WHATEVER fears there may be over audit independence, Hunt & Hunt appears to be collecting the loose ends of former PwC Legal and Ernst & Young Law partners, and weaving them into a tight partnership.
Now that KPMG Legal has taken its final breath, some former MDP employees who are safe in their new roles at Hunt & Hunt, say that, for their practices at least, the MDP model was not going to work.
Hunt & Hunt’s acquisition of six partners and 40 staff from PwC Legal’s insurance and workers compensation practice sent shock waves through the multi-disciplinary practices (MDPs) and added strength to rumours that, post Sarbanes-Oxley, the Big Four accounting firms would have to close their legal arms.
In the last month, Hunt & Hunt’s new partners came predominantly from PwC Legal. Partners Michael Bowyer, Chris Brierley, Julian McGrath, Bruce McLean, Philip Purcell and Andrew Spearritt all specialise in insurance law, and all were formerly of PwC Legal.
As well, partner Peter Faludi, specialising in banking and finance law, property development and tax sharing agreements, was formerly of Ernst & Young Law, another MDP.
Acknowledging the decision to move the insurance practice to Hunt & Hunt was significantly a reaction to the changing regulatory environment. Philip Purcell, formerly of PwC Legal, said “[the environment] had restricted PwC Legal’s ability to provide legal services to PwC audit clients, particularly in the insurance sector”.
The new position as partner at Hunt & Hunt appears much more satisfactory for Purcell, who said “the firm’s strength in the insurance sector is complimented by our areas of expertise”.
“We believe the synergies between the two practices will enable us to create the leading legal advisory group in Australia,” he said.
The MDP model works for certain areas of legal practice, said Peter Faludi, formerly of Ernst & Young Legal, and new partner at Hunt & Hunt. “But I found that in my areas of practice, being banking and finance and property development, the synergies between the accounting and legal firm were simply not there,” Faludi said.
“As a result, with little appetite for investment in these areas, my ability to grow my practice was limited.”
The MDP model was also not able to offer Faludi what Hunt & Hunt could in marketing resources, he said. Hunt & Hunt’s resources were “solely dedicated to winning legal work and helping partners grow their legal practice and your fellow partners better understand what you do and how they can sell you into their clients.”
Hunt & Hunt as a straight legal firm was thus more appealing to Faludi, who argued that “[the firm’s] strong property group and national presence… will allow me to provide better and more cost effective services to my clients and give me the opportunity to develop existing and new client relationships”.