Canadian Lawyer

w w w . C A N A D I A N L a w y e r m a g . c o m A P R I L 2 0 1 8 35 multi-disciplinary partnerships were the rage. Nor have they done what they did in Europe, which is strategically commit themselves to full-service practices. McReynolds notes that they are "big organizations that we deal with on a constant basis." Sometimes, they are on the same side; sometimes, they are not. "The big issue is are they competitors for talent? Are they going to seek to hire away from law firms? That is more likely to cause ill feeling." The best training ground in North America remains law firms, he says, and the Big Four would have to persuade "people who are successful and at the top of their game" to jump ship. He doesn't see that happening any time soon. Peter Lukasiewicz, CEO of Gowling WLG (Canada) LLP, says that, at the moment, "we don't see them as com- petitors," noting that his firm has a "strong business relationship with them. They refer work to us and we end up working together on projects." He doesn't think you can "draw a straight line" between Canada and what's happening overseas. It's the referral link that everyone is concerned about and what will happen if the Big Four open the legal taps more fully in Canada, where B.C. and Ontario allow multi-disciplinary partnerships. Lukasiewicz says "these firms enjoy strong relationships with law firms across Canada. I am sure that goes into their busi- ness planning." However, it's worth noting that the Big Four faced similar concerns when moving into Europe and Asia, and that didn't stop them. Now, they are preparing an assault on the U.K. David Leonard, CEO of McCarthy Tétrault LLP, says "it's a very complicated relationship" that law firms have with the Big Four. "On one hand, they are a client and on the other, we partner and collaborate to deliver to our mutual client. In other ways, we compete with them." Leonard thinks this "co-opetition" model will become the new normal for legal services. However, law firms have to get better at developing new products and services if they expect to compete with the Big Four, he says. Law firms must also sharpen their elbows and stop ceding ground in areas of what is seen as semi-legal or commod- ity work. For example, his firm acquired e-discovery firm Wortzmans last year to provide clients an end-to-end document review solution. As well, law firms need to be more aggressive. One client recently hired a Big Four to review the legal function, Leonard says. The first reaction was that it made sense, but after thinking about it, the legal team went back to the general counsel and made the case that McCarthys should be part of the review. "We're lawyers. It's within the scope of what we are doing. We shouldn't just simply say, 'Accounting firms are doing that and we should back off,'" he says. Where this complicated relationship between the Big Four and law firms goes in North America remains to be seen. The wild card is the U.S., which seems defiant to lowering restrictions around the practice of law. If that domino topples, and there is no sign it will, then all bets are off. In the meantime, the Big Four continue to chip away, and that should concern law firms, says Landry. He notes that the Big Four have been expanding their legal ser- vices since the 1980s and encountered some failures along the road. However, he says, "You learn from your mistakes and sooner or later, you are going to succeed." HOW ONE LAW FIRM IS FIGHTING BACK I f you want to see the impact that the Big Four is having on law firms, look to Australia, where they are actively engaged in practising law beyond tax and insolvency. Tony Harrington, CEO of law firm MinterEllison, says lawyers need to understand the Big Four are not building law firms. They are weaving legal services into their broader professional services tapestry to find holistic solutions to clients' complex problems. "Law is not something that is sepa- rate and distinct." Harrington would know. He is a former global managing partner, strat- egy and transformation at PwC, and sat on PwCs global executive lead- ership team. He joined MinterEllison in 2014 to help the firm adjust to the shifting competitive landscape. Lawyers have legal acumen, while the Big Four stress financial acumen, he notes. The legal profession "really should own the risk space. Gover- nance, risk and oversight are becoming more and more the norm." Harrington persuaded the partners to realign the firm around four client-facing themes to help clients: • grow; • develop and manage their assets and infrastructure; • strengthen and defend their business models, and • optimize their businesses. Lawyers had to shift focus from touting their individual fields of expertise to providing creative and distinctive end-to-end business solutions. The firm developed what it calls "Empower," a performance culture program to develop its people. It segmented its client base, fast-tracked promotions and reshaped its partner income model. Since Harrington's arrival, the firm has grown its revenue by 40 per cent, and it is forecasting 20-per-cent growth in 2018. The firm is on track to become the largest in Australia. "There is enormous opportunity in [law] firms to drive sustainable, client- focused, profitable growth," says Harrington, who will step down in June when his term expires. "It's just a matter of having an open mind to that concept of what clients need."

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