‘Big four’ accountancy behemoth PwC will fully integrate its national legal arm into the UK business on 1 October, to become a fully fledged multidisciplinary practice.
The move, announced this morning, carries the stamp of approval of the Solicitors Regulation Authority, which hailed the development as evidence of ‘how modern regulation can work to support innovation’.
PwC Legal senior partner Shirley Brookes told a conference last month that the legal sector could soon be dominated by MDPs, which she said have ‘more to offer’ than traditional law firms. Revenue at PwC’s legal arm jumped from £48.5m to £59.9m in the last financial year. This places the firm just outside the UK’s top 50 law firms by revenue.
Kevin Burrowes, head of clients and markets and executive board member at PwC, said today: ‘This is the natural next step. PwC Legal has a simple strategy to offer advice that complements services provided by PwC. By fully integrating PwC Legal into the rest of our business we are better placed to meet increasing client demand for more holistic advice.’
PwC Legal has 16 partners, 26 directors and a 350-strong UK team in total, based in London, Birmingham, Newcastle, Manchester and Belfast, providing advice in areas including cybersecurity and data protection, corporate reorganisation, disputes, employment, immigration, M&A, pensions and technology. As of tomorrow, the PwC Legal entity will effectively cease to trade, with the business subsumed in a full fee-sharing merger with PwC LLP.
He added: ‘The ability to embed legal advice more fully into our advisory services allows us to better help our clients solve their complex challenges and problems, particularly as the UK heads towards the uncharted territory of Brexit.’
Three of the ‘big four’ were granted an alternative business structure licence by the SRA in 2014 – the others being EY and KPMG. Deloitte has said it has no plans to go down the ABS route.
Brookes told the Gazette this afternoon: 'In our experience MDPs are becoming more and more attractive as clients' businesses become more complex. They offer an easier solution to their needs.'
PwC's audit arm is a heavily regulated business, said Brookes, which limits the firm's ability to provide legal advice to the dozens of FTSE 100 businesses on its audit roster. But she said there will be opportunities to 'embed' the firm's lawyers across the full panoply of non-audit services - from consultancy right through to HR and forensics services - to cross-sell work.
The legal arm has growm 20% year on year in the last two years, she added, and Brookes anticipates further rapid growth following a string of lateral hires from law firms including CMS, Osborne Clarke and DLA Piper.
Crispin Passmore, SRA executive director, policy, said: ‘Clients have always had needs that cut across professional boundaries and subject specialism. A multidisciplinary service allows those clients to get access to all the services they need, organised at their convenience rather than the convenience of professions.
‘We therefore welcome PwC’s shift to become a full multi-disciplinary practice. It is one more example of how modern regulation can work to support innovation.’