Study sees Big Four legal consultancies on the rise

The legal consultancies of the major accounting firms have become serious players in the law firm market. In some areas, such as legal tech, they are even ahead, as a study by the market research company Lünendonk & Hossenfelder has shown.

In an increasingly networked world, cross-disciplinary solutions are in demand. For more and more tasks and mandates, legal expertise alone is no longer sufficient – understanding economic contexts, the client’s business model and its industry are just as important for many clients as innovative technological solutions that increase efficiency and enable completely new services.

The current Lünendonk study “Leading Commercial Law Firms in Germany” not only demonstrates the increasing competitive pressure that the Big Four’s legal advisory arms are bringing to the German law firm landscape. And it also highlights the Big Four’s gateways in. For this purpose, 32 commercial law firms and legal advisory units of accounting firms were surveyed, which, with an estimated market volume of 6.5 billion, account for more than a quarter of the total market.

One important result of the study is that the legal services provided by the accounting firms are growing more dynamically than the market as a whole. While the companies surveyed as a whole were already able to achieve strong growth in the 2016 financial year, averaging 9.3 percent, growth of 13.6 percent emerges when looking exclusively at the WP companies. So the cross-disciplinary approach is meeting demand.

Digitization on hold

The study examines how the industry is approaching digitization. While all respondents rate the strategic importance of big data, cloud services and other technological innovations as high, the majority continue to hold back on investments. Only a scant four percent of estimated revenue is expected to go to technical development outside of IT costs.

This rather wait-and-see attitude on the part of auditors is also evident when it comes to dealing with legal tech in everyday professional life. Almost all respondents are concerned with the issue. More than half, 58 percent, of the study participants already use individual legal tech applications. 75 percent, however, say that legal tech still plays a role primarily in strategy meetings or in discussions among partners. For a full eight percent, this topic of the future has played no role at all so far.

These numbers are adventurous: if all observers and participants attach great importance to the issue, then watching from the sidelines cannot be a promising strategy. Examples from other industries show that digitization is not a temporary phenomenon. We need to take the experiences of other industries to heart instead of ignoring them.

Lünendonk press feed:
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