AI EARTHQUAKE: BIG FOUR ACCOUNTING FIRM BECOMES A LICENSED LAWYER!
AI enables --- Private Equity Funds
On trendlines I brought to AIC readers last March - HERE.
The flash, official, too significant to ignore.
Accounting giant KPMG (say again an ACCOUNTING FIRM)
has been granted a LAW LICENSE in the state of Arizona!
Repeat, CPA KPMG, the firm, as a firm, becomes A LICENSED LAWYER. Read all about it at Bloomberg Law.
Some details yet to work out as the Arizona Supreme Court has brought a challenge after an Arizona Bar committee approved.
This is a feature of accounting being early adopters of AI into their practices.
Over the year and two, no doubt, greater tools, greater facilities with tools such that accounting will now stand before the law bar!
Accounting would always typically give ancillary legal advice to their tax clients, after all, tax is law.
In the traditional large corporate set up now of yesteryear, companies would have two "wings" representing them -- top F/A (finance and accounting, tax), and big brand white shoe Law firm.
Move over corporate law, for high end tax and accounting clients (read: large Fortune 100), your new lawyer is am accountant — enabled with ai-legal tools.
A TOTAL PARADIGMATIC SHIFT, BUCKLE UP LAWYERS AND ALL —
WE ARE AT THE BEGINNING OF THE BEGINNING!
The Private Equity Story Behind It
Behind this dynamic, in large measure, is the private equity markets and players.
[Private equity gets a bad rap, and comes in for some perjorative treatment especially recently. However private equity is neither good nor bad, or put another way can be both good and bad.]
In the case of law practice, however, private equity is making inroads in ownership and this will change the character of law practice in America and around the world.
Accounting eats legal,
private equity eats accounting,
and, who is driving whom?
It had long been the case historically that only licensed lawyers could own a law practice.
However, recent rule changes in various states open the prospect to non-lawyer ownership of law practices.
Many investors are beginning to enter this backdoor by acquiring accounting firms that obtain licenses to practice law.
This trend will change much.
As of last year, 32 states in the U.S. allowed for alternative business structures (ABS) and nonlawyer ownership of law firms.
Five of these states are among the top ten GDP states in the nation.
This regulatory shift has opened the door for private equity firms to invest in legal services indirectly through purchase of accounting which also does legal.
Since 2021, five of the nation's 25 largest accounting firms have received significant investments from private equity sponsors.
As more states allow nonlawyer ownership of law firms, accounting firms backed by private equity will continue expand into legal services, and perhaps this is the plan.
SOTA (state-of-the-art) ai legal software allows accounting professionals, already adjacently expert in the law of tax and more, to competently deliver legal — restructure their cpa firms into multi-disciplinary practices.
The line between law and accounting is blurred, and accounting is in the far lead.
This is what we see with the breaking Arizona news on KPMG becoming “a licensed lawyer” in Arizona, and no doubt more states on the radar.
LIKE I HAVE SAID, THE PRACTICE OF LAW IS IN A STATE OF INHERRENT TRANSFORMATION AND LAWYERS MUST MORPH OR DIE — AI IS BOTH THE EXIT DOOR FROM THIS MADNESS AND THE ACCELERATOR TO CREATE WHOLLY NEW LAW.
