KPMG's brash ambition cannot be ignored

KPMG's announcement that it is integrating its European legal network will not immediately strike fear in the hearts of UK law firms. Bringing together so many disparate practices will take a lot of work, and may delay the accountancy firm's goal of merging with a City law firm.

But its decision to follow its big five rivals in the painful process of reorganising means KPMG is priming itself to compete with a full range of "professional services".

Senior figures at the top City law firms remain relaxed about competing with the accountants, and in the short term it may be the beleaguered middle-tier firms that are squeezed further.

But PricewaterhouseCoopers has already boasted that it intends to be one of the five largest global law firms within five years, and firms that powerful do not make empty threats.