Australasian legal business
dispute resolution * canberra
AUSTRALASIAN
LEGAL BUSINESS
www.legalbusinessonline.com ISSUE 10.11 DECEMBER 2012
DECEMBER 2012 dispute resolution canberra fast 10 ASIA
Can Australia’s megafirms make an impact in Asia?
ALB 2012 ISSUE 10.11
Supported by
fastest growing firms revealed
CONTENTS
Australasian Legal Business ISSUE 10.11
1
“For us, it is very much about in-house lawyers being seen as not just lawyers, it’s about showing the business that we can bring a lot to the table and that they should use the lawyers in that broader fashion.” Lynette Ireland, Foxtel
18 NEWS 06
DEALS
COVER STORY
One day Asian firms will dominate the world – but will Australia’s intrepid mega-firms be part of the story?
LEAGUE TABLES 50
FEATURES Canberra You may have heard of the law firm rush for Asia – now let us tell you about the rush for Canberra
26
Dispute resolution Where the backend is foremost
40
Asian century A country-by-country review of the Asian market, from a distinctly Australian perspective
50
Sponsored update Buddle Findlay
Profiles In-house perspective Lynette Ireland, Foxtel APPOINTMENTS ACLA PERSPECTIVE
14 09 32
38 48
Australasian Legal Business ISSUE 10.11
2
AUSTRALASIAN
LEGAL BUSINESS
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4
EDITORIAL
RESISTANCE IS FUTILE (BUT LET’S DO IT ANYWAY)
A
few days ago, someone asked me about the correct naming convention when referring to King & Wood Mallesons. KWM? KW Mallesons? Mallesons? Other than observing that “KWM” appears to have won favour with most publications, it wasn’t a question I was able to answer definitively. Nor did it strike me as important – to be honest, I’d rather see journalists directing their energies towards solid, intelligent writing rather than worrying too much about the style guide. In my own writing, I’ve continued to use the old nomenclature after the obligatory first reference spelt out in full. That’s a practice born of stubbornness more than anything else. I just can’t get used to the new names and I like the idea of keeping the old ones alive, at least in this small ineffectual way. That’s probably a sentiment shared by all those people who apparently raided the Mallesons marketing department last year in search of merchandise bearing the old logo. Meanwhile, I’ve just received an email from some organisation calling itself HSF. A health care fund, perhaps? No, that’s the new abbreviation for Herbert Smith Freehills. Now I’m writing a story about Allens. I type “Allens” on my computer and wonder if I’ve missed something. It doesn’t look right without the “Arthur Robinson.” I type “Squire Sanders” and suddenly feel an urge for some Southern fried chicken. Odd. Some of the new names work better than others. “Ashurst” rolls nicely off the tongue, perhaps because there’s no double/ triple barrel hyphenated action with this brand. Simplicity has its benefits. Norton Rose is another lovely brand and a distinct improvement over “Deacons”, which sounded like a group of cardinals trapped in a lighthouse. “Clifford Chance” sounds like some posh casino that James Bond might frequent. Then there are the names which are hard work for the accident-prone. It’s taken me five years to learn to spell “McCullough Robertson” (or is it McCullough Robinson?) and to learn that “HopgoodGanim” is spelt as one word. I’d like a dollar for every time I’ve seen “Herbert Geer” spelt “Herbert Greer” and no doubt they would too. So if you see any firm names misspelled in the legal press, please be tolerant. Journalists have a lot on their plate these days. And sometimes there’s a method in the madness. Renu Prasad Australasia Editor, Australasian Legal Business, Thomson Reuters
AUSTRALASIAN
LEGAL BUSINESS
6
deals
Australasian Legal Business ISSUE 10.11
your month at a glance US$3.4 billion
Your month at a glance Deal
Value
Advisor
Client
Lead Lawyer
debt
Algeco Scotsman Group’s acquisition and debt financing
US$3.4 billion
King & Wood Mallesons
9 Joint Lead Arrangers
Richard Hayes
Algeco Scotsman Group’s acquisition and debt financing
US$3.4 billion
Baker & McKenzie
Algeco Scotsman Group
George Harris, Julie Hutton
CNOOC’s acquisition of BG Group’s LNG assets
A$1.93 billion
King & Wood Mallesons
BG Group
Craig Rogers, Joshua Cole
CNOOC’s acquisition of BG Group’s LNG assets
A$1.93 billion
Herbert Smith Freehills
China National Offshore Oil Corporation (CNOOC)
Woolworths property fund Shopping Centres Australasia Property Group sale
A$1.4 billion
Allens
Woolworths
Stuart McCulloch
Woolworths property fund Shopping Centres Australasia Property Group sale
A$1.4 billion
Ashurst
Shopping Centres Australasia Property Group RE
Sarah Dulhunty, Nick Terry, Chris Mitchell, Melinda Harris, Lisa Simmons, Rehana Box
ING Direct’s residential mortgage-backed securities (RMBS)
A$1 billion
Allens
ING Direct
Ian Wallace
BHP Billiton’s bond issuance
A$1 billion
Herbert Smith Freehills
BHP Billiton
Andrew Booth
Discovery Metals takeover
A$830 million
DLA Piper
China-Africa Development Fund (CADFund)
Esther Leung
lgeco Scotsman Group’s A acquisition and debt financing
• Baker & McKenzie also advised TDR Capital, the owners of Algeco Scotsman, on the acquisition of Ausco Modular from Waco International in May 2011.
Ian Wallace, Allens Allens also advised ING DIRECT on the establishment of its Securitisation Program in 2010
A$1 billion DEBT BHP Billiton’s bond issuance
• Herbert Smith Freehills also recently acted for BHP Billiton on its A$2.74 billion and A$2.5 billion issues under its Euro medium term note program
deals
Australasian Legal Business ISSUE 10.11
DEALS REPORTED TO ALB, November 2012. Please note that owing to the limited space in this table, only the higher value deals in any given month will be shown.
Your month at a glance Deal
Value
Advisor
Client
Lead Lawyer
Discovery Metals takeover
A$830 million
GTR Lawyers
Discovery Metals
Scott Standen, Glenn Vassallo
Discovery Metals takeover
A$830 million
King & Wood Mallesons
Cathay Fortune Corporation (CFC)
Stephen Minns
The Campbell Group’s acquisition of SA Government plantations
A$670 million
Kelly & Co Lawyers
South Australian Government
Jamie Restas, Nick Karagiannis
The Campbell Group’s acquisition of SA Government plantations
A$670 million
Herbert Smith Freehills
The Campbell Group (OneFortyOne)
Peter Butler
Retail assets investment
A$436 million
King & Wood Mallesons
Canada Pension Plan Investment Board (CPPIB)
John Sullivan, Stuart DixonSmith
A$330 million
Middletons
iiNet
Chris Scott, Simon Salter
iiNet syndicated debt facility
A$330 million
King & Wood Mallesons
Banking syndicate
Nicholas Creed
Sale of EYE Corp by Ten Network
A$113 million
Gilbert + Tobin
Ten Network
Bill Spain, Paula Gilardoni
Sale of EYE Corp by Ten Network
A$113 million
Clayton Utz
oOh!media and CHAMP Private Equity
John Elliott, Mark Williamson, Geoff Geha
DBP Group debt facility
A$155 million
King & Wood Mallesons
DBP Group
Nicholas Creed
DEBT DBP Group debt facility
A$330 million DEBT iiNet syndicated debt facility
iiNet syndicated debt facility
A$155 million
Nicholas Creed, Mallesons Mallesons and Nicholas Creed have previously acted for DBP Finance Co and the DBP group on a A$550 million domestic medium term notes issue.
• Mallesons and Creed have previously acted for DBP Finance Co and the DBP group on an A$550 million domestic medium term notes issue.
• Middletons previously acted for iiNet on its acquisition of Internode, Australia’s second largest privately owned broadband services company.
Mark Williamson, Clayton Utz Clayton Utz advised CHAMP on the formation and fundraising for the CHAMP III Funds and on the acquisition of oOh!media earlier this year.
7
8
deals
Australasian Legal Business ISSUE 10.11
your month at a glance A$105.1 million Property -10 O’Connell Street 6 Sydney sale
• General counsel at MGPA, Stuart Greaves was previously a senior associate at Clifford Chance.
A$105.1 million property -10 O’Connell Street 6 Sydney sale
• This is the most recent in a spate of deals involving Asian investors buying Australian commercial real estate assets according to Freehills.
Ben Liu, Minters U&D Mining is an existing client of Minter Ellison; earlier this year the firm assisted the them to acquire another coal tenement in Queensland’s Bowen Basin.
Your month at a glance Deal
Value
Advisor
Client
Lead Lawyer
6-10 O’Connell Street Sydney sale to MGPA
A$105.1 million
Clifford Chance
MGPA
Richard Graham, Scott Bache
6-10 O’Connell Street Sydney sale to MGPA
A$105.1 million
Herbert Smith Freehills
Private Property Syndicate (seller)
Greg Hing
Charter Hall Retail REIT fund raising
A$100 million
Allens
Charter Hall Retail REIT
Stuart McCulloch
Charter Hall Retail REIT
A$100 million
Clayton Utz
Macquarie Capital
Brendan Groves
40 Creek Street, Brisbane sale
A$84.5 million
Mills Oakley Lawyers
Charter Hall (seller)
Michael Nixon
ALE Property Group fund raising
A$80 million
Allens
ALE Property Group
Stuart McCulloch
U&D Mining takeover offer for Endocoal
A$71 million
Minter Ellison
U&D Mining Industry
Ben Liu, FaiPeng Chen, Brendan Clark, Theo Kindynis,Joseph Pace
U&D Mining takeover offer for Endocoal
A$71 million
Gilbert + Tobin
Endocoal
John WilliamsonNoble
Ardent Leisure Group’s acquisition of Fenix Fitness and capital raising
A$60.9 million
Mills Oakley
Ardent Leisure
David Nolan
Firm Profile
NZ Commentary
Aligning Trans-Tasman consumer law: New Zealand developments Proposed changes to New Zealand’s consumer laws look set to go ahead soon, following the release of the Commerce Select Committee’s report on the Consumer Law Reform Bill in early October. In addition to modernising New Zealand’s consumer law, the Bill is intended to improve its alignment with Australian consumer law. The Ministry of Consumer Affairs has heavily relied on the Australian experience in developing consumer law reform proposals in the Bill, and this is highlighted by some of the changes recommended in the Committee’s report. Following Australia: Prohibition on unfair contract terms
A significant change is the proposed introduction of a new prohibition on unfair terms in standard form consumer contracts. The Committee acknowledged that provisions relating to the new prohibition reflect the essential features of Australian consumer law. The prohibition will mean that a court may declare a term of a standard form consumer contract to be ‘unfair’ if the term: · Would cause a significant imbalance in the parties’ rights and obligations under the contract · Is not reasonably necessary to protect the legitimate interests of the advantaged party and · Would cause detriment (whether financial or otherwise) to a party if it were applied, enforced, or relied on. A court will not, however, be able to declare as unfair a term that defines the main subject matter of the contract, the upfront price payable, or a term required or expressly permitted by any enactment.
