Big Four’s Next Big Bite

Blood in the water as professional services firms eat into global legal markets

By Heather Suttie

While traditional law firms may believe that technology and non-traditional legal companies are the biggest competitive threats, none – not even all of the world’s legal technology companies and alternative legal service providers (ALSPs) combined – come close to the continuing advancements being made into the global legal services market by the Big Four professional services firms.

目前传统型律师事务所仍错误地将新兴的法律科技公司和非传统的律所视为最大的竞争威胁。但实际上,所有的法律科技公司和替代法律服务提供者(ALSPs)占据的市场份额加起来也不及四大在法律服务市场已经取得的成就。

For more than 20 years, the Big Four have been steadily moving into the legal services market and stealth has been their modus operandi. But no more. Like sharks, they smell blood in the water and are acting accordingly.

其实在过去的20多年中,四大一直在以潜移默化的方式持续平稳而秘密地挺进法律服务市场。但随着政策的放宽,四大如同鲨鱼般察觉了市场的动向,开始了迅速挺进市场的步伐。

They are not an idle threat. However, traditional law firms tend to refer to the Big Four’s presence in the legal services market as “encroachment” – a rather benign reference to aggressive actions that speak louder than words especially when each offers a suite of professional services that can include finance, legal and consulting, which is music to many client’s ears, including those attached to the heads of some CFOs. Moreover, CFOs, who have the ear of the CEO, usually have long-standing relationships with one or some of the Big Four. This means that when decisions are made about hiring outside legal counsel, the CFO often has major influence because money talks.

四大在法律服务市场形成的威胁,并不是虚张声势。但是,传统律师事务所更倾向于使用“侵入”这一更加温和的词语来形容他们激进的行为。四大中的任何一家都提供包括金融,法律以及咨询等一系列的专业服务,在客户们,尤其是CFO和身边的人的简直视其为救命稻草。还有,CFO作为企业高层,尤其是CEO的首席顾问,大部分都与一家或多家的四大之一有着长期合作关系。这意味着在针对雇佣外部法律顾问时,CFO由于财政的关系往往占有较大的发言权。

Recent Past

In June 2018, Deloitte, which now has 2,400 “legal people” located in more than 80 countries worldwide, bought the non-U.S. offices of immigration law firm Berry Appleman & Leiden, while that firm’s U.S. offices entered into an alliance with Deloitte.

2018年6月,在超过80个国家已经拥有2400位“法律人士”的德勤会计事务所,收购了专注于移民问题的Berry Appleman & Leiden非美国地区的办事处;同时,其位于美国的办事处也与德勤达成战略合作。

As of September, EY bought NewLaw entity, Riverview, which meant that as of last year, EY Riverview Law comprised 2,200 law practitioners in EY member firms across 81 jurisdictions worldwide.

9月份,安永收购了新的法律机构Riverview Law。这意味着截至去年,安永的Riverview Law在全球81个地区的成员公司中拥有2200名法律从业者。

Also in September, PricewaterhouseCoopers LLP (PwC UK), the UK member firm of the PwC network joined forces with U.S.-based immigration law firm, Fragomen, Del Rey, Bernsen & Loewy LLP to provide global mobility tax and immigration services. This move enabled one of PwC’s core business lines to align with Fragomen, a global immigration powerhouse with more than 50 offices worldwide and over 3,800 immigration professionals, including more than 550 lawyers and equivalent professionals. Currently, PwC’s lawyer headcount stands at over 3,500 working in 90 countries and providing immigration legal services in 116 countries.

同样是在9月,普华永道的英国分公司联合美国的移民律师事务所,Fragomen, Del Rey, Bernsen & Loewy LLP,提供全球流动税收和移民服务。此举使普华永道的核心业务之一得以与弗拉格曼(Fragomen)结盟。弗拉格曼是一家全球移民服务的巨头,在全球拥有50多个办事处和3800多名移民专业人士,其中包括550多名律师和同等专业人士。目前,普华永道的律师人数超过3500人,在90个国家工作,在116个国家提供移民法律服务。

As for KPMG, it has ambitions to have 3,000 lawyers working in its global legal services unit within the next few years.

