With today being Halloween, it’s only fitting to publish something scary. Last week, under the title Law Firms, Regulators Keep Eye on Big Four Move to Legal Services, Bloomberg’s BigLaw Business reported that
Sixty-six percent of those law firm partners and managing partners surveyed by ALM over the summer declared they were either “very concerned” or “somewhat concerned” about their law firm’s ability to compete with “alternative legal service providers” and accounting firms.
CPA firms moving into legal services was cited by 64 percent of law firm respondents as the biggest threat to traditional law firms’ share of the legal services market, according to Bruch’s study.
“The Big Four’s approach of packaging lawyers alongside accountants and consultants is attractive to clients,” wrote Nicholas Bruch, ALM senior analyst and the author of the two-part ALM report on the accounting firms’ advances into the business of law. Coupling the accounting firms’ tax services with legal consulting has proved to be one of the biggest draws for companies, Bruch told Bloomberg Tax.
Similar joining of legal services with help on mergers and on finance also has gained favor among companies, he said.
This threat is real, but not for the reasons you might think
To those inclined to pooh-pooh the risk, citing the restrictions that constrain accounting firms’ inroads, you’d be wise to consider them as temporary. As we know, regulations are subject to change, and the potential lobbying power to change them is not limited to that of the accounting firms, but if combined with the limitless lobbying power of their corporate clients, who very much like the idea of integrated solutions, could very well be definitive.
However, to use a basketball metaphor, focusing on the risk of accounting firms as direct competitors is biting on the head-fake and allowing the central lesson to go right by you. That lesson is: Clients prefer advisors who know their business and can assemble multi-discipline teams to solve their problems. The days of buying discrete legal services are fading fast. (And even if you could still sell a discrete legal service, it’s a losing game. Clients are much better informed, and better at buying, than you are at selling.)
Become an industry expert
Your action item is: Become an industry expert. It enables you to:
Develop a context that makes your service relevant
Be welcome and participate in the industry conversation -- at any level
Understand what drives demand
Predict service-category maturity and avoid obsolescence
Align yourself with high-impact problems that give you pricing power
Communicate with thousands of buyers and influencers simultaneously
Every industry is changing faster than ever before, and even insiders must pay close attention to keep up. Whatever industry you currently get a lot of work from, or have targeted, ask your clients and contacts:
What publications they read to stay informed about developments
What blogs and social media they follow
What events they make sure to attend
Who they consider industry thought leaders
Apart from whatever strategic threat they may present, the Big Four accounting/consulting firms can help you today. They publish tons of really good industry-specific content that can help you stay informed.
Use what you learn as an excuse to speak with your clients and industry contacts. For any issue you learn about, formulate a hypothesis about what it might mean to the person you’ll speak with, in terms of:
The industry as a whole, strategically
Her specific company, strategically and competitively
Revenue and profit going forward, and how that financial picture affects these other categories of consideration
His department, i.e., how operations may have to change in response
Opportunities to enhance her career, or threats to it
With clients, whenever you have a work-in-progress discussion, at the end, draw a bright line so they know that the billing meter is turned off, and ask if they have a few more minutes to help you get a better handle on an industry issue you’ve been following. Their first reaction will be to be pleased that you’re paying attention to such things. (Hopefully, they won’t be too surprised by it.) Offer your conclusion, and ask how accurate it is through the eyes of an insider. Listen while they improve your understanding. When the discussion is over, thank them for the insight and ask who else in their circles might offer additional informed opinion.
The combination of picking your client’s brain and getting referred to others strengthens your position and enables you to expand your network, all through an easy extension of a conversation you already have to have.