KPMG: Big Four player poses new threat to law firms
KPMG is growing its legal arm beyond tax, threatening to become a major player in the legal services market.
Speaking to Lawyers Weekly, Jeremy Geale, the head of KPMG’s tax controversy team, said the Big Four firm is boosting the range of legal services it will offer its extensive list of existing clients.
“The firm is very focused on growth,” Mr Geale said. “KPMG today is not an accounting firm, we are a professional services firm.”
KPMG Legal initially will focus on developing its corporate, employment and property practices. It also plans to pick up offshore work via referrals from its European practices and from foreign corporates looking to enter the Australian market.
The firm’s growth plans called for an experienced head of legal, Mr Geale said.
Lawyers Weekly exclusively revealed in April David Morris (pictured), the joint head of corporate (Asia Pacific) at DLA Piper, had been recruited by KPMG to lead its legal arm.
Mr Morris said client demand was growing for a full-service professional services firm with a broad legal offering.
“I don’t see that demand reducing in the future,” he said.
Mr Morris added that he expects to recruit lawyers to meet this demand, but would not be drawn on how many partners or lawyers he wanted to bring on board.
In taking the position with KPMG, Mr Morris brought across former DLA senior associate Michelle Monteleone, who now holds the title of special counsel.
This is Mr Morris’ second stint with KPMG. He was a partner in KPMG Legal’s corporate and securities practice from November 1996 to May 2004.
In 2004 Middletons (now K&L Gates) recruited Mr Morris and five other partners after KPMG Legal ceased trading under the banner of the Big Four firm. The decision was a reaction to the Enron scandal in 2001, which placed the audit-independence of accounting firms under scrutiny and resulted in the enactment of US legislation restricting the provision of non-audit services to audit clients.
Mr Morris said he supported the decision at the time, but the firm’s concerns no longer applied in today’s multi-disciplinary practice (MDP) environment, with the MDP model transformed to account for conflict of interest issues.
In October last year, KPMG was awarded an alternative business structure licence by the UK Solicitors’ Regulation Authority, allowing the firm to operate on a MDP basis.
That same month, KPMG in Australia recruited Maddocks partner Angela Wood and two senior lawyers from the national firm’s tax controversy team.
KPMG’s expansion strategy follows a similar push into the legal services market by PwC last year.
In August 2014, former King & Wood Mallesons managing partners Tony O’Malley and Tim Blue joined PwC to build what it termed as a “premium multi-competency legal practice globally”, targeting annual legal services revenue in Australia of more than $100 million.
Mr Morris would not speculate on revenue expectations for KPMG Legal.