Paris. Credit: Pixabay

The French legal arm of KPMG has appointed top-tier external advisers on its dispute with local firm Fidal about a mass lawyer hire.

The Big Four accountancy firm has instructed highly rated local law firm Veil Jourde to help it defend action taken by Fidal in relation to KPMG's hire of 144 Fidal lawyers – including 26 partners – earlier this year, according to one person close to the process.

KPMG and Veil Jourde declined to comment.

On the other side, Fidal is being advised by Darrois Villey Maillot Brochier, a top-tier French firm that focuses on corporate transactions and dispute resolution.

The fact both are represented by well-regarded firms demonstrates the seriousness with which each side is taking the dispute, which initially erupted on the basis of Fidal's claim that KPMG breached a break-clause when the two firms ended their non-exclusive partnership, which began in 2011 and ended in July 2018.

During discussions prior to ending the partnership, Fidal said two reassurance clauses had been agreed by KPMG: one being the notice that the agreement was ending, and the other a non-poaching clause until 2020, which stated that KPMG could not hire lawyers from Fidal without Fidal's written consent.

However, there is disagreement about how those discussions concluded.

At the time of the hires, KPMG said in statement: "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'."

This is denied by Fidal.

Fidal is asking for compensation for the damages suffered, which the firm said include a damaged image, loss of turnover, disrespect towards a contract and unfair competition, among others.

The dispute is still in the preliminary stages: Fidal is in the process of finalising all the proceedings against KPMG, having now carried out a damage assessment. A hearing date has not yet been confirmed.

Speaking in French, Fidal managing partner Yves de Sevin said: "[I still have] the same feeling: we respect KPMG's strategy but its form, which disrespects the agreements, is unacceptable and as such, we will defend the interests of the law firm with the greatest determination."

He added that the next step for the dispute is to hear KPMG's response to Fidal's legal action.