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.

目前傳統型律師事務所仍錯誤地將新興的法律科技公司和非傳統的律所視爲最大的競爭威脅。但實際上,所有的法律科技公司和替代法律服務提供者(ALSPs)占據的市場份額加起來也不及四大在法律服務市場已經取得的成就。

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.

其實在過去的20多年中,四大一直在以潛移默化的方式持續平穩而秘密地挺進法律服務市場。但隨著政策的放寬,四大如同鲨魚般察覺了市場的動向,開始了迅速挺進市場的步伐。

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.

四大在法律服務市場形成的威脅,並不是虛張聲勢。但是,傳統律師事務所更傾向于使用“侵入”這一更加溫和的詞語來形容他們激進的行爲。四大中的任何一家都提供包括金融,法律以及咨詢等一系列的專業服務,在客戶們,尤其是CFO和身邊的人的簡直視其爲救命稻草。還有,CFO作爲企業高層,尤其是CEO的首席顧問,大部分都與一家或多家的四大之一有著長期合作關系。這意味著在針對雇傭外部法律顧問時,CFO由于財政的關系往往占有較大的發言權。

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,在超過80個國家已經擁有2400位“法律人士”的德勤會計事務所,收購了專注于移民問題的Berry Appleman & Leiden非美國地區的辦事處;同時,其位于美國的辦事處也與德勤達成戰略合作。

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,安永收購了新的法律機構Riverview Law。這意味著截至去年,安永的Riverview Law在全球81個地區的成員公司中擁有2200名法律從業者。

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.

同樣是在9月,普華永道的英國分公司聯合美國的移民律師事務所,Fragomen, Del Rey, Bernsen & Loewy LLP,提供全球流動稅收和移民服務。此舉使普華永道的核心業務之一得以與弗拉格曼(Fragomen)結盟。弗拉格曼是一家全球移民服務的巨頭,在全球擁有50多個辦事處和3800多名移民專業人士,其中包括550多名律師和同等專業人士。目前,普華永道的律師人數超過3500人,在90個國家工作,在116個國家提供移民法律服務。

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

至于畢馬威,它的目標是在未來幾年讓3000名律師在其全球法律服務部門工作。

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,四大巨頭對于法律服務市場進行了進一步的蠶食。今年6月,安永收購了最早的替代性法律服務提供商之一,Pangea3,一次性收編了超過1200名法律專業人士。這是一家法律管理服務(LMS)公司,之前屬于湯森路透(Thomson Reuters),到目前爲止已經平穩運營了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.

現在,安永除了法律咨詢服務外,還可以提供法律運營咨詢、管理服務和技術服務,這些服務是在這家全球專業服務巨頭活躍的80多個地區允許的範圍內提供的。將Pangea3的法律人員納入其中後,安永將在全球範圍內有3500名法律專業人士爲其工作。

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首席執行官Chris Price還透露:“未來18個月,我們將在以客戶爲中心的技術上投入20億美元,從而與其他四大的法律部門競爭。”

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.

傳統律所似乎很難與其競爭。四大會計師事務所已經積累了足夠的競爭優勢,包括巨額的資金,高度成熟的金融頭腦,這些優勢使他們能夠實現業務的高效擴張。

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”國際公認的品牌優勢,複雜的基礎設施,已經悄然醞釀了25年。這其中包括強大的銷售文化和團隊,數量龐大、種類繁多的專業人員,使用專業商業工具和系統的渠道,以及作爲大型國際性雇主對于全世界優秀人才的吸引力。更爲關鍵的,是他們有強大的能力在全世界範圍內爲客戶提供一系列的、口碑良好的專業服務。

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,四大的法律部門與稅務、審計、保險和咨詢等核心業務部門保持一致。法律服務也定位于四大其他服務的關鍵目標市場和行業,並通過一站式平台在全球範圍內開展業務。由于四大一直以來對于低風險高回報的偏好,至少在目前,他們不太可能提供與商業或者金融完全無關的法律服務。

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.

大律師事務所創建ALSP的熱潮正如火如荼,上月,三家全球實體相繼成立了自己的ALSP。格林伯格·特魯裏格(Greenberg Traurig)推出了Recurve,安永勝山地産(Eversheds Sutherland)宣布科內克(Konexo)加盟,布萊恩·凱夫·萊頓·派斯納(Bryan Cave Leighton Paisner)創建了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.

