Global link-ups

According to Garrett & Co managing partner Julia Chain, the Arthur Andersen law firm is working towards the new concept of the European law practice. She adds: “The provision of legal services on a European or global basis is the way of the future.”

Many UK solicitors are still in a state of shock after Andersen's entrance into the legal services sector two years ago. There will be further shocks in store as Garretts develops both domestically (it has yet to get its teeth into litigation, for example) and internationally.

The firm is working fast. It already has “very close links” with law firms in 15 other European countries, and the links will get closer. “We are being held back by regulatory constraints,” says Chain.

What Garretts lacks in history, it can make up for in bucks. With a worldwide turnover of US $7 billion, Andersen has cash to spare for its new legal ventures. It can also provide business and a tried and tested approach to setting up an international professional firm.

This approach has separated Andersen from its competitors in accounting, and made it the largest, most successful firm in the world. Following the same logic in the law, it could also become a major legal power.

Of the accountancy firms, Andersen is often regarded as the brash, arrogant, overly American one. Its competitors are starting to consider similar moves into the legal market but most of them still seem somewhat hesitant.

The London office of KPMG knows that its French firm has a close relationship with a law firm but took a week to find out exactly what the relationship is.

In fact, the relationship between KPMG France and Fidal (France's largest law firm) dates back to 1922, when they were a single integrated professional services firm. Officially split by a 1945 ban on multi-disciplinary practices, they continue to work closely together and may rejoin if allowed to.

KPMG in Australia has recently set up KPMG Legal Services. Ernst & Young is taking the same route. Discussing MDPs at a conference last year, Ernst & Young's Melbourne head Colin White said: “It's a question of when, not if.”

As always, some of the most interesting developments come from the small accountancy firms. Morison International is the 30th largest international network of accountancy firms. It targets growing, medium-sized businesses which it often introduces to one another.

Two years ago it set up a law group which now has seven members (including Howard Kennedy in the UK). It plans to recruit members in another 30 countries around the world.

Marketing director Gillian Angel says: “The inclusion of the law group has been very useful from a marketing point of view. We've been able to develop new products and introduce a new perspective. People relate to each other because of their clients.”

She adds: “We don't want to be traditional accountants or lawyers. But accountants and lawyers still have more in common with each other than we would have expected.”

When small and large firms are making similar moves abroad, there are all the signs of new behaviour patterns emerging. Chain believes solicitors should not be frightened that they will be the underdogs.

She says: “Ultimately there may be global services firms covering accounting, tax and legal services, but with none of those areas being pre-eminent.”