For those with long memories there might seem to be nothing new in this week’s feature about the rise of the accountants. True, this time the tone of PwC, EY and KPMG suggests a more measured, less potentially hubristic story. But don’t be fooled. There is no lack of ambition.
Look at the numbers. The scale is staggering. For starters, the accountants’ spend on technology globally is more than the total revenue of the world’s largest law firms. Bluntly, that means they can afford to screw up and come back for another go.
Then there is PwC’s 2014 statement of intent about being a $1bn, top 20 global legal services provider by 2019. At a granular level their ability to throw bodies at areas that require hefty leverage is unmatched. For example, PwC’s UK tax disputes team has three partners and 20 other fee-earners. Its regulatory disputes team has one partner and 11 fee-earners. And its immigration team? Two partners to 110 fee-earners.
It is these process-driven practices leveraging existing client relationships that will work best for them in the short term. These are areas where their ability to offer “integrated solutions” (the mantra that recurs throughout any conversation with the lawyers in these businesses) can best be displayed. Think risk management, international staff mobility, share options and other areas where HR and the law collide. Then add in corporate reorganisation – with its high tax element – due diligence, technology and cyber-related matters or money laundering and reputational issues. Most – if not all – traditional law firms simply don’t have the resources to offer these services on the same scale.
But that’s not all that is different this time round. Most obviously, the regulatory regime now encourages integration between lawyers and accountants. Less obviously, the world is simply a different place. Fifteen years ago there was no AI, no new model providers, no industry-wide pushback on fees by clients. Now, clients are holding a much stronger hand, and are often looking for a process-driven, cost-effective solution.
And the accountants won’t stop there. The likelihood is that an increasingly heavyweight roster of law firm partners will be attracted to their offering.
The usual criticisms will crop up, with “the accountants won’t attract magic circle hires” being the most obvious. Someone who knows a thing or two about both camps is former Clifford Chance managing partner and Andersen Legal head Tony Williams, who says “if I was [the accountants] I’d be delighted at the sneering because when [law firms are] sneering, they’re not responding”.
In other words – the accountants are not there yet, but don’t rule it out.