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. Last Updated: 07/27/2016

Law Firm Landwell CIS Says PwC Forced It to Close

Maryann Gashi-Butler, head of the Landwell CIS law firm, has said that her firm has been forced to close by former partner PricewaterhouseCoopers, Vedomosti reported Friday.

PricewaterhouseCoopers on Friday said it disagreed with several parts of the report, but declined to give any further comment.

Vedomosti reported that Landwell had virtually stopped its operations after the accountancy firm terminated an agreement for providing joint services in Russia and several employees were refused entry to their office based in PwC’s block.

The Swiss company Landwell was formed in 1999 as part of PwC’s global restructuring that began in 1997. The legal practice was separated from the auditing element in the same way the Big Five firms are separating out their consulting business.

Despite Landwell CIS being a separate legal entity, it relies to a large extent on PwC. In particular, the Big Five firm provides the law firm with premises and equipment and calculates employees’ pay and tax payments. In return the lawyers provide their services to PwC.

Landwell is not a holding, but rather an association of law firms — Landwell does not own their shares. In Russia the name Landwell was given in 1999 to the company previously known as Pricewaterhouse CIS Law Offices BV, which was founded by Gashi-Butler and her husband, William Gashi-Butler. A small stake of Landwell CIS shares belongs to PwC partner Alexander Podolsky.

Landwell CIS said in a press release that the roots of the conflict between it and PwC lie in "PwC’s policy in respect of professional legal independence," and problems connected with "the integrity and confidentiality of client information."

In other words, the management of the company Landwell CIS, essentially controlled by PwC, considers the law firm not sufficiently independent enough for clients to be sure there is no conflict of interest.

In particular, clients have no guarantee that their documents would be protected from third parties, Gashi-Butler said.

She said that attempts to draw the attention of PwC to this problem, which in her opinion has become particularly acute over the past year, had actually resulted in Landwell CIS’s essential closure.

Law firm employees have not been permitted to enter their office, which has virtually paralyzed the firm’s work only a few days after PwC notified them that the contract was terminated, Gashi-Butler said.

PwC employees with no connection to the company’s legal practice had even gained access to Landwell CIS’s client files, she said.

"The outcome of this matter is the best support for the fears I had expressed earlier," Gashi-Butler said.

Under condition of anonymity, several Landwell employees said that a few days prior to the actual termination of work, PwC had offered the law firm’s employees the possibility of moving to a different company operating within the structure of the auditing giant. The previous joint owner of Landwell, Podolsky, had left for this company, the employees said.

However, 13 Landwell CIS employees were not offered positions in the other firm. Now several of them are trying to file claims against PwC through the prosecutor’s office and State Labor Inspectorate.

(Vedomosti, MT)