KPMG move heralds summer offensive

The legal market has moved up a gear in the past two weeks.

The long-running phoney merger war is about to end after Cameron McKenna confirmed The Lawyer's story that it was forming a European alliance across Europe in the same week that top management consultancy KPMG ended months of speculation by poaching Arnheim Tite & Lewis partners to set up its new legal brand, KLegal (see story page 3).

The defection of partners from PricewaterhouseCoopers subsidiary Arnheim Tite & Lewis is a minor setback for the accountancy giant which aims to become one of the "top five legal firms in the world within the next five years".

Sources suggest that the large-scale departure has left Arnheim Tite & Lewis in disarray. While it is likely to hire more big hitters, rumours that KPMG is about to take over an existing law firm proved to be untrue.

In textbook management consultancy style, KPMG has avoided the inherent problems of taking over an existing law firm by hiring its own partners and setting up its own brand.

KPMG has co-opted lawyers with experience of working with its accountancy rivals, rather than opting for the more difficult and ultimately expensive route of taking over a firm and inheriting all of its weaknesses.

Rival big five accountant Deloitte & Touche is also waiting in the wings, having stated it intends to become a global legal player.

The consultancy world is still waiting for the green light from the Law Society to form full-blown MDPs so that they can begin to cross-sell services to their impressive client base.

Ironically, while UK law firms like Cameron McKenna are re-branding their overseas offices and forming alliances throughout Europe, at home the accountants are about to open a second front.

If UK law firms get too distracted by the rich pickings to be had in new markets, they may find that their domestic business is about to be swept from under them.