Earlier this month, EY, the mega accounting firm and one of the Big 4 accounting firms, announced plans to spin off into two separate businesses. One business would be devoted exclusively to providing audits to EY clients. The other business would be devoted to providing a variety of consulting services to EY’s business clients. The consulting business will likely be a public company which suggests where EY is putting its future priorities.

 

The split must be approved by some 10,000 EY global partners, which will take some time. The thought is that this split will eliminate conflicts created by EY’s auditing function. The split will remove obstacles to the consulting and business services EY can provide.

 

Why is this relevant to a legal?

 

Why is this relevant to a legal? By spinning off the auditing function and the conflicts it creates, EY will be able to provide sophisticated legally related consulting services to a broader group of business clients. These services include many services that law firms have traditionally provided. Services for which a lawyer is not really needed or needed less and less as the potential of AI and automation increases.

 

I predicted some time ago that a Big 4 firm might take this step. . And it will place the accounting firms in indirect competition with law firms worldwide and, more particularly, in the US.

 

I say indirectly because it’s unlikely that an accounting firm will actually “practice law,” at least in the traditional US sense. Trials and pure legal advice are probably not something EY wants to do. But, like other accounting firms, EY views legal problems quite differently than law firms. Accounting firm leaders would tell you there are no legal problems. There are only business problems with legal implications. This diferant conceptual attituded enables accounting firms to make inroads into what law firms and, for that matter, other ALSPs now provide.

 

EY wants to provide business consulting services that may include everything but pure practice. And the concept of the actual practice of law is increasingly blurred with the advent of AI and machine learning. EY wants to take over functions that can be done by AI and machine learning and for which a lawyer is not needed. It wants to be the trusted advisor that many lawyers aspire to be in all business areas, even if and when those areas touch upon law. It wants to be a one-stop for its clients for the handling of business matters.

 

And when those matters may require a lawyer, I am sure EY wants to help manage that arrangement and perhaps even select the lawyers. It certainly wants to provide legal management services and process management for legal matters. We may even see EY and the big 4 move toward forming alliances with law firms to provide pure legal services when needed. We already have seen this in some specialty areas like immigration. We are also seeing similar alliances with big 4 firms and legal tech vendors: Deloitte and Litigiy recently announced just such a move.

 

When the lawyers no longer are diving the bus, someone else—the business enterprise and their Big 4 advisors- will decide who will do what. The lawyer’s role may be relegated to doing what they are told to and only what they do best.

 

The Deloitte-Litify Alliance

 

I see similar motives in a recently announced alliance between Litify, an end-to-end legal operating platform and Deloitte, another big 4 firm. According to the joint press release, the alliance will “help legal teams across industries modernize and digitally transform their legal operations via Litify’s enterprise legal management (ELM) technology, automation, and data-driven insights alongside Deloitte’s Legal Business Services.”

 

The purpose of the alliance, as stated by Brian Karney, a Deloitte Legal Business Services Managing Director, is telling. Says Karney, “Litify’s modern approach to enterprise legal management and Deloitte’s experience advising legal teams on operational transformation offer our shared clients an integrated platform built on Salesforce—which many of our clients’ organizations already leverage—to help enhance the way they manage and deliver work.” Enhance the way they manage legal that is.

 

And according to the press release, what the two firms will offer includes “enhanced management, visibility, and predictability in how legal services are managed and delivered via a single platform, including matter management, e-billing, customer relationship management (CRM), case management, document management, legal service request, document generation, and other initiatives.” Whew.

 

Deloitte says a lot of pressure is being placed on law firms to be more agile and have better data driven insights. With Litify, Deloitte no doubt believes it can help businesses and in-house legal do what the law firms have not. Says Karney, “legal is getting closer to the rest of the enterprise, meaning that it is the business that now drives legal rather than vice versa. And it is the business side where the Big 4 can best compete.

