Big 4 Firms as Legal Service Providers: Implications for Audit Practice and Future Research Directions

Author:

Brewster Billy E.1,Grenier Jonathan H.2ORCID,Herda David N.3ORCID,Marshall Mary E.3ORCID

Affiliation:

1. Texas State University

2. Miami University

3. Louisiana Tech University

Abstract

SYNOPSIS The Big 4 accounting firms have expanded their legal service arms to historic proportions over the last decade, employing thousands of lawyers around the world. Although most of the Big 4's revenue from legal services is presently generated outside the U.S., they are now making inroads into the U.S. legal market, and rule changes are being considered that would further allow the Big 4 to offer legal services in the U.S. This essay summarizes the current status of Big 4 firms as legal service providers, discusses potential implications of legal offerings for their U.S. audit practices, and suggests directions for future research. Our proposed research questions are informed by several literatures, interviews with former Big 4 partners and practicing attorneys, and a survey of the general public. They center on the fundamental difference between audit and law practices, brand equity considerations, and culture changes within the Big 4.

Publisher

American Accounting Association

Subject

Accounting

Reference127 articles.

1. Aaker, D. A. 1991. Managing Brand Equity. New York, NY: The Free Press.

2. Aaker, D. A. 1996. Measuring brand Equity across products and markets. California Management Review38 ( 3): 102– 120. https://doi.org/10.2307/41165845

3. Abbott, A. 1988. The System of Professions: An Essay on the Division of Expert Labor. Chicago, IL: University of Chicago Press.

4. Abraham, V. M. 2018. Fending off incursions by the Big Four into the legal industry. Practice Innovations19 ( 2): 8– 10.

5. Accounting Today 2019. The 2019 Top 100 Firms. Available at: https://www.accountingtoday.com/data/top-accounting-firms

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