Big Four accounting firms looking to grab a bigger slice of the legal services pie

Clients will increasingly turn to the Big Four for legal work because of their superior technology capabilities, KPMG’s Stuart Bedford told Bloomberg Law last week.

Bedford, global head of legal services at KPMG, said that the Big Four have the necessary technology stack to handle matters with huge data and multiple contracts – such as harmonizing thousands of legal contracts as part of a post-merger integration.

Law firms are less able to significantly boost their tech capabilities because of their capital structure, Bedford explained. Law firms owe annual profit payouts to their partners, lest they risk losing top earners, while large consultancies are able to reinvest profits into technology.

KPMG US is angling to be the first Big Four firm to launch a legal services venture in the US, with an application currently before the Arizona Supreme Court. The state is experimenting with unique guidelines that would allow non-attorneys to operate law firms.

Big Four expansion wouldn’t eliminate the need for large law firms, but they might displace them in select areas where the accountancies can work more efficiently.

Bedford, formerly a partner at Linklaters, said budget-wise clients could look to reduce their costs by transferring some work from more expensive law firms to the Big Four.

“There is a point where actually what we offer is a better product than is actually offered for that type of work by Big Law,” he said.

For example, Bedford said KPMG recently worked on a large M&A deal where a Big Law firms handled the deal’s closing, while KPMG focused on reorganization issues pertaining to complex tax advice.