Quick to disperse any suggestion that, like KPMG’s KLegal, which was disbanded last year, PwC Legal would be forced to close it doors, PwC tax and legal chief Paul Koenig told Lawyers Weekly that “we are not exiting the legal market, we are now embarking on a growth path in our business”.

Regarding the recent departures of partners and lawyers to Hunt & Hunt and Maddocks, Koenig acknowledged the two incidents appeared significant but said that they needed to be separated completely as they related to two completely different issues.

Hunt & Hunt’s acquisition of six partners and 40 staff from PwC Legal’s insurance and workers compensation practice suggested an extreme loss for PwC.

This was accentuated when Hunt & Hunt CEO John Igoe trumpeted the new appointments, claiming that “we are delighted to be able to add PwC Legal’s insurance practice to our own in this specialist area”.

Koenig explained that the bulk of insurance clients were audit clients of PwC.

Keen to avoid the question of whether the perceived independence issue may or may not arise, PwC endeavoured to find a solution that would not raise this question at all. “There was substantial sensitivity to find a solution that would not involve public debate on whether doing insurance litigation work for audit clients does or does not impinge on audit independence,” Koenig said.

Claiming that independence was not purely a legal question but a matter of public confidence, Koenig said PwC thought the business, and the clients, would be better served if the entire team operated outside the PwC legal group. “It was a one off,” he said.

The loss does indicate more specific future limitations for PwC Legal. Koenig explained that “it is fair to say that we will not aggressively expand into insurance litigation for audit clients again”.

The recent departure of partners, special counsel, senior associates and lawyers from PwC to Maddocks has been attributed to “cultural differences”. Koenig explained that this was a personal issue “to do with how they prefer to operate”.

The Melbourne/Sydney law firm Maddocks recently announced it will be adding tax disputes to its existing list of practice areas with the recruitment of a senior specialist team taken in total from PwC. Maddocks’ executive chairman David Laidlaw told Lawyers Weekly that “this was not a PwC initiative”.

Confirming that the group of 10 did not depart in an executive decision to not be at PwC per se, but rather that the entirety followed two partners across in an attempt to stay as a team, Koenig said that “the rest of the team are following because they have worked together and will continue to work together”.

“The core issue is the two partners, who would prefer to operate in a more boutique environment,” Koenig said. “The departing of [the partners] is not a strategic indication that we are not committed to tax litigation.”

Arguing that PwC Legal is “absolutely” confident that it can still negotiate the generic independence concerns that prompted KPMG’s actions, Koenig said that “there is tremendous scope for a sizable law business to live happily under the PwC umbrella serving predominately non audit clients”.