Artificial Lawyer spoke to Valerie Dickerson, a partner within Deloitte based in Washington DC, about the launch of its Legal Business Services practice in the US, and the key insight is just how relaxed the Big Four firm is about its goal of taking a chunk of the legal process and legal ops consulting market there.
First, what has actually happened? As Dickerson explained, part of the launch is really about bringing together process-based services and consulting capabilities that already exist. For example, they already do ediscovery and forensics/investigations. Their management consulting groups in the US also help corporates with a range of business change issues – and legal teams are part of that already.
What does seem to be new are two things: first the bringing together of all the various offerings under one roof (see graphics below), at least in terms of marketing; and second, a drive to hire in new talent and grow the Legal Managed Services (LMS) arm.
As you can see above, ‘corporate document assessments’ – a mainstay of LMS work, is just a subset of the Legal Entity Management stream, which itself is just one of eight streams of legal business services. And in turn, all of this is just one part of Deloitte’s total offering to corporate America.
Plus, as seems to need constant repetition to prevent the panic-stricken from passing out: Deloitte CANNOT provide legal advisory services via regulated lawyers in the US. This is not just because of cast iron anti-competitive Bar rules, but because of the Sarbanes-Oxley Act that was put in place after the Andersen collapse two decades ago (remember them?)
Anyway, back to Deloitte. After talking to Dickerson it’s clear that she sees what they are doing in the US as a very logical and practical extension of what they already do there. After all, Deloitte and the other Big Four are built around helping large corporates with business problems. This area is also about business problems, they just appear as ‘legal’ issues to those that live in the legal bubble.
For a corporate with a large inhouse legal team, that group and the issues it deals with are (or at least should be) just another part of the business e.g. ‘what do all of our contracts say?’. This is where Deloitte’s ethos of consulting and problem solving comes in, and which doesn’t need to have anything to do with giving legal advice.
But, do inhouse legal teams need all this consulting – call it legal ops, or legal entity management support – call it complex legal work at scale? For sure – just see the rapid growth in these areas.
Moreover, Deloitte just sees this as a way to further help their clients that it’s helping on a range of areas, from tax to accounting matters.
In short, while some are yelling: ‘The Big Four are coming! The Big Four are coming!’ as if they were Paul Revere in 1775, the reality is that they have been there for decades already and what they are doing is not really what traditional legal services businesses with a strong advisory focus do.
‘We help clients with business transformation and legal teams are part of that. We will help with legal ops, we will help companies use their resources more strategically. We will work with the C-suite.
‘As legal departments need to adapt we will also help with BAU CLM matters,’ Dickerson added.
‘The market is very large and there is plenty of work to do that is not practising the law [in the US],’ she also noted.
Artificial Lawyer asked what the strategy will be for the LMS side of things? If they wanted more human resources here, would they go out and acquire one of the many process-focused businesses in the US? After all, Deloitte has very deep pockets and could easily afford the asking price of most process-driven LSBs, just as EY could when it bought Thomson Reuters’ LMS/ex-Pangea3 group.
On this point Dickerson has no comment, other than to say ‘we will build out our expertise in the US’.
And will the US launch mean a close working relationship with Deloitte Legal in the UK, which does have ‘regular lawyers’ who offer legal advice, as well as a LMS group, headed by ex-Luminance boss, Emily Foges, that is set to rapidly grow now?
Because of regulatory reasons the answer is carefully put, but the key point Dickerson made is: ‘We won’t be directly working with Deloitte Legal in the UK. We have a separate business in the US.’
As with most of the Big Four, and despite outward appearances, they are made out of dozens of smaller corporate entities, and this is often due to regulatory needs. So, it’s important to note that Deloitte’s US group that serves inhouse teams there is not the same thing as the UK Deloitte Legal group – even if they are all under the same branded umbrella of ‘Deloitte’.
So, as we wrap up, last question: Where is all of this going?
Dickerson replied calmly, but enthusiastically: ‘The potential market in the US is very large. We are very optimistic. There is plenty of space.’
In conclusion, the impression is that Deloitte doesn’t see this as starting an invasion of the US legal market – far from it. For them, it’s just an extension of the work they already do for corporates in America. And they are going to get on and grow the business because they rightly believe there is a demand for what they have on offer.