KPMG Investing Millions in AI to Grow Legal Business and Challenge Big Law Firms

KPMG, one of the Big Four consultancies, is making a bold move to outspend major law firms on artificial intelligence tools in a bid to grow its legal business. The company plans to invest “tens of millions of dollars” in implementing generative AI to help corporate legal departments streamline operations, according to Stuart Fuller, KPMG’s head of legal services.

Fuller highlighted the advantage that the Big Four have over traditional law firms in terms of capital investment, allowing them to develop technology-enabled solutions and invest in AI. KPMG reported over $36 billion in gross revenue last year, giving them a significant financial edge over even the largest law firms in the world.

While the Big Four have been seen as potential rivals for Big Law firms for over a decade, they have not yet posed a strategic threat to elite law firms. However, with the implementation of generative AI tools, KPMG aims to revolutionize the legal industry by automating tasks typically assigned to junior lawyers.

Fuller emphasized the transformative potential of generative AI in the legal sector, particularly in tasks involving language and words. By partnering with Microsoft to leverage their AI expertise, KPMG is positioning itself as a leader in the adoption of this cutting-edge technology.

The company’s legal services arm has seen significant growth, with revenue increasing between 10% and 15% last year. KPMG Law is targeting further expansion, particularly in the Asia-Pacific region, and has identified legal services as a key sector for growth in its recent strategy review.

As generative AI tools continue to evolve, Fuller is focused on educating his workforce and preparing them for the changes ahead. He anticipates that the market will consolidate around a few key AI technology providers, with the ability to harness internal data being a crucial differentiator.

While the traditional billable hour model of law firms may face challenges with the adoption of generative AI, Fuller sees this as an opportunity for both law firms and their clients. As clients push for more cost-effective solutions, law firms will need to adapt and find ways to deliver value in this rapidly changing landscape.

Overall, KPMG’s ambitious investment in AI technology signals a significant shift in the legal industry, with the potential to reshape how legal services are delivered and consumed in the future.