(thanks to nierodzim)
EY Law has hired partners from Baker & McKenzie and Weil Gotshal & Manges to join its financial services practice. They combine with lawyers from Freshfields, BLP and Addleshaw’s.
It makes sense, and since the SRA is easing its rules on forming ABS and therefore becoming an MDP, that the big accounting firms are resurrecting earlier ideas about becoming multidisciplinary practices. Despite Enron and the debacle of Arthur Andersen’s implosion in the early 2000s, the Big 4 accounting firms realise legal services are too important to be left to the lawyers alone.
EY Law’s website shows their imperial ambitions with the sole exclusion of North America (but for how long?). They have a neat and colourful graphic (which needs recolouring drastically–awful) detailing how legal services form a core element in their work.
The other Big 4 are plucking lawyers from law firms to build capacity in their own legal services units. Deloitte Legal has over 1300 lawyers but is not becoming an ABS, which is odd. PwC Legal, KPMG and EY Law have received ABS licences from the SRA. Even in Ireland KPMG has taken on six lawyers from the Dublin law firms.
I presume that gaining the ABS status is a precursor to moving out into the market as an independent entity in the way that BT has done with BT Law. And why not? One of the main complaints of clients of law firms is that their lawyers don’t understand their business. One could argue that accountants ought to have great insight into the running of businesses and so offer significant value to legal clients. Despite noises from accounting firms that they don’t intend to challenge law firms on their core services, which I don’t believe, it’s inevitable they will compete. One of their strengths is in their global networks which lawyers can only dream about.
Years ago when the senior partners of Clifford Turner and Coward Chance, two somewhat insignificant London banking law firms, held secret merger talks on park benches they imagined they could form a law firm so big that they could merge with an accounting firm. Of course they didn’t but now that would be impossible. No law firm could merge; it could only be taken over.