By: Eric Richard

A big question floating around the legal industry these days is “what’s next?” There are mounting threats from artificial intelligence (AI), machine learning automation, and alternative legal service providers (ALSP) that seem to grow without hindrance on a regular basis.[1] There’s even competition specifically from four of the largest accounting firms that are threatening to siphon off work usually done by big law firms.[2] The legal industry has always been fierce with competition, such is a hazard of the profession, but what is changing the game recently is competition coming from other industries, as just mentioned.[3]

Deloitte & Touche, Ernst & Young, KPMG, and PricewaterhouseCoopers (the “Big Four”) are the four largest accounting firms in the world.[4] Over the past ten years, the Big Four have been creeping in on services traditionally offered by big law firms.[5] While the Big Four are not able to provide legal services in the U.S., they can in fact provide services that are “legal adjacent,” like e-discovery.[6] “Legal adjacent” meaning services that are able to be performed by those without a legal education and are usually done in preparation for services that do require them to be performed by a licensed attorney. E-discovery is a good example because anyone or any company is capable of gathering information in preparation for litigation, but only a licensed attorney can litigate the issue being researched. This selection of services is carving out a niche for itself among providers that can accomplish the tasks at less of a cost than the average law firm.[7]

So, what exactly has been the effect of these alternative legal service offerings from non-law firms? According to reports, approximately 23 percent of large firms and 21 percent of medium firms say that they have lost at least some of their business to the Bog Four over the previous year.[8] It’s not just individuals and business capitalizing on ALSPs, it’s law firms themselves as well.[9] In another report performed by Thomson Reuters in 2019, 87 percent of law firms that responded said that they were utilizing ALSPs 56 percent more than the rate of use in 2015.[10] This shows that not only do firms themselves have to worry about losing business to ALSPs, but the lawyers working for those firms are losing out as well. After all, faced with competition, what other choice do firms have than to incorporate the new business practices in order to keep up with the changing market?

Often this is referred to as “future proofing.” It’s the practice of taking steps now to take advantage of innovative ideas or practices in order to transition a business more successfully into the future.[11] In further efforts to “future proof” law firms have also begun looking inward for adaptation and not just to what is being offered by ALSPs.[12] Firms are even beginning to grapple with the concept of cryptocurrency when it comes to estate planning and accepting payments for services.[13] While this adaptations may seem small to some, they are an indication of drastic change to come in both the way law firms operate and the type of services that are likely to be offered.

[1] See Jason Tashea, ABA Techshow to delve into ‘future proofing’ law practices, A.B.A.J. (Jan. 29, 2019), http://www.abajournal.com/news/article/techshow-to-deal-with-future-proofing-the-practice-of-law.

[2] See Jason Tashea, Should BigLaw firms worry about increasing competition from the Big Four accounting firms?, A.B.A.J. (Sept. 2018), http://www.abajournal.com/magazine/article/law_firms_competition_accounting.

[3] See id.

[4] See id.

[5] See id.

[6] See Jason Tashea, Alternative legal services providers come into their own as major players, says news report, A.B.A.J. (Jan. 30, 2019), http://www.abajournal.com/news/article/alternative-legal-service-providers-worth-over-10-billion-come-into-their-own-says-new-report/.

[7] See id. See also Jason Tashea, Should BigLaw firms worry about increasing competition from the Big Four accounting firms?, A.B.A.J. (Sept. 2018), http://www.abajournal.com/magazine/article/law_firms_competition_accounting.

[8] See Jason Tashea, Alternative legal services providers come into their own as major players, says news report, A.B.A.J. (Jan. 30, 2019), http://www.abajournal.com/news/article/alternative-legal-service-providers-worth-over-10-billion-come-into-their-own-says-new-report/.

[9] See id.

[10] See id.

[11] See Jason Tashea, ABA Techshow to delve into ‘future proofing’ law practices, A.B.A.J. (Jan. 29, 2019), http://www.abajournal.com/news/article/techshow-to-deal-with-future-proofing-the-practice-of-law.

[12] See id.

[13] See id.

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