Accountancy firms are competing well on both sides of the Atlantic with law companies in the fast-growing market for ‘alternative legal services’.
That’s according to a recent study carried out by Thomson Reuters in conjunction with the Georgetown University Law Center and the Saïd Business School at Oxford University.
A comprehensive study looking at the subject found that Alternative Legal Service Providers (ALSPs) now make up a $10 billion industry and have rapidly expanded their global footprint in recent years.
ALSPs include the so-called Big Four accountancy and professional service firms Deloitte, EY, KPMG and PwC, who are understood to be among the organisations primarily responsible for driving growth in the field in the UK, as well as in the US, Canada and Australia.
In fact, almost one in four (23 per cent) of the big law firms asked about their experiences to date with regard to the ALSP sector said that they’d already lost contracts that they’d expected to win to an accounting firm.
A total of 74 per cent of corporations polled on these issues said that they’d used ALSPs at some stage which was a figure up from 60 per cent two years ago.
Corporations based in the UK were found to be particularly keen to use alternative providers of legal services, which can include accounting firms.
Meanwhile, law firms themselves are turning to ALSPs to support their own operations by acquiring services such as e-discovery, legal research and investigation support.
Law firms were found to be more likely than corporate legal departments at big businesses to make use of ALSPs.
The emergence of ALSPs is being enabled in no small part by new technologies which makes it possible for companies to carry out increasingly complex legal tasks at relatively low cost.
The Thomson Reuters report on the subject states clearly that “as use of ALSPs grows, law firms are increasingly finding themselves competing with the Big Four consulting firms”.
“The pace of change in the legal industry continues to accelerate, and alternative legal service providers are playing a large role in driving that change,” commented James W Jones, a co-author of the report and a senior fellow at the Georgetown University Law Center.
“ALSPs offer a variety of business models that can often provide new levels of speed, efficiency, flexibility and cost-effectiveness,” he said.
“Not only are ALSPs here to stay, but their reach and usage will likely continue to expand rapidly — across applications, customer bases and geographies.”