 

The Big 4 don’t consider themselves accounting firms but professional service firms. They provide enterprise solutions as opposed to accounting or legal solutions

 

And make no mistake, EY and Deloitte, like its big 4 brethern, has all the tools to do just this. The Big 4 don’t consider themselves accounting firms but professional service firms. They provide enterprise solutions as opposed to accounting or legal solutions. They offer HR, IT, R&D, and financing services in a holistic sense. Unlike law firms, the Big 4 see the enterprise—the business—as the client, as opposed to seeing the GC as the client, as most lawyers do. The Big 4 offer substantially more to the overall business than lawyers can or do.

 

The Big 4 have the ear of the business parts of the enterprise. Their reach in the business is broader and more vast than people the GC works with. Lawyers and law firms? To the Big 4, this is just a tiny part of what the Big 4 and the business deal with.

 

They also have the ear and inroad into almost every corporation of any size. EY, like other Big 4 firms, are global service providers to some of the biggest companies in the world. They have or can get the ear of their well-heeled clients, who routinely hire U. S. lawyers. And as I have said before, it is these clients that will ultimately drive change in the legal industry.

 

One of my former partners told me years ago that if you want to become indispensable to a client, learn its documents. Today’s mantra is a little different: if you want to be an indispensable service provider to a client, learn that client’s business. In-house counsel consistently express a desire for outside counsel to better learn their businesses. But who is in a better to understand a client’s business than an accounting firm that provides business advice across a broad range of functions, including legal? It’s hard to see how law firms could hope to match this breadth of understanding.

 

So who else would an in-house counsel turn to for a thorny legal problem than a single firm? A single firm that knows the business (perhaps even better than the client)?

 

And free of limitations that auditing functions impose (such as those under Sarbanes Oxley, for example), EY will be better able to provide such a range of services.   So who else would an in-house counsel turn to for a thorny legal problem than a single firm? A single firm that knows the business (perhaps even better than the client), can marshal the required legal services, and manage the work consistently with the overall business goals. And the Big 4 don’t even need to bother trying to change the legal, ethical rules barring nonlawyer ownership of law firms to get what they want.

 

Less restraint on what the Big 4 can do. Alliances that give the Big 4 even more of a foothold with legal. If lawyers weren’t already concerned with where the Big 4 is headed, perhaps they better be.

As I have discussed before, the legal profession, especially the law firm end of it, can’t be thought of as a monolithic marketplace. Instead, today’s legal marketplace is composed of various segments. These segments have business models and goals that are so different that they might be thought of as distinct businesses entirely. Marketers and vendors need to understand that different the sizes and types of law firms are have fundamentally different motivations and concerns. They also need to know where all law firms are similar. And various surveys can help in this understanding.

 

Toward the end of this year’s ILTA conference, for example, ILTA released an Executive Summary of its annual technology survey. This tech survey, along with those done by the ABA and ALM, forms the basis of much of our law firm knowledge when it comes to tech. The ILTA survey respondents tend to be from larger firms and are people who work in the legal tech field as opposed to practicing lawyers.

 

Continue Reading ILTA 2022 Tech Executive Summary: Law Firms’ Tech Approaches Vary By Size

It’s an accepted truism that lawyers and law firms are notoriously slow to adopt technology. With all the publicity surrounding new technology and automation, it’s tempting for law firms and lawyers to rush to some tech—any tech—hoping that technology will somehow miraculously solve all their problems. But it won’t unless the tech adoption is carefully considered and well thought out. Ill-considered tech adoption often has the opposite effect from that which is intended. Poor adoption will sour users on tech in general and further exacerbate the reluctance to use any tech—even that which can help.

 

But the legal tech field is full of products and vendors, all offering what they trumpet as the be all and end all solution. So how do busy lawyers and legal professionals figure out what and how to adopt tech?

Here are ten tips:

Continue Reading Want To Better Integrate Legal Technology? Ten Tips for Successful Selection and Implementation

I just got back from this year’s annual conference of the International Legal Technology Association (commonly referred to as ILTA). The Show, held at National Harbor near Washington DC,  was the first in-person ILTA conference since 2022 and may be the biggest post- pandemic legal tech show. It was great to see so many people and be more or less back to normal. And ILTA, by and large, pulled off a great show, although to some extent, the Show, like the legal tech market itself, was a study in contrasts. But it may have provided a look into the future of the legal tech market.

