Band & Brown chairman and CEO Nick Band has accused former managing director Graz Belli of taking his staff and clients for her new venture, Third City.
Speaking to PRWeek, Band fumed: 'I admire entrepreneurial spirit, and many former Band & Brown employees have left to start successful business, but there is a line you should not cross.
'Third City has literally recreated Band & Brown under a different name, with our staff and our clients. I worry for the future of any start-up which lacks the vision to create something new, rather than replicating its old agency.'
Belli responded: 'We've been approached by a number of clients and staff who have long-standing relationships with us, and over which we had amicable discussions. And agreements are now in place. We have recently been approached by another member of staff, and I've been discussing this with Nick. We have every intention of resolving this fairly and continuing the good working relationship with our former agency.'
Band & Brown came 36th in this year's PRWeek's Top 150 PR Consultancies table, with a fee income of £6m.
Belli joined as a graduate trainee in 1997 and worked her way up to the role of MD in 2008, before leaving to set up Third City with Band & Brown colleague Mark Lowe.
Belli and her former boss have already settled out of court for unknown compensation sums after previous incidents of staff and clients shifting to Third City.
Belli's agency has taken on Band & Brown clients ING and Ancestry, while senior account director Chris Blackwood has also moved to work for the new agency.
This week it emerged that Belli also planned to appoint a current Band & Brown senior account manager to her new agency.
Band's former partner Gill Brown is also reported to be providing 'occasional consultancy' to Third City.