Between the lines: KPMG and letter of the law

KPMG Legal is in the eye of a storm over its name.

The New Zealand District Law Society's ethics committee rejected the name in June on the grounds that it is misleading, because it suggests it is a division of the global accountancy firm KMPG.

On Friday it will confirm a hearing date of September 8.

Multidisciplinary practices involving lawyers are not allowed here under the Law Practitioners Act.

KPMG Legal was started two years ago as a separate partnership to KPMG, although it is associated.

On July 1, it merged with the heavyweight law firm, Kensington Swan, retaining the name KPMG Legal despite the ethics committee ruling.

The name is used by law firms associated with the accountancy firm in many jurisdictions overseas, including several Australian states.

Britain, however, still insists that law firms reflect their partners' names.

The chairman of KPMG Legal, Ian Haynes, who is a former law society president, said the firm had relied on a decision of the Auckland District Law Society's ethics and legal practice committee in November 1998 that it had no problem with the name.

Why the problem now at the time of the merger that greatly increases KPMG Legal's size?

Andersen Legal, associated with one of the other Big Five accountancy firms, Arthur Andersen, hit the same snag.

It started life in mid-1997 under the name Sharwood, Eyers, Wilkie - the name of the Australian law firm connected with Arthur Andersen.

When the Australian firm changed to Andersen Legal, the local partners did likewise. They also relied on advice from the Auckland society that the name was okay.

The Law Society's ethics committee later raised concerns about the new name, claiming it gave the impression of size and substance that did not exist with the then two-partner firm. Eventually this was shot down and the law firm left in peace.

It will be hard for the Law Society to argue that Andersen Legal is substantially different to KPMG Legal just by omitting Arthur.

Hamilton law firm Beattie Rickman Legal was set up last year in an association with a local accountancy firm, Beattie Rickman. It is also run autonomously.

It has avoided controversy so far, but then it is small fry on the national scene.

The Chambers report on multidisciplinary practices in Australian states found it was smaller firms who had grasped the nettle there, whereas the push here comes from within the Big Five.

And there lies the problem.

New Zealand's larger traditional law firms appear threatened by anyone encroaching on their domain. They have no such qualms about doing the same to real estate agents.

The Auckland District Law Society recently gave $20,000 of practitioners' fees towards the newly set up Real Estate And Lawyers (Real) group.