Is AI Coming for Accounting and Law? $KPG.AX $AFL.AX

Tristan is a tax accountant in Australia and a member of MicroCap Club. He is a long-time shareholder of Kelly Partners Group ($KPG.AX), the accounting firm rolling up small practices in Australia and now overseas, and of AF Legal Group ($AFL.AX), the listed family law firm expanding into criminal law and contested wills. He also spent part of his career working inside a Kelly Partners firm.

This discussion took place live on September 3rd, 2026, on the MicroCapClub Community. Join MicroCapClub and unlock the ability to listen and participate live in these discussions - microcapclub.com/#join

In this episode, Tristan explains why he sees AI as another tool rather than a threat to accounting, how Kelly Partners structures its 51% partnership stakes and ten-year partner lock-ins, why the special purpose vehicle around each deal matters, and where the margin improvement in an acquired firm actually comes from. He then walks through AF Legal, the turnaround since the 2022 management change, the software implementation and one-off costs that weighed on the second half, the receivables build in the contested wills business, and what he thinks it takes to hit the AUD $50 million revenue target.

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Chapters

00:00 Introduction to the episode and Tristan's background
02:08 What is Kelly Partners and its focus on business advisory
05:02 Workflow changes and automation at Kelly Partners
08:40 Partnership structure and stakeholder management
12:14 Client selection and due diligence in acquisitions
15:53 Entry multiples and value creation in acquisitions
17:09 Margins, productivity, and cost management
18:38 Valuation multiples and future outlook
20:24 Acquisition of Hello AI and strategic hires
21:08 Why Kelly Partners succeeds and others fail
23:22 Managing debt, enterprise value, and financial structure
24:38 Overview of AFL and recent performance
26:03 Project Titan and software implementation
29:03 Receivables buildup and future cash flow
30:04 Growth targets and margin improvement opportunities
31:47 Outlook, catalysts, and risk factors
33:29 AI's impact on pricing and competitive dynamics
35:06 The importance of human relationships in professional services
36:27 The role of the commercial team and client acquisition
37:36 Summary and closing thoughts on the future of firms

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