Page 8 - 1 Disruption and Opportunties - Law and Accounting rd
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Professional Services Disruption
concentrated in the United States because of strict ethics codes prohibiting the sharing of fees with non-
lawyers. Soon after, however, it spread to other nations. It was not the debate that seemly eliminated the
expansion but Enron and Sarbanes Oxley.21 While not exactly sub rasa, the expansion continued in countries
which did not have the same ethical restrictions as the United States.
This left Biglaw to continue their own global expansion.
This effort did not last long. Reality struck Biglaw when
their international expansion hit a wall during the
worldwide recession in 2008. Managing dozens of their
own offices was no longer financially practical in a
recession, and so they consolidated offices in key
commercial centers. If a branch was outside of a
commercial center, they kept it only if another Biglaw
firms did not have an office in that location.27 Other also
restructured the firms into vereins, a network or type of
club or association under Swiss law; this allowed them to
reduce financial risk, because each member firm
remained independent. The result is today Biglaw is
competitively squeezed between vereins and the Big
Four.
What was the actual reality in the late 1990s? The legal
media was abuzz with the dire implications (much as the
media are today). Global practice charts illustrated issues
and compared income among firms to show different
aspects of the market. They focused on the micro aspect rather than the macro economics. The fact is the
relative market share for the Big Five firms never exceeded 0.4% of the total legal market which remains the
same today.
The contrast between size and markets (or countries) is
illustrated by the opposite two charts. While the size of
individual law firms is similar to the Big Four, the Big Four
legal practices are, on average, located in more than twice
the number of countries.
Financially, each of the largest firms or vereins has
revenues exceeding the combined total of $2 billion of
legal services provided by the Big Four.30 The risk to
Biglaw is illustrated by the sheer size of the Big Four’s legal
coverage. Biglaw is confined to the same exact 30
locations (Paris, London, Frankfurt, Beijing, Rio de Janeiro,
etc.) in which the Big Four have their largest office.
21 Big Four Accounting Firms, WIKIPEDIA, https://en.wikipedia.org/wiki/Big_Four_accounting_firms; Enron, WIKIPEDIA,
https://en.wikipedia.org/wiki/Enron.
27 Supra note 11.
30 David Wilkins & Maria Jose Esteban, The Reemergence of the Big Four in Law, HARVARD CENTER ON THE LEGAL PROFESSION (Jan. 2016) (global legal
market is $700 billion), https://thepractice.law.harvard.edu/issue/volume-2-issue-2/.
5
concentrated in the United States because of strict ethics codes prohibiting the sharing of fees with non-
lawyers. Soon after, however, it spread to other nations. It was not the debate that seemly eliminated the
expansion but Enron and Sarbanes Oxley.21 While not exactly sub rasa, the expansion continued in countries
which did not have the same ethical restrictions as the United States.
This left Biglaw to continue their own global expansion.
This effort did not last long. Reality struck Biglaw when
their international expansion hit a wall during the
worldwide recession in 2008. Managing dozens of their
own offices was no longer financially practical in a
recession, and so they consolidated offices in key
commercial centers. If a branch was outside of a
commercial center, they kept it only if another Biglaw
firms did not have an office in that location.27 Other also
restructured the firms into vereins, a network or type of
club or association under Swiss law; this allowed them to
reduce financial risk, because each member firm
remained independent. The result is today Biglaw is
competitively squeezed between vereins and the Big
Four.
What was the actual reality in the late 1990s? The legal
media was abuzz with the dire implications (much as the
media are today). Global practice charts illustrated issues
and compared income among firms to show different
aspects of the market. They focused on the micro aspect rather than the macro economics. The fact is the
relative market share for the Big Five firms never exceeded 0.4% of the total legal market which remains the
same today.
The contrast between size and markets (or countries) is
illustrated by the opposite two charts. While the size of
individual law firms is similar to the Big Four, the Big Four
legal practices are, on average, located in more than twice
the number of countries.
Financially, each of the largest firms or vereins has
revenues exceeding the combined total of $2 billion of
legal services provided by the Big Four.30 The risk to
Biglaw is illustrated by the sheer size of the Big Four’s legal
coverage. Biglaw is confined to the same exact 30
locations (Paris, London, Frankfurt, Beijing, Rio de Janeiro,
etc.) in which the Big Four have their largest office.
21 Big Four Accounting Firms, WIKIPEDIA, https://en.wikipedia.org/wiki/Big_Four_accounting_firms; Enron, WIKIPEDIA,
https://en.wikipedia.org/wiki/Enron.
27 Supra note 11.
30 David Wilkins & Maria Jose Esteban, The Reemergence of the Big Four in Law, HARVARD CENTER ON THE LEGAL PROFESSION (Jan. 2016) (global legal
market is $700 billion), https://thepractice.law.harvard.edu/issue/volume-2-issue-2/.
5
