KPMG Advances in Offering Legal Services in Arizona
January 15, 2025, 9:05 AM CST
KPMG US is poised to make history as the first Big Four law firm in the United States. (Photo from Shutterstock)
KPMG US is on the verge of a significant milestone, potentially becoming the first of the Big Four accounting firms to operate as a law firm in the United States. This development comes as the Arizona Supreme Court’s Alternative Business Structures Committee recently endorsed KPMG Law US’s application to provide legal services in Arizona, signaling a major shift in how professional services can be delivered within the legal landscape.
The Committee’s decision, made unanimously, requires KPMG Law US to obtain a license that would enable it to practice law in Arizona. While the Arizona Supreme Court holds the final authority, a determination regarding the application is scheduled for January 28th. Thus far, discussions indicate that the Court may seek additional information before arriving at a final decision, highlighting the cautious approach regulators are taking in this unprecedented scenario.
KPMG’s interest in entering the legal services market is backed by a strategic long-term plan. During the recent hearing, KPMG tax partner Tom Greenaway conveyed that the firm has diligently examined Arizona’s unique legal structure for numerous years. He expressed enthusiasm about the opportunities that lie ahead stating, “We truly believe in providing innovation and fully integrated legal solutions to our clients here in Arizona.” This sentiment underscores KPMG’s commitment to innovating client service in its expansion into the legal field.
Arizona stands out as a pioneer when it comes to alternative structures for legal business operations, having already approved several such entities focusing largely on personal injury law, mass tort law, product liability, and established trust and estate practices. KPMG Law’s planned operations as an alternative business structure are part of a wider trend embraced by Arizona, allowing non-lawyer ownership, which contrasts with many other states that maintain strict prohibitions against similar practices.
Despite currently providing legal services globally across more than 80 jurisdictions with a workforce of over 3,750 employees, KPMG faces challenges domestically where municipal regulations often prevent non-lawyers from owning or managing legal firms. To navigate these complexities, KPMG compliance attorney David Rizzo highlighted that the firm is committed to collaborating closely with licensed attorneys to ensure adherence to professional ethics and regulatory guidelines.
As Rizzo articulated, “My job is to make sure that Arizona lawyers don’t represent themselves as lawyers in other jurisdictions.” This proactive stance emphasizes KPMG’s awareness of and commitment to proper management practices, which are vital in avoiding potential ethical breaches or legal repercussions.
Conclusion
The developments surrounding KPMG’s foray into providing legal services in Arizona could signify a transformative period in both the accounting and legal professions. The decision by the Arizona Supreme Court’s Alternative Business Structures Committee, followed by the anticipated ruling, could pave the way for a more integrated approach to professional services in the U.S. Should KPMG successfully secure its license, it may encourage other firms to explore similar routes, ultimately reshaping the competitive landscape of legal service delivery.
FAQs
What is KPMG’s plan regarding legal services in Arizona?
KPMG aims to establish KPMG Law US as a licensed provider of legal services in Arizona, potentially allowing the firm to operate as a law firm under the state’s alternative business structures.
Why is this development significant?
This could mark the first time a Big Four firm operates as a law firm in the U.S., showcasing a trend where accounting firms expand into legal services, thus blurring traditional professional service boundaries.
What does “alternative business structure” mean?
An alternative business structure permits non-lawyers to hold ownerships or investments in legal service companies, which is not widely accepted in many other U.S. states.
When will the Arizona Supreme Court make its final decision?
The Arizona Supreme Court is expected to make a final decision regarding KPMG Law US’s application on January 28th.
What are the implications for other states?
If successful, this case may encourage other states to reconsider their regulations regarding non-lawyer ownership in legal firms, potentially leading to broader reforms in the legal profession.