What’s Going On Here?
KPMG has announced its aspirations to double its legal services headcount in an ambitious declaration of growth.
What Does This Mean?
The Big Four are the world’s four largest financial services providers, offering professional services in areas such as auditing, tax, and corporate finance for both public and private companies. The companies termed the ‘Big Four’ are Ernst Young (EY), PricewaterhouseCoopers (PwC), Deloitte, and KPMG. In announcing this desire to expand their provision of legal services, KPMG are following suit of the other Big Four firms. Collectively they currently employ over 9,000 lawyers and have a powerful global presence, with PwC’s legal arm holding offices in over 90 countries – significantly more than most law firms. This means they have the potential to threaten law firms as they increasingly branch out into other areas of law, including mergers and acquisitions.
Why Should Firms Care?
There’s no doubt that sweat should be – and is - forming on the brows of the big City law firms, as the legal divisions of the Big Four achieve growth year on year, made easier by the deregulation of the UK legal industry. This cuts into the available revenue of an already under-strain legal market.
In offering integrated and multi-disciplinary services, the Big Four enjoy a major advantage over more traditional law firms. Not only this, but they further have an established international presence, are more willing to invest and innovate, and are more cost-effective – playing to the demands of clients who are forever insisting on more bang for their buck.
Not only do these companies threaten the client base of law firms, they also threaten their chances of employing the best of the best, with successful hires being made from the likes of Eversheds Sutherland and Shoosmiths. Now, law firms may have to work harder just to hold on to their lawyers.
However, there is hope. Change (particularly in the legal sector) does not happen overnight and general counsels still generally have high faith in the big-brand legal names. Specialised firms in particular who deliver on efficiency will maintain their position. Regardless, this threat among others should be encouraging law firms to prepare for a real shaking up of the UK legal services market.
Report written by Elizabeth C.
If you're interested in writing for LittleLaw, click here for more information