Posted by John Martini.
On February 27, 2025, KPMG won a ruling in the Arizona Supreme Court granting them a license to operate a law firm within the state of Arizona. The decision was granted with the condition that KPMG doesn’t sell legal services to any of the firm’s audit clients. The firm is also prohibited from providing legal advice to clients outside of Arizona and will be reliant on co-counseling and referral relationships in order to service its clients outside of the state.
Within Arizona, KPMG will be able to wholly own a law firm subsidiary, making it the first Big Four firm to operate any such subsidiary, as it has previously been against both the law and business norms in most states for a law firm to be operated in a traditional corporate structure and owned by outside parties, who historically have been effectively barred from owning percentages of firms. However, outside the U.S., in countries such as the UK and Australia, Big Four firms have been engaged in providing legal services for some time.
KPMG Law will likely be focused on complementing its existing accounting and consulting services, as well as more economically complementing its in-house legal needs. It is perhaps because of this potential business synergy that KPMG’s Vice Chair for Tax, Rema Sefari, has said, “KPMG Law US is uniquely positioned to transform the delivery of legal services.”
My personal opinion is that this move paves the path for the legalization and normalization of outside ownership of law firms and the eventual death of perhaps our nation’s most prestigious profession. Though I did for some time believe that non-law firms would eventually find their way into the industry, I also previously believed it would be private equity firms spearheading this tragedy. While I personally have never had any aspiration to enter the legal profession, I now pity anyone who must enter it in these dark times. I do expect that if these events result in the trend which I fear, this country will soon see a significant cheapening of legal services, as well as their eventual outsourcing to developing economies, and with this, a corresponding drop in quality, as well as this nation’s capacity for intelligent lawmaking and legal interpretation.
John is a finance major at the Stillman School of Business, Seton Hall University, Class of 2027.
Link: https://chatgpt.com/c/67c35dc1-0aa8-800d-b418-dfc3a8e9d4ca