Views on the proposed new prohibition are (unsurprisingly) mixed - with consumer interests/organisations and enforcement agencies generally supporting a new prohibition, and businesses and business associations generally opposing it. Arguments against the prohibition include the lack of evidence for the need for intervention, and that the change would impose significant compliance costs for businesses (which would be passed on to consumers). Arguments for the prohibition include a desire for increased transparency in allocating risk in standard form contracts, and that the fact that consumers
are unlikely to read or understand terms in standard form contracts indicates that there is market failure in this area. The Ministry of Consumer Affairs has also relied on an Australian Productivity Commission report, which concluded that there are ethical and economic reasons for introducing unfair contract terms provisions. Since the enactment of similar provisions in Australia, the ACCC’s focus appears to have been on providing guidance and education to businesses (rather than taking enforcement action), and undertaking proactive compliance reviews of contracts in particular industries. In its recently released annual report, the ACCC notes that, during the compliance review process, businesses have deleted, amended, and made structural changes to contract terms in response to the ACCC’s concerns. Examples of types of terms that the ACCC has identified as possibly unfair include terms that: · E xclude or limit liability for errors and inaccuracies on a business’s website ·D eem a consumer to have ‘understood’ the contract · Attempt to limit a business’s liability for what its employees say and do · Enable the business to unilaterally vary the terms. The Australian experience suggests that the existence of legislation prohibiting unfair terms could have a significant impact on modifying behaviour in relation to standard form contracts, even if enforcement action is rare. It also provides insight as to the likely areas of focus of the Commerce Commission if and when the provisions are enacted in New Zealand.
and introduction of new provisions regulating uninvited direct sales in the Fair Trading Act will better align with the regulation of ‘unsolicited consumer agreements’ in Australia (although some aspects of the Australian law have not been included, such as the regulation of the hours for such sales). No prohibition on unconscionable conduct (yet)
The Committee decided not to recommend the introduction of unconscionable conduct provisions, concluding that “it is prudent to wait until Australia has developed a body of authoritative case law on the matter before following suit”. This conclusion indicates that even further alignment with Australian consumer law is on the cards – but perhaps only after the Australians have shown such provisions to be enforceable and effective. This article was written by Susie Kilty, partner, and Anna Parker, senior solicitor, of Buddle Findlay, one of New Zealand’s leading law firms. Susie and Anna both specialise in competition and public law. Susie can be contacted on+64 4 498 7356 or susie. kilty@buddlefindlay.com and Anna on +64 9 358 7007 or anna.parker@buddlefindlay.com
Other areas of closer alignment
Other proposed changes to New Zealand’s consumer law, which will better (but not completely) align areas of the law with Australia include: · A new prohibition on unsubstantiated representations. The ACCC’s power to issue substantiation notices partly motivated the new prohibition on unsubstantiated representations. · I ncreased maximum penalties for breaches of the Fair Trading Act. The Committee recommended that the maximum penalties be increased from $60,000 to $200,000 for individuals, and $200,000 to $600,000 for bodies corporate, bringing the penalty regime closer to that of Australian consumer law. ·C hanges to the regulation of ‘door to door’ sales. The repeal of the Door to Door Sales Act
Susie Kilty
Buddle Findlay
Anna Parker
Buddle Findlay
10
analysis
Australasian Legal Business ISSUE 10.11
SPOT THE AUSSIE Who’s really winning the race for Asia? Analysis: Renu Prasad
An Asia Pacific leader: the largest fully integrated law firm in the Asia Pacific. -Herbert Smith Freehills We are the largest law firm in Asia. -King & Wood Mallesons
S
ize, as they say, is not everything but Australian firms have certainly not been shy about staking their claim to Asian preeminence. It is easy to understand why: when we look back at the rapid merger activity of 2012, it is clear that much of this activity was designed inter alia to build capacity in Asian jurisdictions. Quality is important, but so is the size of the regional footprint. Both King & Wood Mallesons and Herbert Smith Freehills have made their pitch to be seen as Asia’s dominant firm, which raises the interesting question: who actually is Asia’s largest firm? By our calculations the answer is neither of the above but, as we will see, there are many ways of doing the maths. After what was no doubt a very energetic series of merger negotiations both internally and externally, firms such as King & Wood Mallesons and Herbert Smith Freehills are entitled to indulge in a little boasting. These firms have made significant sacrifices in order to take their place on the global stage and, judging by the overseas
Australasian Legal Business ISSUE 10.11
ANALYSIS
11
on the list although they would not have been far off the pace. As far as Australia is concerned, only two familiar names appear in the top 10: King & Wood Mallesons and Baker & McKenzie.
The road to Asia may not necessarily run via London, but if you’re a London firm, the road to Asia may run via Australia.
press, their manoeuvres have been watched by the global business community with interest. But as statistics from our sister publication Asian Legal Business reveal, it’s a somewhat crowded global stage up there in Asia. In fact, it’s not always easy to spot the Australians and their new best friends in the crowd at all. To put the market in its full context, we’ve published a list of Asia’s 50 largest firms by lawyer count. You can find this list on page 12, directly following this article. Not all of the firms on this list are direct competitors to international firms and some may have a more modest focus. We could offer an opinion on who’s who in the Asian market, but those kinds of assessments have a potential to turn ugly if the firms in question don’t agree. It’s best left as a general point: size may not correlate with the complexity or scope of work performed by the firm. The first thing you’ll notice is that the list is dominated by names which are likely to be new to many in the Australian market. The largest firm in Asia is Dacheng Law Offices, followed by Beijing Yingke – not exactly household names down under. Firms such as South Korea’s Kim & Chang or India’s Amarchand & Mangaldas – numbers nine and 11 respectively – may be more familiar. And where do the Australians fit into all this? Well, Herbert Smith Freehills comes in at number 47 on the list, while Allens partner Linklaters comes in at number 21. Other major names with an Australian presence, such as Ashurst and Norton Rose, don’t appear
While it would be banal to assert that King & Wood Mallesons has won the race for Asia simply because it has more lawyers, it is also hard to ignore the substantial difference in size between Mallesons and its Australian rivals who have merged with UK firms. It is a reminder that merging with a UK firm gets you a big footprint in the UK – not necessarily elsewhere. It has always been interesting to see the marketing people use the phrase “UK firm” synonymously with “global firm” and therefore synonymously with “Asian firm.” They might be right – UK firms, of course, do some impressive work in Asia – but it always pays to be vigilant about the use of language. To paraphrase Corrs CEO John Denton, the road to Asia may not necessarily run via London. But if you’re a London firm, the road to Asia may run via Australia. From the UK perspective, a list of Asia’s largest firms which excludes Australia must seem irrelevant: the whole point of getting into Australia was to gain capacity in the AsiaPacific region. Australia sees itself as part of Asia, it’s in a compatible time zone – why wouldn’t you count Australian lawyers in your Asia resourcing? Why shouldn’t Herbert Smith count Freehills’ 1,000 odd lawyers in its Asia headcount? Viewed this way, there is nothing inaccurate about the Freehills claim to be one of the largest firms in Asia – although Mallesons would still be ahead on that basis. It all comes down to the parameters. So, next time you hear a UK merger referred to as “Eurocentric”, remember that it’s a two way street. It might be Eurocentric from the Australian perspective, but as far as the English are concerned, they’re gaining capacity exactly where they need it. Or not too far from where they need it, at any rate. And Mallesons? Well, no doubt they will continue to argue that they are Asia’s largest firm in the true sense of the concept. And there will be plenty of people who will agree with them.
12
analysis
Australasian Legal Business ISSUE 10.11
ASIA’S 50 LARGEST LAW FIRMS Note: “Total fee earners” includes foreign counsel, patent attorneys and other time keepers not included under the “lawyers” column. For this reason, the total figure may not be the sum of the first two columns. Rank
Firm
Headquarters
Partners
Lawyers
Total fee earners^
Rank
Firm
Headquarters
Partners
Lawyers
Total fee earners^
1
Dacheng Law Offices
China
749
1428
2,676
26
Zhongcheng Renhe Law Firm
China
78
275
307
2
Beijing Yingke Law Firm
China
567
1053
1,820
27
Mori Hamada & Matsumoto*
Japan
95
189
307
3
King & Wood Mallesons
China
226
955
1,181
28
Yulchon
South Korea
90
170
307
Grandall Law Firm
29
Yoon & Yang*
South Korea
100
154
301
4
China
215
580
1112,
30
Khaitan & Co
India
58
242
300
5
DeHeng Law Offices
China
187
763
1,106
31
Clifford Chance*
UK
62
142
295
6
Baker & McKenzie
U.S.
247
639
1,100
32
Luthra & Luthra
India
44
246
290
33
Allen & Overy*
UK
46
164
287
7
Zhong Yin Law Firm
China
117
584
960
34
Bae, Kim & Lee*
South Korea
99
157
280
8
AllBright Law Offices
China
184
671
940
35
Jingtian & Gongcheng
China
85
96
279
9
Kim & Chang
South Korea
120
N/A
800
36
China
37
181
277
10
Zhong Lun Law Offices
China
203
560
747
Deheng Law Group Company Limited
37
DLA Piper
UK/U.S.
60
214
274
11
Amarchand & Mangaldas & Suresh A Shroff & Co
India
68
467
533
38
Jincheng Tongda & Neal
China
99
217
271
Jun He Law Offices
39
80
167
270
China
149
299
482
Mayer Brown JSM
U.S.
12
Nishimura & Asahi
40
65
140
268
Japan
95
321
474
Guantao Law Firm
China
13
41
Deacons
Hong Kong
51
135
268
14
GH Law Firm
China
112
348
455
42
WongPartnership
Singapore
93
171
264
15
Lee & Ko
South Korea
128
225
436
ZhongLun W&D Law Firm
43
46
214
260
China
98
320
418
Beijing Grandway Law Offices
China
16 17
Lee and Li
Taiwan
53
327
380
44
J Sagar Associates
India
53
196
250
18
Allen & Gledhill
Singapore
136
184
357
45
Hogan Lovells
UK/U.S.
44
204
244
19
Shin & Kim
South Korea
118
159
356
46
AZB & Partners*
India
19
221
240
20
Rajah & Tann
Singapore
117
172
355
47
Herbert Smith Freehills
UK
45
192
237
21
Linklaters
UK
53
215
352
Guangdong Sun Law Firm
48
43
150
235
China
35
234
350
Hylands Law Firm
China
22
49
Drew & Napier
Singapore
79
72
233
23
Nagashima Ohno & Tsunematsu
Japan
82
227
340 50
UK
31
N/A
233
Anderson Mori & Tomotsune
Japan
Freshfields Bruckhaus Deringer
TMI Associates*
Japan
24
25
84
207
325
*Information obtained from law firm website 66
215
311
Australasian Legal Business ISSUE 10.11
news
13
In case you missed it….. The month’s top headlines from www.legalbusinessonline.com
STORY OF THE MONTH
In-house report reveals shape of the industry
The Australian Corporate Lawyers Association and Corporate Lawyers Association of New Zealand have released a supplement report for law firms following their bi-annual survey of Australian and New Zealand organisations. According to the supplement, total legal spend by an organisation jumps dramatically once the organisation exceeds turnover by A$1 billion or more per annum or has more than 2,000 staff. It also found that external legal spend increases when the size of the legal team increases. Law firms receive 89 percent of the survey respondents’ legal spend according to the report. The finance and insurance sectors are the most likely to be “legal reliant” and utilise a significant amount of external legal advice. The most common form of advice sought from external suppliers, according to 91 percent of respondents, is contract and commercial advice. The second most common form required is litigation and dispute resolution. Overall only 29 percent of respondents use legal panels, although amongst government respondents that figure percentage jumps to 51 percent. Companies with an annual turnover of more than A$1 billion are also more likely to use panels (58 percent). Alternative billing still remains limited across the spectrum of respondents included in the report. Overall 29 percent use alternative billing options. Again, organisations with a turnover of more than A$1 billion are more likely to utilise alternative billing (37 percent) than companies with a lower turnover. Of those organisations that utilise alternative billing arrangements, 93 percent use fixed price billing, compared to 39 percent using volume base and 21 percent using risk or reward billing arrangements. A small six percent of organisations utilise Legal Process Outsourcing. Looking ahead at the next two years, seven percent of respondents expect to increase legal budgets “significantly” while 43 percent expect to increase them “slightly” and 36 percent expect them to remain steady. In terms of increasing legal teams, 45 percent expect to make slight increases, while 42 percent expect teams to remain steady.
