KPMG Seeks Arizona Approval for Alternative Legal Business Model

Obtaining the license would permit a KPMG subsidiary to provide legal work. KPMG is the first of the Big Four to seek Alternative Business Structure status in the U.S.

If approved, KPMG Law US could integrate legal services with its existing offerings, challenging Big Law’s traditional dominance.
Arizona’s alternative business structure (ABS) program has paved the way for nonlawyer ownership of law firms, with more than 100 licenses granted.
Industry experts predict other Big Four firms may follow KPMG’s lead, potentially reshaping the U.S. legal market.

KPMG’s U.S. subsidiary is seeking approval from Arizona’s Supreme Court to operate as an alternative business structure (ABS), leveraging a 2020 rule change that permits nonlawyer ownership of law firms, according to ABA Journal.

If approved, KPMG Law US would provide legal services alongside its existing advisory offerings, focusing on areas like contract lifecycle management and legal managed services.
The move could be transformative, allowing KPMG to expand its legal footprint in the U.S., where nonlawyer ownership has long been barred under American Bar Association Rule 5.4.
KPMG Law already offers legal services globally in more than 80 jurisdictions and has more than 3,750 employees.

Why Arizona?

Arizona remains one of the few states to permanently adopt ABS rules, with over 100 entities already approved under the program.

The state’s progressive stance contrasts with the ABA’s more cautious approach, which largely maintains restrictions on nonlawyer ownership.

While KPMG would initially operate only within Arizona, experts believe the firm could use its ABS status to serve clients in other states, potentially creating a ripple effect across the U.S. legal market.
"As an Arizona ABS, KPMG Law US would be able to practice law in the United States, subject to legal rules in its various jurisdictions, which is something that no Big Four network firm can currently do," KPMG said in a statement.

This is a significant step, but it’s still just one of 50 states, according to legal experts quoted by Law.com. It’s too early to declare Big Law under threat, but this could be the beginning of something larger, experts said.

"I don't think Big Law is going to be running scared right now because there aren't that many jurisdictions where ABS is allowed and there's going to be regulatory scrutiny, there's going to be challenges," said University of Miami law professor Michele DeStefano.

Implications for Big Law

Observers suggest that KPMG’s move could inspire its Big Four peers—Deloitte, EY, and PwC—to consider similar ventures, further challenging the traditional law firm model.

"I wouldn't be surprised if Deloitte didn't make a move just because they seem to have been sort of significant players at the fringes of the legal marketplace," said retired attorney and legal news blogger Stephen Embry. "I suspect they'll wait and see how the [KPMG] thing plays out."

Balancing Risks and Opportunities

Despite its potential, KPMG’s foray into the legal market is not without challenges. Critics argue that ABS models could erode the independence of legal professionals, while others question whether nonlawyer entities can navigate the complexities of the U.S. legal system.

KPMG has a strong global track record in jurisdictions with ABS models, like the U.K., but replicating that success in the U.S. will require careful integration and strategic focus.

KPMG’s application will be reviewed by Arizona’s Committee on Alternative Business Structures on January 14, with the state Supreme Court having the final say.