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Legal Market Competition — Do the Math

A simplified history of today’s Big Four and how they add to the competitive legal services market.

Today’s Big Four – Deloitte, PwC, EY and KPMG – are the largest global professional services firms offering audit, assurance, tax, consulting, advisory, actuarial, corporate finance, and legal services.

Outward appearances indicate no discernable differences among them. However, compared to other professional services firms, the difference in being a Big Four firm is that you either are one or you’re not.

Once upon a time, the Big Four were more. Mergers and a major scandal shrunk what were once the Big Eight to four.

Their recent and simplified history goes like this:

The eight were Arthur Andersen, Arthur Young & Co., Coopers & Lybrand, Ernst & Whinney, Deloitte Haskins & Sells, Peat Marwick Mitchell, Price Waterhouse, and Touche Ross.

In the 1980s, the Big Eight forged global brands, instilled marketing and business development functions, and instituted sales cultures. They grew like weeds.

Mergers with smaller firms enabled expansion. One of the largest was in 1987, when Peat Marwick joined Klynveld Main Goerdeler and after some name-shortening became KPMG.

The eight became six in 1989 when Ernst & Whinney merged with Arthur Young to form Ernst & Young, now called EY and Deloitte, Haskins & Sells merged with Touche Ross to form Deloitte & Touche, which now goes by Deloitte.

Six became five when Price Waterhouse merged with Coopers & Lybrand in 1998 to become PricewaterhouseCoopers – known at that time as the biggest name in the business, literally – now know as PwC.

And, five became four in 2002 when Arthur Andersen collapsed under the weight of the Enron scandal and practices were sold to the remaining Big Four firms.

All this in 15 short years.

Many in the legal profession point to the Big Four accounting firms as having the recipe for success. Applied to recent happenings in the Canadian legal market, how might this recipe work out?

Since 2011, Canada’s Ogilvy Renault LLP and Macleod Dixon LLP morphed into Norton Rose Fulbright, Fraser Milner Casgrain LLP blended into Dentons, Heenan Blaikie LLP dissolved in 2014 and next month, Davis LLP will merge with DLA Piper.

All this in four even shorter years.

With Baker & McKenzie having had a Toronto presence since the 1960s, there are now four international legal behemoths operating in major markets across Canada and the rest of the world. Each has a global brand, massive infrastructure, and insatiable appetite for revenue.

For BigLaw and MidLaw, this is resulting in a small world getting even smaller.

Legal market competition isn’t becoming fierce; it is fierce. And with continuing competition from other legal service providers, including the Big Four, it won’t soon abate.

[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 widely acknowledged as one of the world’s leading authorities on legal market strategy and management of legal services firms.

For 25 years, she has advised leaders of premier law firms and legal service providers worldwide — Global to Solo | BigLaw to NewLaw — on innovative strategies pertaining to business, markets, management, and clients.

The result is accelerated performance achieved through a distinctive one of one legal market position and sustained competitive advantage leading to greater market share, revenue, and profits.

The effect is accomplishment of the prime objective — To Win.

Reach her at +1.416.964.9607 or

3 responses to “Legal Market Competition — Do the Math”

  1. Heather, two questions of interest to me are: 1) why have Canadian law firms be so invisible in London and Europe compared to their American cousins and 2) why will the Big Four succeed in offering legal services this time round?

    • Fraser, there are a number of Canadian law firms with locations outside Canada doing business in other countries. However, an over-simplified “nutshell” answer to both questions may be: money, infrastructure, and processes.

  2. Excellent piece that puts recent history into perspective, and helps explain where and why things are headed. I concur with your conclusion as to who will “win out” in the legal sweepstakes.

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