big 4 vs. law firm comparison from an industry perspective

Big 4 vs. Law Firm Comparison
from an Industry Perspective

It’s tough to make generalizations about strengths and weaknesses of Big 4 vs. law firms, so rather than do that I will try to provide examples.

  • Be more responsive.  We had the luxury of getting near-instant calls back from partners at law firms, and very rapid responses to emails.  Some of these law firms were long-established with the company.  Others we had never done work with before.  But they were all incredibly attentive.  Even if the emails just acknowledged receipt and said they would get back to us ASAP, the response told us they were on the case.  We had similar experiences with the foreign offices of the Big-4 firms.  Big-4 firms in the U.S. sometimes took days to respond, did not demonstrate urgency, and sometimes things fell through the cracks where no one responded.  Based on my years in public accounting, I was imagining that there was so much administrative work going on in the office, that client work had fallen to the wayside.
    • Much of this responsiveness was due to our company brand.  But U.S. accounting firms were always the exception.
  • Provide substantive answers.  Foreign big-4 offices and law firms everywhere provide substantive answers.  U.S. accounting firms focus on the theoretical.  The responses may have been initial thoughts, or informal advice, but the goal of the law firm was always to provide an answer.  And it almost always came from the lead client service team.  Occasionally we had to loop someone else in, but that was the exception.  I rarely heard a law firm partner say “I need to run this by someone.”  Dealing with Big-4 foreign offices was similar to this too - the lead engagement contact provided substantive answers.
  • Risk management is a limitation.  When we meet with our lawyers, they sit across the table and provide answers.  There is no four eyes review, no confirmations with national office on 90% of the advice.  If they need to collaborate, they give some initial views and then collaborate on the tough issues.  The U.S. big-4 firms seem incredibly hampered by risk management to the point where even a simple e-mail answer to a question takes days.  A law firm will provide an answer in hours.  You figure out who we use.
  • Win with accounting.  We had an audit of a new entity in Thailand.  The tax authorities had a hard time understanding our transfer pricing and cost-plus calculations.  The large, multi-national law firm that we had handle the issue stumbled repeatedly over the accounting issues, and failed to appreciate the need to be very specific about intercompany transaction facts when responding to the tax authorities.  We had no doubt a Big-4 firm would have handled this far better.
  • Start with a call, work up to a memo.  My discussions with law firms were often on the phone, with nothing put in writing.  Big 4 firms were more inclined to send an email, or want to write a memo.  There’s good and bad in this.  Some companies want everything confirmed in an email or memo.  That wasn’t our culture.  In one case, a Big-4 Japan office prepared a multi-page memo to respond to an email question.  We hadn’t asked for a memo, an e-mail or phone call would have been much more appropriate.  Start small, work your way bigger.
  • Practical solutions.  Samples and templates.  Walk me though calculations.  Highlight the theory, but move quickly into the practical.
  • Advice, not projects.
  • Personal relationships.  We don’t have a relationship with EY India, DT India, PwC China, PwC Japan, PwC Canada, Baker McKenzie, PwC US, etc.  We have a relationship with specific partners in all of those entities.  We like those partners very much.  In cases where the partner has left a firm, we have followed the partner to the new firm.  In other cases, we have requested the partner be swapped out, because we didn’t like the partner.  
  • Teamwork is overrated.  With the exception of our tax return, very few of our issues require a team approach.  The fewer people involved, the better.  See above re: personal relationships.
  • Bililng surprises are disasterous.  Deloitte India presented an invoice 2 years late.  We took our work elsewhere.  Monthly billing with detailed invoices should be the rule, not the exception.
  • Roadshows need to be focused.  Don’t ever present a slide deck at a roadshow.  Tell me how the changes impact me.  Don’t tell an internet company about manufacturing incentives.  And don’t ever start flipping through slides.
  • Discount your work.  Don’t tell me that a project is $15,000.  Tell me that it’s $20,000 with a 25% discount, or $15,000. It's easier to sell internally.

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