KLegal International announced last Friday (30 January) that it would disband its legal alliance despite its chief executive’s attempts to preserve a formal network.
The firm said it was only a temporary measure and that it would be relaunched when regulatory obstacles related to the Sarbanes-Oxley Act were removed.
However, KLegal UK appears to be split about the direction it wants to take, with one source saying that key members of KLegal’s management team actually see an informal alliance as a more acceptable long-term prospect than a formal network.
KLegal International chief executive Robert Glennie has been negotiating with member firms for a number of months to retain formal ties, but the process has been plagued with problems. The Italian and Finnish member firms have already decided to go their own ways.
Glennie said: “All the law firms have to have regulatory independence from KPMG.” He said KPMG had still not resolved its discussions
with the US Securities and Exchange Commission as to what constitutes regulatory independence. This is compounded by the fact that the law firms were disassociating themselves from KPMG at different rates, he said.
Glennie, who could not say when the new alliance would be concluded, denied that the firm was split. “One or two people may say that,” he said, “but the general feeling is that something stronger [than an informal alliance] would be better. I’ve always thought the loose alliances don’t produce seamless, reliable service… and don’t give a high volume of referral work.”