KPMG forges link with top 25 US law practice

KPMG has formed a strategic alliance with US international firm Morrison & Foerster in the first major tie-up between a big five accountancy firm and a US law firm.

The move has taken global accountancy giants by surprise. The link is being viewed by insiders as extremely bold.

The announcement comes three months after KPMG created its own UK law firm KLegal as a prelude to the Law Society's expected approval of multidisciplinary partnerships (MDPs). James Hodgson, partner at KLegal stressed that the link-up was a tax alliance only at the moment. He says: “The tax alliance was the first stage in KPMG providing full legal services in the US, whether using Mo-Fo or other firms. We think this takes us ahead of the game regarding the other big accountancy firms.”

San Francisco-based Morrison & Foerster, known as Mo-Fo, has 700 lawyers in 15 offices worldwide, and is ranked 25 in the US on gross revenue of $274m in 1998. Mo-Fo opened a London office 15 years ago where US and English law are practised.

KPMG is also forming an alliance with Chicago firm Horwood Marcus & Berk Chartered.

Both US firms are part of the SALTNET national state and local tax network.

KPMG has 650 tax experts in 32 US cities. Robert Peters, national partner in charge of KPMG's state and local tax practice, says: “Our job is to ensure KPMG clients receive the benefit of this assembled talent.”

A source within the industry says: “This is very significant and bold on the part of KPMG because it is not easy to do. There were enough problems when two law firms, Clifford Chance and Rogers & Wells, started to set up their merger, let alone an accountancy and a law firm.”

A spokesman for Pricewaterhouse Coopers: “We are looking for a major US firm.”

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