corporates to well-known skills in project management and process improvement. A recent study by the Harvard Centre on The Legal Profession calculated that the Big Four was represented in 71 countries compared to the 10 largest law firms which covered just 31.