KPMG offices in Washington, D.C. / Photo: Diego M. Radzinschi/ALM

KPMG has expanded its legal reach in Asia, establishing an alliance with one of the largest firms in Indonesia.

Lubis Ganie Surowidjojo, a 100-plus lawyer firm based in Jakarta, has entered into an alliance with KPMG Indonesia and joined the accounting firm's global legal network. LGS has seven partners, including founders Timbul Thomas Lubis, Mohamed Idwan Ganie and Arief Tarunakarya Surowidjojo, focusing on corporate and dispute resolution.

LGS previously had an association with U.K. firm Clyde & Co. That association, which began in 2013, ended in April. The two firms advised Indonesian clients in the energy, infrastructure, maritime and commodities sectors.

“KPMG in Indonesia provides audit and assurance, tax and advisory services. We do not have any law firm and, therefore, formed an alliance with Lubis Ganie Surowidjojo,” said KPMG Indonesia managing partner Tohana Widjaja.

The accounting giant has been aggressively expanding its legal services in Asia this year. In January, it launched a law firm in Hong Kong—SF Lawyers—and said it plans to launch a firm in Shanghai later this year. Elsewhere in the region, KPMG has affiliated law firms in Cambodia, Taiwan, Thailand and Vietnam.

KPMG's association with LGS means three of the Big Four now have affiliated firms in Indonesia, a growing and increasingly important market for global law firms. EY has yet to form an alliance but it has said it is currently looking to do so. Hermawan Juniarto & Partners joined Deloitte Legal in October 2018 while Melli Darsa & Co. joined PricewaterhouseCoopers' global legal network in 2017.

International firms have also been attracted to Indonesia, a resource-rich country with about 270 million people and an economy of more than $1 trillion. The Southeast Asian country reelected President Joko Widodo to a second and final five-year term earlier this week with 55.5% of the vote.

As foreign firms are not permitted to have offices in Indonesia, many have over the past decade formed alliances with local firms. More recently, Jakarta-based Hanafiah Ponggawa & Partners joined Dentons last September and HFW formed an association with Rahayu & Partners in late 2017. In December, Clyde & Co Asia managing partner Christopher Jobson told Law.com's Asia-based publication, The Asian Lawyer, that the firm was looking for another association in Indonesia, citing its “enormous market with economic growth and lots of infrastructure.”

But not all of those Indonesia alliances have worked out. In 2017, both DLA Piper and Clifford Chance ended their Indonesia alliances after three years with Ivan Almaida Baely & Firmansyah and Linda Widyati & Partners, respectively. IAB&F has since had a close working relationship with Bryan Cave Leighton Paisner, which has Singapore partner Marius Toime seconded at the Indonesian firm.