For years, law firms have made a handsome living putting their employees years of schooling to work at an hourly rate that can hurt individuals and companies pockets alike. The most common gripe from clients stems from the fact that many pay top attorney money for jr attorney work.
This trend has led many clients to take their business elsewhere, a migration that has not affected big law firms’ bottom line, until now. A group of accounting companies known as the Big Four have quietly been building up strong legal divisions for years, with their sights on getting their own piece of the legal services pie. These top performers in the accounting industry account for $120 billion in revenue, compared to the top 100 law firms who account for $89 billion combined.
Thus far, theses accounting firms are focused on small deals and medium-term services, staying away from the lawsuit and big ticket deals that large law firms chase. Their growth has been stunted by regulation in the U.S. where they are not permitted to practice law as well as in european countries, where they are heavily regulated in how they service legal clients, leaving only a select number of countries allowing them to practice fully. Consequently, caught in the crosshairs of these Big Four efforts are not major law firms, but more middle tier, low margin firms that have become very efficient at performing repetitive legal work.
And worse, this type of work is exactly what these accounting firms have historically been great at perfecting. Now, the Big Four are looking to grow their legal arms by exploiting this avenue. The biggest selling point these accounting firms offer new clients is now a bundled package of legal services coupled with accounting consultants and tax filing. Thats a value proposition that’s looking like it might be enough to steal market share away from the firms currently occupying the space.
At the end of the day, a showdown may be brewing between accounting firms with their deep pockets, and law firms with experience in the space.
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