KPMG Seeks License to Operate US Law Firm Based in Arizona

Jan. 6, 2025, 9:54 PM UTC

KPMG wants to ramp up its US legal business through an Arizona program that would loosen restrictions on its services.

The Big Four accounting, tax, and consulting firm has asked the Arizona Supreme Court to approve KPMG to operate as an “alternative business structure.” That would pave the way for a subsidiary—KPMG Law US—to practice law across the country.

“Pending approval, this innovation would differentiate KPMG Law US both in the legal and the consulting markets,” a KPMG US spokesperson said in a statement. “KPMG Law US would be able to bring legal capabilities to managed services, such as contract lifecycle management.”

Big Four accounting firms have intermittently been seen as a potential threat to Big Law firms, even though they’ve never competed for complex legal work in the US. Many industry observers have said that could possibly change if the Big Four were able to overcome the barrier to practicing law in the US, the world’s largest and most important legal market.

A committee that makes recommendations to Arizona’s top court is slated on Jan. 14 to review an ABS application filed by KPMG Law US. Arizona, unlike most other states, allows approved entities to provide legal services even if some of their owners are not lawyers.

KPMG and other accounting firms have provided legal-adjacent services to companies in the US, but have been restricted from practicing law or providing legal advice. Most US states’ professional ethics rules limit the practice of law, which has a broad definition, and law firm ownership, to licensed lawyers.

The Arizona ABS program changed that when launched in 2021, creating a unique regulatory regime that allowed legal businesses to have investors or owners beyond lawyers. More than 100 entities have been approved under the program, many of which operate in the realm of consumer or personal injury law.

Similar regulations exist in countries such as the UK and Australia, which have allowed the Big Four to develop broader legal businesses in those jurisdictions.

KMPG delivers legal services globally in more than 80 jurisdictions, and the tax and legal services business was the fastest growing function across the global KPMG network last year. That division grew revenue by 10%, the company said in December.

But the US firm said that the Arizona entity would “complement” the services of traditional law firms. The new venture would target large-scale, process-driven work, such as volume contracting, remediation exercises, M&A-driven harmonization of contracts, and other legal managed services.

KPMG already works with law firms to support legal teams with business services including operations and technology transformation.

“As an Arizona ABS, KPMG Law US would be able to practice law in the United States, subject to legal rules in its various jurisdictions, which is something that no Big Four network firm can currently do,” a KPMG spokesperson said.

To contact the reporters on this story: Roy Strom in Chicago at rstrom@bloombergindustry.com; Amanda Iacone in Washington at aiacone@bloombergtax.com

To contact the editors responsible for this story: Chris Opfer at copfer@bloombergindustry.com; Amelia Gruber Cohn at agrubercohn@bloombergindustry.com

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