September 21, 2019

Legal Experts Think KPMG France Will Likely Get Away With Fidal Lawyer Poaching

Early last week we told you guys about KPMG France recently stealing away 130 lawyers (some reports say 144 or 145 lawyers) away from France’s largest law firm, Fidal, which is threatening to sue the Big 4 firm for “unfair competition.”

But legal experts who were interviewed by Law.com say Fidal’s case against KPMG is kinda murky.

If Fidal were to file a lawsuit on the basis of unfair competition, it could point to a European law that says a firm can’t abuse its majority position in a market, or to a French civil liability law that allows companies to make cases for unfair competition, according to Law.com. KPMG, in turn, could say before this poaching massive hire, its newly created French legal practice, KPMG Avocats, wasn’t very competitive.

According to French financial newspaper Les Echos, Fidal’s entire international mobility team (about 50 lawyers) left to join KPMG Avocats, along with 80 to 95 other lawyers who specialize in tax. Among the group are 26 partners. KPMG Avocats has said it hopes to expand its staff to more than 400 (probably by poaching other French law firms—heads up, Gide Loyrette Nouel).

KPMG and Fidal used to have a rosy relationship that spanned decades, and the two firms had a non-exclusive partnership agreement that began in 2011. But last year, KPMG suggested Fidal join its network of firms. After Fidal said, “Not interested,” KPMG ended the partnership.

According to Law.com, Fidal claims KPMG reneged on a non-poaching clause the two firms agreed to that would be in effect until 2020:

The nonpoaching clause stated that KPMG could not hire lawyers from Fidal without Fidal’s written consent, regardless of which side made the approach.

However, there seems to be disagreement about what, if anything, was eventually agreed to.

“The constructive proposals, made to Fidal to ensure the future of their teams, dedicated to the KPMG network, were rejected by the representatives of Fidal. In this context, a number of professionals have decided to leave Fidal and have expressed their wish to join KPMG Avocats,” KPMG said in a statement.

Fidal managing partner Yves de Sevin denies this. The firm said the only disagreement came when KPMG made two proposals: either become a member firm with the Big Four auditor, or have KPMG take lawyers from Fidal, neither of which Fidal agreed to.

Law.com spoke to a French competition partner at a rival domestic firm who said Fidal could only take KPMG to court for civil liability, claiming it was unfair of the Big 4 firm to take so many assets from the law firm. But the partner added that in France, “every lawyer has the freedom to go where they want … so arguing for unfair competition will be very difficult.”

Ronnie Fox, a partnership and employment specialist partner at Fox & Partners, agreed, saying, “The fact that there was once a partnership agreement doesn’t mean that those that used to work for Fidal can’t work for KPMG. Ultimately, slavery has been abolished so if people want to move, they can.”

Fox added that considering the size of the hire, it would probably have been orchestrated sensitively to any agreements made, and likely organized by recruitment specialists, according to Law.com.

But it seems like de Sevin isn’t giving up without a fight:

“Us refusing these two proposals does not give [KPMG] the right to hire our teams! KPMG’s behavior is therefore inadmissible and the entire office is shocked by such behavior,” de Sevin said.

Am I the only one who imagines him saying this with his hand tucked in his button-down shirt like Napoleon?

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