The Threat of the Big Four
Beware of the Big Four (Canadian Lawyer Magazine Cover Story),
Accounting for Legal Work,
“But the focus on bespoke work from the top talent in the legal field may be missing the point. While these lawyers are correct that “bet-the-company” work is not the area in which accounting firms are initially going to compete, the “run-the-company” work is, as Jordan Furlong has argued. And once you start to run the company, all bets are off. It is not just about personnel but about processes, products and systems. And that is where the accounting firms excel.”
Why it Matters:
As Cornelius Grossmann, global law leader at EY notes, “Canada is a big market and we still have a small practice there.” As Big Four accounting firms begin their expansion beyond tax, insolvency and immigration, law firms can expect to have new competition for work (especially in M&A and the tax work typically left to law firms). Will the strong global brands, deep pockets and focus on technology and process pose a serious threat to big law firms in Canada? Only time will tell, although this is clearly a threat not to be overlooked.
In-House Lawyers – You Aren’t off the Hook!
GE Inks Legal Outsourcing Deal With UnitedLex, Eying Big Savings,
“The legal sector is going through its own version of the industrial revolution, 250 years after the fact,” said Kent Zimmermann, a Chicago-based consultant with the Zeughauser Group. “This development is evidence of an ongoing trend; led by clients, the market is forcing a more efficient allocation of resources to get legal work done.”
Why it Matters:
While the Big Four may take work that corporate departments outsource to external counsel, the risk of that work never making it to external counsel should not be overlooked.
In late March, UnitedLex (a legal services company) announced a multi-year deal with General Electric (GE) that is expected to reduce GE’s legal spend by 30%. How? By deploying UnitedLex technologies and business processes to serve GE around the world in several areas, including litigation, investigations, eDiscovery, forensics, and document review. While in-house lawyers will face changes to their work environment, this also isn’t great news for GE’s external counsel, who can expect much less work to be outsourced. The legal reformation is upon us.
This isn’t the first big UnitedLex deal. In late 2017, UnitedLex inked a 5-year deal with a Fortune 200 company to provide over 250 professionals to support their legal operations.
We can expect additional transactions to be announced in the coming months, as UnitedLex pursues its path to “render traditional models obsolete.”