[The latest in-house perspective from Matt Fawcett, senior vice president and general counsel for global data company NetApp:]

It’s no secret that the big accounting firms – Deloitte, Ernst & Young, KPMG, and PwC – are positioning themselves to win business traditionally served by large law firms. 

The Big Four bring new competitive pressure to a service industry that desperately needs it...

In a September 2017 ALM Intelligence study, 69 percent of law firms interviewed saw the Big Four as a “major threat.” A 2018 Law Firms in Transition survey by Altman Weil showed a similar result, with nearly two thirds of firms with more than 250 lawyers consider the Big Four to be a “potential threat.” 

From my perspective as a GC, I welcome the Big Four.

They bring new competitive pressure to a service industry that desperately needs it. The strengths of the Big Four – process efficiency, global reach, advanced use of technology and automation, and a deep and diverse bench of consulting and technical expertise – are difficult for law firms to equal.

...the promise of a single partner spanning deeply connected legal and financial matters.

And the Big Four have a further advantage when it comes to serving legal departments like mine, which work closely with the CFO and finance team. They offer the promise of a single partner spanning deeply connected legal and financial matters. 

Take commercial litigation as an example. 

This type of work often has significant need for forensic accounting and economic analysis. Law firms traditionally farm this out via expert retainers. An accounting firm could handle this directly, offering a more efficient and cost-effective service with a cleaner single point of accountability. 

Further, to the extent the accounting firm has a preexisting relationship, there would be less “start up” costs explaining the company’s business model, accounting systems, and related processes.

M&A is another discrete but high volume, high cost area where legal services from a Big Four provider could offer advantages. 

The due diligence process in particular is rife with waste and inefficiency. Corporates often hire consultants to support these bursts of activity, but much work gets repeated through the individual lenses of each provider and function, and the transactional costs of having “legal” coordinate with “finance” on areas including contractual liabilities, compensation and benefits, accruals and expenses, etc., can be significant. A single unified approach driven by a Big Four could be a compelling alternative.

The Big Four’s extensive geographic footprint is another big selling point.

While BigLaw mergers have created several giants in the last decade, they still do not come close to rivaling the reach and scope of the Big Four: Deloitte has over 250,000 employees across 100+ offices; Baker & McKenzie has 13,000 employees and a comparably smaller footprint (by revenue, the world’s largest law firm is still less than 1/10 the size of the smallest of the Big Four).

For multi-national corporates the lack of consistent coverage for international subsidiary structuring, maintenance, and governance, including tax planning and local/regional tax disputes, can be a huge pain point. These are areas where I see time and money  wasted purely due to the lack of an efficient, integrated single solution. The “one throat to choke” accountability of a single global provider is an attractive option.

BigLaw isn’t going away anytime soon, but it shouldn’t rest easy...

The value of the Big Four is not limited to such specific scenarios. There is a ton of work in any company that is “legal” in a general sense, but does not require high cost lawyers to complete.

To the extent the Big Four can work inside this broad market segment, they can offer a good new option for a general counsel. By adding another strata to the existing legal ecosystem, they give corporate departments like mine more choices to determine the best tool for the task.

For those reasons and many more, I welcome the opportunity to work with the Big Four. It might not happen right away, but I expect this to be a long-term and enduring trend. BigLaw isn’t going away anytime soon, but it shouldn’t rest easy.

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[As senior vice president, general counsel, chief compliance counsel, and secretary for NetApp, Matthew Fawcett is responsible for all legal affairs worldwide, including corporate governance and securities law compliance, intellectual property matters, contracts, and mergers and acquisitions. He has overseen the development of NetApp Legal into a global high-performance organization with a unique commitment to innovation and transformation.]