By Louis Goss
The Big Four accounting firms – EY, Deloitte, KPMG, and PwC – are capturing an ever-larger share of the global market for legal services.
The accounting giants are rapidly expanding their legal businesses, in boosting their own sales and taking work away from traditional firms, the research from Said Business School shows.
The world’s four largest professional services businesses now generate $1.5bn (£1.25bn) in revenues from their legal segments, up from just $900m in 2015 and $1.2bn in 2017.
Having made their first forays into the market in the 1990s, the Big Four have expanded their legal businesses dramatically over the past decade following a renewed push in the 2010s.
The Big Four have achieved this growth by expanding into multiple practice areas, in a shift that has seen them increasingly begin to compete with traditional firms.
Now, with the accounting giant’s gains in the legal sector beginning to plateau, the Big Four are pursuing a new push to capture more work.
For reference, the Big Four’s legal revenues grew on marginally from $1.48bn in 2019 to $1.5bn in 2021, despite a boom in wider legal sector revenues.
The push to grow is set to see the Big Four bolster the ranks of their legal businesses, with EY aiming to triple its lawyer headcount in the UK and Ireland over the next three years.
EY’s push to expand its legal business comes as its worldwide split could free the firm from the conflict-of-interest rules that currently block it from selling services to audit clients.
PwC and KPMG are also looking to double the size of their own legal departments over the next three to four years.
The shift has seen the Big Four encroach on law firms’ businesses, with more than a tenth (13 per cent) of British law firms saying they had lost work to one of the world’s top accounting firms in 2022.
Top American law firms experienced even greater competition, with almost a quarter (24 per cent) of large US players stating they had lost out on business to the top accounting firms over the past year.
Meanwhile, a push to deregulate the US legal sector could see the Big Four capture an even larger share of the American market, the report says.
Laws in states such as New York and Florida currently restrict the Big Four and other alternative legal services providers (ALSPs) from competing with traditional firms.
The Big Four could however expand rapidly if those states follow in the footsteps of Arizona, Utah, and California by letting non-traditional firms provide legal services.
The post Big Four: EY, Deloitte, KPMG, and PwC step on law firms’ toes increasing legal revenue to £1.25bn appeared first on CityAM.
