The Lawyer’s new China Elite report contains the most detailed research available on the PRC legal market and contains unparalleled insight into the country's leading law firms. They vary in size, practice focus and geographic coverage, but they all share one common quality – ambition... Read more
This year, The Lawyer’s annual ranking of the largest UK law firms by turnover is available as an interactive, digital benchmarking tool. For the first time this will allow you to manipulate each data set against the metrics of your choice.
The accountants are making some lawyers jittery. Some, but not all. There are still plenty of lawyers – mostly transactional – who think the accountants’ return to the legal sector is irrelevant to their business.
More fool them; they said the same about the Legal Services Act. The new entrants only threaten the volume end, they said. It won’t make any difference to established firms with a long-held client base, they said. But alternative business structures (ABS) are not an end in themselves; they are vehicles that allow traditional thinking in legal services to be challenged.
So the accountants’ relaunch into the legal sector via ABSs should worry law firms; just look at the multibillion-pound global platforms, distribution channels, commerciality and culture of cross-selling advisory services.
Yet, and yet. I’m sceptical whether the accountants can grow their own. The most successful is PwC, which kept the faith in the post-Andersen panic and maintains a £40m-odd business in the mid-market that encompasses business reorganisation, tax and regulatory investigations, immigration and IP/IT. Sure, PwC is taking bread from the mouths of the national firms here, but £40m doesn’t match the growth trajectory of, say, a Parabis in the insurance sector. In turn, that doesn’t suggest a wave of client demand; I spend a lot of time talking to general counsel and they’re not pining for an accountancy-led offering. If most buyers of legal services are lawyers, accountants are always going to have a bit of a brand issue.
So – head above the parapet here – the accountants are not going to be much of a threat in the medium term if they’re building from scratch. But where things get scary for law firms is if they go on a takeover binge and incorporate existing law firms within their ABS vehicles.
In the pre-Enron days the accountants never quite got the hang of law firm partnership culture. Firms that were tempted into the accountancy fold, such as Dundas & Wilson, were never pressured to transform. But that was before the recession and ABSs forced a new understanding of commerciality and service delivery. So what mid-sized firms need to worry about is the Big Four’s acquisition strategy and what they can build – but also how they can transform existing legal services into a modern advisory model.
If DWF and Slater & Gordon can treble turnover in 18 months through takeovers, the Big Four can easily do the same with their legal arms. Lord knows, there are enough targets out there.