A recent instalment of the podcast series LegalSpeak addresses the question of whether or not recent forays into the legal arena by the accounting industry’s Big Four actually comprise a significant threat to U.S. law firms.
Nicholas Bruch, principal analyst at ALM Legal Intelligence, who has been looking into this issue deeply for at least two years, believes that the answer is “Yes” – particularly for large law firms with an international reach. He also believes that many of those firms are not paying enough attention to potential threats to their existence – or at least to their current law-practice systems and structures.
Bruch points out that for many corporate entities around the world, particularly in Asia, the Big Four provided the first introduction to the global economy. These accounting firms have the benefit over almost every law firm of having built brand recognition and trust over several decades. Clients also like the idea of “single stop shopping” when doing certain work that requires both an accountant and a lawyer.
At the present time, this kind of advantage has more to do with legal services than legal advice, but Bruch believes that sooner or later, the accounting industry will want to extend its purview into other traditional legal practice areas. Bruch predicts that in the long term they will be successful, because they have the money as well as the global reach to do so.
Already, in addition to having made inroads into the most obvious legal fields, such as those associated with tax, Bruch points out that the Big Four have acquired legal expertise in traditionally law-firm-exclusive fields like regulation and compliance, labor and employment, mergers and acquisitions, and certain other areas of corporate work – particularly in Asia. The accounting industry is also making advances in legal technology, mainly through acquisitions.
Bruch admits that in some areas the threat may currently be be overblown, pointing out that accounting mega-firms tend to be “big vereins” that are not as organized as some might think, and therefore not as capable of detailed planning. But he believes that keeping a close eye on the situation is essential.
This podcast is definitely worth a listen for Bruch’s predictions regarding accounting’s prospective legal-talent acquisitions, the future of trade restrictions, what the ABA is doing, and – the essential questions – who is worrying, who should be and who isn’t.
Please let me know your thoughts on this or any other area of the law, either in the comments section below, or directly via email.