PricewaterhouseCoopers offices in Washington, D.C. (Photo: Diego M. Radzinschi/ALM)
PricewaterhouseCoopers (PwC) is set to launch a law firm in the U.S., a clear sign that the concerted push into legal services by the Big Four accounting firms continues.
The firm, called ILC legal, will begin operating later this month with an office in Washington, D.C.. It will not offer U.S. law advice, but instead will assist U.S. clients on international issues and act as a marketing operation to generate work that can be referred to PwC’s existing legal services network.
The office will be led by the head of PwC Legal’s international business reorganizations practice, Richard Edmundson, who will relocate from London alongside a small number of other PwC lawyers and support staff.
“This is market driven,” said Edmundson, who has been a partner at PwC Legal since 1998. “Our clients are increasingly looking for advisers that can provide international coverage on transactions from planning to execution.”
Edmundson said that the office will focus on services that are relevant to U.S.-based multinationals doing business abroad, including international corporate structuring, M&A support, labor, financial services, immigration, cybersecurity and data protection, corporate secretarial, tax controversy and dispute resolution.
“We don’t regard ourselves as a traditional law firm,” he said. “We don’t look at legal services in isolation—it’s just one part of a broader offering.”
Large corporations are now “much more accepting” of accounting firms providing multidisciplinary services, including legal advice, he added.
Edmundson said that PwC decided to open in Washington, D.C., in part because it is a large and important market. But it also chose the city because bar rules permit lawyers to register as foreign legal consultants and practice U.K. law.
The firm has no current plans to open additional offices in the U.S., but Edmundson didn’t rule out it doing so in future. “We want to be successful and grow our business,” he said. “We will see how the market reacts.”
ILC Legal, which Edmundson described as a law firm, will be structured as a separate legal entity from the rest of PwC and its legal services arm. Edmundson said that although the firm would not offer U.S. law advice, there is no reason why it couldn’t. “It isn’t controlled by the accounting firm, so it can in theory do anything that any independent law firm can do,” he said.
The American Lawyer first discovered PwC’s plans to launch in the U.S. after PwC in-house IP counsel Joseph Cilluffo filed multiple trademark registrations for ILC Legal LLP. The registrations cover the “ provision of law firm and legal services related to the laws and regulations of non-U.S. jurisdictions.”
PwC then updated the legal entity listing page of its website to include ILC, while Edmundson’s listing on online legal services marketplace Avvo was changed to that of a Washington, D.C., legal consultant at the firm.
A recent study by ALM Intelligence warned that law firms should prepare for a “significant increase in competition” as the Big Four accounting firms continue to ramp up their legal services offerings. The report found that the Big Four’s formidable brand strength, client base and ability to offer multidisciplinary services has helped them take market share from traditional law firms.
The American Lawyer also analyzed the Big Four’s legal services ambitions in a 2014 feature story.
Deloitte, EY, KPMG and PwC have invested heavily in their legal services arms in recent years—particularly in Europe—and now collectively employ about 8,500 attorneys globally.
PwC Legal, the largest legal arm of the Big Four, has 2,500 lawyers, making it the world’s sixth-largest legal services provider by that measure, up there with the likes of Clifford Chance and Jones Day. PwC Legal, which last year fully integrated with the accounting firm’s U.K. business, also has offices in 85 countries, far more than any other law firm.
Each of the Big Four’s legal arms has regularly achieved double-digit revenue growth—EY’s revenue has risen by more than 10 percent for five consecutive years. But their focus on lower-value work is reflected in relatively weaker financial performance compared to top law firms. PwC Legal’s $500 million revenue would put it in the bottom quartile of the Global 100 by that metric.
While the Big Four have historically focused on practices that complement their audit and tax advisory businesses, such as tax, labor and employment, and immigration, the report found that they are increasingly branching out into other areas, including M&A.
Two-thirds of law firms surveyed by ALM Intelligence said they were “concerned” about the threat posed by accounting firms and other alternative service providers, while 45 percent consider them to be a “major threat.”
ALM Intelligence will release a second report, assessing the Big Four’s prospects in the legal industry and examining three possible scenarios for their further expansion, on Sept. 27.
Chris Johnson is based in London, where he writes about global law firms and the business of law. Contact him at firstname.lastname@example.org. On Twitter: @chris_t_johnson.