The SEC's drive to force firms to split their audit and consulting practices could kill off early attempts to partner law and accountancy firms in multi-disciplinary practices, big firms warned this week.
The US regulatory watchdog is expected to announce its decision on the development of multi-disciplinary practices next month.
And although the crackdown is concentrating on firms that provide audit and consultancy services, many fear it could also kill off MDPs before they have even got off the ground.Three Big Five firms and many mid-tier firms have already developed associated law firms, though the Law Society currently bans lawyers from sharing fee incomes with non-lawyers.
A society working party is expected to relax that ban next month when it meets to discuss the finer details of a relaxation of its partnership rules. Ian Barlow, legal expert at KPMG, said any move by the Law Society was likely to be of little consequence because of SEC intervention. ‘I don’t expect there to be a relaxation of rules,’ he said. ‘The noises coming from the SEC have been against firms providing audit and legal services.’
Grant Thornton tax partner Robert Purry added: ‘Given SEC views on auditing firms having consultancy arms. I can’t imagine [the SEC] taking a different view on firms offering legal services.’
Barlow said he expected accountancy firms to continue to work alongside non-integrated law firms. Purry added: ‘Grant Thornton is watching the developments with interest. But there are no definite plans to establish a partnership with a law firm.’
A Law Society spokeswoman said that despite most law firms’ eagerness to build bridges with accountancy firms, she did not expect any concrete outcome from next month’s working party meeting.