Time to face up to the Big Six threat

The renewed interest of the Big Six accountancy firms in entering the legal marketplace should come as no surprise to anyone.

Arthur Andersen's foray into the field some years back through Garrett & Co heralded the first such move. Law firms at the time were slightly alarmed but sceptical that Garrett & Co would make a dent in their business.

So far, there has been no notable evidence that law firms have suffered as a result of Garrett & Co.

However, the combined effect of a number of accountancy firms going this route will change all this. On the international front, accountancy firms have built up strong legal departments across Europe. Price Waterhouse has one of the biggest law firms in France as has Arthur Andersen and KPMG.

The accountants have taken advantage of the favourable climates in these jurisdictions towards multi-disciplinary practices to snatch a significant portion of the marketplace. In France, six of the top 10 law practices are also accountancy firms.

The likelihood of change on the question of multidisciplinary partnerships if Labour comes to power means that a similar climate may prevail in the UK.

While there are undoubtedly stronger and bigger law firms in the UK than in many countries on the continent, nonetheless the accountants are adept at adapting to the local marketplace.

Law firms in the UK cannot sit back and ignore this potentially major threat to their work.

They would do well to take a good long look at how they conduct their relationships with the accountancy firms.

There is room in the market for those who correctly anticipate client needs. It will be interesting to see how the accountancy firms measure up on this score.