Although KPMG Legal would “neither confirm nor deny such rumours”, industry sources told Lawyers Weekly earlier this week that the legal arm of the accounting giant would be “taken over” by Melbourne-based mid-tier firm Middletons.

While KPMG managing partner Jeff Goss would not commit to the validity of the story, he noted that a press release would be forthcoming after this issue of Lawyers Weekly went to press.

“Coincidently”, KPMG Legal partner Chris McArdle this week moved on to Colin Biggers and Paisley in Sydney. Although he had expected to stay with KPMG Legal for the rest of his life, he told Lawyers Weekly that as of the end of March, KPMG Legal “will be no more”, so he was forced to move on.

McArdle said that there were seven partners at KPMG and, other than himself, one would become a general consultant, and “five would be moving onto another firm”. Although unwilling to confirm that the unnamed firm was Middletons, he said that the Perth and Melbourne KPMG offices were abolished in February, and March would see the final bow for the legal arm worldwide.

KLegal, the multi-jurisdictional network that houses all of KPMG’s in-house law firms, announced in November last year that it would stop trading under the banner of the Big Four accountant according to a directive from global partners. However, it hoped to retain links with its parent company in a ‘best friends’ arrangement.

But this week’s instalment in the long-running saga illustrates that a blueprint for the organisation’s future has been drawn up and put in place.

Questions will be asked of the other Big Four accounting firms about how they are able to maintain their legal arms and whether they envisage a similar fate for their legal factions. PwC, which indicated a desire to press ahead late last year, has recently sold 20 per cent of its legal arm to Hunt & Hunt.

Middletons CEO John Chisholm was unavailable to comment at this early stage as he and all the partners of the firm were in a “yearly partners’ conference”, a spokesperson said.

However, industry sources predicted that an announcement would have been made by the time this issue of Lawyers Weekly hits desks. On Monday this week, staff were slated to be informed of the new developments in Sydney on Wednesday and in Melbourne on Thursday.