Freshfields has hit back at allegations made in the Italian parliament that it has been undercutting rivals in a bid to win market share.
Insiders in the Italian market have accused Freshfields of pricing legal advice at an anti-competitive level. And sources have also fingered Allen & Overy for following a similar pricing strategy.
A spokeswoman for Freshfields admits the firm was cited in parliament earlier this year accused of undercutting fees quoted by other law firms.
Freshfields entered discussions with the minister in question and sent a letter protesting its innocence. The spokeswoman says: "I can confirm very vigorously that there is absolutely no truth that we are undercutting other law firms in Italy."
A source at a rival firm says: "Freshfields were sometimes going in at a third less. At first they denied it but then they said they were doing it for strategic reasons."
A source at a top Italian firm accuses Freshfields of subsidising Italian operations.
Allen & Overy is also stringently denying similar charges which have prompted an irate response from international and domestic rivals.
A&O is associated with Brosio Casati e Associati, with offices in Rome, Milan and Turin. Freshfields has offices in Milan and Rome.
A boom in top grade M&A work, including hostile bids like the Olivetti/Telecom Italia deal, has focused international law firms' attention on the Italian market. Sources say Linklaters is still in talks with Gianni Origoni, and a number of US firms continue to look for Italian link-ups.
Cleary Gottlieb Steen & Hamilton, which has a two-partner outfit in Rome, is understood to be looking for an Italian merger partner.