Earlier this month, EY, the mega accounting firm and one of the Big 4 accounting firms, announced plans to spin off into two separate businesses. One business would be devoted exclusively to providing audits to EY clients. The other business would be devoted to providing a variety of consulting services to EY’s business clients. The consulting business will likely be a public company which suggests where EY is putting its future priorities.
The split must be approved by some 10,000 EY global partners, which will take some time. The thought is that this split will eliminate conflicts created by EY’s auditing function. The split will remove obstacles to the consulting and business services EY can provide.
Why is this relevant to a legal?
Why is this relevant to a legal? By spinning off the auditing function and the conflicts it creates, EY will be able to provide sophisticated legally related consulting services to a broader group of business clients. These services include many services that law firms have traditionally provided. Services for which a lawyer is not really needed or needed less and less as the potential of AI and automation increases.
I predicted some time ago that a Big 4 firm might take this step. . And it will place the accounting firms in indirect competition with law firms worldwide and, more particularly, in the US.
I say indirectly because it’s unlikely that an accounting firm will actually “practice law,” at least in the traditional US sense. Trials and pure legal advice are probably not something EY wants to do. But, like other accounting firms, EY views legal problems quite differently than law firms. Accounting firm leaders would tell you there are no legal problems. There are only business problems with legal implications. This