The legal arm of Big Four accounting firm PwC is intensifying its global push and setting up a Singapore base, hiring two senior partners from global law firms Ashurst and Norton Rose Fulbright.
The Straits Times understands this move is in line with the Committee on the Future Economy's drive to develop strategies to position Singapore's key legal and accounting service sectors for the future.
"Asia's continued growth and advancements in technology present both opportunities as well as challenges for the sector. There are also inherent synergies between legal and accounting services which can be better harnessed," Senior Minister of State for Finance and Law Indranee Rajah had said earlier.
When asked about its plans in Singapore, PwC declined comment. But the firm confirmed that it has hired former Ashurst Singapore corporate partner Keith McGuire and former Norton Rose Fulbright real estate funds partner Natalie Breen. Global legal services leader Leon Flavell was relocated from London to Singapore in mid April.
The Singapore Accountancy Commission declined to comment, saying that "a lot of details regarding PwC's move are not firmed up yet".
Accounting firms are again making forays into the legal business after a brief halt with the failure of Arthur Andersen in 2002, following a major accounting scandal over United States energy firm Enron.
"There is a global trend towards multi-disciplinary practices, where clients can get accounting, restructuring and tax advisory services from one service provider," said TSMP Law's joint managing director Stefanie Yuen Thio.
"But I think a big driver for this is that margins for professional services are being squeezed... so professional firms need to find new revenue streams."
Another Big Four firm, Deloitte, may move similarly. Mr Low Hwee Chua, regional managing partner of Deloitte South-east Asia's tax and legal department, told The Straits Times that launching its own law firm is under consideration.
PwC had said its vision is to become a global legal services network, focusing on corporate reorganisation, labour law, mergers and acquisitions, and tax litigation. Its legal arm, PwC Legal, a member of the PwC network of firms, has lawyers in more than 85 countries. In Singapore, PwC tied up with Camford Law two years ago.
Similarly, another Big Four firm, Ernst & Young has tied up with local law firm PK Wong & Associates, in a move to grow its presence in the Asia-Pacific region.
The hope is that a "one-stop shop" offering will attract clients and result in lower costs, Ms Thio said.
It makes sense for accounting firms to build a more targeted practice in areas complementary to their work, such as large restructurings across many jurisdictions. These areas tend to come under the scrutiny of an accounting and legally trained team, she said.
But industry observers flag challenges in the marriage, including how accounting firms will manage potential conflicts of interest with their other service offerings.
The auditing function, for instance, requires an element of independence. If accounting firms now add legal services to their suite of offerings, this may result in another area of conflict. Also, they may want to avoid active litigation as not many clients would want to use an accounting firm that has sued them.
Still, this development poses yet more competition to the legal sector. "Law firms that provide services that are ancillary to accounting functions may find someone is nibbling at their lunch. We lawyers need to up our game," Ms Thio said.