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Business Journals
23-04-2025
- Business
- Business Journals
Big Four firm KPMG launches law division as part of broader industry shift
By submitting your information you are agreeing to our Privacy Policy and User Agreement . A rule change in some states has opened up an avenue for accounting firms that want to diversify their offerings. Some heavyweights are already seizing the opportunity. Accounting firms looking to diversity their offerings to stand out from their competitors have a new target: law firms. A relaxation of rules in some states that allows non-lawyers to have an ownership stake in law firms is opening the door for accounting firms to open their own law firms. Audit and tax-advisory giant KPMG, for example, in February waded into the legal world with its rollout of KPMG Law US. The so-called Big Four firm said the new law firm — based in Arizona — launched with 100 clients and will help the firm deliver a wider array of services to KPMG clients. GET TO KNOW YOUR CITY Find Local Events Near You Connect with a community of local professionals. Explore All Events Rema Serafi, vice chair of tax at KPMG, in a statement earlier this year said the firm is "uniquely positioned" to transform the delivery of legal services. She said KPMG Law will combine artificial intelligence and advanced-technology solutions with legal services. Arizona's state Supreme Court in 2021 struck down rule 5.4, which prohibited non-lawyers from owning or having a partnership with law firms. Following that decision, such partnerships between lawyers and non-lawyers in Arizona can apply for an "alternative business structure license." So far, about 114 businesses have applied for and received the license, according to a report issued earlier this year by the Committee on Alternative Business Structures. In 2024, the Arizona courts issued 51 licenses, more than double the number granted in 2023. Arizona is not the only place where rules over law-firm ownership have changed. Utah; Washington, D.C.; and the United Kingdom have all previously moved to do so, although Arizona has allowed the change on a permeant, ongoing basis. The rule change opened the door for Aprio LLC, a business advisory and accounting firm, to acquire Arizona-based Radix Law to create April Legal LLC, a full-service law firm that will work with other divisions of the company to offer a fuller suite of client services. The deal, announced in February, is expected to close in late spring. Andy Kvesic, managing partner of Radix Law, said the firm's clients are largely high net-worth individuals, many of whom are business owners in need of accounting and other advisory services. In the past, Radix would refer those clients to an outside company. He added the firm had been planning a move like this for years. "We are constantly brainstorming and figuring out ways to improve the system to benefit our clients," Kvesic said. "And it led us to this relationship." Richard Kopelman, CEO of Atlanta-based Aprio, said the firm has been acquiring new service lines since it received a strategic investment from Charlesbank Capital Partner in 2024. Since 2016, it has completed 28 separate business transactions, with nine of those in the past four months. It can now offer clients 55 different capabilities — and it's on the lookout for more. "I would describe it as building the firm of the future," Kopelman said. "And we are going to build a very big, nationally recognized professional services business that will include legal, accounting, financial, wealth, consulting and technology services." Accounting industry grapples with labor, other challenges The expansion of accounting firms into other services comes as the industry faces a number of challenges, including a lack of interest among business-school students to pursue accounting as a profession and hundreds of thousands of certified public accountants dropping out of the workforce. An AICPA report examining the industry's shortage found the average starting salaries for those graduating with a degree in accounting (although not necessarily a CPA) lagged behind every other business-school major, and salary growth did not keep up with inflation. What many people see as a shortage of accountants could actually be a symptom of reduced demand overall for at least some accounting services, as more of the profession's so-called grunt work becomes automated. Last year, consulting firm RGP released research that found 43% of financial decision-makers at companies it surveyed were investing more in end-to-end automated-accounting processes and AI tools, while 31% said they were using consulting talent and 27% said they were using interim staffing solutions. But, Kopelman said, even though both the law and accounting professions are going through a lot of change, their services have never been in higher demand. 'Entrepreneurs want to grow their businesses and want to scale their businesses locally, nationally and globally, and they need a team of experts around them to do that,' he said. Chad Cummings, a CPA, lawyer and owner of joint law and accounting firm Cummings & Cummings Law, said in an email the expansion of accounting firms into legal services is partly because accounting firms frequently encounter legal issues that require coordination with law firms. "By integrating legal services within their corporate structure, accounting firms can provide a seamless experience for clients who require both tax and legal advice, particularly in areas such as mergers and acquisitions, international tax law, estate planning, and regulatory compliance," Cummings said. He said in other countries, accounting firms have long offered legal services. Recent growth in legal and accounting business combinations is a way for firms in the United States to distinguish themselves from their competitors, Cummings said. "The ability to offer legal services allows accounting firms to compete more effectively with traditional law firms and consulting firms that provide adjacent services," Cummings said. "As more states experiment with allowing non-lawyer ownership of law firms, it is likely that additional accounting firms will follow the path of Aprio and KPMG in integrating legal services into their business models." Get more stories like this one in your inbox every day by subscribing to The National Observer newsletter.
