Comparing Law and Accounting Firms in Terms of Innovation

In an article by Lawyers Weekly, Campbell Jackson, EY Australia’s national professional services leader, shares his view on law’s growth agenda, comparing it to the accounting profession.

“Innovation to me is doing more with less,” says Jackson. “The challenges come down to revenue growth and competitiveness. The firms have to ask themselves ‘How do we remain relevant? How do we optimize costing structure? How do we deal with disruption? How do we utilize technology and how do we get the best out of it for our workforce?’ “

According to Jackson, there are law firms on both ends of the innovation spectrum. Some are moving forward, but others remain stagnant. What he is most adamant about it is that the firms that do not change will not survive. Firms must shift with their clients’ expectations and in his view, the next five years will be the indicator of which firms have done so.

Jackson commented that accounting firms have shown more willingness to diversify their traditional revenue streams than law firms, but even those who do, have innovated much more conservatively. He suggested that in some cases this may be attributed to the fear of being viewed as a ‘hobbyist’ rather than a ‘specialist’.

“I do have a saying that I think is critical to professional services: fail quickly and fail cheaply. Failing’s okay. Just make sure it’s cheap, and just keep trying because eventually you’ll get it right,” says Jackson.

He offers the traditional, segmented way that most law firms bill as an example of the kind of aversion that law firms show to diversifying their revenue streams. Packaging legal services according to practice areas may have been a useful and effective way to deliver a service offering to clients, but today’s clients expect more holistic attention.

Jackson believes that accounting firms have been more progressive and have “extended the tentacles into other areas by moving from compliance to advisory services.”

He said that law firm partnerships should consider how diversification could introduce new channels of business and the benefit of being able to portray the firm as a ‘one stop shop’.

“If there is client demand, the ability to implement and execute is going to be profitable, which will be a good thing. It makes sense if it is profitable and there is client demand,” says Jackson. “If you don’t innovate, you’re dead in this environment. You’ll go backwards.”