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If you add up all the lawyers at the Big Five accounting firms and their affiliates, the total dwarfs the number of attorneys at the five largest law firms in the world. Take Chicago-based Arthur Andersen. Its affiliated international law network, Andersen Legal, which reported a 30 percent increase in revenues for fiscal 1999 (to $480 million), has more than 2,860 attorneys practicing law outside the United States. Add to that the approximately 750 law school graduates that Andersen has in the United States working in tax, additional U.S.-based law-degreed troops in corporate finance and other areas and Andersen’s 36 in-house lawyers, and the total number of lawyers and law school graduates affiliated with Andersen is well over 3,600. By comparison, Baker & McKenzie, which employs more attorneys than any other traditional law firm, reported having 2,478 attorneys worldwide in 1999. Even more impressive than the sheer size of the Big Five’s legal ranks is how quickly they are expanding. London-based Landwell, a PricewaterhouseCoopers affiliate, has about 1,500 attorneys worldwide and, said a Landwell representative, is growing by 30 percent a year, excluding mergers-and-acquisitions deals with legal practices, which would result in an even larger increase. Landwell thinks it could more than triple its legal professional staff by 2004. “Our ambition is to be a practice that [has revenue] of more than $1 billion by 2004,” said Alan Morris, Landwell’s head of global operations. On top of Landwell, PricewaterhouseCoopers employs more than 1,500 additional lawyers and law school grads worldwide. KPMG, which has its U.S. headquarters in New York, is also engaged in a massive buildup, with 3,300 attorneys between KPMG and its affiliate, Paris-based KLegal. This total includes 1,500 lawyers providing tax services. It is not just size that the Big Five are after. “The mission is to be a top-five global law firm by reputation as well as size,” said Bridget Juniper, Landwell’s spokeswoman. The one gaping hole in the Big Five’s law networks, of course, is the U.S. market, which has been largely off limits because of multidisciplinary practice restrictions. Although each of the Big Five has 800 to 1,000 law school grads working for it in the United States, the Big Five are careful to iterate and reiterate that the vast majority are not engaged in the practice of law. Indeed, several of the Big Five say that aside from their in-house attorneys, they do not track whether the other law graduates they employ in the United States have been admitted to practice law because, by definition, their employees are not practicing law. This distinction was lost, however, on the law-grad recruiting page on New York-based Deloitte & Touche’s Web site. The site said, “With more than 4,000 tax partners and professionals in the United States, including more than 800 attorneys, we are larger than any law firm.” Ernst & Young, also based in New York, has taken a novel approach to U.S. law practice with its financial backing of McKee, Nelson, Ernst & Young L.L.P. This Washington, D.C., law firm is the only one in the country to carry a Big Five name. What does the Big Five buildup mean for U.S. law firms? David Yates, chief operating officer of Baker & McKenzie, has been watching the Big Five’s global legal expansion. He said that law firms had better keep a competitive edge by paying close attention to client care and capitalizing on their ability to work on deals seamlessly across national borders, or “the audit firms will come in and eat their lunch. “I’m not saying the days of the big law firm are gone,” he added, but when it comes to relying on streams of revenue from middle-market work, “those days are numbered.” The end result could be a huge consolidation in the law industry. Already, some U.S. firms are taking an “if you can’t beat ‘em, join ‘em” approach by exploring the possibility of forming alliances with Big Five firms.

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