SOUTH AUSTRALIA
New president for SA Law Society
The South Australian Law Society has appointed John White as its new president. White replaces outgoing president of two years Ralph Bönig. In his new role White, a barrister who practises at Mitchell Chambers, will oversee the society’s response to the changes that the Government proposes to make to Compulsory Third Party Insurance, amendments to the Legal Practitioners Act 1981, to bring aspects of the regulatory system for lawyers in line with provisions already existing nationally, and other upcoming key issues facing the legal profession. “I also intend to advocate for proper funding and better resourcing for the courts with a focus on quicker processes for resolution of matters before the courts,” said White.
VICTORIA
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Women now account for half of the Victorian profession
The Law Institute of Victoria has released its membership details for the previous financial year and women now account for 50 percent of members according to the state body for lawyers. The LIV had a total of 17,188 registered members in the 2011-12 financial year, representing a two percent increase. Of those 12,250 were full members, 2,165 were associate members, 2,653 were student members and 120 honorary members. The average age of members is 40 years, however, 55 percent are under the age of 40. More than 58 percent of employed members are working in city-based organisations and 53 percent are employed in Victorian law firms.
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14
league tables
Australasian Legal Business ISSUE 10.11
Top M&A Firms - Australian completed deals
1
NO.
Top M&A Firms - Australian completed deals
1
herbert smith Freehills llp
13,713.31 Deals: 58
NO.
Value ($Mil)
Market Share: 21.8
Rank Legal Advisor
Value Mkt. Deals ($Mil) Share
King & Wood Mallesons
21,452.07 Deals: 36.3
Value ($Mil)
Market Share: 43
Value Mkt. Deals ($Mil) Share
Rank Legal Advisor
2
Gilbert + Tobin
10,111.39
16.1
32
2
Ashurst
18,820.02
31.8
39
3
Ashurst
9,891.05
15.7
46
3
Gilbert + Tobin
18,750.47
31.7
28
4
King & Wood Mallesons
7,042.65
11.2
50
4
Herbert Smith Freehills LLP
17,455.93
29.5
65
5
Allens
6,594.07
10.5
37
5
Clayton Utz
16,923.59
28.6
40
6
Clayton Utz
5,677.32
9.0
34
6
Allens
16,256.57
27.5
28
7
Baker & McKenzie
4,952.95
7.9
30
7
Corrs Chambers Westgarth
11,991.24
20.3
20
8
Latham & Watkins
3,309.12
5.3
1
8
Minter Ellison
8,856.95
15.0
42
8*
Jipyong Jisung
3,309.12
5.3
1
9
Allen & Overy
8,196.11
13.9
26
10
Linklaters
3,248.53
5.2
2
10
Baker & McKenzie
7,602.83
12.9
31
11
Minter Ellison
3,076.29
4.9
40
11
Norton Rose
4,320.75
7.3
24
12
Osler Hoskin & Harcourt LLP
3,027.19
4.8
6
12
Cravath, Swaine & Moore
4,074.33
6.9
2
13
Allen & Overy
2,924.32
4.7
16
13
McCullough Robertson
3,407.92
5.8
19
14
Clifford Chance
2,918.63
4.6
9
14
Clifford Chance
3,150.23
5.3
9
15
Blake Cassels & Graydon
2,510.43
4.0
4
15
Baker Botts LLP
2,739.72
4.6
1
16
Norton Rose
2,277.41
3.6
27
16
Orrick Herrington & Sutcliffe LLP
2,554.96
4.3
2
17
Middletons Lawyers
1,639.97
2.6
5
17
Stikeman Elliott
2,440.81
4.1
3
18
Squire Sanders & Dempsey LLP
1,564.50
2.5
7
18
Osler Hoskin & Harcourt LLP
2,338.40
4.0
4
19
Corrs Chambers Westgarth
1,318.23
2.1
22
19
Kirkland & Ellis
2,083.05
3.5
5
20
Johnson Winter & Slattery
1,313.28
2.1
4
20
Cassels Brock & Blackwell LLP
1,351.86
2.3
3
Gowling Lafleur Henderson LLP
21
Werksmans Attorneys
1,334.61
2.3
1
21
1,305.91
2.1
3
21*
CLS Attorneys
1,334.61
2.3
1
22
Simpson Thacher & Bartlett
1,250.64
2.0
2
23
2.1
1
1,118.41
1.8
1
Lawson Lundell Lawson & McIntosh
1,220.35
23
Lawson Lundell Lawson & McIntosh
23*
Kalamba & Associes
1,220.35
2.1
1
24
GRT Lawyers
959.16
1.5
1
23*
Linklaters
1,220.35
2.1
1
25
DLA Piper
774.95
1.2
26
23*
1,220.35
2.1
1
Subtotal with Legal Advisor
47,860.99
76.1
401
Davies Ward Phillips & Vineberg LLP
Subtotal without Legal Advisor 14,995.80
23.9
1,017
Subtotal with Legal Advisor
50,623.66
85.6
354
Industry Total
100.0
1,418
Subtotal without Legal Advisor
8,528.22
14.4
666
Industry Total
59,151.88
100.0
1,020
62,856.79
(*tie) Based on Ranking Value inc. Net Debt of Target Source: Thomson Financial Date: 2012-10-30 09:21:47 EDT
(*tie) Based on Ranking Value inc. Net Debt of Target Source: Thomson Financial Date: 2012-10-30 09:07:00 EDT
Unlock your growth potential. Firms using BHL Insight really are more profitable. BHL Insight gives law firms a complete accounting, matter management, document/ email automation, marketing and collections system. At a surprisingly low cost. 1. BHL Insight costs less. Firms use Insight for between $60 and $100 per user per month. You choose a subscription model or traditional licensing.
2. Insight requires fewer computer servers than most other systems. It is fast and reliable. This is important if you decide to use a cloud-based or hosted platform. 3. Insight does not need external consultants to connect and configure different components. IT and consulting costs exceed software costs in most firms, so reducing them is a major contribution to law firm profitability. CFOs and Partners love it.
4. Insight is a secure, long-term platform for your business growth. It is not subject to sudden price increases or termination of support. BHL has increased the support costs for Insight by 4% per annum for the last eleven years. We don’t lock clients in with long contracts or closed databases.
5. Your investment of staff time in your own systems and processes is safe. At BHL we have been developing and supporting practice management systems for 35 years. Insight is our fourth generation product. No BHL client has ever been denied ongoing support or obliged to move to a new system until they were ready to make the move. 6. BHL Insight is easy to learn and use, so it is learnt and used. This delivers the promised productivity benefits of software and lets you manage more matters with the same number of staff. 7. Clients who want to have the system modified to suit their needs can have that done swiftly and at reasonable cost. Insight adapts to your needs, so you can differentiate your firm and grow your practice groups.
Software or more time at home?
Software or bigger premises?
Software or better holidays?
Use BHL Insight and have it all!
8. The “Paperless Office” is here: BHL Insight is fully developed and very functional. We often hear that practice management software is all the same. Not so. Firms who examine prospective systems in detail usually buy BHL: “Mate, I don’t want to float your boat but the comparison between “________” and Insight is chalk and cheese.” Statement of the CFO of a mid-sized law firm. 9. Many law firms have taken the word of their software vendor or consultants for the effectiveness of their accounting software. To their cost. Insight automates accounting as well as document assembly, document management, workflow and legal project management. Releasing the accounts staff from mundane data entry might seem like a trivial cost saving, but experience shows it has a material impact on the quality of firm management, cash flow and profitability.
10. Using the same system for all of your firm automation initiatives reduces costs and speeds the adoption of automated processes. Control your IT costs and give your people the tools they need. It’s money in the bank.
11. The people at BHL care about the results you get. We are not ‘incented’ by ROI or ROE, we are motivated by client satisfaction and building strong reputations as law firm automation specialists. We help you make it all happen.
12. Insight has been developed in collaboration with a wide variety of law firm clients in Australia and New Zealand, it suits large and small firms, from 1 to 1000 users, and can make a significant contribution to your profit per partner. Contact cmec@bhl.com.au or call 1300 132 385 to arrange a free, no obligation presentation.
Ph 1300 132 385
16
>>
GOVERNMENT
Technology in practice
Q&A with
Damian Huon Damian Huon is a legal technology strategist with over 23 years experience advising Australia’s leading firms. As CEO of Huon IT, Damian and his team achieve business outcomes for professional service organisations with ‘everything technology’.
Would you carry an entire copy of your firm’s IP around in your bag each day? Your staff might be. Are we actually opening ourselves to more risk in the process of trying to backup our data? Here, seasoned Legal Technology Advisor Damian Huon answers the most commonly asked questions about taking backups offsite, and how to do it safely.
Q1 Isn’t taking a backup disk offsite each evening enough? No. Not only are traditional backup systems loaded with risks such as hardware failures, information loss and data corruption, there is also a vast margin for human error. All it takes is a staff member to forget the daily drive changeover, and you are without an offsite backup for at least 24 hours. We also frequently see drives lost in transit, and stored insecurely in places like car boots.
Q2 So how does Online Backup differ?
In simple terms, Online Backup lets you send a copy of your data offsite via a secure, protected internet link. It is a fully managed service, allowing your staff to focus on their primary roles while all monitoring, maintenance and testing of backups is taken care of by a qualified provider. This increases efficiency, reduces costs and instils confidence in your ‘Plan B’. It means firms of any size or budgets are able to access an achievable backup solution, which also has the potential to act as a platform for Disaster Recovery in the future.
Q3 Is it safe?
It depends. Online backup certainly reduces risks of data damage, information loss, and serious compliance breeches, by creating an automated system to eliminate human error. But it also depends on where your provider stores it. You should accept no less than a government certified secure data centre, with encrypted data transfer to ensure nothing can be intercepted. Done right, online backup is a far safer alternative to your staff carrying your critical data home in their bag each night. Email your questions to alb@huonit.com.au
Australasian Legal Business ISSUE 10.11
AN OVERVIEW OF LEGAL SPEND BY KEY GOVERNMENT DEPARTMENTS AG drops spend, but Ashurst doubles its share The Commonwealth Attorney General’s department has managed to slightly decrease its annual legal expenditure despite a number of high profile cases in the past 12 months. The department, led by Nicola Roxon, spent a total of A$11,819,550 on legal costs in the 2011-2012 financial year, down from A$11,830,853 in the previous financial year. The majority of that budget was spent on external legal services, which came to a little over A$10 million. The Australian Government Solicitor (AGS) accounted the for lion’s share of the external legal expenditure with a total bill of A$7,439,502. Ashurst (formerly Blake Dawson) was the second highest recipient of legal fees from the department, earning A$572,246. The firm more than doubled its fees from the department compared to the previous financial year, which was A$223,374. King & Wood Mallesons (formerly Mallesons Stephen Jaques) also increased its legal fee collection from nothing the previous year to A$62,602 as a result of special investigation services for the department.
