PwC partners hit with restrictions if they try to move to rivals

afr.com:

PwC partners who have recently left for rival consultancies say they are being hit with unreasonable restrictions that prevent them from providing services to new clients and withhold part of their pay to make sure they comply.

Partners who have left or are in the process of leaving the embattled firm have sought legal advice to navigate the exit terms of the PwC partnership deed, which one partner described as “outrageous, onerous and unenforceable”.

The firm says partners enter into the agreement voluntarily and the exit conditions are not dissimilar to other partnership agreements for professional services firms.

PwC’s office in Barangaroo, Sydney. Louie Douvis

PwC is grappling with the fallout from a tax leaks scandal which involved partners using confidential government information to help US tech giants sidestep tax laws that a PwC partner was helping Treasury design.

The Australian Financial Review was told one version of the ever-changing exit conditions said partners were informed they would be unable to work with clients that any partner in their business unit had provided with advice or services in the last three years.

For the partners, who spoke on the condition of anonymity, that effectively ruled out working with any ASX500 or government client for two years – extending far beyond restrictions that state partners can’t take their direct clients with them.

The Financial Review understands the conditions still applied to government clients despite PwC last month selling its government consulting arm for $1 to private equity firm Allegro Funds.

The partners, who are paid a monthly profit share, were also told that PwC would withhold between 50 per cent to 100 per cent of their salary during their six-month