Canada is Deloittes' next target

Philip Hoult reports. Big Six accountancy firm Deloitte & Touche is set to add Canada to its global network of law firms but is still publicly insisting that it has no intention of moving into the UK legal market.

The firm has hired Ian Tod, ex-managing partner of Toronto firm Torkin Manes, reportedly to carry out a feasibility study into setting up an associated practice in Toronto.

If Deloittes does open in Toronto, it will be the second Big Six firm, after Ernst & Young (E&Y), to develop a Canadian legal capacity.

E&Y's law firm Donahue & Associates opened in Toronto in January last year and has grown rapidly to 25 lawyers.

Currently, Law Society of Canada rules prevent lawyers sharing fee income with accountants, but it has a committee looking at the issue of multidisciplinary practices.

Meanwhile Deloittes' UK arm has insisted that it has no “current” intention to set up its own UK legal practice or merge with a UK law firm.

But one insider commented: “UK partners are under pressure from European partners to create a UK legal capacity.”

The firm held a meeting for European partners in May at which all partners were given a presentation on its presence in the European legal market.

Deloittes has been anxious not to alienate its law firm clients, of which it has more than any other Big Six firm. But many of these clients were serviced through highly regarded head of professional practices William Barnes who left Deloittes in April.

Barnes, who is working on a six-month project for surveyors Jones Lang Wootton, denied that the firm was changing its policy when The Lawyer revealed his departure last November.

Deloittes partner and national communications director George Westrop said last week: “Deloitte & Touche's position on merging or not in the UK with a law firm remains as it has been for a number of years. It is not our current intention to do so.”

He said he was not aware of any pressure from his European partners.

In the US an alarm has been sounded by Price Waterhouse's director of law firm services Lisa Smith. An adviser on law firm strategy, she is joining the Washington DC office of management consultancy Hildebrandt. She told The Lawyer she was moving because of a “growing conflict” as accountancy firms in the US increasingly competed for legal and tax work. In March last year, Price Waterhouse forged an alliance with Washington niche tax law firm Miller & Chevalier. “Law firms feel that the accountancy firms are becoming competitors,” Smith said.