Law: Partners who sleep with the enemy

It's unthinkable: lawyers and accountants chatting? Next thing they'll be in business together...

IT MIGHT not have struck the casual observer as the most dynamic of gatherings, but when a group of leading City lawyers and accountants sat round a table last week to discuss the way they provide professional services, it was a landmark event.

To put it mildly, the two professions are suspicious of each other. Lawyers view the big five accountancy firms as number-crunching automatons, hell-bent on world domination. For their part, accountants see lawyers as mired in antiquated working practices more relevant to the 19th century than to the 21st.

So what on earth were these high-flyers from the two professions doing, squeezed round a table at the London offices of the US law firm Jones Day Reavis & Pogue? They were discussing the prospects of what, until recently, would have been unthinkable: multi-disciplinary partnerships (MDPs).

For some, MDP are the way of the future: professional services - accountancy, auditing, consultancy and law - all wrapped up in a one-stop shop. But there is just one problem. Professional regulatory bodies in England and overseas generally take a dim view of lawyers forming partnerships with anyone apart from other lawyers. So a debate rages in legal circles around the world, over whether dropping bans on MDPs will allow the Barbarians through the gates, pillaging independence and leaving a trail of conflicts of interest in their wake.

Indeed, international opinions differ. A commission of the American Bar Association should report any day on its view of MDPs. It is expected to be heavily influenced by the US Securities and Exchange Commission, which has said the roles of auditors and lawyers would be incompatible under one roof.

A contrary view has come from Europe, where the European Commission said at the end of April in response to a Law Society of England and Wales consultation paper that MDPs "will promote innovation". In Australia recently, the Law Council of Australia came out relatively in favour of relaxing bans on MDPs, while, in Canada, the Quebec Bar has given qualified support, as long as individual MDPs are controlled by the legal profession.

And back at home, the Law Society of England and Wales has just completed a consultation on whether the ban should be amended or dropped. It is likely that the Society's ruling council will give the go-ahead for MDPs by the end of the year.

Over the last six years, lawyers and accountants have been co-operating and indeed coming close to forming MDPs without in fact crossing the regulatory line.

And at the end of April, KPMG jumped on to the bandwagon, bringing a marketing-department-designed name to the concept in its launch of Klegal. To get into the game, KPMG also created waves by luring six partners from Arnheim Tite & Lewis, the affiliated firm to its rivals PricewaterhouseCoopers.

Ian Barlow, KPMG's head of tax and legal services, is adamant that blended service provision is the way forward for both professions. "There is a significant market wish for disciplines to be combined to provide integrated solutions," he says. "Not all clients will want that to happen; many will still want to manage their professional services separately. But there is a substantial number of clients - both large and small - who will want an integrated solution developed, because doing so will take the heat off them internally."

The big players in the traditional world of independent City law firms tend to be less enthusiastic about the prospects of success for MDPs. At Clifford Chance, the second-biggest law firm in the world, the view is clear. "I don't think there is a place for MDPs," says the firm's Tom Rose. "Our clients want a high- quality service and an MDP could endanger that level of service." However, Terence Kyle, the chief executive at Linklaters & Alliance, says it would not be sensible for law firms to discount the fact that the big five accountants are establishing themselves in the legal market. And they have the resources to to do it.

But for them to be successful presupposes that they will be able to attract successful lawyers. And one of the problems they face in doing that is that accountants' earnings are generally lower than lawyers'. "I don't see them as being able to persuade enough quality lawyers to gel together to form a force that would threaten the top end of the City legal market", he says.

But Christopher Tite, managing partner of Arnheim Tite & Lewis, disagrees. "The sort of work we are doing currently is for companies in the top 200. And our revenue-per-lawyer figure puts us at about 16th in the UK. All of our lawyers come from top-10 City firms and their ability to handle top-end work has been proved."

As is often the case, it appears that market demand for choice will force the hand of regulators around the world.

Arts and Entertainment
books
Arts and Entertainment
The Doctor and the Dalek meet
tvReview: Doctor Who Into the Dalek more than compensated for last week's nonsensical offering
Arts and Entertainment
Star turns: Montacute House
tv
Arts and Entertainment
Iain reacts to his GBBO disaster

TV
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
Arts and Entertainment
Simon Cowell is less than impressed with the Strictly/X Factor scheduling clash

TV
Arts and Entertainment
Gothic revival: artist Dave McKean’s poster for Terror and Wonder: The Gothic Imagination
Exhibition
Arts and Entertainment
Diana Beard has left the Great British Bake Off 2014

TV
Arts and Entertainment
Lisa Kudrow, Courtney Cox and Jennifer Anniston reunite for a mini Friends sketch on Jimmy Kimmel Live

