Two of the UK’s major accountancy firms are considering applications to become providers of regulated legal services.
KPMG today confirmed it is considering whether to apply for an alternative business structure licence.
Its rival Ernst & Young has confirmed to the Gazette that it is keeping its options ‘under review’ with regard to the Legal Services Act, having flatly denied any interest in ABS status last year.
The interest from accountancy firms comes as their own representative body, the Institute of Chartered Accountants in England and Wales (ICAEW), is awaiting confirmation from the Legal Services Board on its application to be a licensed ABS regulator.
If approved, the ICAEW would have the authority to license organisations and companies that offer regulated legal services.
A spokesman for KPMG confirmed that it has increased its number of non-practising lawyers in recent years, and is looking to appoint a Manchester-based team of four or five corporate lawyers. Three more lawyer vacancies are also available in London.
The firm stressed that it is not looking to go into high street work, but to extend its existing services to meet the demands of clients.
The spokesman added: ‘We have long had non-practising solicitors working with colleagues in the tax practice to provide certain complementary services to our existing tax clients, and we continue to recruit in this area.
‘We are considering whether to apply for an ABS licence, as this would allow us to extend these services in certain limited areas.’
When the Gazette approached Ernst & Young last year about a move into ABSs, the firm said there were ‘no plans’.
Now, however, it appears to be keeping its options open, with a spokesman saying: ‘A number of EY offices in Europe have had legal services capabilities for a number of years, this is not a service that is currently provided by the UK firm.
‘We are aware of the changes to the Legal Services Act in the UK and always keep these things under review.’
The legal profession has warned against allowing the ICAEW to regulate ABSs.
The Law Society wrote to the LSB in May with ‘significant concerns’ about the ICAEW’s ability to separate its representative and regulatory functions – a key aspect of the Legal Services Act.
The ICAEW said it has taken steps to ensure the public interest will always supersede professional self-interest. In a letter sent in June to the LSB, it said the primacy of public interest was ‘built into the DNA of the accounting profession for over a century’.
The LSB is set to decide whether to approve the ICAEW’s application by 14 December this year.