ATO ups legal spend to nearly A$100m The Australian Tax Office (ATO) has seen its legal fee expenditure increase by more than A$8 million in the past financial year. The ATO spent a total of A$59.5 million on external legal fees in the 2012 financial year, in addition to A$36.3 million on internal legal fees, bringing it to a total of A$96.3 million. The taxation office put the increased legal expenditure down to an increased number of cases and the “complexity of cases”. However, despite the soaring legal fees, the ATO managed to recoup only A$3.5 million in the 12 months to June 2012. This is despite the ATO recording a win in 50 percent of cases that were finalised in the Federal Court during the 2012. “While we have a good success rate with litigation overall, some court cases where we were not successful involved substantial amounts of revenue or strategically important issues of law interpretation,” stated the ATO’s annual report. From 1 July 2008 until 30 June 2012 there were 17 decisions of the High Court where the ATO Commissioner was a litigant. The Commissioner was successful in seven of those cases. Based on its own analysis, 11 decisions (65 percent) clarified the law and five (29 percent) resulted in the government announcing law change. Of those, 47 percent were funded under the ATO test case funding program.
GOVERNMENT
Australasian Legal Business ISSUE 10.11
>> ACCC legal fees increase to A$26.2m The Australian Competition and Consumer Commission (ACCC) has seen its budget blow out as a result of increased external legal costs. The regulator reported an operating loss of A$26.2 million for the 2012 financial year, and spent a total of A$26.277 million on legal fees. This is an increase on the previous two financial years which were A$25.3 million and A$20.9 million respectively. According to its annual report, the ACCC increased expenditure overall by A$27.2 million, as a result of increases in employee related costs and settlement of litigation costs. The regulator’s expenditure has been steadily increasing for the past five years. In the 2012 financial year the ACCC commenced a total of 26 litigious matters including cases against Apple, Google and Harvey Norman.
ASIC drops external legal costs The Australian Securities and Investment Commission (ASIC) has dropped its annual legal spend for the 2012 financial year. The regulator, which has had a number of high profile cases come to conclusion in the past 12 months, dropped its legal and forensic costs to A$15.332 million, down from A$25.152 million the previous financial year. ASIC launched 134 new litigation cases in the 12 months to June 30 and completed 179. Of those completed, it was successful in 92 percent of cases, up from 90 percent the year before.
17
In-house Q&A
CHRIS MURPHY General Manager – Legal and Company Secretary
Melbourne Stadiums Ltd | Etihad Stadium
1
In your opinion, why have in-house lawyers become an increasingly indispensable part of an organisation? In-house lawyers occupy a unique position within an organisation whereby they often interact with and provide support to a wide number of stakeholders, both internal and external to the organisation, as well as across various departments within an organisation. As a result, in-house lawyers are well placed to take a global view of matters and drawing on a breadth of experience may be able to provide not only legal advice but strategic advice as well. In addition, as the legal and regulatory compliance burden on business increases, in-house lawyers are playing an increasingly important role in assisting organisations to manage compliance risk.
2
In recent times, the role of the General Counsel has diversified into a multi-faceted role, (where the General Counsel can wear the ‘hat’ of Lawyer, Legal Manager, Compliance Manager, and Company Secretary). In your opinion, do you believe this has increased your risk profile? In-house lawyers by virtue of their skills and experience are often the logical choice to take on additional roles such as compliance manager or company secretary, particularly in smaller organisations. However, in the wake of the James Hardie decision, I believe that some in-house lawyers may think twice before taking on additional responsibilities beyond the traditional role of in-house lawyer and will want to be sure that they have both the resources and time to properly carry out their responsibilities.
3
In your opinion, what do you consider to be the main challenges you will face in the year ahead? Etihad Stadium is a world-class sports and entertainment venue and is privately owned, mainly by a number of Australian superannuation funds. As such, my main challenge in the year ahead will be to support the business in generating a return for our investors in a difficult economic climate while ensuring that our business appropriately manages and safeguards against legal and compliance risks.
JLegal is a global specialist legal recruitment consultancy focused solely on providing recruitment solutions to the legal profession. For a confidential discussion about your career, contact one of our senior consultants today.
Melbourne t | +61 3 8102 1900
www.jlegal.com Sydney t | +61 2 8249 4730
18
fast 10
Australasian Legal Business ISSUE 10.11
ALB 2012
FAST 10 Supported by
We reveal Australia’s fastest growing law firms
I
n August, ALB calculated that the average large Australian law firm had grown revenues by about nine percent in FY2012. It was a somewhat surprising result given the economic gloom which has dominated the headlines and we noted that the average figure could be compromised by
very high and very poor results at either end of the scale. Nonetheless, it is safe to say that the industry had a stronger than expected 2012. Anecdotal evidence indicates that the first quarter of 2013 is a very different story, but for the moment let’s take the time to bathe in the glow of the previous financial year.
Continued on page 20
ALB 2012
FAST 10
Australasian Legal Business ISSUE 10.11
Supported by
ALB FAST 10 – 2012 The following list is ALB’s pick of the fastest growing firms, based on revenue growth and size of the base from which this growth has been achieved. Please refer to article text for more on the methodology behind the Fast 10. Firm
2012 revenue
2011 revenue
Growth
1
Herbert Smith Freehills
$565 million
$511 million
11%
2
McCullough Robertson
$96 million
$83 million
16%
3
Arnold Bloch Leibler
$67. 8 million
$58.6 million
16%
4
Kelly & Co
$25 million
$19 million
32%
5
Mills Oakley
$49 million
$42 million
17%
6
Wotton + Kearney
$27 million
$23 million
18%
7
Fox Tucker
$12 million
$9.4 million
30%
8
People & Culture Straegies
$4.2 million
$3.1 million
36%
9
Carter Newell
$21.9 million
$19.1 million
15%
10
Marque Lawyers
$5.6 million
$4.8 million
17%
RAW REVENUE FIGURES – 2012 The following is a ranked list of the fastest growing firms without embellishment by ALB. For an explanation of why this list was not used as a basis for the 2012 Fast 10, please refer to the article text. Firm
2012 revenue
Growth
Firm
2012 revenue
2011 revenue
Growth
$3.1 million
36%
12
Arnold Bloch Leibler
$67. 8 million
$58.6 million
16%
$25 million
$19 million
32%
13
Carter Newell
$21.9 million
$19.1 million
15%
Fox Tucker
$12 million
$9.4 million
30%
14
$28.5 million
14%
$15.2 million
$11.8 million
29%
Integrated Legal Holdings
$32.4million
AdventBalance Thomsons Lawyers
$93 million
$76 million
22%
15
M+K
$52 million
$46 million
13%
16
Maddocks
$114 million
$100 million
13%
17
Lander & Rogers
$75 million
$67 million
12%
18
Moray & Agnew
$84 million
$75 million
12%
19
Herbert Smith Freehills
$565 million
$511 million
11%
20
Holding Redlich
$69 million
$63 million
11%
1
People & Culture Straegies
$4.2 million
2
Kelly & Co
3 4 5
2011 revenue
6
Slater & Gordon
$218 million
$184 million
19%
7
Wotton + Kearney
$27 million
$23 million
18%
8
HWL Ebsworth
$140 million
$120 million
17%
9
Marque Lawyers
$5.6 million
$4.8 million
17%
10
Mills Oakley
$49 million
$42 million
17%
11
McCullough Robertson
$96 million
$83million
16%
20
fast 10
Australasian Legal Business ISSUE 10.11
The ALB Fast 10 is ALB’s annual list of the fastest growing firms in Australia and New Zealand. Certain caveats have always applied: firms need to supply their revenue figures in order to be considered for the 10, which means that a number of firms – particularly New Zealand firms – opt out of the process for confidentiality reasons. Two years of revenue results are required, which means that newly established firms are not eligible. In the early years of the Fast 10, the process was fairly straightforward and all of the featured firms were nimble midsize firms with revenue growth in the vicinity of 20 percent. From 2007 onwards, a number of these firms were involved in mergers and were able to claim this “growth” for Fast 10 purposes, a result which was not particularly popular with firms which were growing organically. More recently, the Fast 10 has been dominated by firms with alternative models to the traditional corporate firms: these have included plaintiff firm Slater & Gordon, listed aggregator Integrated Legal Holdings and secondment-only firms such as Advent Lawyers (now Advent Balance). This provided a useful reminder that the real growth in the Australasian market has been with those who are prepared to experiment with new models. But lying at the heart of the Fast 10 is something close to a fallacy or at the very least an ambiguity. The difficulty is that the rate of revenue growth does not take into account the relative size of each firm and the space it occupies in the market. For example, Herbert Smith Freehills recorded 11 percent revenue growth, which is a remarkable achievement given the size of the firm and the fact that it has easily surpassed the growth at all comparable firms. Eleven percent growth would not, however, put Freehills even within striking distance of the top 10. At the other end of the scale, People & Culture Strategies recorded 36 percent growth – a very good result which is a credit to the firm. The base from which this growth was achieved, however, was
A$3.1 million. Compare that with the Freehills base of A$511 million and you start to see the point. Sometimes 11 percent is harder work than 36 percent, depending on who’s doing the sums. Mergers have been another perennial challenge for the Fast 10. Firms which have grown by acquisition have “grown” in the literal sense of the word, but some would argue that this is less meritorious than organic growth and may not say much about the long term sustainability of the firm’s growth. Some firms that have made the Fast 10 on the back of acquisitions in recent years have not reappeared since. We have toyed with the idea of introducing an “Organic Fast 10” concept to address this problem. Apart from diluting the Fast 10 brand, “organic growth” is in itself a difficult concept to pin down. It is arguable that firms who make lateral hires with the intention of acquiring not only the lawyer in question but also their client base cannot be said to have grown organically – a point which may apply with even greater force where firms have acquired entire teams. Two of the fastest growing firms, HWL Ebsworth and Thomsons Lawyers, have both made major en mass hirings which fall into that category. The ultimate answer to these questions lies with the reader and the particular purpose the reader has for seeking out the information in the Fast 10 survey. We have therefore resolved to provide two lists: the first, at the front of this feature, is a list of the fastest growing firms purely by revenue growth, without reorganisation by ALB. The second list is a ranked showcase of what ALB has determined to be the fastest growing firms where firm size and the context of the firm’s growth has been taken into account. Generally, firms which have been involved in mergers or large scale lateral hirings do not appear on this list. This is by no means an exact science and the results will not please everyone – but we suspect this is one of those situations where no single solution will completely cover all eventualities.
ALB’S PICK OF THE TOP GROWING FIRMS Marque Lawyers
Partners: 8 (14 percent increase) Lawyers: 23 (21 percent increase) Revenue: A$5.6 million (17 percent increase) Michael Bradley, Marque Lawyers
10
Back in 2010, Marque Lawyers was the fastest growing firm in Australia with revenue growth of 56 percent and revenues of A$4.5 million. Two years down the track, the corresponding figures are 17 percent and A$5.6 million, which suggests that the firm had a quieter 2011 before returning to growth in 2012. These figures also demonstrate the growth trajectory of many new firms which record very high revenue growth in their first two to three years of operation and return to more modest levels thereafter. In that context, 17 percent is a creditable performance for Marque given that the firm is now beyond the initial momentum of its launch years. The firm also added five new fee earners during the year, including an additional partner.
