EY’s leadership recently greenlit a major structure, ending months of deliberation. There are two main parts of the plan: (1) The EY business will be separated from the consulting business; and (2) the advisory business replaces its cooperative model with a publicly traded corporate structure.
The new structure provides a unique opportunity for EY Law to expand the scope and meaning of “legal services,” modernize the nature of delivery, expand the scope of legal practice for licensed attorneys and associate legal professionals, and extract significant value from the legal practice by aligning and integrating it with the business. EY has the ability to transform the legal landscape by providing multidisciplinary, vertically integrated, technology, a legal remedies. This will benefit its customers and the business community at large. It also offers new career options for licensed attorneys, associates, and professionals.
Cornelius Grossmann, EY Global Law Leader, said: “Moving away from the partnership model and removing independent accounting restrictions is critical to our vision of becoming the leading corporate legal services provider of the world.” The opportunity to achieve this bold vision is real, but there are also many challenges. This article examines both.
EY’s Infrastructure Exchange Unlocks Many Opportunities
The two-way structural transition opens up many opportunities for EY Law and the consulting business within it. Separation from the accounting business removes special restrictions that prevented him from performing legal work for accounting clients. The EY legal market will expand by 20%, its share of the World 2000 audits. With the size of the market that is being expanded, more investment will be made to rapidly expand existing services and develop new offers that are beneficial to customers. Being independent from accounting restrictions reduces the administrative burden for EY and, in some cases, its clients.
In turn, EY Law can also develop relationships with audit clients. This opens up partnerships that produce new products and services to help customers. For example, EY Law can join a number of leading technology companies that it reviews. It’s in Google’s directory
The integration between the legal and technical sectors at this world-leading level is a market advance. It helps break down the anachronistic barriers that separate the two industries. Their relationships benefit clients and expand the parameters of existing law firms that promote participation in industry-wide collaboration. It accelerates the transformation of law from a vertical-centered attorney to a multi-indictment practice. This benefits businesses, employees and society.
Law, technology, and business are the three main areas of law enforcement. The Fusion is currently the most stay calm, non-scalable, integrated, and single-objective. The EY Act is set to combine these three delivery areas at scale. Collaboration with other industries will accelerate the internal integration of EY Law and other lines of advisory business services— IT, data analytics, risk management, process and project management, to name a few. It also offers customers a comprehensive, multi-functional, and data-backed solution that manages the process to complex business challenges. Whether this is a “legal service” or something else, it is an important step for clients.
EY Law’s ability to engage with the wider consulting industry—and vice versa—is essential to achieving its vision. Re-introduction applies to both customers and employees. The connective tissue that binds them together is a common theme. The ability to deliver clients, multitasking, collaboration, and teamwork sets a new standard for the legal profession. It increases the impact of law enforcement on business by harnessing its latent ability to identify, mitigate, and eliminate risk and collaborate to create value.
Restructuring EY Law is an opportunity to create a better, more flexible, client-focused, data-driven, streamlined, collaborative, and connected and meaningful than the merit of the cooperative model that replaces it. Venture capital provides opportunities for long-term financing of technology, performance improvements, new services, joint ventures, acquisitions (including legal entities permitted by law ), and talents.
This is in contrast to the friendship model where decision-making is slow and often prompted by a partner’s impending retirement. Resistance to long-term investment, likewise, is linked to a lack of economic impact for the industry. This promotes space, temporary space, and discourages creativity and innovation.
EY Law’s corporate structure allows it to hire a wide range of staff and pay fairly, something it plans to do. This promotes loyalty, retention, and cooperation. Other benefits of equity include: collaboration, the opportunity for long-term success of the enterprise, the ability to accumulate assets, and a greater understanding of the project. Ownership also helps to eliminate legal liability for partners and associates, lawyers and “non-lawyers,” and employers and employees. This will promote teamwork, boost morale, and serve as a beacon for talent looking for a different “legal” environment.
EY Law’s structural transformation is built on a solid foundation. An internationally recognized brand (the consulting business will operate under a new name but will retain links to the auditing business); deep C-Suite connections; access to capital; multidisciplinary expertise that cuts across legal intersections; and enlightened leaders who manage 4,500 lawyers across 90 countries.
Change brings opportunities but also comes with challenges. Here are some of the highlights that EY Law can expect to encounter.
Change Management Is EY’s Legal Biggest Challenge
The biggest challenge facing EY Law is a vulnerable and valuable asset: its employees. Changing from a partnership model to an enterprise requires a change in mindset, culture, measurement, organizational structure, and economic model. We need to switch from input to output; individual to group; and legal considerations to business solutions. Sharing operational knowledge, data, and other operational knowledge/intellectual capital with colleagues should be the norm, not the exception. Likewise, sharing should occur across the legal practice, including connected service lines, strategic partners, and clients. Legal providers, especially lawyers, are not used to this.
How can EY Legal leadership encourage its employees to embrace these and other changes? Setting the scene is a good place to start. Also providing context—the “why”—of change. Change is not “change for change’s sake” without punishment. Rather, it is a continuous response to meet the changing needs of its customers, businesses, society, and the environment. Law cannot be mistaken for the macroeconomic forces that are reshaping our world.
Most employees don’t realize they’ve crossed the digital divide as customers. They shop online; embrace technology; rely on data to make quick and informed buying decisions; and value access, transparency, choice, and customer service. They prefer suppliers that make it easier to buy, faster, and better.
If legal professionals have navigated the digital divide as consumers, why not as providers? They need to think about what they do from a customer/end-user perspective—how can they improve their individual and team performance to deliver a better product and experience for customers?
The leadership and a fraction of the workforce were not enough to bring about new ideas. The success of the organization must first be adopted with the team. It means trust, collaboration, sharing, and customer focus. The emphasis is on continuous improvement, not the model; diversity, not uniformity; output is not included; and the team, not the individual. These are not the practices of most law enforcement agencies, but most do.
EY’s ability to navigate internal change management challenges is a foundation for its success in tackling external challenges. Here is a list of the market challenges it faces.
1. Can the EY Act encourage GCs to embrace vertical integration and move away from protracted acquisition decisions?
2. Can his C-Suite/Board connections be used to advocate for a new look at the professional services procurement process?
3. Can EY Law use structural change and successful change management to create and deliver a legal practice that is fit for purpose?
4. It can convince clients and employees by offering a safe, effective, scalable way to work both ways outsource to law firms (and law firms) and offer apply to corporate law groups?
5. How EY Law can effectively integrate with other business advisory services, especially those related to law. Does the category list include: management, legal, technology, compliance, tax, and data analytics?
6. Will it acquire or collaborate with an international law firm to enhance its “legal” qualifications/qualifications?
7. With EY Law, which is a small participant in the products of the consultant, it takes the integrity of the consulting business leader to maintain the necessary investments, and to promote cooperation within and cross selling?
8. Will EY overcome the long held belief of many legal clients that the Big Four are still based on their accounting firms and not legal providers?
9. Can he tell the legal profession—even the GC’s—that he has the “legal skills” to take on a broader and more complex set of legal tasks?
The importance of EY’s vision “to build the world’s leading corporate legal services provider” goes beyond financial success. It seems to increase the market share and profits. Most importantly, EY Law can revolutionize the way legal services are delivered to benefit clients and expand law firm business opportunities. If his employees can adapt, he will do well.