Top 30 accounting firm Aprio is planning to combine with Scottsdale, AZ-based boutique business law firm Radix Law this spring to form the Arizona law firm Aprio Legal, a move that could set off a wave of other CPA firms entering an industry that was once considered off limits.
Financial terms of the deal weren’t disclosed.
The last real barrier preventing public accounting firms from practicing law in the United States is federal regulation. Nonlawyer firm ownership is mostly barred in the U.S.
But Atlanta-based private equity-backed Aprio is taking advantage of Arizona’s ABS Program, which allows entities owned or controlled by nonlawyers to provide legal services as an alternative business structure law firm.
“This strategic collaboration with Radix Law and Aprio—together joining as Aprio Legal—will reimagine the client experience by offering entrepreneurs and business owners a one-stop destination to address both business and legal challenges with forward-thinking solutions,” Aprio said in a Feb. 12 media release. “Clients can seamlessly and efficiently connect with experienced tax advisors, CPAs, transaction advisors, wealth advisors, and attorneys in one place, empowering them to build and grow their businesses with confidence.”
Alternative business structure law firms were first introduced in Utah in 2020 under a pilot project, and on Jan. 1, 2021, through an administrative order, the Arizona Supreme Court created the ABS Program permitting nonlawyers to partner with lawyers in business. These individuals may “own, have an economic interest in, manage, or make decisions in” an ABS that provides legal services and may split fees with attorneys.
KPMG is trying to become the first Big Four firm in the U.S. to practice law by leveraging Arizona’s ABS Program. The accounting firm’s attempt to create its own law firm, KPMG Law, passed a significant hurdle when the Arizona committee that oversees the program unanimously approved the request in mid-January, according to the Wall Street Journal. However, in late January, the Arizona Supreme Court put KPMG’s plans on hold for now by asking the firm for more details on its bid to deliver legal services in the state.
Aprio Legal and Radix Law, separately, are already licensed law firms under Arizona’s ABS Program. Aprio received licensing approval in Arizona last May. Upon the completion of the combination, both entities will operate as Aprio Legal.
“We are thrilled to be the first national accounting and advisory firm to open an ABS law firm and join forces with Radix Law—a combination we know will be a powerful force in Arizona for entrepreneurs and businesses,” Aprio CEO Richard Kopelman said in a statement on Wednesday. “At Aprio, we are focused on our commitment to building the firm of the future and reimagining the client experience. Aprio Legal is an important part of that commitment. Our firms are both like-minded and entrepreneurial, and together as Aprio Legal we will continue to pioneer the legal profession.”
Founded in 2008, Radix Law was approved by the Arizona Supreme Court in 2021 to become the first ABS law firm in the U.S. to operate as a multi-lawyer, full-service law firm, combining both lawyer and nonlawyer owners. The firm includes 15 lawyers who provide a variety of legal services, including estate planning, corporate transactions, commercial litigation, real estate, and business law.
“This is an incredible leap forward in the evolution of Radix Law and an exciting time for our business as we join forces with Aprio to establish Aprio Legal,” said Andy Kvesic, Radix Law CEO and managing partner. “Our clients are our priority, and with Aprio Legal, we will have the added resources to deliver an even more personalized and comprehensive approach to help them grow.”
In the coming months, the two entities plan to work together to determine the optimal structure for collaboration under the rules of the Arizona ABS Program.
Aprio announced last July that it was receiving private equity backing from Boston-based investment firm Charlesbank Capital Partners. The firm now operates as an alternative practice structure. Aprio LLP, a licensed CPA firm, will provide attest services, while Aprio Advisory Group LLC will provide business advisory, tax, and other nonattest services. Aprio LLP will operate as a separate legal entity.
The separation of audit and nonaudit services through the deal allows Aprio to comply with securities laws prohibiting conflicts of interest that could impair the objectivity of the firms’ auditors.
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