Deloitte is expanding its legal services offering in the UK, following similar moves by PwC, KPMG and EY to edge in on the territory of traditional law firms, The Financial Times of London reported.
“There is room [in the market] for a lot of players and our competitors in the Big 4 are already operating in this space,” said Matt Ellis, managing partner for tax and legal at Deloitte, according to the newspaper.
The Big 4’s legal divisions are already larger than most law firms, but the profession’s leading law firms earn much more. The Financial Times noted that Latham & Watkins in the U.S., for example, had revenues of $2.8 billion in 2016, while PwC earned $500 million from legal services in the same year, and Deloitte earned $250 million.
As part of its plan, Deloitte is applying for an alternative business structure license, introduced as part of the 2007 Legal Services Act, which allowed non-lawyers to own and run legal services.
Deloitte is expected to focus on using technology to speed up routine legal work. “We’re planning to use our technology and advisory skills to transform legal services and help address many of the challenges lawyers . . . are facing in today’s increasingly complex legal environment,” Ellis said. Although he added that Deloitte was not seeking to replicate a traditional law firm, he acknowledged that its legal offering “may threaten some players.”
Several observers said that the Big 4 may be interested in a mid-tier law firm if it ran into financial trouble. Lee Ranson, co-chief executive of law firm Eversheds Sutherland, predicted that at least one of the Big 4 would make such a takeover move in the next three years. “In a significant number of areas and geographies, they are already our competitors,” he added.