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 - https://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. ✉️ Share your feedback - david@microcapclub.com ✉️ David’s X (Twitter) - https://x.com/Valuehunte 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 Disclaimer: All content on this channel is for discussion, education, entertainment, and illustrative purposes only and SHOULD NOT be construed as professional financial advice, solicitation, or recommendation to buy or sell any securities, notwithstanding anything stated on this channel. There are risks associated with investing in securities. Loss of principal is possible. Past performance is not a predictor of future investment performance. Ian Cassel and the guests on this channel are not responsible for investment actions taken by viewers. Should you need such advice, consult a licensed financial advisor, legal advisor, or tax advisor. You agree to verify all information yourself before investing. Any past performance discussed during this program is no guarantee of future results. Investing involves risk and possible loss of principal capital; please seek advice from a licensed professional. All views expressed are personal opinions as of the date of recording and are subject to change without the responsibility to update views. No guarantee is given regarding the accuracy of the information on this channel. Releasees undertake no obligation to provide accurate or sound investment statements. You waive any and all duties that may exist flowing from you to any Releasee. You agree not to hold any Releasee liable for any possible claim for damages arising from any decision you make based on information or other content on the Channel.