In many movies (and on The Simpsons), the high-priced lawyers are the scary ones. Turns out, there’s something that scares even Big Law.
It’s Big Accounting.
KPMG has requested permission to offer legal services in Arizona, the Wall Street Journal reported. If it wins approval, it would become the first Big Four firm to practice law in the US. And the legal profession is nervous about the new competition. As Bloomberg Law columnist Roy Strom pointed out, KPMG’s revenue is more than five times that of the world’s largest law firm, Kirkland & Ellis.
“The Big Four are at the door,” he wrote. “And whether they say it or not, they are coming for Big Law.”
Most US states only allow attorneys to own law firms. But in 2021, Arizona began allowing some non-lawyers to own firms under a program intended to increase access to legal services. To date, the state has permitted 114 entities to do so.
KPMG’s application was approved by the Committee on Alternative Business Structures. It’s now gone to the Arizona Supreme Court, which will rule on it on January 28. KPMG believes it will be able to use “co-counsel relationships” to offer legal services to clients outside Arizona, the Wall Street Journal wrote.
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Big Law’s fears of a Big Accounting takeover may be overblown. KPMG already practices law in the UK, for instance, as do the other three Big Four firms, and the law profession hasn’t suffered noticeably there. The Big Four have “thousands of lawyers” in the UK, Corinne Staves, a partner at British law firm CM Murray, told Bloomberg Law, “but they are not threatening or diminishing UK law firms significantly.”
Also, KPMG has said it won’t go after the same big-ticket work that the major law firms do. Instead, it’ll concentrate on work it can do existing client's in-house attorneys, Christian Athanasoulas, a leader of KPMG’s US tax practice, told Reuters. KPMG is “not intending to focus…on any sort of bet-the-company matters,” but rather on “places where our clients have told us that they are struggling, and that’s largely around large-scale, process-related legal tasks.” Those tasks might include integrating legal contracts after mergers, for instance.
“This is a natural extension of what they’ve been trying to do for the past decade or more,” David Wilkins, director of the Center on the Legal Profession at Harvard Law School, told Bloomberg Law. “They went from trying to be like law firms but bigger to pushing a multidisciplinary model that is tech-enabled.”