Deloitte Not Ready to Practice Law in U.S., Tax Unit Chief Says

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Deloitte is downplaying the possibility of using state changes in legal service ownership rules to more aggressively compete against Big Law in the U.S.

“We are monitoring these developments,” said Steve Kimble, U.S-based CEO of Deloitte Tax, in a recent interview. “At this point in time, though, we just don’t believe it’s practical to enter the practice of law.”

The comments dampen speculation by industry observers that ownership changes states are adopting will entice Deloitte and others in the Big Four—KPMG, PwC, and EY—to tap into the largest global legal market they’ve up until now been forbidden from entering.

Arizona, Utah, and California are among the states making rules changes that ease the path for non-lawyers to co-own law firms and other legal service operations. But while Deloitte is watching the developments, it’s too soon to consider the option viable, Kimble said.

“It’s extremely complicated for a variety of reasons,” he said. For instance, the various rules in different states would make trying to open a type of law firm in the U.S. a nonstarter, Kimble said.

He also noted that practicing law in the U.S. could create conflicts with other parts of Deloitte’s business, which includes tax and audit services.

“We serve clients that operate and need assistance in all states, in all countries,” Kimble said. “We just don’t view it as practical.”

The better option for Deloitte now is to focus on its recent campaign to sell legal business services tools to corporate counsel offices, he said.

In July of last year, Deloitte unveiled its new U.S. legal business services practice, which involves consulting with in-house legal departments to streamline their contract formation and review processes, as well as functions that track client invoices and eDiscovery.

The move has increased competition with some technology-forward U.S. law firms, which often bid to work on the same projects.

EY quickly followed suit with its own legal services business push in the U.S.

VIDEO: The Big Four accounting firms employ enough lawyers to rank among the largest law firms by headcount. As Bloomberg Law’s Sam Skolnik explains in this video, for law firms “there’s real reason to be concerned about the rise of the Big Four in the legal space.”

Neither Kimble nor Deloitte Global Tax & Legal Leader Philip Mills, who was also interviewed, would discuss how Deloitte’s new project is faring, including revenues it has earned since the program was unveiled, or how many new corporate clients they’ve enlisted.

Mills and Kimble touted Deloitte’s ongoing alliances with the workplace law firm Epstein Becker Green, and with the immigration law firm Berry Appleman & Leiden. The partnerships have allowed Deloitte to “serve our clients in a more comprehensive manner,” Kimble said.

According to Deloitte and EBG, their alliance—which has involved both entities referring clients to each other, and also bidding jointly on new international projects—has succeeded, aided by a growing need for employment and labor legal services spurred by the pandemic. Kimble added Deloitte is open to similar such arrangements but had no announcements to make.

Mills said the key is that Deloitte’s clients benefit from the arrangements. “In those markets where we can’t provide legal services, it was quite a natural evolution for us to develop these alliance relationships,” he said.

In the more than 80 countries where Deloitte currently practices law, Mills said employment is among the fastest-growing legal areas, as is intellectual property and patents, practices involving technology and digital issues, and mergers and acquisitions.

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