A recent order posted by the Arizona Supreme Court shows that KPMG won conditional approval to operate as an Arizona ABS, but the high court put a restriction on the application, determining that the firm cannot perform legal services for clients for which KPMG or its member firms conduct financial statement audits or attestations.
The state Supreme Court approved KPMG’s application to operate a nonlawyer-owned law firm after one of its own committees previously had unanimously recommended licensure.
KPMG, which is a U.S. audit, tax and advisory firm, says the approval will enable it to run KPMG Law US in Arizona to service Arizona legal clients.
The firm called the approval a “milestone,” saying it will mark the first law firm owned by a Big Four firm to serve legal clients in the U.S. market.
“KPMG is uniquely positioned to transform the delivery of legal services,” KPMG Tax LLP Vice Chair Rema Serafi said in a statement. “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.”
The firm, in a news release, said that 100 clients are already being served in Arizona, and that its in-state presence will enable KPMG Law US to operate as an independently managed subsidiary of KPMG and will maintain a strategic alignment with the KPMG Tax practice.
“This approach combines innovation with the longstanding KPMG commitment to quality, ethics, independence, and professional standards, so clients may benefit from comprehensive, integrated, professional services,” the news release states.
KPMG says that the legal services market is experiencing “rapid growth and transformation,” and that many businesses are looking to transform their legal operations to gain a competitive advantage.
“KPMG Law US combines the technological capabilities of KPMG 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,” the news release states.
The firm said that it plans to deliver technology-enabled legal services powered by artificial intelligence, and that the new law firm will collaborate with KPMG’s global network of law firms already operating in more than 80 jurisdictions.
KPMG said its legal subsidiary will provide a suite of legal managed services, legal operations consulting and advanced legal technology innovation for clients.
This approval was significant because none of the other three Big Four accounting firms had yet expressed interest in operating as an ABS law firm in Arizona, which in 2021 eliminated the prohibition on nonlawyer law firm ownership.
While licensees are technically only able to service in-state clients, co-counsel relationships and other methods for collaboration may enable Arizona ABS firms to provide legal services nationwide.
Another accounting firm, Atlanta-based Aprio, recently announced a merger with another Arizona ABS boutique law firm, Radix Law, to offer alternative legal services in Arizona, and possibly beyond.
As part of KPMG’s license approval, the state Supreme Court said the law firm would have to conduct semiannual audits to review internal firm policies and procedures to ensure compliance with the rules and regulations of the ABS license.
The original version of this story was published on The American Lawyer
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