KLegal's KPMG split promises headache

KLegal now faces the prospect of disruption and expense as it moves to disentangle itself from big four accounting parent KPMG.

KLegal and McGrigor Donald announced two weeks ago that they were negotiating changes that will make them "completely independent" of KPMG.

In order to achieve this, KLegal will have to make considerable administrative and structural changes.
KLegal's benefits and payroll system is currently administered by KPMG. The accountancy firm also provides other support services such as marketing and public relations.

A key issues is IT: KLegal is understood to be on KPMG's IT platform, although Scottish firm McGrigors is not.

Separating the IT systems was a complicated and costly exercise for the law firms that survived the collapse of Andersen Legal, which included McGrigors' Scottish arch-rival Dundas & Wilson.

A further issue is KLegal's Dorset Rise offices, which are owned by KPMG. According to a source close to the firm, the current terms under which KLegal rents the office are "if not heavily discounted, then certainly beneficial".

KLegal sources say the law firm will probably remain in the Dorset Rise building, but will have to renegotiate and formalise the terms of its lease.

On the plus side, although KLegal has an overdraft underwritten by KPMG, it is understood that the level of debt is relatively insignificant.
KLegal declined to comment.