TV
Arts and Entertainment
TVDessert week was full of the usual dramas as 'bingate' ensued
Arts and Entertainment
Clara and the twelfth Doctor embark on their first adventure together
TVThe regulator received six complaints on Saturday night
Arts and Entertainment
Vinyl demand: a factory making the old-style discs
musicManufacturers are struggling to keep up with the resurgence in vinyl
Arts and Entertainment
David Baddiel concedes his show takes its inspiration from the hit US series 'Modern Family'
comedyNew comedy festival out to show that there’s more to Jewish humour than rabbi jokes
Arts and Entertainment
Puff Daddy: One Direction may actually be able to use the outrage to boost their credibility

music
Arts and Entertainment
Suha Arraf’s film ‘Villa Touma’ (left) is set in Ramallah and all the actresses are Palestinian

film
Arts and Entertainment
Madame Vastra and Jenny Flint kiss in Doctor Who episode 'Deep Breath'

TV
Arts and Entertainment
Steve Carell in the poster for new film 'Foxcatcher'
filmExclusive: First look at comic actor in first major serious role
Arts and Entertainment

TV
Arts and Entertainment
Kingston Road in Stockton is being filmed for the second series of Benefits Street
arts + entsFilming for Channel 4 has begun despite local complaints
Arts and Entertainment
Led Zeppelin

music
Arts and Entertainment
Radio presenter Scott Mills will be hitting the Strictly Come Dancing ballroom
TV
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Have you tried new the Independent Digital Edition apps?

ES Rentals

    Independent Dating
    and  

    By clicking 'Search' you
    are agreeing to our
    Terms of Use.

    The other Mugabe who is lining up for the Zimbabwean presidency

    The other Mugabe who is lining up for the Zimbabwean presidency

    Wife of President Robert Mugabe appears to have her sights set on succeeding her husband
    The model of a gadget launch: Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed

    The model for a gadget launch

    Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed
    Alice Roberts: She's done pretty well, for a boffin without a beard

    She's done pretty well, for a boffin without a beard

    Alice Roberts talks about her new book on evolution - and why her early TV work drew flak from (mostly male) colleagues
    Get well soon, Joan Rivers - an inspiration, whether she likes it or not

    Get well soon, Joan Rivers

    She is awful. But she's also wonderful, not in spite of but because of the fact she's forever saying appalling things, argues Ellen E Jones
    Doctor Who Into the Dalek review: A classic sci-fi adventure with all the spectacle of a blockbuster

    A fresh take on an old foe

    Doctor Who Into the Dalek more than compensated for last week's nonsensical offering
    Fashion walks away from the celebrity runway show

    Fashion walks away from the celebrity runway show

    As the collections start, fashion editor Alexander Fury finds video and the internet are proving more attractive
    Meet the stars of TV's Wolf Hall... and it's not the cast of the Tudor trilogy

    Meet the stars of TV's Wolf Hall...

    ... and it's not the cast of the Tudor trilogy
    Weekend at the Asylum: Europe's biggest steampunk convention heads to Lincoln

    Europe's biggest steampunk convention

    Jake Wallis Simons discovers how Victorian ray guns and the martial art of biscuit dunking are precisely what the 21st century needs
    Don't swallow the tripe – a user's guide to weasel words

    Don't swallow the tripe – a user's guide to weasel words

    Lying is dangerous and unnecessary. A new book explains the strategies needed to avoid it. John Rentoul on the art of 'uncommunication'
    Daddy, who was Richard Attenborough? Was the beloved thespian the last of the cross-generation stars?

    Daddy, who was Richard Attenborough?

    The atomisation of culture means that few of those we regard as stars are universally loved any more, says DJ Taylor
    She's dark, sarcastic, and bashes life in Nowheresville ... so how did Kacey Musgraves become country music's hottest new star?

    Kacey Musgraves: Nashville's hottest new star

    The singer has two Grammys for her first album under her belt and her celebrity fans include Willie Nelson, Ryan Adams and Katy Perry
    American soldier-poet Brian Turner reveals the enduring turmoil that inspired his memoir

    Soldier-poet Brian Turner on his new memoir

    James Kidd meets the prize-winning writer, whose new memoir takes him back to the bloody battles he fought in Iraq
    Aston Villa vs Hull match preview: Villa were not surprised that Ron Vlaar was a World Cup star

    Villa were not surprised that Vlaar was a World Cup star

    Andi Weimann reveals just how good his Dutch teammate really is
    Bill Granger recipes: Our chef ekes out his holiday in Italy with divine, simple salads

    Bill Granger's simple Italian salads

    Our chef presents his own version of Italian dishes, taking in the flavours and produce that inspired him while he was in the country
    The Last Word: Tumbleweed through deserted stands and suites at Wembley

    The Last Word: Tumbleweed through deserted stands and suites at Wembley

    If supporters begin to close bank accounts, switch broadband suppliers or shun satellite sales, their voices will be heard. It’s time for revolution