據稱,這些新的ALPSs以創新爲中心、技術爲主導,同時也是隸屬于母公司的子公司。雖然它們都旨在以精簡的方式提供法律服務,但它們也提供類似托管服務、咨詢、項目管理、法律操作和資源分配的服務。他們的另一個相似之處是,他們作爲一種防禦性的策略,把工作留在家裏——母公司或子公司——而不會冒著被四大會計師事務所或其他競爭對手搶走的風險。

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.

它們都沒有將業務擴展到其他專業服務的廣闊領域。如果客戶主要在法律領域尋求幫助,他們可能有優勢。但如果一個客戶更傾向于一個擁有廣泛而多樣專業服務的平台,比如四大,這些ALSPs仍然無法與之競爭。

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.

傳統架構的北美律所很可能會繼續埋頭苦幹,因爲它們知道,2018年經濟穩定的一年;而在2018年的中期往長遠來看,2019年似乎也擁有著良好的金融基礎。此外,另類業務結構(ABS)還沒有像在世界其他地方那樣站穩腳跟,這使得四大能夠以最快的速度進入各種法律市場。

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,四大將繼續在立法和監管允許它們運營的地區發展。他們很樂意在這樣做的同時完善自己的戰略,規劃未來的策略,並增強自己的法律服務團隊。他們深知,隨著時間的推移,不斷升級的全球市場壓力和客戶需求將打破傳統的法律服務文化,這反過來將爲ABS模式打開更多的市場。

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.

人們越來越擔心的是,傳統律所的自滿和不作爲非但沒有有力地對抗四大的發展,反而最終會導致它們爲償付能力而掙紮,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:

對于大多數傳統結構的律師事務所來說,快速應對方案是魯莽的,甚至幾乎不可能嘗試。然而有可能的是,在“四大”的核心“劇本”範圍內,執行一部分策略。這三種策略包括:

1. Industry Alignment

産業定位

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.

通過行業代碼識別當前客戶,提供充分的數據。調查結果將明確行業優勢,這將使企業能夠根據不同的産業類型,整理並面對市場。它還將使得營銷機會、決策和財務支出更容易針對和證明,並通過潛在的客戶目標爲發展更多的業務提供方向。

2. Industry-Practice Client Teams

客戶團隊

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.

結合行業和實踐小組成員,以客戶團隊的形式提供一套服務。由四名或以上,在客戶經營的行業中擁有豐富經驗的律師來服務關鍵客戶,這些客戶則會更加忠誠,不會輕易離開。

3. Client Service Interviews

客戶服務的回訪

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戶服務訪談計劃。這樣做會讓你立即從競爭中脫穎而出!最近的加拿大律師年度企業法律顧問調查發現,87.8%的受訪大公司沒有接受他們律所的訪問。

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.

當然,如何做到這些是非常重要的。快速而粗略的複選框調查降低了客戶的體驗,作出差評,也很容易地按下刪除鍵並忽略掉。但是,面對面的交談表現出關心、能夠促進相互了解並加深信任。依照我的經驗來看,積極聽取意見並根據客戶意見而采取行動的情況很少發生;即使發生了,通常所需要的改變也是較爲輕微,可以接受的,但是卻可以爲你贏得比想象中更多的忠誠、工作、推薦和善意。

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.

這些舉措並非以公司爲中心,而是以客戶爲中心,這是四大成功的基礎。此外,每一項在不同規模、管轄範圍和執業方向的律師事務所都可以靈活運用。

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.

衆所周知,客戶關系是每家律師事務所成功的核心,也是償付能力的關鍵。如何從現有客戶那裏贏得更多的工作,同時吸引與自己的法律服務、文化和價值觀一致的潛在新客戶,將變得至關重要。

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.

這是因爲,經濟的全球化和隨之而來的涓滴效應將影響所有規模、所有地區和所有類型的律師事務所。英國脫歐,以及國際市場對2020年全球金融疲軟的預測等即將到來的國際事件,都有可能成爲法律服務市場變化的轉折點。在這些時間點中,也許有一個會使得本來就對法律市場震蕩不滿的客戶伺機而動,也尋求在法律市場中分走一杯羹的機會。

[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, http://ca.linkedin.com/in/heathersuttie or @HeatherSuttie1

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