Big 4 Firm KPMG Gains Approval To Practice Law in Arizona

Model Rule 5.4 of the American Bar Association (ABA) prohibits non-lawyers entering into a partnership that involves the practice of law. The idea is to ensure a lawyer is making business decisions in the best interests of their clients without any conflicts of interest.

While each state sets its own legal rules, all had adopted the use of Model Rule 5.4. Arizona's Committee on Alternative Business Structures (ABS), part of the Arizona Court System, was tasked with broadening access to legal services in the state. On January 1, 2021, the Arizona Supreme Court eliminated the state version of Model Rule 5.4.

For the first time in a U.S. state, non-lawyers could partner in a law firm (it was already permitted in the District of Columbia). On February 27, 2025, the face of legal practice in Arizona was likely changed forever with the approval of Big 4 accounting service giant KPMG as a law firm.

Saul Goodman Need Not Worry

KPMG throwing its massive hat into Arizona's legal ring is likely to have a jarring effect on the field. While the repeal of Model Rule 5.4 was over four years ago, KPMG is by far the largest company to take advantage of Arizona's unique situation. KPMG Law US is a wholly-owned subsidiary that will operate as an independent law firm.

Known primarily for accounting services, KPMG is structured much like a large law firm. They offer different but complimentary services under their umbrella. Their foray into the legal world is targeted at complementing large-scale outside and in-house teams with legal work such as post-merger integration or dealing with the ever-changing world of tariffs and financial regulations.

For permission to operate as a law firm in Arizona, KPMG Law US agreed not to perform any legal services for audit clients of KPMG. The Arizona restrictions are broader than those under U.S. securities law.

Brave New World

With a move as seismic and groundbreaking as permitting KPMG Law Inc to operate in Arizona, there are still many unanswered questions to deal with. While corporate mergers between two Arizona companies would be convenient for KPMG Law US, they'll likely have to deal with entities located in other states - states that KPMG Law US isn't permitted to practice law in.

While KPMG Law US has indicated they'll use staffing agencies and relationships with other law firms that use cooperative co-counseling, the added layers may belie their plans of being a self-contained "one-stop shop." Arizona may mark KPMG's first foray into law in the United States, but the firm has already established similar operations in Australia and the United Kingdom.

It seems likely their legal competition will keep tabs on the types of work KPMG Law US is doing and where they're doing it. KPMG may give the fledgling law firm an advantage through its resources, funding, and networking, which can allow them to offer lower rates. There's also the chance one or all of their Big 4 rivals — Ernst & Young, PwC, and Deloitte — may decide to dip their toes in the Arizona legal waters as well.

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