ALB 2012
FAST 10
Australasian Legal Business ISSUE 10.11
Supported by
Carter Newell
Partners: 12 (8 percent increase) Lawyers: 58 (12 percent increase) Revenue: A$21.9 million (14.9 percent increase) Carter Newell and McCullough Robertson are the two Brisbane firms in this year’s Fast 10 and both had similar growth statistics (15 percent for Carter Newell and 16 percent for McCullough Robertson). However, McCullough Robertson is a considerably larger firm and therefore progressed further up the Fast 10 list in recognition of the fact that the larger the firm, the more difficult growth becomes. That is a practical example of the kind of logic being applied to this year’s list. Carter Newell is the quintessential example of the old adage “choose your strengths, build them up and stick with them.” Familiar practice areas such as insurance or construction are an important part of the mix but the firm also has a strong niche practice in aviation law. This, we suspect, will be the blueprint for mid-size and boutique firms into the future – while the more commonly found practice areas have their place, it is the more specialist areas which are the likely distinguishing factors.
Paul Hopkins, Carter Newell
9
People & Culture Strategies
Partners: 4 (100 percent increase) Lawyers: 12 (33 percent increase) Revenue: A$4.2 million (36 percent increase) In 2010, Joydeep Hor departed well known workplace relations firm Harmers to establish his own practice, People & Culture Strategies (P&CS). Well, time flies and it’s now been two years since P&CS opened its doors, meaning that the firm has two years of revenue data and is therefore eligible for Fast 10 consideration. The figures show that P&CS recorded 35.5 percent growth last year, earning a total of A$4.2 million in revenue. Hor is a well known workplace relations expert and the latest point of differentiation for his firm is an emphasis on alternative billing arrangements. Hor told Lawyers Weekly that the firm was anxious to offer alternatives to hourly billing and that he hoped that around 70 to 75 percent of the firm’s revenue will be derived from the retainer model alone in five years time. Fixed fee and retainer models currently provide around 30 percent of firm revenue.
Joydeep Hor, P&CS
8 scope identification
business processes and system design
change management
focused
goals
client focused
communication planning
project management
outcomes
independent advice
strategic review
training design
data extract validation
tools and methodologies
data clean up
business process re-engineering
authentic
risk assessment
approachable
planning
system design
strategy quality assurance
training design
disciplined value report design
support
reliable
objectives
results
report design
industry experience
achievement
teamwork collaboration
system and process testing
risk assessment
insight
trusted adviser
project planning
knowledge management
training
system evaluation
training delivery
implementation
STRATEGY IMPLEMENTATION SUPPORT
change impact assessment
data migration
vision solutions focused success
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22
fast 10
Australasian Legal Business ISSUE 10.11
Fox Tucker Lawyers
Partners: 15 (15 percent increase) Lawyers: 27 (no change) Revenue: A$12.1 million (30 percent increase) Joe DeRuvo, Fox Tucker Lawyers
7
While national firms were readying themselves for international mergers, there were plenty of partners who opted out of the global strategy and made their own arrangements. The Adelaide office of the former DLA Phillips Fox is one such example and these lawyers split off from DLA before eventually joining forces with local rival Rankine Tucker in 2010 to form Fox Tucker Lawyers. While part of the reason for this move was to reduce costs by avoiding the overheads associated with a national or global structure, there has also been a benefit on the revenue side of the equation: revenues are up 30 percent to about AS12 million. The headcount for nonpartner lawyers has remained steady during the same period, although the firm has added two extra partners.
Wotton + Kearney
Partners: 13 (7 percent decrease) Lawyers: 58 (14 percent increase) Revenue: A$26.9 million (18 percent increase) David Kearney, W+K
6
Last year we noted that W+K was leading the growth stakes in a field of well regarded insurance specialist firms who were all performing strongly. We can only echo that sentiment in 2012 as W+K notches up its fourth consecutive year in the Fast 10. The firm is particularly pleased with the growth of its Melbourne office which now has 22 lawyers after opening with a team of just three back in 2007. Interestingly, Melbourne is also a strong growth market for rival Moray & Agnew and Colin Biggers & Paisley also opened its doors there this year, so clearly this is a market to watch for insuranceoriented firms. Overall, W+K boosted revenues by 18 percent in 2012.
Mills Oakley
Partners: 36 (24 percent increase) Lawyers: 119 (17 percent increase) Revenue: A$48.6 million (17 percent increase) John Nerurker, Mills Oakley
5
Consistency has always been the key to sustainable growth and with double digit fee growth for eight consecutive years, it’s no surprise to see Mills Oakley back in the Fast 10 for 2012. Growth in the modern era has always been a delicate balance between building capacity and maintaining quality of service and in this respect, Mills Oakley CEO John Nerurker has proven to be a master of his craft. The trick is attracting and retaining the right talent – and if the culture stays right, there’s no reason why Mills Oakley can’t remain on its current growth trajectory for many years yet.
ALB 2012
FAST 10
Australasian Legal Business ISSUE 10.11
Supported by
Kelly & Co
Partners: 18 (12.5 percent increase) Lawyers: 45 (10 percent increase) Revenue: A$25 million (32 percent increase) It’s good to see two Adelaide firms in this year’s Fast 10 – a variation on the usual Melbourne dominance, although we also have two Victorian-based firms in the list. Former Kelly & Co CEO Stuart Price left the firm in August and has been replaced by former Grant Thornton managing director Mark Bisset. It’s not a bad time to be handing over the baton as Kelly & Co has just recorded its strongest performance in its 95 year history – 32 percent growth and A$25 million in revenues – so Price is leaving the firm in great shape. The firm has been busy building its relationships with the community and established a Business Advisory Council earlier this year to strengthen links with local business people.
Mark Bisset, Kelly & Co
4
Arnold Bloch Leibler
Partners: 38 (15 percent increase) Lawyers: 81 (1 percent decrease) Revenue: A$67.8 million (16 percent increase) In addition to its well known Melbourne heritage, ABL celebrated 10 years of operation in Sydney this year. This is a unique firm with a mix of clients ranging from large corporates through to high net worth individuals – the firm represents a large proportion of the individuals and family groups identified in Business Review Weekly’s annual review of Australia’s Rich 200. The diversity of the client base may help explain the firm’s second consecutive appearance in the Fast 10, on the back of 16 percent growth last financial year.
Henry Lanzer, ABL
3 scope identification
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ALB 2012
FAST 10
fast 10
Supported by
McCullough Robertson
Partners: 50 (9 percent increase) Lawyers: 164 (7.5 percent increase) Revenue: $96 million (16 percent increase) Brett Heading, McCullough Robertson
For a firm which is dangerously close to cracking the A$100 million revenue mark, McCullough Robertson has had strong growth. Sixteen percent is not quite in the category of stratospheric growth – if we were to apply the pure revenue formula of previous years, 16 percent would not even qualify for the top 10 – but the notable factor here is the size of the base from which this growth has been achieved. This is a firm which habitually refers to itself as Queensland’s largest firm and while it’s not often that the largest firm in a given market has the fastest growth, this is exactly what McCullough Robertson has achieved.
2 Herbert Smith Freehills
Partners: 193 (no change) Lawyers: 734 (2.5 percent increase) Revenue: A$565 million (11 percent increase) Gavin Bell, Freehills
1
Eleven percent growth may not sound overwhelming, but when your 2011 revenues were over A$500 million and you’re operating in the sorely challenged premium market, it’s a noteworthy achievement. The only other firm in the old “big six” to even come close to double digit growth was Minters (eight percent) while the remaining firms were below five percent and in some cases in negative territory. Meanwhile, Corrs recorded five percent growth, Norton Rose had seven percent and Gilbert + Tobin had a good year with 10 percent growth. The key point from all this is that Freehills has outperformed all of its comparable rivals in a tough market and it has outstripped many of the smaller firms too. There has been much conjecture as to how this has occurred – the firm’s excellent industrial relations practice and fast growing Brisbane office are two likely factors – but as CEO Gavin Bell has noted, these teams do not make up a large enough proportion of the firm’s revenue base to independently drive the overall result. A knack for picking up the top work on offer across a wide range of practice areas is the more probable explanation.
If it’s getting the strategy right or getting the strategy implemented the right way, you can depend on Harriss Wagner.
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client focused
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data clean up
business process re-engineering
authentic
risk assessment
approachable
planning
system design
strategy quality assurance
training design
disciplined value report design
support
reliable
objectives
results
report design
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+ 61 2 9293 2516
|
vision
achievement
teamwork collaboration
system and process testing
risk assessment
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canberra 2012
A one client town
Australasian Legal Business ISSUE 10.11
Just like politics, the Canberra legal market continues to witness a whirlwind of movement, but what will tighter budgets and an upcoming election mean for those on the ground? Olivia Collings investigates.
Australasian Legal Business ISSUE 10.11
canberra 2012
C
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anberra, home to the Federal Government and an assortment of law firms all looking to get a share of the Commonwealth’s annual A$280.6 million plus external legal budget. In the past 15 months the market has welcomed an additional two law firms to the ranks, however, both firms established themselves with partners already within the market, although there has been an overall increase in lawyers in the territory. According to the ACT Law Society there are currently 922 private practice lawyers and 651 government lawyers, up from 916 private practice lawyers and 579 government lawyers in 2011. This equates to an overall increase in lawyers of five percent. The two new firms are of course, HWL Ebsworth and Maddocks. HWL Ebsworth entered the market with a team of partners from the then DLA Phillips Fox (now DLA Piper) while Maddocks entered on a smaller scale with one partner from Blake Dawson (now Ashurst). HWL Ebsworth’s managing partner Juan Martinez says the firm made a strategic decision to enter with “critical mass” straight away, and entered with a much larger commitment to Canberra than one would normally expect with a new office. Since launching with seven partners the firm has added a further partner from Ashurst. “We have managed to sustain our initial strong start in Canberra,” says partner George Marques. However, according to Minter Ellison’s senior Canberra partner Paul McGinness, the arrival of new law firms to the market has not dramatically changed the landscape. “New firms have launched, but they are the same people who were operating there before,” he says. Long time Canberra partner at Clayton Utz John Carroll says that with the significant changes in the Australian legal market, with some firms having a more international focus and others having a more distinctly Australian focus, some firms appear to be less focused on government work than they traditionally were.
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canberra 2012
Australasian Legal Business ISSUE 10.11
Simonetta Astolfi, partner-in-charge at the Maddocks Canberra office says the decision to move from Ashurst to Maddocks was based on a desire to “build something from scratch” and not a result of her former firm’s internationalisation. She states: “Maddocks already had a fairly sizeable commonwealth practice and therefore a Canberra office was consistent with the firm’s focus on government as a practice and a lot of the firm’s clients were encouraging it to open an office in Canberra.” Ashurst has in the mean time promoted a lawyer to the partnership in Canberra thus maintaining its presence and government-work. In fact, for the most recent financial year, Ashurst received the second highest percentage of legal fees paid by the Attorney General’s department, behind the Australian Government Solicitor (AGS). Ashurst’s fees from the Attorney General’s department more than doubled between FY2011 and FY2012 from A$223,374 to A$572,246.
New firms have launched, but they are the same people who were operating there before Paul McGinness, Minter Ellison According to Marques the Canberra HWL Ebsworth office has had a very busy initial 12 months because of its involvement in the Defence Department review, which had been initiated at DLA and the start of the Commonwealth Legal Services Multi-Use List (LSMUL), which was formalised in June. “About 80 percent of our work is Australian Government, the rest is insurance or private sector work,” says Marques. “And we have managed to sustain our initial strong start in Canberra.” Similarly, Norton Rose Australia has also had a prosperous year in Canberra despite being a global firm. “It is absolutely booming,” says partner Michael Tooma. “We are experiencing record growth in our Canberra office, driven largely by a concerted effort by our partners in that office to pursue work and by our appointment to the LSMUL.”
