The former CEO of Deloitte has warned the accounting industry that law firms are increasingly capable of entering into the taxation space and posing a serious threat to the established dominance of the big four.
Big four put on notice by former Deloitte CEO
Giam Sweigers, current CEO of engineering firm Aurecon and formerly of Deloitte Australia, told AccountantsDaily 's sister publication Lawyers Weekly that although the big four themselves are the masters of expanding their footprint and service offerings, law firms may soon follow suite and expand into the taxation space.
Mr Sweigers indicated that it is not far-fetched to picture a scenario in which law firms dominated all aspects of tax, particularly in the audit space.
“If you think back 35 years ago, very few of the accounting firms had separate, strong tax divisions – the auditors were still doing tax 25 years ago. They started specialising. It's always interesting to mull over a glass to wine and ask ‘What would have happened if the law firms had moved first to play in that space?’
“With so many lawyers in tax group, it shows the service could have been in either of the houses.
“At the end of the day, tax is just the interpretation of law and understanding a few numbers,” Mr Sweigers stated.
With audit firms successfully pushing into the legal space, most notably PwC, who has revealed aspirations of becoming a top 20 global law firm, Mr Sweigers noted that the time is now for law firms to diversify their own service offerings and push into non-legal sectors.
“What they have to do is look at everything they already do and ask ‘Do we have anything that would naturally fit with our brand or the skillset of our people?’”
According to Mr Sweigers, the professional services sector as a whole will continue to face significant disruption, due to the nature of services offered.
“I’m of the view that all professional service firms might find themselves disrupted. A lot of what the professional services firms did in the past is commodity-based services – and anything that’s commodotised can be digitised and automated.”