I’m sure PwC, EY, KPMG, and Deloitte would like to be thought of the same way as these bands, but…dream on. Why are they there? A press release from Karl Chapman popped into my overstuffed mailbox saying Riverview Law has just been acquired by EY.
Despite the hype of press releases, this is a significant move in the legal services market. At bottom it shows two things: NewLaw is coming of age and is now attractive to others; the accountants, particularly the Big Four, are serious about conquering the legal services market. Law firms should be worried because I believe they are on borrowed time.
A few years ago I sat in a meeting at the Solicitors Regulation Authority (SRA) in London discussing how and if accountants should be given regulatory powers in legal services. The accountants said they only wanted powers for probate. They declared they wanted no other regulatory authority. Really? I thought to myself. Surely no one believes that. The lawyers at the meeting also asked the accountants for assurances this would be as far as they would go. The accountants said they aren’t interested in anything else. Really? I thought to myself. I suppose you believe what you want to hear.
Riverview has evolved since its inception. It had a role in offering quick responses to general counsel who needed a lawyer at the end of the phone line to answer questions as they arose. Since then it has moved towards legal process work, or what is now termed legal operations. It offers legal departments the same sorts of resources available to HR and procurement departments, for example, along with virtual assistants.
To anyone observing the legal services market, it should have been clear that legal process outsourcing was on a short leash, and I include most of NewLaw here too. Partly because some of it was brought back onshore into law firms’ offsite offices, and also because legal process outsourcing is tiny compared to business process outsourcing over which the accounting firms have some dominion.
After the failure of Enron and Arthur Andersen in the early 2000s, it was a matter of time before the accountants moved back into law. They are more canny this time making their legal deployment part of the professional services enterprise rather than merely standalone quasi-law firms.
The Big Four dwarf any major law firm in scale and size. And, moreover, they can devote resources to research and development, something which law firms are only just beginning to learn to do. Even with the discussions in Britain and the EU about whether the Big Four should be broken up, moves into law are an obvious extension to their business. Their only real competitors are the Magic Circle or top New York law firms. But how long will it be before they start thinking about merging?
At a global level, and globalisation hasn’t gone away whatever Donald Trump thinks, the big global professional services firms are necessary conduits for modern capital, which means they must have the resources to handle all kinds of business. Expect to see many more of these M&As in the future.
