Signs Big 4 Accounting Firms May Present Business Owners and Managers with Practical Alternatives to U.S. Law Firms (Part 1 of 3)

My most recent post urges business owners and managers to seek terms of service from their legal services providers that are consistent with the basic management disciplines that they require in every other part of their companies — other than legal.

That means finding alternatives to the terms of service that conventional law firms usually insist on — terms of service usually at odds with basic management disciplines.

This post addresses one place to look for those alternative terms of service: Legal services from accounting firms.

It will surprise nobody that when U.S. lawyers consider the array of service offerings available to their business clients that they think in terms of their own wellbeing:

What’s out there that might threaten our lunch?

Until recently, Stephen Embry was a national litigation partner with the Am Law 200 firm of Frost Brown Todd — one of the 200 highest grossing law practices in the country. He has spent most of his career specializing in the defense of mass tort actions for large corporate clients.

In a piece entitled “U.S. Law and the Big Four: Who’s Afraid of the Big Bad Wolf?“, he offers his view of the Big 4 accounting firms as a near-term, viable, competitive alternative to law firms in the U.S.

Though he offers this view from the standpoint of what law firms have to fear from the Big 4 accounting firms as their potential competitors.

“I have written before about the Big 4 accounting firms and the threat that these firms may pose for U.S. lawyers and law firms.

“The response has typically been a bit like that of the first two pigs in the old 3 Little Pigs nursery rhyme who arrogantly believed their houses of straw and twigs would protect them from the Big Bad Wolf.

“Going into last week’s Legalweek [conference] in New York, several legal pundits (and lawyers) made it a point to tell me Big 4 encroachment on U.S. legal can’t happen. That Sarbanes-Oxley won’t allow it. That the Big 4 don’t make enough profits to do it. That they can’t do what U.S. law firms and lawyers do. That the Big 4 isn’t at all interested in the U.S. market. That they certainly have no business or strategic plans pointed in our direction. I was starting to conclude they were right …  

“But if a panel discussion at ALM [American Lawyer Media’s] recent Legalweek is any indication, perhaps these pundits may want to reconsider. The panel was composed of head of EY Legal, Rutger Lambriex, (EY is one of charter members of the Big 4), Jeremy Fudge. a lawyer with the immigration law firm, Barry Applemen Leiden that recently formed an ‘alliance’ with the Big 4 firm Deloitte and Dan Packel, the ALM reporter who early on wrote so articulately about the alliance and its possible impact.

“Of these panelists, it was Rutger Lambriex who perhaps offered the most telling—and chilling—comments with respect to the state of the U.S. legal market and the future. If his views are shared by the rest of EY and the Big 4, look out.”

“Lambriex was, of course, quick (perhaps too quick) to point out that EY is not a threat to U.S. big law; instead it’s the way the Big 4 approach things like innovation, efficiency and, well, business issues in general that pose dangers. That’s true on one level: it is these drivers that threaten the status quo. But so far these drivers have not changed U.S law much.

What’s different with the Big 4 is frankly who they are … They are global service providers to some of the biggest companies in the world. They have or can get the ear of their well heeled clients many of whom routinely hire U. S. lawyers … The fact that EY sees the need for innovation and automation in U.S. legal and has the means and desire to provide it is indeed what makes them so dangerous to the status quo.

Part 2 of this three-part post takes up this question:

For business owners and managers, what could the Big 4 accounting firms offer to their companies that a conventional law firm does not?  

 

Part 2

Part 3