Lexpert Magazine

48 LEXPERT MAGAZINE | SEPTEMBER 2017 | ACCOUNTING FIRMS IN LAW | ranked 13th in deal count in the region. To be sure, the numbers aren't over- whelming. It's also true that Europe is where the Big Four's legal practices took root and have had the greatest impact. EY, for example, is France's largest law firm. But just showing up in the M&A rank- ings among the most powerful law firms in the world gives the Big Four a cachet they haven't managed before — at least not on what has always been hallowed ground for traditional law firms. "e penetration of the Big Four is less obvious in North America but it's grow- ing with only regulatory hurdles in the way," says Daniel Desjardins, Senior VP and General Counsel at Bombardier Inc. "For the time being, they're not into big M&A or bet-the-company litigation, but it doesn't mean they won't go there, especially because they can learn from their experi- ence in Europe. And in that case, we'll opt for the provider that provides the best qual- ity and most efficient service and costs." Any discussion of Big Four strategy in Canada's legal market, however, has an el- ephant in the room: the accounting firms have tried this before and they failed spec- tacularly, culminating with the 2003 wind- up of multidisciplinary firm Donahue, Ernst & Young LLP. e failure can be traced to, among other things, the oversized ambition of what was then the Big Five, which included pre- Enron Arthur Andersen. Trading on their multi-disciplinary practice (MDP) capabil- ities, the Big Five made no bones about the grandiosity of their ambitions: phrases like "largest law firms in the world" and "major players in the transatlantic New York-Lon- don corridor" flew about like the swallows at Capistrano in the mid-'90s. In July 1998, Russel Robertson, then managing partner for Arthur Andersen in Canada, intimated that the Big Five would at McCarthy Tétrault LLP in Toronto and General Counsel to the firm, transactional work is where the Big Four are lacking ex- perience. "Moving to the transactional side from where they are would not be a simple evolution," he says. Mercer also believes that accounting firms will be cautious of competing in litigation waters because law firms are significant buyers of the litigation consulting services they provide. According to Suttie, however, experi- ence is within reach. "All accounting firms think about is money and process and effi- ciency, and that's why they're going to gob- ble up some very good legal talent," she says. "ey have tools in the shed that are attrac- tive to the younger generation of lawyers." As things stand, information gleaned from Mergermarket's 2016 global league tables of legal advisors suggests that trans- actional work is already on the Big Four plate. Europe is where they have made their strongest impression on the M&A landscape. Most impressive is PwC Legal, which ranked 17th in deal count among le- gal advisors in Europe; and Deloitte, which ranked ninth in buyouts by deal value. Spain and Iberia are particularly strong for the Big Four: Deloitte ranked sixth in deal value in Spain and fih in deal count in Spain and Iberia; PwC took fourth place in Spain and Iberia in deal count, and 15th in the region in deal value; and KPMG take no prisoners in their quest for legal- services dominance. "If I were a lawyer, I'd be concerned if … the … major accounting firms got into the legal services businesses," he told the Toron- to Star. And in late 1999, Douglas Black, managing partner of what was then Dona- hue's in Calgary, told Lexpert, "My role in Canada during the next three to four years is to build [Donahue] into a national law firm with 300 lawyers. By 2002, Ernst & Young intends to be one of the three larg- est global business law firms with 3,000 to 4,000 lawyers worldwide. Our objective is the senior corporate market." But with few exceptions, MDPs never at- tained their avowed goal of being in direct competition for top-tier international legal work with the US and UK majors, such as Shearman & Sterling; Skadden, Arps; Clifford Chance; Linklaters; Freshfields and the like. In Canada, where the Big Five never escaped the mid-market straitjacket, Donahue topped out at about 130 lawyers and closed up shop in 2003. Over the next decade or so, complacency replaced the fear originally evoked in the legal profession by the in terrorem arguments that MDPs would change the practice of law forever. What's different this time around is that strategic spin has replaced predatory bom- "For the time being, they're not into big M&A or bet-the-company litigation, but it doesn't mean they won't go there … And in that case, we'll opt for the provider that provides the best quality and most efficient service and costs." DANIEL DESJARDINS > BOMBARDIER INC. PHOTO: SHUTTERSTOCK

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