Much of the growth for the Canberra office of Norton Rose has been in new areas such as workplace, health and safety, which is a new practice area for the office. “Growth has been spearheaded by the addition of a special counsel in our team who relocated 18 months ago from Sydney to Canberra… she has built up a team of 10 lawyers around her who do nothing but OHS work for commonwealth departments,” says Tooma. Overall, the Canberra Norton Rose practice has grown three fold in the past two years according to Tooma. Carroll says the Clayton Utz office there has also grown consistently over the past few years and in the past 12 months. “For the last couple of years we had had significant growth in our work for the Commonwealth, including in Canberra,” he says. Clayton Utz received the largest amount of fees from the Commonwealth in out of the private practice firms accounting for 13 percent of fees paid in FY2011. “About 75 percent of our work in the Canberra office is government related,” adds Caroll. However, he is quick to point out that the Canberra office is not wholly responsible for the firm’s government work. “There is as much work done for Commonwealth clients in Canberra as is done by the firm outside of Canberra,” he says. “The Canberra office does more than the other offices, but it does not do the majority of the firm’s commonwealth work.” He adds: “The Commonwealth Government has its offices spread across the country. They
Canberra legal market Canberra Office
Partners August 2012
Partners August 2011
% Change
AGS Ashurst**
Lawyers August 2012
Lawyers August 2011
% Change
150
140
7%
6.6
8.4
-21%
27.3
28.4
-4%
Clayton Utz
6
6
0
48
39
23%
DLA Piper
6
4
50%
19
20
-5%
HWL Ebsworth
8
7
14.3%
14
9
55%
King & Wood Mallesons
6
5
17%
35
35
0
Maddocks
1
0
-
4
0
-
Minter Ellison
11
10
-9%
40+
40+
0
Norton Rose*
3
3
0
22
18
22%
Sparke Helmore
6
7
-14.3%
27
24
12.5%
* includes graduate lawyers ** Full Time Equivalents
canberra 2012
Australasian Legal Business ISSUE 10.11
are not all based in Canberra. The work, at least in part, follows the geographic location of the clients giving instructions.” The Commonwealth Government’s primary external legal advisor, the AGS, has also witnessed a consistent level of activity in the past six to 12 months. In 2011 the AGS accounted for 40 percent of the legal fees spent by the government and 45 percent of AGS staff are based in Canberra. It acts for government agencies across all areas government activity from significant areas of policy reform through to routine business matters. Sparke Helmore has also witnessed a busy six months at the Canberra office. “Growth across our firm continued with a number of new partner and special counsel appointments,” says Canberra partner Richard Morrison. “We’ve worked on a number of significant matters, including the public takeover of Ideas International.” Budgetary pressure While all firms reported growth in headcount and revenue in the Canberra market, many are wary that the coming six to 12 months will not be as prosperous as the Gillard Government approaches the end of its tenure and agencies push to meet tight budgetary limits. Some firms such as Minter Ellison are already beginning to see the impact of budgetary restrictions. “There has been a drop off in the past few months as a result of the Federal Government’s budget pressures,” says “McGinness. Astolfi, Carroll and Marques have also started to notice this trend: “The government is in a position where its day-to-day expenditure is being curtailed,” says Carroll. “The overall market is one that looks to
be a bit cooler.” Astolfi adds: “The result of the more tightened budgetary constraints, which all agencies are experiencing, is placing a greater focus on the cost effective services of legal providers.” According to Marques the Gillard Government’s determination to have a budget surplus come May next year is one of the key reasons for the tighter budgetary provisions across government clients. “However, at the same time, certain programs have to continue and those are likely to demand more legal services. But it depends on which programs fall into that category as we approach an election,” he says. However, despite this pressure most firms have managed to maintain their hourly rates. The only exception are the partners at HWL Ebsworth who as part of moving to the firm were able to offer the Commonwealth “far more competitive” rates than what they could at their previous firm DLA Phillips Fox. Indeed, budgetary pressure has proved more of an issue for legal service providers than the long awaited LSMUL. “Many agencies are yet to transition so it will take
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canberra 2012
New firms have launched, but they are the same people who were operating there before Michael Tooma, Norton Rose Australia some time to assess the full impact of the reforms,” says AGS CEO Ian Govey. Morrison concurs that it is still too early to see what the full impact of the LSMUL will be on the procurement of external legal services. The LSMUL is still young,” says Morrison. “But, like many others in the Commonwealth Government market, we believe that the establishment of the LSMUL will open doors for firms like ours. We’re looking forward to seeing how the LSMUL operates over time and are excited about the opportunities that our appointment to the LSMUL creates.” Although some firms claim the LSMUL has already benefited them: “It has transformed the nature of the legal market in Canberra, it has made the legal market far more competitive to the benefit of the Commonwealth,” says Norton Rose’s Tooma. Similarly, the team at HWL Ebsworth’s Canberra office also see it as being beneficial to them already. “The commencement of the LSMUL was a growth opportunity for us and has provided
Australasian Legal Business ISSUE 10.11
significant work for us, because we had not been on many panels previously,” says Marques. To the polls The other significant issue set to affect government practices across the country and Canberra offices is the next Federal Election. While the date of the election will remain a mystery for some time, lawyers are aware that it will have to be some time in the next 12 months, and that includes the traditional care taker period between the election being called and polling day. “History proves however that there is a downturn in work whenever an election is called,” says AGS’s Govey. However, Marques disagrees, stating that work is likely to increase as the election approaches, as a result of government agencies rushing to complete programs ahead of the election.
Australasian Legal Business ISSUE 10.11
McGinness says that in his experience there is a tendency for work to drop off once the caretaker period begins; “and then it will depend on what happens as to whether work picks up again straight away or if there is a period of inaction”. However, as Astolfi says, this is simply a factor of working for the government. “The election cycle has to be factored in for anybody doing government work, at any level,” she says. “There is always a period where things quieten down; and then depending on the outcome can have an impact on the volume and type of work then coming through. You have to factor in that every three years or so there will be a disruption.” The outcome of the election can also have an impact on work flows according to Marques: “After the election, if there is a change of government there is a period of quiet while those members get a handle on their portfolios and what their election promises mean; and if there is not a change of government the lull afterwards is not as prolonged.” However, Tooma disagrees: “I don’t expect that a change of government would have a material impact on work either way. I think the work we do for various government departments will need to go on.” Working in the nation’s capital For anyone in politics Canberra is the place to be, but for law firms, getting people on the right people on ground in the nation’s largest inland city can be a struggle. “Finding the right people for the right role is always a challenge, and the Canberra market is no exception,” says Sparke Helmore’s Morrison. First and foremost is the tendency for younger lawyers to go to major metropolitan centres despite the capital having one of the best law schools in the country. Secondly, the Commonwealth is itself a significant employer of lawyers and can offer practitioners a range of benefits which private practice firms cannot. “Finding appropriate lawyers, between five and seven years meaningful experience can be a challenge, because we are competing against other firms and the Commonwealth, which offers very attractive working conditions and benefits,’ says Marques. Carroll says the trend for lawyers to jump between government and private practice has increased in recent years, which has its
canberra 2012 advantages and disadvantages. “The trend is much more pronounced than before,” he says. “It is a good, because it means we can recruit people with a range of experience and so can government legal areas. But, that goes both ways.” Clayton Utz recruited workplace relations and former in-house government lawyer Andrew Klein as a senior associate in Canberra in March this year. McGinness says movement between private practice and government is natural as there is good quality work at and viable careers in both. “I think overall it leads to a strong legal market,” he says of the shifts. In order to address the staffing issue some firms, such as Maddocks and Norton Rose, have relocated partners and lawyers from their Sydney and Melbourne offices to the capital. “We have had a concerted effort of relocating staff to Canberra,” states Tooma. Astolfi adds: “We are certainly seeing more people coming from interstate looking to settle in Canberra which means that the talent pool is more diverse.” DLA Piper has taken that a step further recruiting for its Canberra office from overseas. The firm relocated UK-based partner Stewart James to Canberra to join the government and intellectual property and technology practice in Australia in September. And, as the past year also shows, the competition between firms for talent also remains fierce. “It certainly is a small community, and it’s fair to say that all the law firms know their competitors well. That is the unique part of being in Canberra,” says McGinness.
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George Marques, HWL Ebsworth
Simonetta Astolfi, Maddocks
John Carroll, Clayton Utz
BIG ENOUGH TO DELIVER. Small enough to care.
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profile
Australasian Legal Business ISSUE 10.11
In-house perspective
Switched on GC Lynette Ireland, Foxtel General Counsel Foxtel general counsel Lynette Ireland loves the fast paced nature of television, even if it does cause a few headaches along the way, reports Olivia Collings
I
n 1995 Lynette Ireland left the world of private practice at Allens Arthur Robinson to work on a one year secondment at new subscription television provider Foxtel. Seventeen years later she is still there. Ireland, who is now general counsel at Foxtel, has in that time seen the pay TV company grow from nothing to a multibillion dollar enterprise, which earlier this year acquired its main competitor Austar as part of a A$1.9 billion transaction. Ireland and her team worked tirelessly on the transaction which also included a lengthy Australian Competition and Consumer Commission (ACCC) approval process. “The approval process took close to 11 months and the process itself was extraordinarily demanding on the team,” says Ireland. “The team was always incredibly enthusiastic about the transaction and that never wavered during the process.” Foxtel, with the assistance of Ireland’s former firm Allens, eventually got the approval they needed to absorb Austar,
its regional counterpart, and on 23 May the Foxtel and Austar operations merged. As a result of the merger, Ireland’s role and legal team have changed slightly. The team has increased to 18 including five members from both Austar and XYZ Networks (a channel production company that Foxtel acquired via the merger). “My role is now much broader, and there are some new issues that I have not previously dealt with, as the Foxtel business was essentially a metropolitan business,” says Ireland. “The Austar service has a slightly different offering to the Foxtel offering, and so it requires a different approach to marketing on a national basis when you have two slightly different products.” For example, in the metro areas Foxtel retransmits the free-to-air networks, but in regional areas it is unable to do this because there are more services, and it does not have the satellite capacity to undertake such an endeavour. In demand Having undertaken a mammoth regulatory approval process and M&A transaction in the first part of the year, Ireland is now looking to ensure that the integration process is as smooth as it can be from a legal perspective. “Bringing the two businesses together is very much about making sure there are no bumps in the road,” she says. “The good thing for us is that the two businesses are very similar, we have worked together on a number of issues over the last 10 years in particular, so we had a very good understanding of the Austar business.”
