RSM McGladrey and McGladrey &
Pullen (M&P) have patched up the contractual dispute that had
threatened to split their collaboration.
The two firms agreed to extend the terms of
their alternative practice structure until 1 May 2015. This has
been approved by a vote of M&P partners subject to definitive
documentation. This collaboration will automatically renew for
additional five-year terms unless either party withdraws under
clearly defined circumstances.
H&R Block president and chief executive
Russ Smyth said the agreement provides a “stable” foundation for
the future growth of RSM McGladrey.
“The discussions were ultimately healthy to
review the needs of both firms and to identify how we can best
manage our respective operations to improve client service,
accelerate growth initiatives, improve partner wealth creation and
increase shareholder returns while preserving and protecting the
independence of M&P,” Smyth said.
H&R Block said the agreement largely
retains existing restrictive covenants, as interpreted in the
recently concluded arbitration proceeding, where a ruling
apparently favoured H&R Block and RSM McGladrey.
This ruling will enforce a restrictive labour
agreement involving employees of the two firms, H&R Block
said.
The core alternative practice structure
between the firms remains intact. This operating model sees M&P
solely responsible for audit and attest work and RSM McGladrey
responsible for other business advisory services.
Both parties agreed to enhance co-operation in
various areas with the goal of aligning short and long-term
strategies to enhance client service and improve operating
efficiency and profitability.
