KPMG Separates Legal Services, Discussing Formation of New Legal Group
KPMG announced this week that it will stop providing full-scope legal services, and that its associated legal network – KLegal International – is to be discontinued.
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 - where appropriate - on a non-exclusive basis.
The announcement reflects changed market conditions, including the U.S. Sarbanes-Oxley Act – which restrict the provision of non-audit services to audit clients, particularly legal services.
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:
"KPMG’s clear strategy going forward is that its member firms will be multi-disciplinary and provide audit, tax and advisory services, with global consistency in terms of quality and delivery. We will continue to lead the industry in helping to restore public confidence in the accounting profession and the capital markets.
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."
Jean-Louis Paul, Chairman of KLegal International, said:
"KLegal International has built a strong reputation, and now operates with more than 3,000 lawyers in 60 countries around the world. The aim now is for a restructuring which will allow legal practices to become completely independent of KPMG. Our ambition is to create a new federation with a strong position in the international legal market and with a "best friends" relationship with KPMG. This is an exciting development, and I am confident that the new grouping will increase its presence in the international legal market."