It was only three years ago that EY was insisting it would not rival law firms – now the accountancy giant is buying them. True, Riverview Law is an altogether different proposition to the direct competitors you might naturally expect to be on EY’s radar.
But the bare figures now accompanying the accountancy giant now suggest we are no longer talking about the Big Four planning an assault on the legal profession: the assault began long ago and flags are already being set down.
While yesterday's official announcement contained the usual corporate blather about springboards and winning formulas, things were altogether pithier – and more ominous - in the single tweet from EY UK law leader Matt Kellett. He said: ‘So we’ve acquired Riverview – you weren’t expecting that – watch this space – lines are being drawn’.
EY now houses more than 2,200 lawyers in member firms across 81 jurisdictions. The number of legal practitioners is still fewer than the biggest law firms, but the gap is closing quickly. Estimates suggest the remaining members of the Big Four, PwC, KPMG and Deloitte, have at least 6,000 lawyers between them on their payroll.
As important as the numbers may be, the strategic importance lies in capturing a firm that was at the forefront of legal services technology advances (albeit one which had yet to turn such a position into meaningful profits).
Finance journalist Sally Percy says the expansion is about EY positioning itself as a purveyor of professional services in general, rather than just auditors. ‘What I think is interesting about this latest acquisition is how EY applies emerging technologies such as automation, AI and analytics to enhance the service that is already offered by Riverview Law,’ said Percy. ‘I suspect EY has some quite ambitious plans to revolutionise the service offering using technology in future.’
Allan Carton, managing director of business consultancy Inpractice, said Riverview had pioneered the use of analytics based on historic data and reliable management information to model consumption of other professional services to price packages of legal services.
Carton added: ‘Formal procurement of legal services is gaining momentum and this data-rich and analytics-rich approach is likely to fare well in that area to the detriment of law firms. If EY can get it right, Riverview and [legal virtual assistant technology] KIM could make a big impact with the resources they have available.’
The acquisition should be put into context: Riverview was big on self-publicity but was a relatively recent entrant and was posting an estimated £10m annual turnover. One legal technology website perhaps jumped the gun when it said the takeover will ‘almost certainly go down as one of the biggest but perhaps most inevitable “oh shit” moments for mainstream law’.
But the significance will be talked up by legal analysts and commentators. Riverview was part owned by law firm DLA Piper, which had reportedly retained a 14% stake before offloading it as part of the EY deal. The symbolism of a so-called traditional firm vacating the space and replaced by an accountancy practice will not be lost on anybody.