There has been much reported of late about a renewed
assault which has seen accounting firms expanding rapidly into
legal services, but as Australasian Lawyer reveals, two
can play that game.
Peter Bobbin, the managing principal of Rockwell Olivier's
Sydney office, predicts that there will be a growing trend of law
firms expanding into the accounting sector.
He spoke to Australasian Lawyer and responded to
comments made by the Big Four accounting firms - KPMG,
Deloitte, PricewaterhouseCoopers (PwC) and Ernst & Young
– about their plan of attack on the legal arena.
Last week the heads of legal services at PwC and Ernst and Young
told us that a 'highly integrated offering' is what will
differentiate the legal services provided by accounting firms in an
already crowded market.
But Bobbin says he can't see the bid being successful unless
the firms learn from their past mistakes, which include failed
attempts to expand into full-service legal firms.
"They cannot create a full-service legal firm, not without
making compromises in the way they run their audit, tax, corporate
and business services accounting functions. If they accept that
they can only offer a limited, sort of 'standard
servicing', it can work," he says. "In my view the
current moves reflect the usual business cycle, it is a reflection
of the new national managing partners looking to develop new
business angles and believing that they will do it right this
However, some the Big Four are already acknowledging this
KPMG's head of tax law, Jeremy Geale, told Australasian
Lawyer that KPMG's growth forecast was now solely focussed
on providing legal services on issues surrounding taxation.
"We are not a full service law firm and we don't intend
to become one," Geale said.
If all of the Big Four take on this same attitude, legal firms
may face a real and "permanent" threat, says Bobbin.
And this is not only a threat to market share, but more
importantly a threat to the already limited talent pool, especially
within the mid to larger-tier firms.
"I think their limited talent pool will be the first place
the major accounting firms will hunt for talent. The larger law
firms also rely on the large corporate dollar. It's the large
corporate dollar that the accountants are targeting," he says.
"Often the large corporate dollar will have a corporate
accounting relationship, so consequently if your major accounting
firm is referring the legal work back, you've got a
But never fear, all is not lost.
Bobbin says he's fairly confident that other law firms, like
the accounting firms, will be looking at new business opportunities
and a chance to throw the ball back into the other court.
It's seen his firm, Rockwell Olivier, reverse the assault
and take a step into the accounting realm.
A couple of months ago the firm started a tax agent company, RO
International Tax Services Pty Limited, that offers international
commercial clients an independent tax agent service.
Bobbin says in some respects it's a challenge to the
accounting firms' assault.
"We're saying to our international network 'you
don't need to go to one of these major accounting firms. We can
do the legal work and we can actually do your tax compliance
administration as well'. One of the reasons we can do it is
that we have very strong tax knowledge."
But he says it's important not to lose sight of the fact
that lawyers and accountants are each other's yin and yang.
Because they speak differently languages and think differently,
they can so often be complementary.
But the only way they will be able to work together side-by-side
is by creating and environment of common language and common
"In my view generally speaking if a law firm is embedded in
with the accountants, the accountants will seek to dominate the
relationship both with the client and over the lawyer, and I think
this is why it hasn't succeeded in the past," says Bobbin.
"It's not out of any intention to dominate; it's just
that they think differently. If you're a law firm sitting
inside an accounting firm the majority of them are accountants...
It's like me going and being a Nepalese Sherpa, I just think
and approach things differently. I don't speak Nepalese; I
don't have the same cultural background."
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