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Deloitte Buys Tech-Driven Law Firm, Doubles U.K. Legal Line-Up

Nov. 3, 2020, 3:27 PM

Deloitte said Tuesday that it had doubled the size of its U.K. legal practice with the acquisition of a tech-savvy firm, the latest move by a Big Four accounting firm to expand into law.

Deloitte said it is buying Kemp Little, adding 85 lawyers to bring its U.K. total to more than 170. The deal will add 29 partners to the legal division, which currently has just eight.

“Growing legal is a strategic priority for Deloitte globally,” Michael Castle, managing partner of Deloitte’s U.K. legal business, said in a phone interview. He stressed that the firm regarded legal services as a core offering for clients, not an add-on service.

The announcement marks the latest effort by Deloitte and its Big Four rivals—KPMG, EY, and PwC—to move onto the turf of the big law firms. The accounting giants see an opening, aided by technology that makes possible the automation of many legal tasks, even as the coronavirus pandemic increases the pressure on corporations to cut legal budgets.

Kemp Little was founded 23 years ago and had 2019 revenues of 16.5 million pounds ($21.5 million). The firm has developed its own legal technology products, covering areas including intellectual property protection and contract analysis, Andrew Joint, Kemp Little’s managing partner, said by phone.

These could be used by Deloitte to help offer clients a one-stop service, Castle said, with the firm able to handle the legal side on top of its existing consulting and tax services. “Kemp Little specializes in areas such as employment and digital media, where Deloitte is already the market leader,” he said. “So it builds up our presence in these areas as well as bringing its own technology to Deloitte.”

Deloitte employs 2,500 lawyers globally. Castle said it would continue to look for acquisitions—including in the U.S., if restrictions on law firm ownership there were eased. “We can become a major player in legal,” Castle said.

Deloitte entered the legal market in 2018, when it adopted an alternative business structure allowing it to offer legal advisory services. Castle said that it was on the lookout for more legal acquisitions and was open to the idea of entering new areas of professional services if clients demanded it. He declined to disclose Deloitte’s legal revenue.

Other Big Four firms have also been buying technology-led law firms to boost their legal arms. Ernst & Young has bought two legal firms in recent years, for example: the legal outsourcing business, Pangea3, which it bought from the Thomson Reuters Corp. in 2019, and Riverview, a small technology-led firm in the U.K. EY bought in 2018.

To contact the reporter on this story: Michael Kapoor in London at mkapoor@correspondent.bloomberglaw.com

To contact the editors responsible for this story: Jeff Harrington at jharrington@bloombergtax.com; David Jolly at djolly@bloombergindustry.com

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