What the EY Acquisition of Riverview Law Really Means

EY’s acquisition of Riverview Law has created a great stir in the legal industry. Legal pundits of all types have proclaimed their views on the subject. Here’s a couple of views on the subject and my own view:

Mark Cohen of Legal Mosaic has stated that the deal shows that legal practice and legal services are being separated as ALSPs (Alternative Legal Service Providers) get more legal market share and show legal consumers such as corporate legal departments that law firms aren’t the only alternative for legal services. In the past law firms were the only legal service providers, but now things have changed and legal consumers have many alternatives to satisfy their legal needs.

Mitch Kowalski says,  “Riverview Law is not being acquired as a subsidiary to EY Law, nor as a subsidiary to EY UK, but rather, it’s being put into a vehicle that allows it to grow globally as part of the EY global family and will be known as EY Riverview Law…But what I find more interesting is the lessons that can be already learned from the Riverview Law journey:

Business people use ideas, systems and processes from a non-legal business to create new legal business.

Then new legal business:

  1. is run by business people, not lawyers;
  2. has a mix of investors who are not all lawyers, and who do not expect an immediate return on investment;
  3. retains earnings and invests them for the long term;
  4. creates unique customer experience that’s difficult for incumbent legal service providers to copy;
  5. attracts customers based on a unique customer experience that does not walk out the doors of the business every evening;
  6. does not attract customers based on personal relationships with individual lawyers who could leave at any time;
  7. experiences massive growth over first five years of existence; and
  8. is bought by Big Four firm because of the unique and successful mix of people, process and technology which creates a tangible, stable investment.”

In the above comments I believe Mitch effectively agrees with Mark that we are witnessing the evolution from lawyers determining what legal services are to now having business people and corporate legal departments take control and defining legal services as it meets their needs.

Given these events, law firms need to take action to ensure their clients know what unique value they offer as this evolution takes place. The Big Four have been developing their legal chops for some time and see legal work as an opportunity to add more profitable work to their top line and do it more efficiently than even the largest law firms. They are being very innovative as they penetrate further into the legal market and are unbounded by past legal industry norms.

Fasken Adds Second British Columbia Base

Fasken added a second office in British Columbia in February to strengthen its position in the legal market in Vancouver, BC. It acquired the boutique Surrey firm Roxwal in the process. Meghan Tribe of the The American Lawyer magazine interviewed me on Fasken’s move. Canadian Firm Fasken Bolts on Boutique for Second British Columbia Base

“It’s probably, some would say, the fastest growing city in Canada,” said Colin Cameron, a Canadian legal consultant and founder of Profits for Partners, Management Consulting Inc.

“Surrey’s legal market is centered around real estate, banking and secured lending on the back of Vancouver’s booming housing market. But the suburb is also home to a growing startup, high-tech and emerging companies market, all of which play into Fasken’s strengths, Cameron said of a firm that launched a rebranding initiative late last year.

And while there are global legal giants like Dentons, DLA Piper and Norton Rose Fulbright with offices in Vancouver, those firms don’t have as many people on the ground as Fasken, which boasts 140 lawyers in its Vancouver office alone, Cameron said.

Fasken’s absorption of Raxwal is a part of a larger trend in the Canadian legal market, which is seeing local and domestic firms consolidate operations as larger Canadian firms continue to expand their operations, said Cameron, the legal consultant.

While Canada’s legal market saw much of the same during the 1990s and 2000s, this was mainly due to the threat that accounting firms once placed on legal services providers up north, and which now remains a concern of some firms south of the Canadian border. But now there’s a different threat above the 49th parallel.

“Now it’s the international firms that everybody’s merging up to compete against,” Cameron said.

Norton Rose Fulbright was the first to enter the Canadian legal market in 2010 with its tie-up with 450-lawyer Ogilvy Renault. A year later the firm absorbed Calgary-based Macleod Dixon, and in late 2016 Norton Rose Fulbright moved into Vancouver by acquiring 92-lawyer local firm Bull, Housser & Tupper.

In late 2012, Dentons announced a three-way combination involving 560-lawyer Canadian firm Fraser Milner Casgrain. DLA Piper then entered the Canadian market in 2015 via its combination with Davis, a 260-lawyer firm based in Vancouver. (DLA Piper subsequently closed a legacy Davis office in the frozen Yukon territory.)

The entrance of international firms into the Canadian legal market puts pressure on domestic firms like Fasken to shore up a pipeline of work from clients, Cameron said. And one way to do that is to consolidate.”

 

 

 

How Law Firms Should Respond to Disruption in the Legal Industry Today

Some interesting ideas on how law firms should respond to significant disruptions impacting the legal industry today: