A new leader emerged in Acritas’ 3rd Annual Global Alternative Legal Service Providers (ALSPs) Brand Index as EY Law surpassed PwC to gain the top spot in the index and showed that acquisitions can bring quick returns in building a global legal super brand.
PwC just fell two points behind, dropping to second rank, and underscoring another strong trend: The gaining strength of the Big Four accounting firms in the alternative legal services field.
“We are thrilled to have the market recognize the value that comes from an integrated enterprise legal services offering and multidisciplinary approach,” said Cornelius Grossman, Global Co-leader of EY Law, in a statement.
Elevate, who has also acquired multiple businesses over the past year, rose 13 ranks to reach the Top 10 and secure 9th place. Elevate, which achieved the second-highest gain in index points, was specifically cited by buyers of legal services for its innovative approach.
Acritas, a U.K.-based legal research firm, compiled its Global ALSP Brand Index 2019 from analysis of an extract of data from its Sharplegal Global Elite survey 2019 dataset. All data is derived from 1,169 interviews with respondents who have senior responsibility for buying legal services at organizations across the world with $1 billion or more in annual revenue. All interviews were conducted by telephone in local languages across 51 countries between October 2018 and July 2019 as part of Acritas’ ongoing Sharplegal survey.
In the new index study, more than 1,000 senior in-house counsel were asked a series of questions about both traditional law firms and ALSP competitors, including which providers were top of mind, which were most favored, and which stood out as the most innovative.
Once again, Thomson Reuters dominated as the most innovative provider in the legal industry, but the rising power of the EY brand in legal pushed the technology provider into third place. Interestingly, Thomson Reuters recently sold its legal managed services business to EY.
Among other movers in the index, KPMG Legal jumped up a spot to fourth place, and Deloitte — the only member of the Big Four to lose ground — dropped two ranks to enter into a tie for fifth place with Axiom, which itself was recently in the news after receiving a significant investment from Permira, a global private equity fund, earlier this month.
“More than 90 different organizations ranked in our alternative legal service provider index — however, three-quarters of the points accrued to the Top 10 firms,” said Lisa Hart Shepherd, CEO of Acritas. “To cut through and become a serious global player, ALSPs need to build mega brands, which is very difficult to do in a market already crowded with thousands of traditional law firms.”
Indeed, although Acritas only releases the index’s Top 10, a glimpse at the next 10 firms reveals that other brands are gaining ground dramatically in this part of the market. For example, Consilio Managed Services and UnitedLex are rapid risers — increasing by 21 and 39 ranks, respectively — both moving from a very low global brand level in 2018 to now sitting just outside the Top 10. Also, LawGeex, which didn’t appear in the 2018 study at all, is a new entrant in the Top 20 in this year’s index.
Whither Traditional Law?
Clearly, the division between the traditional law and the ALSP market segments has started to blur, and as clients seek more technological savvy and innovation in their legal providers, that line will continue to get fuzzy.
In fact, this year’s index actually featured several international law firms among its mentions. Of course, those legal giants are not considered ALSPs by any means, however, clients and legal buyers did recognize them for their legal innovation. Of those firms, Allen & Overy, Clifford Chance, and Baker McKenzie stood out the most for innovation this year, even though they still remain some distance from the Top 10.
“Each year, more clients are recognizing one or more of their law firms as innovative, for a range of different adaptations of the traditional operating model,” Hart Shepherd said. “At the same time, the ALSPs are broadening their offerings and moving up the food chain in terms of work value and breadth of services. While most clients still see traditional firms in a different space than the ALSPs, the lines are becoming increasingly blurred.”
While the Acritas Global ALSP Brand Index represents the collective global view, the holders of the top ranks vary considerably around the world — much like the picture in the traditional law firm brand index. For example, Thomson Reuters takes the lead in the U.S., followed by Axiom, while the Big Four legal brands are clearly held back by regulatory constraints. However, the Big Four take the top four ranks in the U.K. and Europe, led by PwC, while in the Asia-Pacific region it is EY Law that takes the lead.