至于毕马威,它的目标是在未来几年让3000名律师在其全球法律服务部门工作。

As of Now

Halfway through 2019, a Big Four bit again. In June, EY acquired Pangea3, a legal managed services (LMS) business that previously was part of Thomson Reuters. Pangea3 was one of the first alternative legal service providers and had operated worldwide for 15 years.

到2019年中期,四大巨头对于法律服务市场进行了进一步的蚕食。今年6月,安永收购了最早的替代性法律服务提供商之一,Pangea3,一次性收编了超过1200名法律专业人士。这是一家法律管理服务(LMS)公司,之前属于汤森路透(Thomson Reuters),到目前为止已经平稳运营了15年。

Now, EY can offer legal operations consulting, managed services, and technology in addition to legal advisory services where permitted within the 80-plus jurisdictions where this global professional services behemoth is active. Combining Pangea3’s legal personnel into the mix means there are some 3,500 EY Law professionals worldwide.

现在,安永除了法律咨询服务外,还可以提供法律运营咨询、管理服务和技术服务,这些服务是在这家全球专业服务巨头活跃的80多个地区允许的范围内提供的。将Pangea3的法律人员纳入其中后,安永将在全球范围内有3500名法律专业人士为其工作。

Add to this a go-to-market revelation from Chris Price, CEO EY Riverview Law that, “We’re spending $2-billion on client-based technology in the next 18 months. That’s kind of difficult to compete against.”

此外,安永Riverview Law首席执行官Chris Price还透露:“未来18个月,我们将在以客户为中心的技术上投入20亿美元,从而与其他四大的法律部门竞争。”

Is it ever! Competing is difficult because EY and others of the Big Four have amassed competitive advantages that include enormous war chests along with cultivating highly sophisticated financial acumen to enable efficient and effective scaling of their businesses.

传统律所似乎很难与其竞争。四大会计师事务所已经积累了足够的竞争优势,包括巨额的资金,高度成熟的金融头脑,这些优势使他们能够实现业务的高效扩张。

Also in the Big Four’s favour is the advantage of internationally recognized brands, sophisticated infrastructure that has been quietly building for the last 25 years that includes development of a strong sales culture and teams, legions of professionals of numerous descriptions, access to every significant business tool and system, and attractiveness as a global employer offering opportunities for international careers. All this is in addition to their ability to offer clients an array of professional services in numerous jurisdictions as applicable worldwide.

“四大”国际公认的品牌优势,复杂的基础设施,已经悄然酝酿了25年。这其中包括强大的销售文化和团队,数量庞大、种类繁多的专业人员,使用专业商业工具和系统的渠道,以及作为大型国际性雇主对于全世界优秀人才的吸引力。更为关键的,是他们有强大的能力在全世界范围内为客户提供一系列的、口碑良好的专业服务。

Currently, the legal units of the Big Four are aligned with core business lines of tax, audit, assurance, and advisory. Legal services are also positioned within target markets and key industries, and are operating globally where regulated to do so using a one-stop-shop platform. Because the Big Four tend to prefer a sure thing with no surprises, they’re unlikely to provide legal services that don’t make business or financial sense, at least at this time.

目前,四大的法律部门与税务、审计、保险和咨询等核心业务部门保持一致。法律服务也定位于四大其他服务的关键目标市场和行业,并通过一站式平台在全球范围内开展业务。由于四大一直以来对于低风险高回报的偏好,至少在目前,他们不太可能提供与商业或者金融完全无关的法律服务。

Feeding Frenzy

The frenzy of BigLaw firms creating ALSPs is on big time with three global entities hatching theirs within days of each other last month. Greenberg Traurig debuted Recurve, Eversheds Sutherland announced Konexo, and Bryan Cave Leighton Paisner produced BCLP Cubed.

