EY UK acquires law firm as Big Four edge toward disrupting legal industry
With the Big Four looking to enter the coveted legal space, and open themselves up to lucrative new contracts in the process, the foursome are weighing up merger and acquisition activity to break into the market. The UK wing of EY has struck a deal to purchase Riverview Law, as the professional services giant works to expand its legal offering.
The global legal market was valued at $600 billion in 2016, and now the world’s four largest consulting firms have reportedly set their sights on expansion into the lucrative sector. According to a recent study, the Big Four, the world’s largest consulting and accounting firms – consisting of Deloitte, PwC, KPMG and EY – could draw an annual revenue of $30 billion from legal services, were they to fully expand into the market. With examples of the disruption the gang of four have already wrought in the digital, design and consulting spaces, the quartet have already shown they are capable of entering new industries and consolidating their market share, and by leveraging practice areas they already serve.
In this regard, the Big Four are already gaining legal market share at a rapid pace by providing legal services in tax, finance, M&A (for lower value deals) and labour. The Big Four’s legal divisions are already larger than most law firms and – as consulting firms forays into the advertising world have similarly shown – an enlarged workforce is one major route to winning over new clients. Deloitte has around 2,000 lawyers, while PwC boasts a total of 3,500. If defined by headcount alone and considered as a standalone organisation, hypothetically this would already make PwC a top 10 firm.
Now, in a further statement of intent from the Big Four, EY has confirmed it has reached an agreement to acquire Riverview Law, an innovative legal services firm that will support the expansion of EY’s global legal managed services division. Launched in 2011, Riverview Law hosts a technology practice that uses a disruptive software from Kim Technologies for the delivery of its legal services. The acquisition will assist and scale the EY Law legal managed services offering, while helping EY clients to increase efficiency, manage risk, improve service transparency and reduce costs of routine legal activities. The deal will also extend the existing EY Law offering, while adding key talent in legal innovation and operating model transformation, as EY bids to eat into the market share of legal firms.
With this deal, EY Law now comprises more than 2,200 law practitioners in member firms across 81 jurisdictions. The addition of the Riverview Law platform will help organizations to manage legal instructions coming into the function, re-direct work that does not require legal input, triage work that does require legal support to the right team and manage all stages from case opening to case closing, including document creation.
The process to acquire Riverview has been led by Chris Price, EY’s Global Head of Alliances in Tax, and upon completion of the deal – which is expected by the end of August – Price will become CEO of EY Riverview Law. He will work closely with the existing leaders of the newly rebranded EY Riverview Law team to bolster the EY cross-sector, multidisciplinary approach to legal services, which the firm hopes can be scaled to serve EY clients across the globe.
Chris Price said, “There is a need for a greater range of service options in the legal market that provides the right service, with the right quality, at the right price to the legal functions of EY clients. I have yet to meet a general counsel function that is under employed; so providing a simple mechanism to assess tasks, assess the requisite skills to achieve those tasks and allocating internal and external advisor skillsets appropriately while helping the legal function to drive the maximum value and service quality is what we will seek to do.”
Cornelius Grossmann, EY Global Law Leader, added, “Legal managed services is one of the fastest growing segments of the legal market. This acquisition underlines the position of EY as a leading disruptor of legal services; it will provide a springboard for current EY legal managed services offerings and bolster the capabilities that we can help deliver for EY clients. We recognize the expertise that Riverview Law has in this growing market area, which when married with the global EY footprint and legal understanding will help drive significant opportunities for EY clients.”
According to Karl Chapman, CEO of Riverview Law, the deal will aid the legal firm in reaching new clients with its innovative services, while the legal profession goes through a period of significant global upheaval. Changes in regulation, technology and in customer expectation have forged an opportunity for a more flexible and customer-centric approach to the provision of legal services, which becoming a part of the Big Four can help Riverview address.
Chapman concluded, “Becoming part of EY is a real strategic fit for our team and is in line with our commitment to deliver world-class service and counsel to Riverview Law clients who are at the core of everything we do. As part of EY, we will have even greater resources to help them drive business outputs from their legal inputs… We believe that the combination of the Riverview Law operating model, operating platform and people, alongside the EY brand, EY clients, existing legal services offering and global scale is a winning formula for the legal market.”
