Beaton's recent 'Bigger. Better. Or Both?' First Movers seminar analysed the merits of size and growth (Bigger) versus focusing on clients' needs (Better) and being rewarded for success. In this context it's interesting to note that of the 10 firms recognised by ALB only half are conventional (ABL, H&W, MO, WH, WK). The others are incorporated consolidators (M+K), listed (ILH, S&G) or so-called non-firm firms (AL, BL).
Industry watchers will no doubt latch on to this as yet another harbinger of change. Nimbleness in the market, access to capital and innovation are, on average, more likely in new structures. So, well done the conventional five. And let's all take note of the five playing by new rules. They are the game-changers and disruptors – dismiss or ignore them at your peril.
Since 2003 when we starting benchmarking client-rated performance, the consulting engineering firms have always lagged the law and accounting firms pretty much across the board. And it's been this way for the 9 years of data we have. What is it about the engineering profession that leads to this lower performance? And what is it that the other professions - particularly lawyers - do so well? There are the obvious things:
However, a recent conversation with a client got me thinking about another possible cause, particularly in large, generalist firms. (more…)
Today's analysis by BRW's Nassim Khadem (13 October 2011) of Australia's accountancy sector confirms the intense battle for market share in the advisory and private client spaces. Given the major differences amongst the four strategic groups: Big 4, mid-size, restructing specialists and the rest, Beaton predicts brand permission as a key competitive dynamic. With Beaton Benchmarks as the only source of robust comparative brand and performance data we continue to provide our insights and interpretation to all contestants.
Late last month the Financial Times (September 26) reported [free registration required] that the European Commission has launched draft regulation to address what many have long considered inevitable. The Big 4 are under inexorable pressure to choose between consultancy and audit. As the end-game approaches we predict ever-greater efforts by all the Big 4 to diversify into all manner of advisory services, so that come the day of complete separation their massive scale will be intact and their transformation into diversified professional service firms, in a sense, complete.
For the clients, the corollary is that audit fees will rise to enable the now 'pure' auditors to generate profits commensurate with the skills and responsibility involved.
Any bets how long the battle between the world's regulators and the profession will last? And who will 'win'?
In Georgina Dent's comprehensive article on Australia's top 30 law firms (BRW 15-21 September 2011) I am quoted correctly (save for an important preposition: in tip 2 the first sentence should read "by 5 per cent of revenue" not "to 5 per cent" – unless the whole firm plans to move to Bangalore!) as suggesting our major firms need to down-size, become much more profitable and find ways being much bigger players in Asia.
I am interested in how others view the strategic options facing the biggest and some of our finest law firms in Australia?
If you have a BRW online subscription, you can read Georgina's article here. If not, let us know and we can email you a PDF.
My article in today’s Australian Legal Affairs highlights the attractiveness of the Australian economy to globalising law firms.
Beaton Benchmarks provides factual evidence on where some of the gems are to be found.
With consequences of the internationalisation of the Australian legal profession being felt every day, hear George Beaton in conversation with Chris Merritt on the shape of the future: http://video.theaustralian.com.au/2033134455/The-future-of-the-legal-profession
Grist was added to the rumour mill by this piece in Legal Week yesterday: http://www.legalweek.com/legal-week/news/2080885/ashurst-sets-sights-strategic-deal-australia. Beaton's market intelligence and benchmarks data are in hot demand by US and UK firms investigating whether and how to enter Australia.