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October 1, 2014 12:01 am

KPMG gains legal services licence

By Harriet Agnew, City Correspondent

Author alerts

Reuters

KPMG has received a licence that will formalise its foray into the legal profession, the latest of the big four to take advantage of
legislation aimed at opening up the market for legal services.
The professional services firm has been awarded an Alternative Business Licence by the Solicitors Regulation Authority, which means it
is now licensed to operate on a multidisciplinary practice basis.
The move underscores how the big four professional services firms are expanding beyond their roots in audit into markets such as law
and consulting. It was facilitated by the Legal Services Act 2007, which was designed to make the purchase of legal services more
accessible.
KPMG follows PwC, whose member firm PwC Legal was licensed as an ABS earlier this year. EY said it planned to develop a legal
capability in the UK, subject to regulatory approval, and has made several legal hires at partner level. Deloitte has no plans at present to
apply for an ABS licence.
In the summer the ICAEW, the UK accountancy body, became a regulator and licensing authority for probate and ABS because its
members were keen to offer these services. A spokesperson said: This will open up the marketplace for the consumer, who might want
their accountant to handle legal services too.
KPMG will not compete directly with the magic circle of law firms such as Clifford Chance and Linklaters, said Gary Harley, a partner
at KPMG who is responsible for its expansion in legal services: Were not looking to create an independent, all-service law firm; were
looking to wrap legal services around the things that KPMG already does.
Mr Harley believes KPMG will be able to avoid conflicts of interest with its other lines of business by thinking carefully about which
areas it wraps legal services around. He added: Its not independent and its not all service. If it was independent and all service the
conflict point would be a lot greater.
KPMG has employed non-practising solicitors in its tax and pensions practice for the last decade, primarily providing legal advice on tax
litigation. In recent years the legal team has expanded to cover corporate, commercial, immigration and employment matters.
KPMG employs 50 lawyers and is hiring more with a view to tripling the number in the next few years. Given that its fledgling legal
department is in effect a start-up, we are looking for quite entrepreneurial lawyers who are excited by the prospect of building
something different, said Mr Harley.
Richard Collins, executive director at the Solicitors Regulation Authority, said that KPMGs new structure was exactly the kind of entity

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envisaged when the Legal Services Act was introduced.

He said that entities of this type ought to benefit consumers by providing greater competition and potential reductions in costs by
services being made available in one place.

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