One of the more fascinating keynotes at this week’s ILTA virtual conference was a panel discussion among three representatives of the big four accounting firms: Peter Krakaur, Managing Director of EY Law, Mark Ross, Principal, Deloitte, and Juan Crosby, PWC NewLaw Services Leader. The title of the talk was Legal’s Next Disruptor? Demystifying the Big 4. Or as I put it before, is the Big 4 the proverbial big bad wolf?
If you may be wondering, the answer whether will the Big 4 be the next legal disruptor is not only yes. Its hell yes. (It’s no coincidence that the titles of two of the panelists feature the word law front and center).
Are the Big 4 firms friends or enemies? Are the Big 4 moving into the American legal space?
The panel was kicked off with the “elephant in the room” question: Are the Big 4 firms friends of law firms or enemies? Are the Big 4 moving into the legal space? I thought the first thing I would hear was of no, we aren’t enemies because the Big 4 can’t and won’t ever practice law in the U.S. As I have written in the past, until now, that’s how the Big 4 representatives always started the discussion.
Not any more. Mark Ross kicked the response by saying with a sly smile, we are friends. But not because the big 4 have no designs on the work lawyers do. He instead told us that the legal ecosystem is evolving, that client needs should be paramount. Ok. But then: “clients will benefit from end to end legal systems”. As in, clients will benefit from the broader range of services the Big 4 can provide, of which legal is only one. Or as Juan Crosby put it: the market is large with elements that require different skills.” That servicing today’s clients calls for a broader range of skill sets. That what clients want is a “comprehensive legal fulfillment model.”
Krakaur chimed in: the Big 4 are professional service firms. They provide enterprise solutions as opposed to legal solutions. The Big 4 offers HR, IT, R&D, and financing services in a holistic sense. The Big 4 see the enterprise—the business—as the client, as opposed to seeing the GC as the client in the way most lawyers do. Or, as Ross put it: “legal is no longer viewed as a siloed part of the business”. The accountants view that there is a big difference between the business of law-their forte—and the practice of law. The practice, they consider, as the tail that should not wag the dog.
What does this mean? It means simply that lawyers will no longer be driving the bus.
What does this mean? It means simply that lawyers will no longer be driving the bus. The Big 4 can offer more to the overall business than lawyers. They have the ear of the business parts of the enterprise. Their reach in the business is broader and more vast and reaches people for whom the GC works. Lawyers and law firms? Will be just a small part of what the Big 4 and the business deal with. Ross says that the business and GCs need a multi-discipline approach the solve the wide array of problems they and the business are facing. According to Ross: it’s only by employing this multi-discipline approach (which the Big 4 can provide ) that the legal department and the legal industry can be “reinvented”.
And there’s more: Krakaur put it bluntly: the Big 4 is deconstructing and then reconstructing the legal function. It’s a simple question, he says, of “who should be doing what?” Ross said the same thing recently on Bob Ambrogi’s always interesting and relevant podcast.
A lot of what lawyers do and bill for lawyers don’t need to be doing
What are they talking about? A lot of what lawyers do—and bill for—lawyers don’t need to be doing. Krakaur correctly noted there are all sorts of alternatives for supplying legal needs. “We need to reshuffle who does what and when”. Some of this “non legal” work the Big 4 wants. And even if it’s not work they want, when the lawyers no longer are diving the bus, that means 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 told to and only what they actually do best. For many firms and lawyers, this, unfortunately, means less work.
And the accountants are all over technology and its use. They recognize that contracting functions of a business–which they view as an asset of the business—for example, is not so much within the purview of the lawyer and can simply be transferred to technology. As Krakaur put it, they see that technology is a means to an end to better serve the client. Unlike many lawyers who view technology tools as something that could reduce billable hours, the Big 4 have embraced technology and its uses.
Same with data-driven decision making. Where do the Big 4 think business is going? As Krakaur put it, it’s all about data. He and his kin recognize that much of what is in lawyers’ heads can be codified into data. Sound familiar? It’s the same point Richard Punt made in an earlier keynote this week. When you think about it, the Big 4 representatives were all over all 6 of Punt’s predictions. Here and now.
The session closed with the accountants offering some advice for lawyers. Have a relentless focus on technical excellence ( which sounds a little like, stay in your lane). And look for opportunities to collaborate with us. The accountants are so confident in their market strategy that their advice is to let us help you.
Competition between the Big 4 and law firms: the game is over almost before it began.