 KPMG announced on Nov. 7 in London that it will stop providing full-scope legal services, and that its associated legal network KLegal International is to be discontinued. Remember all the hand-wringing that was going on a few years ago that accounting firm MDPs would take over the legal profession, and that accounting firms would start buying law firms or putting them out of business?
My, how things have changed.
KLegal International was a global association of law firms that worked in cooperation with KPMG’s network of member firms, but not any more. KLegal International operated with more than 3,000 lawyers in 60 countries around the world. The aim now is apparently to jettison all of them, but call them "best friends" of KPMG.
Member firms of the KLegal International network are now discussing the formation of a new legal grouping that will be completely independent of KPMG, and which will work with KPMG member firms on a non-exclusive basis.
The cause of the shutdown of the legal arm is the U.S. Sarbanes-Oxley Act, which restricts the provision of non-audit services to audit clients, particularly legal services. As a result, the KLegal brand will be discontinued. However, KPMG member firms will continue to employ lawyers in parts of their practices, particularly in support of forensic and tax services.
Mike Rake, Chairman of KPMG International, said, "While we have been very proud of the strength and depth of KLegal's capability, the new environment means that a different approach to legal services is required. This new approach will help KPMG member firms meet marketplace needs, and allow our member firms to focus their resources on expanding their audit, tax and advisory services. It will also allow the full scope legal practices within KLegal to operate without restriction in the marketplace."
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