[Edaily Marketin Song Seung-Hyeon Reporter] As cross-border transactions and large-scale deals increase, the mergers and acquisitions (M&A) advisory market itself is expanding, and competition among industry players for this business is heating up. Amid a trend where foreign private equity funds (PEFs) are leading major deals and domestic conglomerates are increasing their overseas mergers and acquisitions (M&A) and investments, law firms, accounting firms, and investment banks (IBs) are struggling to expand their reach as they vie for dominance in the advisory market.

According to the investment banking industry on the 2nd, M&A advisory roles are typically divided. Law firms handle legal due diligence, contract drafting, and regulatory compliance, while accounting firms are responsible for leading the sale, corporate valuation, financial due diligence, and tax structuring. Investment banks and securities firms are in charge of deal origination and acquisition financing. This structure involves the three pillars dividing roles and collaborating on a single transaction.

However, these boundaries are becoming increasingly blurred. Accounting firms are expanding their scope by offering “one-stop” integrated services that combine strategic consulting and tax advisory. Law firms are evolving into “comprehensive consulting organizations” by recruiting certified public accountants, tax accountants, and foreign attorneys. As they encroach on each other’s territories, competition in these gray areas is intensifying.

In particular, the Big Four accounting firms (Samil, Samil, Deloitte Anjin, and EY Han Young) are rapidly encroaching on the financial advisory sector for large corporations—an area once considered the exclusive domain of global investment banks. An investment banking industry insider stated, “Unlike in the past, when the audit division traditionally dominated, the status of the advisory division within accounting firms has risen significantly,” adding, “In small- and medium-sized transactions, it is not uncommon for investment banks to be outpaced by the one-stop financial and accounting systems offered by accounting firms.”

The strength of accounting firms lies in the efficiency of handling financial and tax due diligence and valuation all within a single organization. Furthermore, by leveraging the Big Four’s global networks to handle due diligence in the counterpart country for cross-border transactions, they are increasing their presence even in deals led by foreign private equity funds. The industry explains that there is a growing trend of securing engagements that bundle financial advisory services with accounting and tax services, particularly for mid-sized deals. However, in cross-border mega-deals worth trillions of won, the competitive landscape remains divided, with global investment banks still holding the upper hand.

Legal advisory remains an area that accounting firms find difficult to penetrate. This is because legal due diligence, contract drafting, and regulatory compliance—such as merger filings—are the exclusive domain of attorneys. In South Korea, Article 34 of the Attorney Act prohibits non-attorneys from hiring or partnering with attorneys, effectively barring accounting firms from directly entering the legal market.

Taking advantage of this gap, law firms are moving to absorb the finance and tax sectors by recruiting certified public accountants (CPAs) and tax accountants. Pacific Law Firm recruited CPA Ryu Yong-hyun, a former tax partner at Samil and Samjeong Accounting Firms, this year and launched a “Tax Solution Center” that brings together CPAs, tax accountants, and former National Tax Service officials.

Sejong simultaneously recruited Lee Jin-wook, a certified public accountant from Kwangjang’s Tax Group, and Yoon Geun-hee, a certified public accountant and former official at the Tax Tribunal; Hwawoo also established an “International Tax Strategy Center” centered on Park Young-woong, an attorney from Samil Accounting Firm’s International Tax Team, and Kim Dae-ho, a certified public accountant with over 20 years of experience in international taxation. As tax structuring and tax risk management in cross-border transactions have emerged as core pillars of advisory services, law firms are bringing these capabilities in-house.

In addition, Yulchon and Kim & Chang are also joining the competition for tax advisory services, led by tax teams that have secured numerous accountants from major accounting firms as well as former officials from the National Tax Service and the Ministry of Economy and Finance. In effect, every law firm is developing its tax organization into a core pillar of its comprehensive advisory services. An official at a major law firm stated, “Law firms are no longer organizations consisting solely of lawyers; they are transforming into comprehensive advisory organizations that combine accountants, tax specialists, and consultants.”