KPMG Wants to Open Up its Very Own Law Firm

“The first thing we do, let’s kill all the billable hours.” OK, Shakespeare said “lawyers” instead of “billable hours,” but the latter must have really been adding up at KPMG. And we are not even sure we should ever cite this line by the Bard in the Mangione era, but whatever. 

On Monday, The Wall Street Journal reported that the accounting giant is looking to open up its very first law firm — a slightly unorthodox move that requires taking advantage of a novel Arizona state law. So what’s KPMG up to?

Add It to the Menu

The KPMG sales pitch is pretty simple: It already offers tax and audit services, so why not offer legal work to clients, too? In a field dominated by just four major players — of which KPMG is the smallest by annual revenue — the firm hopes the all-in-one approach helps differentiate it from its peers. Via KPMG Law, the firm plans to offer a wide-range of legal work that goes hand-in-hand with its financial services, such as M&A law and contract reviews.

It’s a strategy it has already employed abroad, where the rules for establishing law firms are a little more lax. Which makes the US market a source of untapped potential:

• KPMG already offers legal services in 80 countries, and last year, Tax and Legal services was its fastest-growing division, growing 10% year-over-year to generate $8.7 billion of the firm’s total $38.4 billion in revenue.
• Breaking into the US — a.k.a., the largest legal market in the world — means taking advantage of an Arizona program in which, unlike in nearly every other state in the nation, non-lawyers are allowed to own a law firm. KPMG Law’s application has already cleared several procedural steps, WSJ reports, and now awaits final approval from the Arizona Supreme Court; KPMG says the Arizona-based team would be able to service clients across the country.

Rest assured, accounting industry experts told WSJ that Deloitte, Ernst & Young, and PricewaterhouseCoopers are likely to follow in KPMG’s tracks if the firm scores regulatory approval.

Legal Trouble: It’s not all cheery headlines for KPMG this week. On Monday, the UK’s Financial Reporting Council, the accounting industry’s watchdog, announced it had opened an investigation into KPMG’s audit work for Entain, the parent company of British gambling brands such as Ladbrokes and Coral. KPMG Law may just have its first case.