Here are my impressions.

Continue Reading ILTACon 2022: a Few Glitches, a Look at the Future. And A REALLY BIG SHOW

It’s often said that privacy is dead. Indeed, most of us don’t think much about privacy anymore as we opt for convenience. But recent events suggest that the loss of privacy can have dire implications for all of us. Particularly since the government and others have the ability to know everything, and I mean everything about us.

 

I have written before about the potential ability of law enforcement, prosecutors, and others to obtain highly personal information about you. And about what you are doing. Indeed a recent unconfirmed report out of Nebraska suggests that that is precisely what is starting to happen.

Continue Reading Facebook Knows Everything About You. And Is Willing To Share

There has been a noticeable trend in legal tech the past few years toward more AI, more machine learning and, perhaps as a result, more user friendly legal tech. More user friendly tech means more hands on tech usage by lawyers and legal professionals. Which is a good thing.

 

I just got back from 3 days at AALL (American Association of Law Librarians) 2022 conference where these trends—as well as others–were evident. (This was the first in-person conference for AALL in a couple of years). My fellow Legaltech Week panelist,  Zach Warren summarized the conference very well in his recent article. But here are my impressions.

 

First, for the most part, the conference seemed to be a back to normal event. Like Zach, I don’t know the exact attendance numbers. But session attendance was about what you would expect. The exhibit hall looked pretty much normal, and the vendor parties were well attended and lavish.

Continue Reading AALL2022: AI, Machine Learning, User Friendly Tech. And Next Generation LexisNexis+

The 2022 AALL Conference opened yesterday on a solid note of collaboration and cooperation.

 

The 2022 AALL Conference kicked off yesterday, July 16 in Denver. It’s the first time the groups have gotten together since 2019. Perhaps appropriately, the keynote speaker was Tani Cantil-Sakauye. Chief Justice Cantil-Sakauye is the first woman Chief of the California Supreme Court and an engaging and charismatic speaker.

 

The Chief Justice talked a lot about access to justice and the way courts are viewed in today’s society society. She also talked about how to deal with the new realities growing out of the pandemic. But more than that, she talked about collaboration and consensus building, collegiality among those who disagree, and leadership. She struck the right and appropriate note for the Conference.

Continue Reading AALL 2022: It’s All About Good Manners

When it comes to diversity in the legal profession, we often focus on the federal judiciary, law firms, and in-house legal departments. But where most legal work gets done and lay people have the most contact with the law is in state courts. And the diversity scorecard in state courts often gets ignored. But the Brennan Center of Justice has, since 2019, focused on just this issue, at least for the highest courts in each state. The Center recently updated its State Supreme Court Diversity. The update results, unfortunately, were consistent with prior years and, in a word, are appalling.
The Study was based on data shared by Professor Greg Goelzhauser at Utah State University. It is based on detailed demographic and professional information from a number of sources. These sources include biographical statements, obituaries, newspaper articles, and listed membership in affinity organizations.

Continue Reading State Courts and Diversity: A Sad Picture

All too often, we think of the legal market, especially for law firms, as being composed of BigLaw or at least lawyers that bill by the hour.

 

The truth is, though, that today’s legal marketplace is composed of various segments. These segments have business models and goals that are so different that they might as well be thought of as separate types of businesses entirely.

 

The trend toward increase diversification and segmentation in legal was brought home to me in a couple of conversations this week. The first was with Kris Satunkas. Satunkas is the Director of Strategic Consulting for CounselLink.

Continue Reading The Legal Market: Continued Diversification and Segmentation

Lost in the acrimonious abortion debate in the wake of last week’s Supreme Court ruling are fundamental and downright scary questions. What does the brave new world of privacy? What privacy protections are there, or what should there be now that abortion is illegal in so many states? A brave new world that may terrify tech companies and ultimately all of us.

 

A recent report from Reuters entitled U.S. Tech Industry Frets About Handing Data to States Prosecuting Abortion sets out the issue. When you go online and search the web, there is a record created of your search history– and the sites to which you go. There is also geolocation data generated.

Continue Reading Privacy Just Took On a Whole New Meaning