Legal firm Dentons enters consulting with risk advisory unit
International legal expert Dentons has become the latest law firm to make a foray into the consulting industry, with the launch of a new regulatory advisory wing. The company believes its size and experience in the sector will mean it can provide the holistic service which many clients are craving.
The UK legal services market was valued at £35.1 billion in 2018, increasing by 6.3% at current prices on the previous year. Despite the seemingly bullish performance of the market as a whole, however, the fortunes of the majority of law firms are largely obscured by the dominance of a select group of entities.
The number of law firms in the UK has stabilised in recent years at around 12,000, although the business model is changing. Almost half of all firms are now incorporated companies and the traditional partnership model has declined dramatically. The quickly shifting environment has chiefly benefitted the top 100 law firms, who continue to vastly outstrip the growth of the legal market overall. At the same time, the Big Four of the professional services world are encroaching further into the sector, rapidly eating into the market share of traditional law firms. This is by no means a one-way street, however.
As they look to counter this process of conceding market share, a number of legal firms have determined to enter the consulting industry. Exemplifying this trend of long-term incumbents of the legal sector tapping into the booming professional services market to buoy their own revenue streams, ‘magic circle’ law firm Allen & Overy recently stunned the consulting world with the announcement that it will launch its own regulatory consultancy in 2019.
Furthering this trend, fellow legal firm Dentons has also decided to enter consulting. The multinational law firm is ranked as the sixth-largest law firm by revenue, with $2.36 billion in annual revenue, and the world's largest law firm in terms of its lawyer headcount. Dentons, which has bases in both the UK and US, has resolved to take advantage of its size and stature in the legal sector by launching a risk consulting business to provide advisory, assurance and remediation services to clients.
The new Dentons Risk Consulting wing is to be led by Managing Directors John Davison and Christian Blackwell. Davison assumes the position having worked for over 20 years in senior risk and compliance roles in global banking institutions, as well as for the UK regulator and as a management consultant, while Blackwell has spent over 20 years as a management consultant, including a 14-year spell with Big Four firm PwC.
Davison said of the news, “Clients look for efficient, tailored and sustainable solutions that address their specific requirements in a manner that fits their business model and is aligned with their strategic aims. Dentons’ global capabilities provide a platform from which we can deliver a truly holistic service that enables clients to meet their legal and consulting needs from one provider.”
Blackwell added, “While initially focussed on UK financial services institutions, the flexibility of our model will enable us to service clients outside of this arena, such as the highly regulated and potentially high risk automotive, energy, pharmaceutical, aerospace and defence sectors. We will also be able to review the breadth of our proposition in response to changes in global regulation and economic conditions.”
Regulatory consulting is primarily driven by helping clients navigate shifting legal boundaries, meaning law firms are arguably at an advantage when it comes to providing advisory services on the matter. On the back of a wave of new regulations which corporates are facing, including the infamous GDPR, the sector is booming at present, making it a lucrative opportunity for legal outfits.
The launch of Dentons Risk Consulting follows the establishment earlier this year of a UK regulatory and trade group within the firm, which holds over 20 experienced Partners across a range of regulatory disciplines. In response to increasing demands for stand-alone regulatory advice, both in the UK and cross-border, Dentons believes it is therefore well positioned to provide clients with a holistic compliance and regulatory service.
Dentons CEO for the UK and Middle East Jeremy Cohen remarked, “Clients increasingly want their law firms to be holistic service providers as well as trusted legal advisers. Dentons is already on the panels of many of the major global financial institutions, advising them on their biggest transactions and most complex disputes. Now we will be able to offer them a broader service supporting them to operationalise compliance and risk management, aligning legal and non-legal services into an overall offering.”
