Are accounting firms a threat to lawyers and law firms? In Canada, at least, the answer is not yet clear.
Are accounting firms a threat to lawyers and law firms? In Canada, at least, the answer is not yet clear.
As our cover story explores, the Big Four accounting firms are still operating at the margins of the legal field in Canada. They have moved aggressively into some areas — tax, insolvency and immigration — but not yet into the “bread and butter” of what the big Canadian law firms do.
But that is not the full story — especially as we looked abroad to jurisdictions in Europe, where the accounting firms are offering services in areas such as corporate-commercial, finance, real estate, intellectual property, employment law and M&A. In fact, the Big Four now boast almost 9,000 lawyers practising law in their ranks.
For some lawyers, the threat is overstated. Peter Lukasiewicz, CEO of Gowling WLG (Canada) LLP, told us that, at least at the moment, “we don’t see them as competitors,” noting that his firm has a “strong business relationship with them.” Shawn McReynolds, managing partner at Davies Ward Phillips & Vineberg LLP, told us that the best training ground in North America for top legal talent remains law firms and the Big Four would have to persuade “people who are successful and at the top of their game” to jump ship. He doesn’t see that happening any time soon.
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.
I recently attended the ABA TECHSHOW in Chicago and the keynote address, delivered by Daniel Katz, a legal entrepreneur and professor at Illinois Tech - Chicago Kent College of Law, argued that accounting firms are one of the four main threats to the status quo for the delivery of legal services. For Katz, accounting firms excel at “productized knowledge,” which allows these firms to scale much more quickly than law firms and cross-sell their services. In other words, when you are already delivering corporate-commercial, finance, real estate, intellectual property, employment law and M&A services in Europe, you can easily transition to another jurisdiction by tweaking your technology and systems. Hiring the talent could then be done fairly quickly.
For law firms, with much more limited scale and little R&D to speak of, this transition may happen faster than they anticipate. They may want to start thinking like an accounting firm, before the accounting firm starts thinking like them.
