This time it's different: accounting firms renew assault on legal services market

Peter Godfrey
by |
The leaders of the legal practices at KPMG and Deloitte in Australia have both told Australasian Lawyer that their firms are planning to increase their presence in the Australian legal marketplace significantly.

This means they join PricewaterhouseCoopers (PwC) and Ernst & Young, who have already made clear their intentions to make big inroads into the Australian and Asian legal markets.

Ernst & Young has announced its intention to double its Asian legal capacity within the next 12 months.

PwC also said it wanted to double the revenue from its legal practices globally from US$500m to US$1bn. 
Aldrin de Zilva, who heads up Deloitte Lawyers in Australia, said that the firm’s legal practice had been growing steadily over the last five years – from five to 35 lawyers in Australia– and that its aspiration was to double in 'the coming years’.

KPMG’s head of tax law, Jeremy Geale, said that KPMG’s growth forecast would be in line with those of PwC and Ernst & Young but that it was now solely focussed on providing legal services on issues surrounding taxation. “We are not a full service law firm and we don’t intend to become one,” Geale said.

The resurgence of the erstwhile ‘multi-disciplinary practices’, then, is gathering pace, albeit in a different form from the late 1990s phenomenon.

“There is a comeback going on, but this time it’s more tailored,” de Zilva said.  “What happened previously in the Australian market was that the accounting firms tried to take on full-service legal firms and offer a full legal service.”

“That was probably where it fell down – the success wasn’t quite there because not all of the legal services were complementary to the accounting part of the business.”

[Watch out for more on the developments of accounting firms next week in Australasian Lawyer.]

The Big Four accounting firms: Legal capability growing
  • focuses primarily on taxation issues, but also skilled migration
  • has 35 lawyers in Australia, of which 12 are partners
  • has one of the largest tax litigation teams in terms of size and number of cases, and has represented clients in over a dozen separate disputes with the ATO 
  • PwC is currently offering legal services in Sydney, Melbourne, Perth and Brisbane
  • has 30 Australian partners who are entitled to practice as lawyers and about 130 staff with practising certificates
Ernst & Young
  • has 10 partners working in the legal part of its business, supported by approximately 50 lawyers
  • has five partners and executive directors and 13 professional staff
  • is a specialist tax practice offering services across three broad service lines: tax legal advice, tax dispute management, and tax-related legal services
  • Michael on 19/05/2014 11:27:07 AM

    The big 4 need to be careful that they dont risk the accounting base. While it might seem like a good short term revenue boost, the embracing of a MDP carries with the risk that law firms don't refer work to them and consider their own accounting arms that don't focus on high cost / low margin audit work.

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