Page 7 - Legal and Accounting Markets 1985 -2022
P. 7
Global Law and Accounting Practices and Markets
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
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
