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Recent ��˾����ҹ���� studies show the need for consistent, high-quality, multi-jurisdictional services seems to be why a growing number of companies are turning to Big Four accountancy firms for legal services. 

David Wilkins, Lester Kissel Professor of Law at Harvard Law School, says: "The Big Four can offer a far higher integration of technology, project management and process management; they employ a huge number of people across a huge range of specialties and they are way more global than even the most global law firm." According to Wilkins, the strategy is to provide a different offering, moving from a fee-for-service model to an integrated solutions model.

"Initially, ALSPs were more focused on higher-volume, lower-complexity activities a company might outsource, such as manual, volume-based document review in support of M&A or litigation work. But now the types of services offered have moved much higher up the complexity curve," says Juan Crosby, Partner, and NewLaw Leader at PwC.

As the Big Four continues to advance into legal services, traditional law firms are responding to the challenge. 

Andrew Levander, chair at international law firm Dechert, says, "A global platform provides clients with access to teams who possess local knowledge and expertise but who can consult with their counterparts in other parts of the world to most efficiently and effectively support clients. This doesn't mean being all things to all clients but attracting and retaining the best talent to deliver the services needed by clients and in the specific jurisdictions and areas of critical importance that they need the support."

"As markets become increasingly complex and inter-connected, clients require the integrated capabilities of highly specialised practices and industry sector expertise," says Levander.

Download the pros and cons of the global law firm report here.

So, what are the pros and cons of a global law firm vs the Big Four? 

1) The use of legal tech

"The Big Four put a lot of investment around researching how they can take existing technologies that don't even relate to the practice of law but can provide a client solution," says Bea Seravello, Co‐head of Baretz+Brunelle's NewLaw Practice. "Law firms are not there right now; they are still struggling with just embracing technology to use in practice."

According to Fiona Maxwell, financial services senior correspondent at investigative regulatory news publication MLex, this technology-enabled component is key to the Big Four's legal services offering.

"The Big Four aren't positioning themselves as standalone law firms — they know that's not their niche — and they're not necessarily trying to win traditional law firms' business," says Maxwell. "In the legal field, they're positioning themselves as disruptors. So much legal work can be done in an automated way, say making changes to certain contracts, or dealing with regulatory issues such as GDPR."

"Organisations are no longer forced to go down the traditional law firm route, especially if the Big Four are offering tech‐enabled solutions that are better value for money and can be done in half the time. If an organisation is working with one of the Big Four for their audit, tax, or consultancy work — why not add on legal services as well?"

However, David Carter, Chief Product Officer at Norton Rose Fulbright, doesn't believe new technology will necessarily favour the Big Four or ALSPs; it will simply favour those law firms that embrace it over those that don't. 

He says the trends that have created opportunities for ALSPs to thrive – new technology, growth of in-house legal teams and deregulation – are just as relevant for traditional law firms. "Our response to the Big Four and ALSPs has been driven more by our simultaneous reaction to the trends enabling their development than by a defensive response," says Carter. "Indeed, we have expanded our capabilities in recent years into areas pioneered by the Big Four or ALSPs, such as legal operations consulting and risk consulting, so the movement is both ways."

"From a technology standpoint, certainly in the mid-market, there is a heavy emphasis on service and a lot of what clients value is difficult to replicate with technology," he says. "But efficiency is key, so as an operator, the question you have to ask yourself is to what extent can I preserve the value my client sees our operations providing to them, but at the same time doing it in an increasingly efficient manner? That's where technology can help."

Many top law firms have developed tech-as-a-service offerings that enable clients to access tools and products that can deliver legal services faster and more cost-effectively. 

Greg Baker, global head of practice innovation at magic circle law firm Linklaters, says the smart use of technology has been critical in supporting its client for some time.

"Our clients benefit directly from the technology we deploy. They can track progress of deliverables on an online workspace, negotiate documents themselves on our CreateiQ platform or ask us to interrogate our award-winning knowledge databases for negotiating positions and 'what is market?' information."

The firm's team of 2,500+ lawyers spread across 30 offices and 20 countries have access to document automation tools such as automated proofreading tools, and AI-powered review tools to search across sets of documents, and project management tools to deliver a smooth service on time, says Baker.