大律师事务所创建ALSP的热潮正如火如荼,上月,三家全球实体相继成立了自己的ALSP。格林伯格·特鲁里格(Greenberg Traurig)推出了Recurve,安永胜山地产(Eversheds Sutherland)宣布科内克(Konexo)加盟,布莱恩·凯夫·莱顿·派斯纳(Bryan Cave Leighton Paisner)创建了BCLP立方(BCLP Cubed)。

These new ALPSs are described as innovation-focused and tech-led. They are also a subsidiary of their parent firm. While each is designed to deliver legal services in a streamlined fashion, they have similar offerings that include managed services, advisory, project management, legal operations, and resourcing. Their other sameness is that they act as a defensive manoeuver to keep work within the family—parent or subsidiary—rather than risk losing it to a Big Four firm or other competitor.

据称,这些新的ALPSs以创新为中心、技术为主导,同时也是隶属于母公司的子公司。虽然它们都旨在以精简的方式提供法律服务,但它们也提供类似托管服务、咨询、项目管理、法律操作和资源分配的服务。他们的另一个相似之处是,他们作为一种防御性的策略,把工作留在家里——母公司或子公司——而不会冒着被四大会计师事务所或其他竞争对手抢走的风险。

What none of them does is expand into a vast breadth of other professional services. If a client is seeking assistance primarily in the legal realm, they may have an advantage. But if a client is attracted to a platform of expansive and varied professional services, such as those offered by the Big Four, they still can’t compete effectively.

它们都没有将业务扩展到其他专业服务的广阔领域。如果客户主要在法律领域寻求帮助,他们可能有优势。但如果一个客户更倾向于一个拥有广泛而多样专业服务的平台,比如四大,这些ALSPs仍然无法与之竞争。

What Next?

It’s highly likely that traditionally-structured North American law firms will continue to plod along content in the knowledge that 2018 was a solid year financially and, at its halfway point, 2019 seems to be on good financial footing. Also, Alternative Business Structures (ABS) have not taken hold as they have elsewhere in the world, which is what has enabled the Big Four to expand into various legal markets as fast as they have.

传统架构的北美律所很可能会继续埋头苦干,因为它们知道,2018年经济稳定的一年;而在2018年的中期往长远来看,2019年似乎也拥有着良好的金融基础。此外,另类业务结构(ABS)还没有像在世界其他地方那样站稳脚跟,这使得四大能够以最快的速度进入各种法律市场。

For now, the Big Four will continue to develop in jurisdictions where legislation and regulation permit them to operate. And they’re comfortable doing so while perfecting their strategies, planning future tactics, and bulking up their legal service teams knowing full well that, in time, escalating global market pressures and client demands will breach the traditional legal services culture, which in turn will open more markets to ABS models.

目前,四大将继续在立法和监管允许它们运营的地区发展。他们很乐意在这样做的同时完善自己的战略,规划未来的策略,并增强自己的法律服务团队。他们深知,随着时间的推移,不断升级的全球市场压力和客户需求将打破传统的法律服务文化,这反过来将为ABS模式打开更多的市场。

Of increasing concern is that instead of aggressively countering the Big Four’s developments, the complacency and inaction of traditional law firms that leads them to do nothing rather than something, will eventually cause them to struggle for solvency or be completely pulled under.

人们越来越担心的是,传统律所的自满和不作为非但没有有力地对抗四大的发展,反而最终会导致它们为偿付能力而挣扎,或者完全被拖垮。

What to do?

For most traditionally structured law firms, a fast fix is foolhardy and next to impossible to even attempt. What is possible, however, is taking select tactics that form part of the core procedures in the Big Four’s playbook. Three such tactics include:

对于大多数传统结构的律师事务所来说,快速应对方案是鲁莽的,甚至几乎不可能尝试。然而有可能的是,在“四大”的核心“剧本”范围内,执行一部分策略。这三种策略包括:

1. Industry Alignment

产业定位

Identify current clients by industry codes to provide hard data. Findings will sharply define industry strengths, which will enable a firm to organize and face the market by sector. It will also make marketing opportunities, decisions and spends easier to target and justify as well as provide direction for developing more business by way of prospective client targeting.

