MDPs are a way of providing clients with an all-round solution, not of locking out competitors, says Chris Arnheim. Chris Arnheim is one of the founding partners of Arnheim & Co.
The recent announcement by Price Waterhouse and Coopers & Lybrand of their plans to merge, creating the world's biggest professional services firm, has once again brought the issue of multidisciplinary partnerships (MDP) to the fore. But just what does this proposed development mean for the legal services market? And what is the future of the MDP?
The merger of PW and Coopers is a meeting of minds between two firms committed to offering the widest possible range of services to their global clients. If the merger does go ahead, the combined organisation would have 135,000 people worldwide, 8,500 partners and revenues of US$13bn.
Consequently, the merger holds the prospect of enormous developments in legal services because it offers an even stronger platform from which to develop the business. The merged firms would have about 2,500 lawyers and the combined groupings would be in the top 10 law firms in many European financial and business centres.
Size isn't everything and simply having more solicitors does not mean that there will be more work. What is happening is that the Big Six accountancy firms are each building a legal capability that is truly global to supplement their existing services. The market for legal services is very large and enormous resources are needed to build a major presence. Against this background, the proposed merger of PW and Coopers simply doubles the resources and the client base.
Both Arnheim & Co and Tite & Lewis, the respective correspondent law firms of PW and Coopers, are growing strongly. While their status as independent firms means they are not obliged to follow the course of PW and Coopers, a merger between them would give them an even stronger platform.
The driving force behind both the proposed merger of PW and Coopers and the rise of the MDP is the need to provide clients with seamless, integrated, global solutions.
In reality, multi-service professional organisations have existed for years, with combined teams of accountants, valuers, IT consultants, corporate financiers, and marketers working together for the benefit of the client. Lawyers have been a relatively recent addition, but our experience has been that the integration of legal opinion into the consulting process at an earlier stage has enabled the more rapid identification of viable solutions, saving time and money which might previously have been wasted developing solutions which would fall at a later legal or regulatory fence.
Clients are increasingly looking for teams that can advise on a global, multi-service basis. In the UK, Arnheim & Co functions as the UK representative of the Price Waterhouse European Legal Network, which is made up of business lawyers in 23 countries. This means that we can form integrated cross-disciplinary teams which can offer a responsive and wide-ranging service to clients.
Clients rightly want more from their advisers. They want solutions which work for them, which add value and help to move their businesses forward.
A good example of this type of teamwork comes from a recent cross-border mergers and acquisitions transaction, in which PW acted as a financial adviser. The PW legal network worked with tax and management consultants to assess the tax and legal implications of the deal and place them in a transactional context. The team of 65 lawyers, tax advisers and management consultants from 10 countries included a broad range of specialist skills.
Opponents of MDPs have suggested that they are a solution looking for a problem; that the Big Six simply see the provision of legal services as a means of locking in clients – and locking out other advisers – with little concern for the best solution for their clients.
But our experience has shown that clients are attracted to the concept of integrated solutions so long as the individual components are of the appropriate quality.
Once assured of the quality of the team's components, clients do not need to be sold on the merits of an integrated approach – increasingly they are demanding it. This is a key message: the market is there but only for teams of the highest quality.
Naturally, there are hurdles to overcome for any MDP. But these hurdles are surmountable and the client demand is there. If you are not yet convinced, just wait and see.