Ernst and Young to keep their noses out?

The accountancy giant Ernst and Young (EY) was granted an alternative business structure licence by the Solicitors Regulation Authority last year, allowing the firm to have its own legal services practice. EY was the third of the ‘Big Four’ to be granted this licence, as they all move to broadening their working base to branch further into the legal division.

Despite this recent addition of a new licence the firm has insisted that it has no intention to neither encroach into law firms’ territory nor act as rivals to law firms. The EY Global Law leader Dr Cornelius Grossmann has said that the company views the rest of the ‘Big Four’ as its main competitors. The strong reassurance from EY seems to allay any fears from law firms.

However, even though EY have made this statement, it can be easy to see why law firms are worried. All of the ‘Big Four’ are indeed accountancy giants, giving them huge power and influence in this sector. By branching into the legal sector there is arguably more pressure and competition placed on law firms. So though EY may allegedly have no intention of impinge on law firms, it may do it inadvertently.

Many law firms however hope to retain their client base, despite pressure from these larger and more powerful firms. Law firms have the edge of experience in the legal branch, which the ‘Big Four’ are lacking and so the competition may not be so heavy.