“One, two, three, more.” That’s an old accounting joke.
Coming from what’s considered to be a stereotypically mild-mannered profession, it’s meant to gently amuse.
Lately, however, additions and acquisitions of more legal services by Canada’s Big Four professional services firms that work primarily in the audit, advisory, assurance and tax business seem to have been received with surprise rather than amusement. But none of this should be surprising given that much of it has been in the works, in some cases, for almost 20 years.
In 1997, EY Canada launched an in-house, multidisciplinary law practice – Donahue LLP – that wound up in 2003. I worked for EY from 1998 to 2001, and cut my legal marketing and business development teeth working alongside Donahue witnessing first-hand its struggle on various fronts that ranged from regulatory to structural to financial. Suffice to say, it was a spectacular and unique learning experience with insights, perspectives and lessons that have proven valuable ever since.
During this time, Donahue had a roster of some 130 lawyers practicing in a wide range of business law areas that included, for example, the wills and estates team that migrated to McMillan LLP just before Donahue dissolved while the intellectual property group refugeed to Torys LLP. The rest splintered off to various Canadian firms. Those practicing business immigration remained and operated as Egan LLP. Couzin Taylor LLP that was not officially part of Donahue, but was affiliated with EY handling tax law also stayed put.
On March 4, 2016, Egan LLP and Couzin Taylor LLP merged under the EY Law LLP banner along with the addition of a business law services group that, according to the firm’s Canadian website will “deliver integrated, multi-disciplinary services” along the lines of corporate reorganizations, mergers and acquisitions, financings, joint ventures, transfer pricing, drafting, commercial contracts, policies, procedures and corporate secretarial services.
So everything old is new again and there is the potential – once more – for EY to be a professional services “one-stop-shop” – a moniker that, ironically, was detested and bridled against by the former Donahue.
Other members of the Big Four have cobbled together affiliated law firms in Canada, primarily practicing tax and business immigration. But it’s a good bet to expect that there will be an evolution to adopt more formal structures that will enable the taking on of a variety of legal services that are critical to clients of the Big Four.
In the meantime, since it’s a bit tricky to tell the players without a program, the following is – to the best of my knowledge – a current-but-probably-still-to-change Who’s Who of the rest of the Big Four’s Canadian legal participants.
In 2012, immigration firm Greenberg Turner joined KPMG Law LLP, which offers tax and immigration law services. On KPMG’s Canadian site, tax services are noted as “Continuing the practice of Moskowitz & Meredith LLP” while immigration services are noted as “Building on the former immigration law firm Greenberg Turner.”
PwC brought immigration firm, Bomza Law Group, into the fold in 2014. In 2015, Wilson & Partners LLP that already had an affiliation with PwC since 2001, formally joined the firm to form PwC Law LLP. This combined entity is currently set to provide Canadian tax and Canadian, US and international immigration legal services.
Deloitte is certainly no slouch with the affiliation of Deloitte Tax Law LLP.
In 2013, Deloitte made an alliance with independent immigration law firm Shouli & Partners LLP to provide business immigration services pertaining to Canada and the US. In 2014, Guberman Garson Segal LLP was added to expand beyond Canada and the US to include international immigration law.
That same year, the firm acquired document review outsourcing business ATD Legal Services.
Last week, Deloitte announced a new legal business affiliation, Deloitte Conduit Law LLP, by acquiring the business of Conduit Law. According to a news release, the new outfit will “offer outsourced lawyers to support in-house legal teams, meet business needs on-demand at law firms, and deliver short-term projects or special engagements.” (Update: After 18 months as Deloitte Conduit Law LLP, Conduit Law renewed its independence in October 2017.)
Add to that, Deloitte’s announcement the previous week of an alliance with Kira Systems, a Canadian NewLaw success story. Kira’s machine-learning contract analysis system searches, uncovers and synthesizes information from contract texts and related documents and, in short order, provides critical information that enables users to get on with performing higher value work.
The (Pun-Intended) Bottom Line
None of these associations should raise eyebrows given the history of accounting firms wanting to break into the legal services market. It’s been happening for years in other jurisdictions around the world and is finally taking hold in Canada.
Since the dissolution of Donahue in Canada, the Big Four – at least in this country – have been quietly watching from the weeds and waiting for the right time to make their moves.
In the meantime, they’ve been accumulating the capital necessary to buy the infrastructure and systems that are now and continue to be put in place to support and grow their business while quietly integrating legal services into their suite of offerings, all of which are strategically targeted to key client industry markets.
This is simply smart business. If some law firms are nervous, perhaps it’s with good reason. It can be expected that there will be Canadian law firms jumping to join one of the Big Four or a second tier professional services firm while other law firms will continue to stand pat. Both strategies have pros and cons.
But it’s all part of the legal evolution that’s been going on for roughly two decades and that operates according to its own code along with a timetable that used to shift with the speed of the earth’s tectonic plates, but is now rapidly accelerating.
While some further consolidation between accounting and legal can certainly be expected, its comforting to know that if there’s one thing accountants clearly understand, it’s money: how to make it, how to invest in infrastructure, and make even more money as a result.
Given all this, perhaps “one, two, three, more” isn’t really a joke after all.
[Disclosure: EY became a client of mine in 2011 with the creation and execution of a first-ever Canadian national advertising campaign to build brand awareness. The ad campaign—credited with moving EY one position and, in some cases, two positions ahead of its nearest competitor—continues to this day.]
Heather Suttie is an internationally recognized legal market strategy and management consultant to leaders of premier law firms and legal service providers worldwide.
For 25 years, she has accelerated performance within law firms and legal service businesses — Global to Solo | BigLaw to NewLaw — by providing consultative direction on legal business strategy, market strategy, management strategy, and client strategy. The result is a distinctive one-of-one legal market position and sustained competitive advantage culminating in greater market share, revenue and profits.