Tech investment gives KPMG the edge over traditional law firms
KPMG’s UK head of legal services Nick Roome tells Legal IT Insider how the application of technology in all its guises is underpinning the dramatic growth of KPMG’s legal services division.
KPMG’s UK legal services division has doubled its headcount in the past 18 months, bringing its total number of lawyers to 130. The firm has recruited from Eversheds Sutherland, Shoosmiths, Norton Rose Fulbright and Clifford Chance and is planning to make additional senior hires in the New Year.
On a global level, KPMG is aiming to almost double its headcount to more than 3,000 lawyers over the next few years, up from its current 1,800. “The strategy is continued investment in key markets,” says Nick Roome, partner and UK head of legal services at KPMG. “We already have strong coverage in Europe. We will also be growing our presence to cover new jurisdictions such as the Far East.”
KPMG’s legal services division typically works with large corporates, private capital, the financial services sector and global markets, Roome explains. “We run an integrated practice that combines legal capabilities with the wider services of KPMG so that it’s a multidisciplinary team working with a client – not just a standalone legal service,” he says. “All our legal services propositions typically leverage a combination of strong levels of integration with wider KPMG capabilities, technology and data enablement, or our growing global footprint, to create a differentiated offering in the market.”
KPMG’s UK legal practice operates across four core groups: business structuring and transactions; tax disputes and investigations; employment and immigration; and new law and global. “Operating in this way allows our lawyers to offer KPMG clients something that they can’t get from a standalone legal services provider and enables a level of business insight and close multi-disciplinary collaboration which is key for addressing client’s complex business issues,” Roome adds.
The structure of KPMG and the multi-disciplinary approach means that the firm can be flexible in how it helps clients with their business needs and this includes technology capabilities, according to Roome.
“We utilise a combination of legal specific technologies, but also wider capabilities that we have as a firm. There are real benefits to working within the KPMG environment as we’re able to leverage the significant technology investments the firm has made and continues to make in other areas and continue to look at its application to the legal sector,” Roome says.
“We have significant and deep relationships with major technology companies such as Microsoft, Google, IBM and Thompson Reuters and we’re able to leverage those relationships, and associated insights when looking at what technologies we bring to market for our clients in the legal space.”
As part of a much larger firm, KPMG is also afforded the ability to speak to clients not just about technology in a generic sense, but with a real understanding of what technology should be chosen, how that technology should be implemented and how to manage the change that is needed to optimise a technology implementation, Roome adds.
“Our colleagues in consulting are experts when it comes to advising on everything from vendor selection to implementation and change management and this is something we’re able to offer clients in the legal sector which a traditional law firm, focused solely on the provision of legal advice, may struggle to do in a meaningful way.
“We think another key differentiator to a traditional law firm is the size of the investment KPMG makes in technology – we invest significantly across our entire business, both in terms of capital and human resources, in amounts that are difficult to match given the scale and coverage of the KPMG business.”
KPMG’s ambitious legal services expansion plans come as other members of the Big Four aggressively ramp up their legal offering. Deloitte was the last of the major multi-service accountancy firms to obtain an alternative business structure (ABS) licence in June 2017, announcing the expansion of its legal services in January this year.
The firm is now building on its employment law, tax litigation, corporate and commercial and immigration capabilities, with technology at the heart of each of these offerings, according to a spokesperson for the firm. Deloitte currently has more than 50 client-facing practising lawyers and more than 125 other fee earners. Both figures are likely to rise in the last few weeks of the year.
EY, meanwhile, caused a stir in August 2018 when it announced the acquisition of Riverview Law to support the continued expansion of its legal managed services division. A month later and PwC announced it had agreed an alliance with US immigration specialist Fragomen in another disruptive law firm collaboration.
As each of the Big Four continue to dramatically build their legal services presence, traditional law firms are increasingly recognising the competitive threat that they, and their technology firepower, represent.
Speaking to Legal IT Insider about 2018 and looking to the year ahead, David Wood, IT Director at Watson Farley & Williams said: “The biggest story of 2018 has to be the amount of investment in legaltech by the Big Four as they look to cut out a bigger piece of the legal pie.”
And in the same article, which featured in the November/December Orange Rag, Shilpa Bhandarkar, head of innovation and efficiency at Linklaters said: “EY’s acquisition of Riverview Law establishes the ambitions of the Big Four in this space beyond a doubt.”
By Amy Carroll