The decision to pursue alliance relationships with established firms represents a stark reversal from just five years ago, when the major consultancies poached senior lawyers from top-tier firms, with a brief to steal market share from established outfits.
Despite big ambitions – PwC declared it wanted to be a top 20 law firm by the end of 2023 – consultancies’ legal offerings have failed to achieve their goals, and drawn scrutiny over legal professional privilege practices.
The legal divisions’ failure to launch has made them a target for cost-cutting, as firms retreat to core offerings in a depressed consulting market.
Mr Travers said KPMG’s new strategy “is focused on playing to our strengths and prioritising investment into areas which align with KPMG’s growth strategy and markets”.
Second restructure
The dissolution of KPMG’s legal division comes one month after the firm announced it would overhaul its consulting business as part of an $80 million cost-cutting exercise likely to result in the loss of about 200 jobs.
The legal restructure is separate to the firm’s plan to reshape itself as a tech-focused consultancy, and job losses will be in addition to those already announced.
In a further sign of the firm’s retreat to core services, the tax controversy practice area will be the only department salvaged from the law firm.
The tax lawyers will be redeployed in the firm’s larger tax division, and KPMG says it will look to grow its offering in the still-profitable practice area.
“We have an ambition to be Australia’s leading firm in tax controversy and disputes,” Mr Travers said.
“We believe focusing on [this area], and extending alliance relationships, will enable clients to better leverage broader capabilities to solve their issues.”