At the debate I recently attended on future of law-type stuff everything was proceeding to plan. Once the panel finished on artificial intelligence (AI), the law firm model and partners being useless, conversation turned to the Big Four. You know the gist: HERE THEY COME – GLOBAL – SLICK – WAY-AHEAD-OF-LAW-FIRMS.
Of course, the case that these professional service giants with superb boardroom access and resources way beyond the largest law firms should become leaders in law sounds persuasive. And yet discussion of the Big Four still gives so little weight to the plain fact that, with varying degrees of enthusiasm, they have been at this for more than 20 years and have yet to get anywhere near justifying the hype. The only conclusion can be that there is something fundamental to their approach and models that frustrates their progress.
We attempt a little investigation into those issues in this month’s cover feature and many of the problems are apparent. The most cited are endemic conflicts, which have a huge impact on most areas of their legal business.
Obviously, the group also faces major regulatory constraints in acting for audit clients – driving a truck through its original notion of moving into the legal profession. And a particularly hostile climate in the US shuts the group out of mainstream services in the world’s largest legal market.
But perhaps the greater challenges are around culture, office politics and where lawyers fit in. These are huge organisations with complex structures, bureaucracies and hierarchies. While they can marshal their assets with potency for certain core activities, the idea that the Big Four uniformly deliver slick coherence is a corporate fairytale that survives little contact with reality. Like all institutions, they are good at doing what they do and struggle to do something else.
Consider also that there are plenty of influential figures inside the Big Four who are indifferent or even hostile to moving into legal services (hardly surprising since law firms are sources of referrals). Moreover, the cultural chasm between lawyers and accountants still exists, and many of the best lawyers have no desire to play second fiddle in the Big Four.
Yes, the accountants have been rapidly extending their global networks over the last three years but they have made only modest progress even in the crucial and liberalised UK market.
True, they have had more success in recent years by focusing on areas in which they can team up with the wider business, such as immigration, tax disputes, regulation and compliance. But all this remains a good way from the foretold breakthrough. There is only one obvious shift that may change this analysis, coming in the expected development of technology, automation and scale to refashion much of legal services. It is easy to imagine the Big Four constructing scaled up and scalable AI-assisted legal services that dovetail more closely with their huge advisory businesses. Even here momentum matters. If you were PwC, and could get the structure past regulators, the obvious play is to buy Axiom and take this project up several gears.
Such possibilities aside, it is hard to see them as anything but global niche players. No-one doubts the Big Four have the chops to be serious players in law if they really want to. But, to me, the last 20 years says they just don’t want it enough.