That sounds small compared with the 100-plus partners at each of the nation's largest law firms, but they join an overall body of about 500 professional service partners in PwC Australia-wide that permeate ASX 200 boardrooms.

"No law firm around town has that kind of penetration in the local market," said Mr Pistilli.

"We just saw the story as compelling. If you have the right individuals and have the brand – PwC – you won't be asked questions anywhere in the world."

Mr Pistilli and Mr Simmons have chased the tumultuous market for the past decade, switching from their own corporate boutique Chang, Pistilli & Simmons to found the Australian arm of Clifford Chance in mid 2011, when UK and US firms started flooding the local market.

Now, they are backing the Big Four - in particular PwC - to deliver clients' needs.

The ability to offer accounting, tax, legal, actuarial, employment and technological due diligence and advice and integration services cuts the risk of anything "falling through the cracks", Mr Pistilli said.

"I think that's a real selling point, in terms of CEO comfort," he said.

Among the clients that have followed the Clifford Chance crew are Sumitomo Corporation, Servcorp, Bendon and wealth management firm Shaw and Partners. Mr Pistilli said they could now service them "much more broadly".


Raids on staff

Other recent big ticket recruits to the upstart legal arm are banking and finance lawyers Tony Holland and Paul Saward, the latter moving from Herbert Smith Freehills, and workplace relations gun Andrew Farr, who joined PwC's Melbourne office in October. In June, it was another five partners from traditional law firms, including Ashley Poke of Baker & McKenzie and Tiffany Barton of Ashurst.

The remaining Big Four are expanding their pitch for legal services to varying degrees; KPMG similarly looking to corporate legal work beyond the traditional realm of ancillary services such as tax.

The PwC Legal moves highlight the trauma of traditional law firms, as they face raids on staff and clients from an increasingly diverse and hungry set of alternative players – from mid-tiers to boutique start-ups to NewLaw firms. Traditional top tier firms still carry unrivalled clout and prestige – in the corporate law sphere Herbert Smith Freehills, King & Wood Mallesons and Gilbert + Tobin are considered by many to lead the pack – but all are vulnerable to the raids and have been pushed to innovate.

In October, Corrs Chambers Westgarth launched Beagle Asia-Pacific, its joint venture with Canadian technology start-up Beagle which automates contract analysis. Other examples include Minter Ellison's taskflow management tool.

The intense competition and drive to innovate is happening to the backdrop of a stagnant market, according to industry consultants.

"The market, estimated in contestable hours, is at best static, and certainly shrinking in terms of dollars spent," said Beaton Research + Consulting partner George Beaton.

"It's not a cyclical, economic cycle phenomenon. Everybody agrees. It's a permanent structural change and it's worldwide."


Dr Beaton said the 20 largest corporate and commercial firms by size in the country had lost about 400 lawyers in the past few years.

Mr O'Malley said PwC was a beneficiary of the flight of talent triggered by the tumultuous market. Having built up a pool of top tier partners with strong personal brands, it is now looking to build out the broader team.

"It's growing very quickly, but it's not growth for growth's sake," Mr O'Malley said.

"We're trying to move the brand into a space were we've not been before."

PwC Legal has acted on the JB Hi Fi acquisition of The Good Guys and the $450 million initial public offering of Scottish Pacific – deals that, for Mr O'Malley, have been "a bit of a proof point".

It is working on taking ASX listed property company Payce Consolidated private, disposing interests in a major mining project in Queensland, among other confidential M & A deals.

Local strategy remains the same

"This approach is not only working, it's delivering increasingly on complex multi-faceted deals," said Mr O'Malley.


Mr Pistilli, Mr Simmons and their team have been in a holding pattern since leaving Clifford Chance six months ago.

Clifford Chance in Australia is now headed by Diana Chang in Sydney and Paul Vinci in Perth.

Ms Chang said the firm's local strategy had not changed: it will "continue to grow organically and through further hires where they make strategic sense" and "originate a lot of work in Australia, with our focus on ... complex, major transactions including cross-practice and cross-border work".

Mr Pistilli said Australian law firms were run incredibly well, but that "very few people would argue" with the proposition that "accountants are better at running business than lawyers are".

That may well be playing out at rival law firm Minter Ellison, under the helm of accountant and former PwC chief Tony Harrington. This week the firm revealed a nearly $30 million jump in annual revenue to $456 million, recording 23 new partners for the year – its largest intake in more than 20 years.

katie.walsh@fairfaxmedia.com.au