Scyne settles restraint case, as PwC tax partner jumps to KPMG
PwC spin-off Scyne Advisory has settled its case against former partner Connie Heaney, as a senior PwC tax partner jumps ship to rival KPMG.
Under the terms of the settlement, Ms Heaney will be free to continue her role at services contractor Downer EDI after winning an interim judgment in her favour last month.
Former Scyne Advisory partner Connie Heaney is free to continue at Downer EDI under the settlement. Peter Rae
The settlement avoids a final hearing into the matter, which would have tested the strength of consulting firms’ stringent and lengthy non-compete clauses.
In a statement, Scyne’s head of corporate affairs Jamie Briggs said the resolution was reached “on the basis of a recognition of the need to uphold post-contractual restraints and to protect confidential information within the professional services market”.
Explicitly aimed at preventing partners from taking clients and information to rival firms, restraint clauses have been wielded by PwC and Scyne in an attempt to deter high-value partners from jumping ship as the firms continue to deal with the fallout from the tax leaks scandal.
Scyne’s willingness to take legal action to enforce the restraints was seen as an attempt to deter other partners who may have contemplated leaving the new government consulting firm.
PwC partners who have tried to leave the embattled firm have sought legal advice on restraints, which permit the withholding of income and cessation of retirement payments, with one describing the clauses as “outrageous, onerous and unenforceable”.
Former PwC partner Paul McNab is suing the firm in the NSW Supreme Court in an attempt to restore retirement payments that he says were wrongly cut off when he joined law firm DLA Piper in 2020.
Tax partner makes rare move
Meanwhile, senior PwC tax partner Josh Cardwell is serving out a period of gardening leave before joining rival big four firm KPMG.
PwC’s head of real estate tax, Mr Cardwell is the first partner from the firm’s tax division to move to a big four rival since the tax leaks scandal broke last year.
Josh Cardwell was the Tax Institute’s corporate tax adviser of the year in 2019.
Despite its central role in the scandal, PwC’s tax division remains a strong-performing sector of the business.
The loss of a big-billing partner such as Mr Cardwell will hit the firm as it seeks to consolidate its core tax, audit and assurance practices amid a weak advisory market.
Last month, PwC forced up to 37 partners – about 5 per cent of its local partnership – into early retirement as part of a restructure aimed at cutting $100 million in costs from the business.
Confirming the move, a KPMG spokesperson said Mr Cardwell was “Australia’s best real estate tax adviser” and the move formed part of a strategy to grow its own offering in the area, which has been dominated by PwC.
A PwC spokesman thanked Mr Cardwell for his time with the firm: “While we are sad to see him go, he leaves with our best wishes.”
Mr Cardwell will join KPMG in the second half of the year after completing a period of enforced leave.
The tax adviser is the latest in a string of partners to leave the firm as competitors look to sweep up partners looking for the exit at PwC.
Firms as varied as DXC Technology, law firm Ashurst and commercial real estate agency Cushman & Wakefield have all picked up PwC partners since the beginning of the year, although big four rivals have largely stayed away.
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Maxim Shanahan is a professional services reporter at the Australian Financial Review. Email Maxim at max.shanahan@nine.com.au
