Should law firms be worried about the rise of alternative legal service provider accountancy firms?
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Increasing competition from non-traditional legal service providers is one of the biggest challenges facing law firms today. Thanks to the Legal Services Act 2007, alternative legal service providers are now licensed to offer legal services alongside other business areas. In 2014 PwC became the first of the 'Big Four' (the largest global accountancy firms) to become an alternative business structure by investing in PwC Legal. Since then, accountancy firms have been some of the biggest movers and shakers in the alternative legal service providers industry. KPMG recently illustrated its intent to head into the legal sphere with its launch of an affiliated law firm in Hong Kong. For accountancy firms, moving into the legal services market makes a lot of sense – they have a large global client base and can respond to client demand for a single firm to provide integrated solutions to a whole range of problems. So, instead of heading to a solicitor for legal problems and then going an accountancy firm for other issues, these firms are moving into the legal sector and providing clients with all these solutions under one roof.
Not only do these firms have the advantage of a global client base which is likely remain loyal to the business, they are also at the forefront of new technology, often using cutting edge artificial intelligence and machine learning. This means that they can offer clients a legal service that is enhanced by technology – something that law firms should be worried about!
Some believe that these tech-focused giants could swallow up the legal sector as they start using more efficient and tech-savvy methods for legal solutions, especially for document review and research. If law firms want to compete, they will need to improve their legal services with tech-based solutions too – ‘if you can’t beat ‘em, join ‘em’ – meaning that law firms might even look to outsource complicated technology-based legal services to these accountancy firms themselves. This way, they can provide an attractive and efficient service, while still providing traditional legal advice from within a traditional law firm structure. What is certain is that this is a rising trend that traditional law firms cannot afford to ignore. With their huge global client bases and tech knowledge, you can bet that these accountancy giants will not back down quietly.