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Law and Accounting Networks and Associations
associated with financial parts of the client’s business.98 The network’s structure easily accommodated these
services and their geographical expansion.99
As the Big 8 consolidated to the Big 6 and then the Big 4, new networks naturally developed to emulate them.
BDO and Grant Thornton were the earliest followers. Networks were then developed to serve mid-market
companies and private businesses. New networks also sprang up as an extension of a single accounting firm in
the same way the Big 8 were formed. New structures were created to further extend the networks.
The largest accounting networks adopted trade names that each member used. The names of the original firms
that became part of the networks were lost and replaced with trade names. For example, Price Waterhouse
joined with Coopers & Lybrand to become PricewaterhouseCoopers, which became PWC. The perception
was created that these networks were more than networks, but single entities rather than completely
independent firms. This was never the case. The result was that the Big 8 concept was established, which
separated the eight firms from all other accounting firms, which have consolidated to the Big 4.
Another factor in the development of networks in accounting was the AICPA’s prohibition of advertising.
While the largest firms indirectly advertised their services, the small firms complied with the rules and believed
advertising to be unprofessional. Additionally, midsize firms were de facto restricted from advertising simply
because of limited budgets. They could not create a brand that was able to compete with the one established
by the Big 8. The Federal Trade Commission lifted the advertising restriction in the 1970s.100
In the 1990s, the large accounting firms reached another ceiling in the services they made available to their
clients. Having reached their natural limit on growth with more than 90 percent of auditing for public
companies, the Big 6 branched out to become multidisciplinary in legal, technology, and employment services.
Since the essential infrastructure was in place, it was thought to be relatively simple to incorporate other
services into the existing network. As a network, it was natural to create independent entities in other
professions that themselves could be part of the network. The method and structures varied from firm to firm.
When the Big 6 began its expansion to the legal profession, it was met with fierce opposition from law firms
and bar associations. Commissions, panels, and committees were established by legal and accounting firms to
argue their positions. Government agencies were enlisted. For more than five years the debate escalated.101
This movement ended abruptly with the fall of Arthur Anderson as a result of its association with Enron.
Sarbanes Oxley followed, which appeared effectively end this trend.102 This has not been the case in that the
networks have reemerged outside of the U.S. with PWC boasting more than 2,000 attorneys in 75 countries.103
This expansion into consulting has not gone unnoticed by accounting regulatory bodies.104
98 See DELOITTE, www.deloitte.com/view/en_US/us/siteMap/index.htm, for a list of services that Deloitte LLP offers.
99 Aharoni, Internationalization of Professional Services: Implications for the Accounting Profession, in BROCK ET AL., RESTRUCTURING THE
PROFESSIONAL ORGANIZATION (1999). The internationalization process continues; see also Adam Jones & Simon Rabinovitch, Accounting: Stalking
the Big 4, FINANCIAL TIMES, April 16, 2013, at 9, discussing the development of very large indigenous accounting firms in China.
100 American Inst. of Certified Public Accountants, 113 F.T.C. 698 (1990).
101 Stephen McGarry, Multidisciplinary Practices and Partnerships, AMERICAN LAWYER MEDIA (2002); see also CIARÁN HANCOCK, MASTERS OF THE
UNIVERSE: A NEW WORLD ORDER IN ACCOUNTING AND CONSULTING (1998); see also Benito Arruñada, Non-Audit Services: Let an Informed Market
Decide, 4 ACCOUNT. 63 (1998).
102 However, one study indicated that revenue was increased. See Liz Fisher, International Accountancy Networks Survey: Sarbox Boosts Revenues
Across Globe, 135 ACCOUNT. 26 (June 2005), at 26-29. Additionally, Sarbanes Oxley has not limited firms from providing non-audit and non-accounting
services outside of the United States.
103 See PWC LEGAL NETWORK, http://www.pwclegal.co.uk/; see also DELOITTE LEGAL, www.deloitte.com/view/en_US/us/Services/tax/global-
business-tax/global-legal-services/; see also E&Y LEGAL www.ey.com/Publication/vwLUAssets/EY_Corporate_Law_Services_brochure/$File/EY-
Corporate-Law-Services.pdf; see also KPMG LEGAL, www.kpmg.com/cee/en/services/tax/legal-services/pages/default.aspx; see also BDO LEGAL
SERVICES, www.bdointernational.com/Services/Advisory/Other/Legal-Services/Pages/default.aspx.
104 Michael Cohen, PCAOB to Focus on Accounting Firms Growing Consulting Practices, ACCOUNT. TODAY (Nov. 23, 2013),
http://www.accountingtoday.com/news/PCAOB-Focus-Accounting-Firms-Growing-Consulting-Businesses-68855-1.html.