通过行业代码识别当前客户,提供充分的数据。调查结果将明确行业优势,这将使企业能够根据不同的产业类型,整理并面对市场。它还将使得营销机会、决策和财务支出更容易针对和证明,并通过潜在的客户目标为发展更多的业务提供方向。

2. Industry-Practice Client Teams

客户团队

Combine industry and practice group members to provide a suite of services in the form of client teams. A key client that is serviced by four or more practice-specific lawyers who have proven experience in the industry in which a client operates is more likely to be loyal and less apt to bolt.

结合行业和实践小组成员,以客户团队的形式提供一套服务。由四名或以上,在客户经营的行业中拥有丰富经验的律师来服务关键客户,这些客户则会更加忠诚,不会轻易离开。

3. Client Service Interviews

客户服务的回访

Establish a formal and permanent client service interview program. By doing so, you’ll set yourself apart from the competition immediately especially since the most recent Canadian Lawyer annual corporate counsel survey found that 87.8 per cent of large companies asked were not surveyed by their law firms.

建立正式和永久的客户服务访谈计划。这样做会让你立即从竞争中脱颖而出!最近的加拿大律师年度企业法律顾问调查发现,87.8%的受访大公司没有接受他们律所的访问。

Of course, how it’s done is all-important. Quick-and-dirty, check-the-box surveys cheapen a client’s experience, reflect poorly on you, and can be easily ignored by pressing the delete key. Alternatively, in-person conversations demonstrate care, enable mutual learning and deepen trust. Active listening and acting on a client’s request for change—which, in my experience happens rarely, and if it does is usually minimal and easy to accommodate—wins more loyalty, work, referrals, and goodwill than you can ever possibly begin to imagine.

当然,如何做到这些是非常重要的。快速而粗略的复选框调查降低了客户的体验,作出差评,也很容易地按下删除键并忽略掉。但是,面对面的交谈表现出关心、能够促进相互了解并加深信任。依照我的经验来看,积极听取意见并根据客户意见而采取行动的情况很少发生;即使发生了,通常所需要的改变也是较为轻微,可以接受的,但是却可以为你赢得比想象中更多的忠诚、工作、推荐和善意。

Rather than being firm-focused, each of these initiatives is client-centric, which is fundamental to the Big Four’s success. Also, each is scalable to fit law firms of various sizes, jurisdictions, and practice orientations.

这些举措并非以公司为中心,而是以客户为中心,这是四大成功的基础。此外,每一项在不同规模、管辖范围和执业方向的律师事务所都可以灵活运用。

How Not to Bleed

It’s common knowledge that client relationships are at the heart of every law firm’s success and the key to solvency. Winning more work from current clients while attracting prospective new ones whose work, legal needs, culture, and values align with your own will become critically important as ALSPs gain more ground, up-and-coming service providers enter the legal market, and the Big Four continue to steamroll through it.

众所周知,客户关系是每家律师事务所成功的核心,也是偿付能力的关键。如何从现有客户那里赢得更多的工作,同时吸引与自己的法律服务、文化和价值观一致的潜在新客户,将变得至关重要。

This is because while relationships matter, business is global and has a trickle-down effect that has already begun and will continue to impact law firms of all sizes, jurisdictions and expertise. Upcoming international events, such as Brexit along with forecasts for a financially soft 2020 worldwide, may be among the inflection points that incite discontented clients who have long been agitating for change in the global legal services market to be the ones who will take the next big bite.

这是因为,经济的全球化和随之而来的涓滴效应将影响所有规模、所有地区和所有类型的律师事务所。英国脱欧,以及国际市场对2020年全球金融疲软的预测等即将到来的国际事件,都有可能成为法律服务市场变化的转折点。在这些时间点中,也许有一个会使得本来就对法律市场震荡不满的客户伺机而动,也寻求在法律市场中分走一杯羹的机会。

[Disclosure: EY became a client of mine in 2011.]

Heather Suttie is an internationally recognized legal market strategist and management consultant. She works with lawyers, law firms and legal service providers — Global to Solo — BigLaw to NewLaw — helping them thrive in the evolving legal industry by claiming a distinctive position and sustained competitive advantage resulting in greater market share, revenue and profits. Reach her at heathersuttie.ca, https://ca.linkedin.com/in/heathersuttie or @HeatherSuttie1

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