law departments


EY Failed Split Gives Break to US Law Firms Fearing Competition

  • June 1, 2023

Ernst & Young’s scuttling of a plan to spin off its consulting business and much of its tax practice gives breathing room to US law firms who fear new competition from big accounting operations.

The spin-off would have allowed EY to more aggressively pursue the legal services side of its business, said Mark Vorsatz, chief executive officer of consulting firm Andersen.

“The split would have unleashed the capabilities of an international firm with few peers in terms of platform,” Vorsatz said. The opportunities for a slimmer legal and tax advisory group “would have been endless,” he said.

Law firms have long fretted about the scale of competition they’d face should accounting firms plunge into the US legal practice, as they have done in Asia and South America. EY collected $45.4 billion in revenue in fiscal 2022, compared with $6.5 billion by the largest law firm, Kirkland & Ellis, that calendar year.

“Think about the resources they can bring to bear,” Marcie Borgal Shunk, president of the Tilt Institute law firm consultancy, said of accounting operations. “They have a big advantage.”

EY shelved the breakup after partners, particularly in the US, disagreed on the compensation and resources needed for the audit practice left behind after the consulting and tax businesses would be split off. Firm leaders told partners they’d keep working for a possible split some future day.

Meanwhile, EY’s legal unit remains an integral, fast-growing part of the firm’s business and a “core focus,” the firm’s global law leader, Cornelius Grossmann, said in a statement.

“EY Law is committed to continue investing as we have over the past decade in hiring, acquisitions and strategic alliances,” he said. EY’s law operation has maintained a “growth trajectory” since 2020, Grossmann said, though he declined to be more specific.

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Law firms and corporate law departments find strategic partners in ALSPs

  • May 2, 2023

As the market for ALSPs matures, law firms & corporate law departments are seeing the advantages to enlisting ALSPs as strategic partners.

Once regarded as last-minute stand-ins for overflow commodity work, alternative legal services providers (ALSPs) have quickly become strategic partners to both law firms and corporate law departments. And as ALSPs continue to mature, their outside perspective, ability to select and implement technology to drive efficiency, and commitment to improving outcomes by improving processes has helped them carve out a unique role in the legal services marketplace.

This growing trend was highlighted recently published , a data-driven report produced every two years by the Thomson Reuters Institute in partnership with The Center on Ethics and the Legal Profession at Georgetown Law and the Saïd Business School at the University of Oxford.

And the growth message wasn’t lost on the report’s survey respondents. As one U.S.-based CEO and co-founder of an independent ALSP says: “We’re probably at literally 10 times the number of conversations from a year ago about, how do you mature your legal department? How do you adopt the next tech? How do you do a three-year tech plan? How do you do the organizational change? How do you transform your services?”

Interviews with more than a dozen additional ALSP leaders found that more strategic considerations are becoming a routine part of ALSP discussions across multiple service areas. For example, concerning using ALSPs to fill secondment arrangements, one partner in a law firm ALSP explains: “It has become much less of an emergency service — it always used to be, ‘Someone’s left, we’ve got a gap.’ Now it has become built into the way that large clients manage talent.”

<i><b>You can download a copy of the Thomson Reuters Institute’s&nbsp;</b></i> <a href=”” target=”_blank”><i><b>Alternative Legal Services Providers 2023 Report</b></i></a> <i><b>here.</b></i>

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