Australasian Legal Business ISSUE 10.11
profile
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profile
Australasian Legal Business ISSUE 10.11
This includes the legal team at Austar, which moved across to Foxtel headquarters fairly quickly once the deal was signed, and who have now integrated into the Foxtel legal team. “I knew most members of the Austar legal team prior to them joining,” says Ireland. “We got everyone involved and working together very quickly.” The legal team’s focus is now on assisting the business to meet a number of synergy targets, as a result of the company’s new scale and coverage, which has required some changes within the team as well. “Because we are so much larger now I have allocated members of the legal team to respective areas of the business, so that they have a key contact person,”
“If you are making investments into new services, you need to know that the law is there to support you, in case others want to take advantage of the investment,” says Ireland. “The internet is giving people information around how to get around security measures; and that is a constant battle for us.” says Ireland. “Prior to that we were able to manage that relationship between the business and the legal team on the basis that people had areas of specialisation, but there was not a very clear contact point in the team. We have now made it clear to the business who the relevant contacts are.” However, while they are close to the businesses they service, the senior legal counsels still report to Ireland. “I’ve always tried to make sure that lawyers get involved in any project from an early point. For us, it is very much about in-house lawyers being seen as not just lawyers, it’s about showing the business that we can bring a lot to the table and that they should use the lawyers in that broader fashion.” Billion dollar deals aside, Ireland says the legal team at Foxtel in the past undertook a majority of the company’s legal requirements, about 90 percent, and would continue to do so even with a larger business to serve. “This business is a 24/7 business, so a lot of our turnaround times are very quick,” she says. “We have a huge number of program licence agreements,
and for every channel we are producing there are 24 hours of content for 365 days a year. We could not afford for that to all be managed externally.” When she does seek external advice from regular advisors such as Allens the work is mainly transactional, litigious or discrete. Ireland says she uses a number of other firms based on a desire to use a particular individual within the firm. “We would use five or six firms across the board,” she says. The future is here As a significant investor in content, new technologies and programming a lot of Ireland and her team’s attention is also devoted to assisting the business operate within existing laws or advocating for reforms. “If you are making investments into new services, you need to know that the law is there to support you, in case others want to take advantage of the investment,” says Ireland. “The internet is giving people information around how to get around security measures; and that is a constant battle for us.” Cases such as the Roadshow Films v iiNet and National Rugby
Australasian Legal Business ISSUE 10.11
League Investments v Singtel Optus, which have both had appeal decisions in the court this year, are a constant reminder to Ireland and her team of the fast changing landscape they operate in. “There is a lot happening in that space, which is indicative of the fact that things are moving so quickly from a technology perspective,” she says. “I think the courts are recognising that the law is not keeping up to speed with those developments. We have found these cases interesting because of what they have had to say with regards to the need for amendments.” Earlier this year Foxtel secured the rights to the Summer Olympic Games in London, and dedicated a total of eight channels to the Olympics. Previously it had been restricted as a result of provisions in the anti-siphoning list which declared that certain sporting events must be broadcast on free-to-air television. The anti-siphoning list includes events the Minister for Broadband, Communications and the Digital Economy believes should be made available free to the general public. However, the Gillard Government is currently in the process of reviewing the anti-siphoning legislation and the Broadcasting Services Amendment (Anti-siphoning) Bill 2012 is currently before the Senate. If the bill is passed without great alteration it will split the anti-siphoning list into two tiers: A and B. Tier A events will have to be shown live (or very near to live) on the free-to-air main channels while those events on Tier B would be able be shown on the non-main channel. The 2016 Olympics are proposed to be shown on ‘Tier B’.
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Foxtel, through its industry association the Australian Subscription Television and Radio Association (ASTRA), has been very active in lobbying the government for amendments to that list and is continuing to work with stakeholders. “Where we have identified gaps in the law, we have made approaches to the attorney-general and the communications minister, Senator Stephen Conroy,” says Ireland. Similarly, Foxtel and Ireland are eagerly awaiting the development of the National Broadband Network (NBN) which will have a significant impact on the availability and speed of data through internet connections, in particular, films and TV content. “Obviously the progress of the NBN is something that we are very alert to, and keeping a watching brief on,” states Ireland. “We are also interested in the Australian Law Reform Commission Copyright reviews. The Copyright Act is something that we turn to a lot, and we were keen to see that review be quite inclusive and as broad as possible.” The ALRC is considering whether exceptions and statutory licences in the Copyright Act 1968 are adequate and appropriate in the digital environment and whether further exceptions should be recommended. It is due to report in late 2013. These developments and more are set to keep Ireland and her team at Foxtel on their toes for the foreseeable future, which is exactly how Ireland likes it: “Foxtel itself is a cutting edge business: It’s exciting subject matter, there is a lot happening in our business, it’s high profile and it’s television. It’s constantly changing and that continues to excite me.”
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PPSA
Australasian Legal Business ISSUE 10.11
Agricultural Security Interests Special provisions within the PPSA akin to crop liens require urgent attention from agricultural input suppliers writes fox tucker’s tim graham.
T Tim Graham is a senior associate in the Corporate & Commercial team at Fox Tucker Lawyers
he Personal Property Securities Act 2009 (Cth) (PPSA) contains a set of provisions that create a special type of security interest best described as an agricultural security interest. Although agricultural security interests do not fall within the section 14 definition of Purchase Money Security Interest (PMSI), section 85 provides many PMSI-like qualities to agricultural security interests over goods supplied for subsequent application to a crop. Section 85 of the PPSA provides a form of super priority to a party that provides value (funding) for the purposes of producing crops. The priority interest created by s85 is functionally very similar to a crop lien. The secured party’s perfected security interest in the crops will take priority over any other security interest. This means that a security interest over crops should take priority over any other perfected security interests, including another PMSI. For an agricultural input supplier, a perfected s85 security interest to secure payment for the supply of an input to a grower will prevail over any other prior security holder (except one whose security interest is in the same crop), including the grower’s bank. Importantly, the relevant security agreement must be made while the crops are growing or within 6 months prior to planting, so input suppliers should ensure that less than 6 months elapse between the supply of the input to a grower and the application of the input (for example, fertiliser) in the field. The security interest in the growing crop will retain its priority until it is harvested, when the crop will become proceeds under the PPSA. With appropriate drafting of the security agreement, the security interest will be able to continue while the crop is growing and extend to cover grain that has been harvested and has entered a bulk handler’s system, a warehouse or a pool.
Because of the potential for a given input to be retained on a farm (and not applied to a crop) within 6 months of its supply, agricultural input suppliers should consider taking and registering both a s85 priority interest and a PMSI in the input they supply. This is because a PMSI is not subject to the 6-month constraint that applies to s85 priority interests. Under a PMSI, the supplied goods will be recoverable if the grower becomes insolvent more than 6 months after the supply of the goods, but before the input is applied. Potential risks Somewhat surprisingly, s85 of the PPSA does not address the potential for competing security interests in the same crops, where two or more security interests are granted to enable the production of the same crop. For example, security interests could be taken by the suppliers of both fertiliser and seed. This risk can be addressed in a properly drafted supply agreement to ensure that this priority issue is resolved between growers, suppliers and financiers particularly where a supplier has a prior s85 security interest in the crop. Possible risk attaches to s85 priority interests that arise because the PPSA is still largely untested legislation. In ss84(1) and 84(2) the drafters used wording that is arguably contradictory. Section 84(1) of the PPSA provides that a security interest in crops does not prejudicially affect the rights of a prior mortgagee or landlord, which appears to contradict wording in s84(2) that states a security interest in crops is not prejudiced by a subsequent transaction with the land. It is possible that the courts will provide clarification on this point by interpreting the sections so that s84(2) only applies to a subsequent sale, lease or mortgage by the debtor and not a mortgagee exercising power of sale. This appears to be the better interpretation. But until a court decision, there is a risk that security interests over crops may be subordinated to the rights of a mortgagee (the grower’s bank) or landlord. In the meantime, input suppliers can control their exposure by conducting a search of both the land registers and the Personal Property Securities Register prior to supplying their input to a grower. The upshot is that the combination of a priority interest under s85 and a PMSI can result in a level of security for suppliers which is at least equivalent to that previously provided by a crop lien. Suppliers should be aware of these sections of the PPSA and draft their supply agreements to maximise the protection they can offer. Fox Tucker Lawyers advise that the information contained in this communication does not constitute advice and should not be relied upon as such.
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Australasian Legal Business ISSUE 10.5
Lateral partner appointments Name
Practice area
From
Going to
Jeremy Chenoweth
E&R/corporate
Santos
Ashurst Australia
Campbell Davidson
M&A
Allens
Squire Sanders
Nicole Harris
Property
Gadens Lawyers
Kliger Partners
Paul Hartland
Corporate & Commercial
Anthony Harper
Lowndes Associates
Michael Leong
Planning and development
Norton Rose
Corrs Chambers Westgarth
Mark McNamara
Private equity
Baker & McKenzie
King & Wood Mallesons
Hayley Miller
Corporate and commercial
Bell Gully
Kensington Swan
James Mok
Banking & finance
King & Wood Mallesons
Minter Ellison
Dale Nicholson
Litigation
Russell McVeagh
Duncan Cotterill
Mark Payne
Taxation
Hall & Wilcox
HWL Ebsworth
Helen Suke
Family law
Marshalls & Dent
Mills Oakley
Minters recruits KWM partner King & Wood Mallesons
Minter Ellison
Minter Ellison has recruited former King & Wood Mallesons partner James Mok, who has joined the firm’s finance practice as a partner, based in Sydney. Mok had been a partner at King & Wood Mallesons since 2006 and specialises in structured and asset finance, particularly aircraft leasing and financing. He also has extensive experience in aviation law. Mok also lectures in postgraduate finance law at the University of New South Wales, and has authored articles for the Journal of Banking and Financial Law Practice.
WM lures Bakers PE head Baker & McKenzie
King & Wood Mallesons
King & Wood Mallesons has recruited former Baker & McKenzie global head of private equity Mark McNamara to its Sydney office. In his new role he will lead a team of approximately 60 partners and lawyers. His area of expertise lies across the full range of M&A transactions for private equity clients – MBOs/ LBOs, public takeovers, private M&A and security offerings.
Corrs recruits Norton Rose partner Norton Rose
Corrs Chambers Westgarth
Corrs Chambers Westgarth has appointed planning and development specialist, Michael Leong, as a partner in its Brisbane office. Leong had been a partner at Norton Rose since 2006 where he was the workgroup leader of the planning and environment group. He is a regular speaker at industry conferences and is the immediate past president of the Queensland Environmental Law Association, and is currently on the Urban Futures board which provides strategic policy direction to Brisbane City Council.
HWL recruits tax partner Hall & Wilcox
HWL Ebsworth
HWL Ebsworth has recruited Hall & Wilcox partner Mark Payne to the firm’s taxation practice Payne provides advice to Australian and international corporations on a broad range of taxation, superannuation and financial services related areas, including mergers and acquisitions, corporate reconstructions and reorganisations, taxation disputes and private wealth management.
Squires recruits new partner for Sydney Allens
Squire Sanders
Squire Sanders has recruited a senior Allens partner Campbell Davidson, to spearhead the new Sydney practice. Davidson advises national and international
clients on acquisitions, disposals and joint ventures, and he has considerable cross-border experience. During the past 20 years Davdison has worked in London, Singapore, Hong Kong and Shanghai, where he headed Allens’ China corporate practice.
Santos lawyer joins Ashurst Santos
Ashurst
Ashurst Australia has recruited Jeremy Chenoweth as a partner based in the firm’s Brisbane office. Chenoweth is a Blake Dawson (now Ashurst) alumni, having worked with the firm from 2001 to 2009. He has rejoined the firm from Santos where he was legal manager and lead construction lawyer on the $US18.5 billion Santos GLNG Project.
Gadens property partner joins Kligers Gadens Lawyers
Kliger Partners
Former Gadens Lawyers partner Nicole Harris has joined boutique Melbourne firm Kliger Partners as a principal. A property lawyer of nearly 15 years, Harris was a partner at Gadens for seven of those. Harris has previously acted for landlords and institutional clients, in buying and selling commercial property and retail leasing.
Kensington Swan adds new partner Bell Gully
Kensington Swan
made easy Kensington Swan has added a new partner to its Auckland office. Former Bell Gully senior associate Hayley Miller has joined the firm’s corporate and commercial practice as a partner. She has extensive experience in IT, telecommunications and broader technology transactions, as well as outsourcing, commercial supply and procurement, sale of businesses and franchising. Prior to Bell Gully she worked at Ashurst in the UK.
