KLegal 'Federation' Plans Close To Collapse

by Robin Pilgrim, LawAndTax-News.com, London

20 January 2004

KLegal's UK operation has announced that it will be rebranding as McGrigors on February 1st, despite the failure of firms previously united under the KLegal name to reach agreement on the creation of a 'federation' of legal firms.

In November 2003, accounting firm KPMG announced that it would be severing ties with its network of legal firms after four years, as a result of the provision contained within the US Sarbanes-Oxley Act which prohibits accounting firms from providing non-audit services to audit clients.

At the time, the UK arm of KLegal announced its determination to relaunch the network as a new 'federation' under the name of associated Scottish firm, McGrigor Donald.

KLegal's French, Italian, and Dutch member firms all assured the UK management that they would remain as members of a new grouping, but the Spanish and German operations expressed doubts.

However, it is the German operation, Beiten Burkhardt which has brought the negotiations to the brink of collapse. According to reports, the firm is concerned about the quality of some of the other members of the planned network, in particular the French legal giant, Fidal, which concentrates on low margin local work.

Speaking to the Legal Week news service, an unnamed senior Beitens partner revealed that:

"We are in a very difficult situation. Fidal has a very different structure."

Despite these obstacles, however, KLegal's UK operation remains optimistic that its vision of an international federation of firms under the McGrigors brand will be realised at some point.

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