Drama down-under—and its implications for the rest of the world

A booming market in which the boundaries between professional services are evaporating faster than a water hole at Oodnadatta*.

That’s today’s Australian consulting market in a nutshell. Our recent report pegged growth in the consulting market at around 5%, but many firms are growing faster than that, especially if they’re tapping into the rich seams of digital transformation and the modernisation of government (investing in the former may allow Australia to lead the world in the latter). Even the original rich seams, the mining and other natural resources companies that historically fuelled the Australian consulting industry, are starting to make a comeback. 

But client demand isn’t the only thing boosting activity: the Australian professional services sector is also at war. In addition to the usual moves between law firms, the Big Four firms have also been stepping—stamping would be more accurate—into the fray. As the Australian Financial Review recently reported, two “former DLA Piper corporate heavyweights” have joined PwC, taking the firm’s broader legal team, the AFR estimates, to around 100 people. And the other Big Four are getting in on the same act.

Two things are driving this. The first is a change in buyer behaviour, with CFOs—with whom the Big Four obviously have very strong relationships—buying more in the way of legal services. This mirrors many other areas of professional services. It’s long been recognised that clients who are looking for support around their international supply chains welcome the fact that the Big Four can combine traditional, operational advice with tax expertise. Similarly, success in digital transformation depends on being able to combine strategic thinking with knowledge of customer design and behaviour, and deep technology skills. In this world, it’s both harder and counterproductive to draw too hard and fast a distinction between different practice areas.

The other important driver is technology. Both law and audit firms face huge pressures to automate work that has been traditionally done by junior staff. Indeed, law firms are arguably ahead of the accountants so can probably teach them a thing or two about what works. Cross-fertilisation between the two sectors will undoubtedly speed up the process of change. But there’s something more important going on here. What’s kept law and accounting firms separate in the past, aside from regulation, is that you need people with different qualifications. Machines don’t need qualifications: Once they’ve been correctly programmed to replicate the work lawyers and auditors do, you’ll need a handful of deep, deep experts to keep their algorithms up to date, but you don’t need to draw a distinction between which computer does what. 

This is why what’s going on in Australia is so important: The more automation we see in the professional services sector, the more we’re likely to see convergence between professional services firms.

*Had the highest temperature ever officially recorded in Australia, in January 1960—a scorching 50.7C (123.3F)
 

For more information on our report, or to speak to us, please contact Nicola Brooks via email or on +44 (0)20 3478 1207.