Reuters
27-02-2025
- Business
- Reuters
KPMG approved to launch US law firm in first for Big Four
Feb 27 (Reuters) - KPMG won approval from Arizona's Supreme Court on Thursday to launch a law firm in Arizona, making it the first of the Big Four accounting firms to be able to practice law in the United States. KPMG Law US, an independently-managed subsidiary of KPMG, will work with the accounting firm to provide legal and consulting services, the firm said. "KPMG is uniquely positioned to transform the delivery of legal services," Rema Serafi, vice chair of tax at KPMG LLP, said in a statement. Arizona in 2020 became the first U.S. state to scrap rules barring non-lawyers from having an economic interest in law firms, allowing them to have co-ownership with court approval. Most states still allow only lawyers to practice law, own law firms and share legal fees. Supporters of reforming such barriers say they can make legal advice more expensive, hamper innovation in the market and restrict access to justice. Utah introduced limited reforms similar to Arizona's in 2020. But such efforts have stalled in some states, including California, in part over fears of ethical abuses if providers are not fully bound by professional rules that licensed lawyers must obey. KPMG Law US "will be governed by the same high ethical standards that apply to other law firms," a KPMG US spokesperson told Reuters while its Arizona application was under review. Arizona's high court licensed, opens new tab the KPMG subsidiary as an alternative legal business on Thursday after a court committee recommended approval last month. The decision "places Arizona's ABS program in the national and global spotlight as a groundbreaking approach to providing legal services," the court said in a statement. As a condition of approval, KPMG Law US will not be allowed to provide legal services to clients for which KPMG LLP or its network firms perform financial audits. KPMG has said its new law firm unit will provide technology-powered legal services including legal operations consulting, volume contracting and other managed services.
Yahoo
27-02-2025
- Business
- Yahoo
KPMG LLP Launches KPMG Law US, The First Big Four Law Firm Serving The US Market
•First US Big Four law firm delivering integrated technology, scale, and legal solutions•Global reach through established legal practices across more than 80 KPMG network member firms•AI-powered solutions enabling legal teams to focus on strategic priorities New York, New York--(Newsfile Corp. - February 27, 2025) - Today, KPMG LLP, the U.S. audit, tax, and advisory firm, launched KPMG Law US, a subsidiary of KPMG LLP, marking a milestone as the first law firm owned by a Big Four firm to serve the US market. The legal services market is experiencing rapid growth and transformation. Many businesses aim to transform their legal operations to gain a competitive advantage. KPMG Law US combines the technological capabilities of KPMG LLP with legal services to address the evolving needs of legal departments, backed by the firm's trusted legacy of delivering solutions when they matter most. KPMG Law US plans to deliver a focused set of technology-enabled legal services powered by artificial intelligence and KPMG Digital Gateway, building upon the firm's established Legal Business Services practice. The new law firm will collaborate with the KPMG global network of law firms already operating in more than 80 jurisdictions. Together, KPMG Law US and KPMG LLP will provide legal managed services, legal operations consulting, and advanced legal technology innovation, to help clients gain efficiencies and empower their legal teams to concentrate on strategic priorities. "KPMG Law US is uniquely positioned to transform the delivery of legal services," said Rema Serafi, Vice Chair - Tax, KPMG LLP. "By combining cutting-edge artificial intelligence and advanced technology solutions with legal services, we are proud to be a first mover with this capability and to offer the most holistic range of tech-enabled services in the marketplace for our clients' evolving needs." Building on the established presence of KPMG LLP in Arizona, where more than 100 clients are currently being served, KPMG Law US will operate as an independently managed subsidiary of KPMG LLP and maintain strategic alignment with the KPMG LLP Tax practice. This approach combines innovation with the longstanding KPMG LLP commitment to quality, ethics, independence, and professional standards, so clients may benefit from comprehensive, integrated professional services. For more information about KPMG Law US and its services, visit About KPMG LLP KPMG LLP is the U.S. firm of the KPMG global organization of independent professional services firms providing audit, tax and advisory services. The KPMG global organization operates in 142 countries and territories and has more than 275,000 people working in network member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients. KPMG is widely recognized for being a great place to work and build a career. Our people share a sense of purpose in the work we do, and a strong commitment to increasing access to education and opportunity, advancing mental health, and supporting community vitality. Learn more at ### Media ContactErica LeeEricalee3@ Taylor OvalleTovalle@ To view the source version of this press release, please visit Sign in to access your portfolio
