The Big Four is Entering Law: Arizona Supreme Court Allows the First Big Four Accounting Firm, KPMG, to Own and Operate a Law Firm
Samantha Richmond
KPMG has gained approval from the Arizona Supreme Court to practice law in Arizona, making it the first Big Four accounting, tax, and consulting company set to operate a law firm in the US.[1] This ruling will certainly change the market for legal services. With lower barriers to entry, will more accounting firms be encouraged to join the legal market? Will these accounting company owned law firms steal the business of existing firm attorneys specializing in tax matters? Will other states follow suit by allowing non-lawyers to own law firms? While the exact implications of the Court’s decision remain uncertain, it is certain that there will be a new, powerful entrant in the market for legal services.
Pursuant to Rule 5.4 of the Model Rules of Professional Conduct, most states prohibit non-lawyers from owning law firms.[2] However, in 2020 the Arizona Supreme Court unanimously voted to eliminate its ethics rule barring non-lawyers from having an economic interest in a law firm or participating in fee sharing.[3] This decision opened up vast opportunity for new entrants, like KPMG, in the legal market.
Following a recommendation by the Committee on Alternative Business Structures for the licensure of KPMG Law US, on February 27, 2025 the Arizona Supreme Court granted KPMG a license to operate KPMG Law US as a so-called Alternative Business Structure.[4] The Court order states that the law firm will not perform legal services for clients for which KPMG LLP or other KPMG member firms conduct financial statement audits or attestations, likely to avoid conflicts of interest.[5]
According to a press release by KPMG, “KPMG Law US will operate as a subsidiary of KPMG and will combine the technology capabilities of its parent company with legal services to address the needs of legal departments”. Furthermore, Stuart Bedford, KPMG’s global head of legal services, has said that KPMG’s tech capabilities, scale, and pricing structure give it an advantage over traditional law firms.[6]
Although it will be located in Arizona, KPMG Law US’s Arizona licensed attorneys will be able to work in other jurisdictions by entering into co-counsel relationships with attorneys licensed in other states.[7] Will this arrangement be viewed in compliance with the ethics rules of other states barring non-lawyers from owning law firms? If attorneys working for a non-lawyer-owned firm are already practicing across the country, will more states vote to formally allow non-lawyers to own firms?
KPMG will be the first major accounting firm to own and operate a law firm in the US. It will be interesting to track the impact of their entry into the legal market and the impact on existing law firms as well as other major accounting firms in the U.S.
[1] Justin Henry & Roy Strom, KPMG Wins Approval to Launch First US Law Firm for Big Four, bloomberg law, (Feb. 27, 2025) https://news.bloomberglaw.com/business-and-practice/kpmg-becomes-first-accounting-firm-allowed-to-practice-law-in-us.
[2]Model Coed of Pro. Conduct r. 5.4 (Am. Bar Ass’n 1983).
[3] Lyle Moran, Arizona Approves Nonlawyer Ownership, Nonlawyer Licensees in Access-to-Justice Reforms, ABA Journal, (Aug 28, 2020) https://www.abajournal.com/web/article/arizona-approves-alternative-business-structures-as-part-of-access-to-justice-reforms#google_vignette.
[4] Justin Henry & Roy Strom, KPMG Wins Approval to Launch First US Law Firm for Big Four, bloomberg law, (Feb. 27, 2025)
[5] Alternative Business Structure Application of KPMG Law US, LLC, 2025-43 (Ariz. Feb 27, 2025) (Administrative Order).
[6] See Justin Henry & Roy Strom, KPMG Wins Approval to Launch First US Law Firm for Big Four, bloomberg law, (Feb. 27, 2025).
[7] Erin Mulvaney & Mark Maurer, KPMG Wants to be the First Accounting Giant to Own a U.S. Law Firm. Here’s Why., Wall Street Journal (Jan. 20, 2025) KPMG Wants to Be the First Accounting Giant to Own a U.S. Law Firm. Here’s Why. - WSJ.