The Big Four service giants, EY PwC, Deloitte, and KPMG are facing an uncertain future so far as their planned moves into the legal services work is concerned.
The Legal Services Act 2007 allowed the Big Four to enter the UK legal market more aggressively by obtaining Alternative Business Structure (ABS) licenses with PwC being the first to launch a dedicated legal arm in 2014, followed by EY and KPMG. Deloitte joined in 2018.
Initially, the Big Four’s legal ventures seemed promising, with revenues reaching $1.5 billion in 2023. However, signs of trouble have emerged. EY, for instance, has made significant cuts in its legal department, including the closure of EY Riverview Law and which followed a series of high-profile departures, which have reduced its headcount.
A major obstacle for the Big Four is conflicts of interest.
Their auditing businesses, which are heavily regulated, often prevent them from taking on legal work for the same clients. Additionally, the structure of these firms can be discouraging for lawyers who value independence and personal recognition.
KPMG stands out as an exception, having successfully hired more partners than its peers. Unlike others, KPMG focuses on niche legal services rather than competing directly with traditional law firms on large corporate deals.
KPMG made a successful and historic entry into the US legal market a short time ago.
Despite their global networks and client bases, the Big Four’s legal divisions are struggling to attract and retain top talent.
Their approach often conflates hiring partners with success, but the reality is more complex. With profitability issues and ongoing redundancies, the future of their legal ventures remains uncertain.
