Why PwC and Deloitte are betting on immigration law
Said one law firm managing partner: "I think they're going to go after everything eventually."
September 24, 2018 at 06:26 PM
4 minute read
The original version of this story was published on The American Lawyer
As they search for ways to expand their legal services business inside the US, there are good reasons for the major accounting firms to focus on immigration law.
Yesterday ( 25 September), PwC became the second Big Four firm in four months to announce an alliance with a US-based immigration law firm, following a similar deal by Deloitte in June. Facilitating global mobility is becoming an increasingly important business offering for these massive companies, and immigration law is a key component.
"There's a lot about the immigration practice that makes sense: the ability to think about efficiencies, technology and high volume," said J. Stephen Poor, chair emeritus of Seyfarth Shaw. "Those are characteristics that play right to the Big Four's strengths."
The alliance between PwC's UK arm and New York-based Fragomen promises clients joint immigration teams featuring professionals from both organisations, while both will continue to grow their independent practices.
From the perspective of PwC and its peers, immigration law – and mobility expertise more generally – is a product they can sell to significant institutions, not just small and medium-sized businesses. And it's more likely than not part of an integrated offering that they're providing to clients on an ongoing basis.
"They are not adverse to doing standalone legal work, but what they're offering is not going in from the general counsel but through the COO, the CFO, through the director of operations," said Jomati Consultants principal Tony Williams, who led Arthur Andersen's legal arm two decades ago after serving as global managing partner of Clifford Chance.
Like other core Big Four practices – tax, for example – immigration law is heavy on process and lends itself to application of technology. Traditional law firms – even immigration specialists – don't necessarily have the same resources to invest. PwC reported $37.7bn (£28.7bn) in gross revenues in 2017. That's more than 10 times what Kirkland & Ellis, the top firm in the Am Law 100, raked in last year.
Specialists like Fragomen, in addition to lacking the deep pockets of the Big Four, also can't match their complementary practices, making an alliance a smart move.
"There are services that the Big Four offer" – global movement of employees, tax, human resources – "that the single-focus immigration firms don't have in their shops," Poor said.
The PwC-Fragomen alliance follows the June tie-up between Deloitte and US immigration firm Berry Appleman & Leiden (BAL), in which Deloitte's UK arm acquired BAL's international offices while allying with its US operations. Deloitte entered a similar alliance in 2014 with Canadian immigration law firm Guberman Garson.
"The Big Four has always been more willing to explore joint ventures, alliances and different structures than Big Law," Poor said.
It's an open question whether KPMG and EY will look to find immigration partners of their own – if they aren't already in the midst of negotiations.
But few expect the accounting firms' aspirations to end with immigration firms. Robert Tannous, managing partner of Columbus, Ohio-based Porter Wright Morris & Arthur, has been watching the Big Four warily for some time. Even though the full-service firm has an immigration practice, its focus on inbound immigration for smaller businesses doesn't necessarily put it in conflict with these heavyweights yet.
"I think they're going to go after everything eventually," he said.
Poor expressed the same sentiment: "The big elephants are continuing to stomp along."
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