I still don’t get all this fervor around the Big 4 entering the legal market. To me, it would be like if Coca-Cola Co. and PepsiCo. started brewing beer. Yes, they’d have the brand recognition and tons of money to throw at the best people to run their brewing operations, but I don’t think AB InBev, MillerCoors, and Boston Beer Co. would be shaking in their beer-soaked boots, let alone popular craft breweries like BrewDog, Stone, Lagunitas, Cigar City, Dogfish Head, and Flying Dog.
And I just can’t see the most powerful law firms in the world, like Latham & Watkins, Baker McKenzie, Kirkland & Ellis, DLA Piper, and Linklaters, shaking in their derby dress shoes or pumps over the Big 4. I agree with what Caleb wrote last year:
Some law firms couldn’t care less. I doubt anyone at Wachtell is concerned about the Big 4 stealing any of their business. Certain law firms are in another stratosphere when it comes to reputation and brand. Also, I don’t see the Big 4 poaching litigators anytime soon.
But a new analysis by legal research firm Acritas found that the Big 4’s legal brands have shown “dramatic growth” among alternative legal service providers—and big global law firms should now consider them a major threat.
According to Acritas’ 2018 Global Alternative Legal Brand Index, the Big 4 takes up four of the top five spots:
- PwC Legal (100 brand index points)
- Thomson Reuters (83 points)
- Deloitte Legal (80 points)
- EY (76 points)
- KPMG Law (61 points)
Here’s how Acritas explains its methodology for the Index:
Senior in-house counsel were asked to name organizations that provide legal services, excluding law firms, that first to come to mind, along with those they most favored. The Index also shows which service suppliers most demonstrate modern innovative practices.
Acritas created the Global Alternative Legal Brand Index to complement its existing Global Elite Law Firm Brand Index which has been published annually for the last nine years, thereby responding to the increasing diversity of legal service providers that in-house departments turn to help them provide legal support to their organizations in the most effective and cost-efficient way.
Last year, Thomson Reuters was the leading global alternative legal brand, followed by PwC Legal (2nd), EY Law (3rd), Deloitte Legal (4th), and Axiom (5th). KPMG Law was (6th) last year.
According to Acritas, PwC has increased its brand equity in all major regions of the world, including the United States, knocking Thomson Reuters out of first place.
Acritas CEO Lisa Hart Shepherd said:
“It’s not just PwC Legal that both old law and new law need to fear. All of the Big Four have seen significant increases in brand strength over the last 12 months.”
In its global revenue announcement on Oct. 2, PwC said its Legal Services business now has more than 3,500 lawyers serving clients in more than 90 countries. Law.com reported in August that PwC’s legal operations brought in $91.8 million in revenue during the 2017-18 financial year. And in late September, PwC made some waves within the legal community when it announced a “strategic alliance” with New York-based immigration specialist law firm Fragomen, which the firms say will provide global mobility tax and immigration services to clients.
And lest you forget that PwC launched a law firm in the U.S., ILC Legal, in 2017.
In the U.K., all four firms have alternative business structure licenses to practice legal services.
Caleb said last year, “I’m not saying that we’re on the precipice of seeing a dystopian global professional services behemoth emerge, but right now it’s hard to see what would stop it from happening.”
The Big 4 shoved its way into legal services in the 1990s with some success, but then the American Bar Association started throwing its weight around, Enron happened, Andersen bit the dust, and Sarbanes-Oxley became a thing. That slowed the Big 4 down, but here we are, 15 years after SOX and they’re lobbying to dilute its reforms, they’ve built massive digital agencies, and now PwC is opening a law firm in D.C. Imagine what could happen in the next 15 if this continues unfettered.
Welp, what could happen is that, within the next 10 to 15 years, the Big 4 really could be the largest players in the legal industry.