Opening Statement: Numbers Versus Words
PricewaterhouseCoopers Legal was established in London in 2006, but hit several stumbling blocks in training accountants to think like lawyers. However, after 10 long years in the shadows, the rumor is that PwC Legal is finally ready to enter "The War Of The Words" - which is potentially bad news for every global law firm, especially World Number 1, Baker & McKenzie. Because, while B&M is undoubtedly the best in the business, PwC - the accounting side - has thousands of high-value clientèle who trust PwC executives to make (& save) them millions (or billions) in cash; which means that those clients will respect PwC recommendations; which means that once PwC Legal finds the right team of lawyers (reportedly only a matter of time now), other established accounting firms are going to implement the same business model; & that means 2016 is probably a good year for B&M to start exploring its response options.
Exhibit A: Brand Awareness
The Big 4 Accounting Firms command a lot of visibility in both the Developed & Developing Worlds because they basically run the show in making tax policy recommendations to world governments & designing tax avoidance strategies for big business. Deloitte, EY, KPMG & PwC, are names that are well-known by everyone all across the world, from the flat broke to the filthy rich.
When it comes to B&M however, most people have to look it up. For a business that, according to the latest statistics, is ranked as the largest international law firm & the second most profitable law firm (behind Latham & Watkins) in the world, it seems to harbor a pronounced distaste for the spotlight. But, if PwC Legal is serious about leading a charge into international law, the brand awareness that it possesses is going to be a huge advantage over traditional (translation: practically unknown) brands like B&M - especially with the young entrepreneur demographic.
Exhibit B: Headquarters Location
Both PwC & PwC Legal are headquartered in London. London is a very iconic city, well-known to anyone with even the remotest link to sectors such as international business or education. The London label confers great credibility upon any company that maintains corporate headquarters there.
B&M on the other hand, is a Chicago firm; while I'm quite certain that Chicago must be a great place, it just doesn't have the credibility or glamor of New York City, Los Angeles or London. It might be a good idea to make the B&M public image more "chic" by negotiating & undertaking a few well-publicized joint ventures with law firms like Skadden, Arps, Slate, Meagher & Flom (of New York), Latham & Watkins (of Los Angeles) or DLA Piper (of London).
Exhibit C: Relevant Experience
Most prospective clients can accept the idea of a competent accountant remaining loyal to his/her client as he/she navigates his/her way around local & international laws to protect his/her client's financial interests. But no matter which top law school he/she graduated from, people are convinced that a lawyer either cleans you out with his/her billable hours or throws/prolongs the case you hired him/her for (simply because your opponent realized his/her legal skills were worthy of financial incentive the second he/she took your case). Therefore, the odds of clientèle putting not only their legal but financial fate in the hands of a lawyer are close to nil.
B&M is a different case. It focuses primarily on 19 areas of law, which are as follows:
- Antitrust & Competition
- Automotive
- Banking & Finance
- Capital Markets
- Corporate Compliance
- Dispute Resolution & International Arbitration
- Employment
- Energy, Mining & Infrastructure
- Environmental
- Financial Institutions
- Information Technology & Communications
- Insurance
- Intellectual Property
- Mergers & Acquisitions
- Pharmaceuticals & Healthcare
- Private Equity
- Real Estate
- Tax
- Trade & Commerce
Its current chairman served as a Co-Chair of the 2015 World Economic Forum for Latin America. Further, B&M has played an important advisory role in a number of high profile multinational transactions, including Dai-Ichi Life Insurance's US$5.7 billion acquisition of NYSE-listed Protective Life Corporation & Alliance Boots' US$638 million acquisition of the largest local retail pharmacy chains in Mexico & Chile.
Closing Statement: The New Reality
Sepp Blatter has recently lost a lengthy battle to hang on to his leadership position in FIFA. Raymond Moore let Indian Wells slip through his fingers. Elmer Kupper just got forced out of his job as head of the ASX. CEO Michael Pearson & Board Member Kate Stevenson have left Valeant Pharma under a cloud & CFO Howard Schiller is reported to be fighting a losing battle to retain his job title & board membership (& possibly his good name as well). Ruane, Cunniff & Goldfarb CEO Robert Goldfarb has paid for the mistake of investing in Valeant Pharma with his career.
This is obviously a time of great change in the international C-Suite, & the aforementioned cases are rumored to be a glimpse of things to come. If that is true, B&M doesn't have much time to revamp its business policies (or else, enter the global accounting sector) because, while it has definitely reaped plenty of success using its Chicago-1949 business model, current global financial conditions indicate that it is time for all the established businesses in the world to accept the new reality where the unlikeliest of people can suddenly transform into a force to be reckoned with. Word on the street is that these changes might have something to do with the power of the Internet. Therefore, to further clarify the time-tested adage, if you can't beat them, do anything but fight them - within the boundaries of legality & good financial sense of course!
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