15
associated with financial parts of the client’s business.98 The network’s structure easily accommodated these
services and their geographical expansion.99
As the Big 8 consolidated to the Big 6 and then the Big 4, new networks naturally developed to emulate them.
BDO and Grant Thornton were the earliest followers. Networks were then developed to serve mid-market
companies and private businesses. New networks also sprang up as an extension of a single accounting firm in
the same way the Big 8 were formed. New structures were created to further extend the networks.
The largest accounting networks adopted trade names that each member used. The names of the original firms
that became part of the networks were lost and replaced with trade names. For example, Price Waterhouse
joined with Coopers & Lybrand to become PricewaterhouseCoopers, which became PWC. The perception
was created that these networks were more than networks, but single entities rather than completely
independent firms. This was never the case. The result was that the Big 8 concept was established, which
separated the eight firms from all other accounting firms, which have consolidated to the Big 4.
Another factor in the development of networks in accounting was the AICPA’s prohibition of advertising.
While the largest firms indirectly advertised their services, the small firms complied with the rules and believed
advertising to be unprofessional. Additionally, midsize firms were de facto restricted from advertising simply
because of limited budgets. They could not create a brand that was able to compete with the one established
by the Big 8. The Federal Trade Commission lifted the advertising restriction in the 1970s.100
In the 1990s, the large accounting firms reached another ceiling in the services they made available to their
clients. Having reached their natural limit on growth with more than 90 percent of auditing for public
companies, the Big 6 branched out to become multidisciplinary in legal, technology, and employment services.
Since the essential infrastructure was in place, it was thought to be relatively simple to incorporate other
services into the existing network. As a network, it was natural to create independent entities in other
professions that themselves could be part of the network. The method and structures varied from firm to firm.
When the Big 6 began its expansion to the legal profession, it was met with fierce opposition from law firms
and bar associations. Commissions, panels, and committees were established by legal and accounting firms to
argue their positions. Government agencies were enlisted. For more than five years the debate escalated.101
This movement ended abruptly with the fall of Arthur Anderson as a result of its association with Enron.
Sarbanes Oxley followed, which appeared effectively end this trend.102 This has not been the case in that the
networks have reemerged outside of the U.S. with PWC boasting more than 2,000 attorneys in 75 countries.103
This expansion into consulting has not gone unnoticed by accounting regulatory bodies.104
98 See DELOITTE, www.deloitte.com/view/en_US/us/siteMap/index.htm, for a list of services that Deloitte LLP offers.
99 Aharoni, Internationalization of Professional Services: Implications for the Accounting Profession, in BROCK ET AL., RESTRUCTURING THE
PROFESSIONAL ORGANIZATION (1999). The internationalization process continues; see also Adam Jones & Simon Rabinovitch, Accounting: Stalking
the Big 4, FINANCIAL TIMES, April 16, 2013, at 9, discussing the development of very large indigenous accounting firms in China.
100 American Inst. of Certified Public Accountants, 113 F.T.C. 698 (1990).
101 Stephen McGarry, Multidisciplinary Practices and Partnerships, AMERICAN LAWYER MEDIA (2002); see also CIARÁN HANCOCK, MASTERS OF THE
UNIVERSE: A NEW WORLD ORDER IN ACCOUNTING AND CONSULTING (1998); see also Benito Arruñada, Non-Audit Services: Let an Informed Market
Decide, 4 ACCOUNT. 63 (1998).
102 However, one study indicated that revenue was increased. See Liz Fisher, International Accountancy Networks Survey: Sarbox Boosts Revenues
Across Globe, 135 ACCOUNT. 26 (June 2005), at 26-29. Additionally, Sarbanes Oxley has not limited firms from providing non-audit and non-accounting
services outside of the United States.
103 See PWC LEGAL NETWORK, http://www.pwclegal.co.uk/; see also DELOITTE LEGAL, www.deloitte.com/view/en_US/us/Services/tax/global-
business-tax/global-legal-services/; see also E&Y LEGAL www.ey.com/Publication/vwLUAssets/EY_Corporate_Law_Services_brochure/$File/EY-
Corporate-Law-Services.pdf; see also KPMG LEGAL, www.kpmg.com/cee/en/services/tax/legal-services/pages/default.aspx; see also BDO LEGAL
SERVICES, www.bdointernational.com/Services/Advisory/Other/Legal-Services/Pages/default.aspx.
104 Michael Cohen, PCAOB to Focus on Accounting Firms Growing Consulting Practices, ACCOUNT. TODAY (Nov. 23, 2013),
http://www.accountingtoday.com/news/PCAOB-Focus-Accounting-Firms-Growing-Consulting-Businesses-68855-1.html.
15