Craig Chaplin, Partner at DWF and Commercial Director of its Mindcrest Division, says one way law firms could potentially differentiate with tech is by staking out an expert niche and then building a solution around it. DWF, for example, has invested in what Chaplin calls the ‘Ferrari’ of e-discovery software, something that would be too expensive for many small and medium-sized firms to do themselves.

2) Client needs and changing business models

The difference between global law firms and the Big Four is about more than just technology. Clients' demands and business models play a significant role.

"Our strategy is very much rooted in the needs of the client to be offered solutions and not just advice," says Emily Foges, Lead Partner for Legal Managed Services at Deloitte. "The vision for Deloitte Legal has always been that you bring together high-quality legal advice with legal management consulting, legal managed services, and legal technology. This way, you can provide a complete end-to-end service to the client and achieve the outcomes they are looking for, not just give them advice on those outcomes. 

Listen to Emily Foges on .

Some law firms have taken advantage of regulatory changes introduced in 2007 that allow non-lawyers to own and manage law firms. Several firms in the UK now operate under the alternative business structures (ABS) model, including Gateley, which listed on the London Stock Exchange AIM market in 2015. This has enabled it to move away from the traditional partnership model while also expanding into other professional services areas, such as real estate, human capital, and corporate and business services.

Chaplin says DWF's decision to move to the ABS model was driven in part by clients questioning whether they were getting the best value for money from their law firms because of the way those firms were structured, particularly how partners were remunerated. "We realised we could move to a structure that enabled us to provide enhanced legal and business services without much internal disruption."

DWF completed its acquisition of managed services business Mindcrest last year to complement its legal advisory practice with the ability to handle lower value but high-volume work.

Listen to Chaplin on .

3) Practice limitations

Law is not the main priority for the Big Four in the context of their wider businesses. Dr Laura Empson, Professor in Management of Professional Service Firms at London's Cass Business School, says that while legal services are a growth area for the Big Four, it remains dwarfed by the rest of their business. Take PwC, for example; while it employs 3,700 legal professionals globally, they account for roughly only 1% of its total workforce.

"Their legal businesses are tiny in relation to the core elements of their business, and this will have implications for the amount of senior management attention and the resources they get," she says.

Not all of the Big Four compete for certain types of traditional legal work. For instance, only PwC and Deloitte list litigation among their practice areas. "Litigation provides too many complexities, too many regulatory problems and too many conflicts," says Wilkins.

That being said, all four accounting firms are gradually increasing their number of fee earners within their legal services teams. Both PwC and Deloitte have employed several legal leaders from prominent law firms.

4) Regulatory challenges

The Big Four's ability to cross-sell services to their legal business will be constrained by significant regulatory challenges in the UK to guard against further audit scandals. 

"There's this big focus coming from the UK government and regulators right now on the potential conflicts of interest in the Big Four between their audit and accountancy business and its lucrative consulting contracts," says Maxwell.

"Regulators are trying to put in clear structures to prevent audit standards slipping, which means organisations have to make sure everything is being done in a proper and above-board way. I do wonder if that could be a worry for legal services, too?"

So where will clients turn to - Big Four or global law firms? 

"Change tends to happen very slowly and then very fast," says Wilkins. "That tipping point doesn't mean there won't be traditional law firms that attract very high-level talent, but they are going to compete in a marketplace in which there are many other players. For some things, you're going to want a traditional law firm, but for other things, and probably a fairly large number of other things, you're going to want something different, and that might be a Big Four solution."

Chaplin expects that in the future, as more corporate legal teams seek managed service solutions on top of traditional legal advice, there will be increased collaboration between law firms and ALSPs, akin to DWF's acquisition of Mindcrest.

Smith says, "There have always been trends and changes that are relevant to how we operate, and there always will be," says Smith. "There will always be a role for the very best in what you do. So my view is it's not a takeover of legal services, it's a change in the legal services market, and over time there will be a greater delineation of which type of customer wants to buy their services from which type of provider."

See our article on the Big Four and legal services to decide if the Big Four are reshaping the future of legal services.