Kotzapavlidis and lawyer Daniel Kolieb to the firm’s Melbourne capabilities. The team have joined the firm from Marshalls & Dent. Suke has extensive experience in all aspects of family law and is an advocate of alternative dispute resolution methods, particularly mediation. She has particular expertise in representing high net worth clients, with complex financial structures.
Duncan Cotterill adds to partnership in Auckland
Sparkes promotes four to partnership
Russell McVeagh
Duncan Cotterill
Duncan Cotterill has added Dale Nicholson as a litigation partner in the Auckland. She has extensive litigation experience across a wide range of commercial and corporate disputes and regulatory issues, with an emphasis on insolvency related matters. Dale acts for retail banks, receivers, liquidators and secured creditors. Before joining Duncan Cotterill Nicholson worked at Russell McVeagh and DLA Phillips Fox in Auckland.
Lowndes Associates adds partner Lowndes Associates
Anthony Harper
Paul Hartland has joined Lowndes Associates as a partner from Anthony Harper where he was a partner for 18 years. Hartland advises on corporate and commercial work including on the Takeovers Code, joint ventures, mergers and acquisitions, structuring and investments. Hartland is also a chartered accountant.
Family law team moves in with Mills Oakley Marshalls & Dent
Senior associate
partner
Sparke Helmore Lawyers has promoted four staff to the firm’s partnership. The firm has promoted Mark Doepel, Roland Hassall, Nicholas Studdert and Maxine Tills. Doepel and Studdert are based in the Sydney office and are both part of the insurance group. Hassall is also based in the Sydney office and has been with the firm since 1992. He has extensive expertise in all areas concerning employment law. Tills is based in the Brisbane insurance group.
TurksLegal announces all female appointments Senior associate
partner
TurksLegal has promoted Fiona Hanlon to the partnership. Hanlon has spent a large part of her career with the firm as one half of a highly successful job share. She is an experienced practitioner in life insurance risk products and has had significant commercial experience in financial services including investment products, deposit bonds, and financial planning advice.
Over 45 years experience
Mills Oakley
Mills Oakley has added family law partner Helen Suke along with senior associate team Briana
Partnership promotions Firm
Name
Practice area
Office
Sparke Helmore
Mark Doepel
Insurance
Sydney
Roland Hassall
Employment
Sydney
Nicholas Studdert
Insurance
Sydney
Maxine Tills
Insurance
Brisbane
Fiona Hanlon
Insurance
Sydney
TurksLegal
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litigation
Australasian Legal Business ISSUE 10.11
Regulators and shareholders in the driver’s seat The Australian litigation scene has been fast and furious in recent years and as new forms of action grow the industry is not expected to slow any time soon, reports Olivia Collings.
I
t is said that fools and obstinate men make rich lawyers and the same could be said of Australian regulatory bodies in the past 12 months. In the past two years the amount of money spent on legal proceedings by the Australian Tax Office (ATO) and the Australian Competition and Consumer Commission (ACCC) has increased, with only the Australian Investment and Securities Commission (ASIC) decreasing its expenditure during that period as long running cases neared their completion. Some of the highest profile cases in Australian courts in the past 12 months have involved a government body of some type, with only mining magnate Gina Rinehart and Apple and Samsung stealing some of the limelight. “The activity over the past 12 months has been high,” says Corrs Chambers Westgarth disputes head James Whittaker. “We have had a number of nationally prominent cases we have been running over that time.” Indeed, Corrs has been involved in the Fortescue Metals versus ASIC case, the Gina Reinhart and Hancock Prospecting case, the cartel proceedings involving Air New Zealand and the ACCC and the Plain Packaging for Tobacco products dispute on behalf of British American Tobacco. The firm has also acted for regulators, including the ACCC, in its dispute with Google. “There is a growth in public law and public law issues being fought out,” states Whittaker.
Australasian Legal Business ISSUE 10.11
litigation
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litigation
Georgie Farrant, Baker & McKenzie
James Whittaker, Corrs
Mark Van Brakel, Corrs
Baker & McKenzie’s litigation practice has also been busy during the past 12 months and in particular the last six. “We have received instruction on a number of new large cases in the past six months, some in relation to defending proceedings and others in relation to commencing proceedings,” says partner Georgie Farrant. “The litigation market is still very active; general commercial litigation as well as specialist areas.” Farrant says in the post global financial crisis world clients and corporations are showing a greater willingness to pursue their rights through the courts than might have been the case a few years ago. “While companies are still prudent in their approach to litigation, they are more willing to pursue their rights through the courts if they feel that is the best remedy to their dispute,” she says. However, unlike Whittaker, most of Farrant’s cases are commercial in nature rather than regulatory or public law. “For my practice, at the moment, cases which are very large and long running are predominantly commercial disputes. With regulator investigations there can be a sudden burst of activity and then nothing for a long period, whereas when you are in commercial proceedings there is a more regular flow.” Perth-based Corrs partner Mark van Brakel and Perth-based Gadens partner James Scovell have both been involved in the high profile Fortescue Metals and Andrew Forrest versus ASIC case in the past 18 months. Both have seen a significant amount of their practices dominated by disputes in the mining and resources sectors as well associated sectors such as construction and infrastructure. “One of the areas where we are seeing an increased amount of activity is construction, because a lot of the resource projects have construction elements to them, and disputes between owners, builders and sub contractors are prevalent at the moment,” says Scovell. Holding Redlich disputes partner Harold Werksman says he has seen an increased amount of intellectual property and technology disputes. “IT disputes are on the rise, particularly in relation to computer software,” he says. Whittaker has also seen this trend prevalent amongst his practice. “I think there is also a growing trend for intellectual property disputes. I think we will also see a lot of disputes work around IT as IT platforms and products converge,” he says.
Australasian Legal Business ISSUE 10.11
Winning and losing In May this year ASIC successfully won a key case it had been battling for many years in the High Court against James Hardie’s former non-executive directors and former company secretary and general counsel. However, the regulator’s luck was short lived when the High Court upheld the appeals of Fortescue Metals Group and its chairman and former CEO Andrew Forrest against the unanimous decision of the Federal Court. ASIC brought the case against the mining company and magnate because it “raised issues of integrity of the capital markets” according to senior ASIC figures. In the 2012 financial year ASIC spent A$15.3 million on legal and forensic costs, down from A$25.1 million the previous financial year. It completed 179 litigation cases, 92 percent of them successfully, and commenced 134 new litigious cases, four more than the previous year. Having gained wins in its cases against James Hardie and Centro executive and non-executive directors, the loss in the case against Forrest and Fortescue could alter ASIC’s actions going forward. “The stakes have gone up for ASIC,” says van Brakel. “It will have heightened the agony of decision making for ASIC as to who they should or should not pursue. It has also led into another discussion – as to whether there should be an alternative way in dealing with the issue, a quicker process and one that is more focused on the views of market participants.” According to Farrant the fact that the High Court raised some criticisms of the way the case had been run by ASIC could impact the way it pursues cases in the future. “In continuous disclosure cases ASIC has the option of issuing infringement notices instead of taking court proceedings, and we may find that ASIC will increasingly rely on that mechanism instead of pursuing companies in court,” she says. Werksman agrees: “I think that ASIC will be more cautious about commencing proceedings following the Fortescue and Forrest case. It will definitely cause the regulator, ASIC, to be very careful about whether it commences these proceedings again.” In the 2012 financial year ASIC negotiated only 17 cases, down from 24 the previous financial year, and issued only eight non custodial sentences or fines. “The infringement notices for continuous disclosure that ASIC has been using as an alternative [to litigation] have caused some discontent … a lot of corporations take the view that it is easier to pay the fine than challenge the fine,” says van Brakel. According to Werksman, the fact that the Forrest/Fortescue case had such different outcomes at the various levels of the legal system is a reminder to clients that when you take a matter to court, it is a lottery which way the courts will go. “In that case the statements were examined by nine judges, six who went one way and three who went another way,” says Werksman. “Clients are increasingly looking at cases such as this, and deciding that if there is any chance for settling the dispute, they should because they are otherwise gambling as to what the result will be in court.” He adds: “These cases cost hundreds of thousands of dollars to run…ultimately you may be better off negotiating a deal you can live with than risking the costs of a win in a court.” However, while corporates might take the view that a fine is better than court, regulators do not always share that view. “In cases where a regulator is involved, it may not want to settle because it hopes to make a point in principle out of that case,” says Werksman.
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litigation With regards to the ACCC, its chairman has made that very clear: “Rod Sims has said that a very important part of the ACCC’s function is to establish the boundaries, and those are determined as much by court proceedings as they are by the written law,” says Whittaker. In the 2012 financial year the ACCC commenced 26 litigious cases and 45 in-depth investigations. Some of the regulators more high profile cases included disputes with Apple, Google and Harvey Norman. The cost of those actions in legal fees hit A$26.277 million, which is an increase on the previous two financial years which were A$25.3 million and A$20.9 million respectively. In the case against Apple, the international technology company was fined A$2.25 million by the court for misleading advertising, while Harvey Norman was fined A$1.25 million. The case against Google is yet to be finalised. In a class of their own The number of class actions in Australian courts has not dramatically increased in
Australasian Legal Business ISSUE 10.11
recent years despite changes to legislation and rules around funding, but corporates and lawyers expect that to change in the near future. On average 14 class actions are filed every year in the Federal Court, representing less than one percent of all Federal Court proceedings. Despite this, class actions remain a significant concern for both directors and in-house counsel alike due to the scale of many of these actions. In 2011 a number of significant new shareholder class actions, including actions against Nufarm, Gunns and ABC Learning were launched, while this year the market has seen actions against four more banks: the Commonwealth Bank, Westpac, National Australia Bank and Citibank launched in addition to Clem Jones Toll Road.
On average 14 class actions are filed every year in the Federal Court, representing less than one percent of all Federal Court proceedings. “I think class actions will no doubt increase as more and more litigation funders provide funding,” says Werksman. “Funders will be likely to be encouraged by recent successes, for example the Lehman Brothers case.” Indeed, most class actions launched in Australia settle before or during court proceedings. Recent class actions to settle include Sigma Pharmaceuticals A$57.5 million settlement and
Winning conflicts without conflict In an era of global megafirms and the ever growing risk of client conflicts, Holding Redlich is a genuinely independent, national firm. Free of the constraints of bank or insurer panel arrangements, we are a safe and highly experienced pair of hands for your client. We have the skills, the know-how and the track record in major litigation and regulatory investigations. So if you need a litigator who wins conflicts but does not have a conflict, please call us.
Howard Rapke | Partner | Melbourne T +61 3 9321 9752 E howard.rapke@holdingredlich.com Harold Werksman | Partner | Sydney T +61 2 8083 0405 E harold.werksman@holdingredlich.com Paul Venus | Partner | Brisbane T +61 7 3135 0613 E paul.venus@holdingredlich.com
www.holdingredlich.com Melbourne . Sydney . Brisbane
litigation
Australasian Legal Business ISSUE 10.11
Nufarm’s A$43.5 million settlement. By far the biggest class action settlement in the past year was the Centro Class Action which involved six actions, two litigant firms and two litigation funders and a settlement of A$200 million (including costs). A key concern for companies faced with a class action either shareholder or other, is whether their insurance will cover the costs of the action or indeed the legal fees. Clayton Utz partner Colin Loveday says that the way in which a claim is settled can be determined by whether the company is insured. “You must obtain the insurer’s consent or have provisions in a policy beforehand,” says Loveday. “You need an insurer to fund the action if you are going to defend it.” However if an insurer is involved, the insurer will have to approve all alternative dispute resolution mechanisms used during the case, adds Loveday. “It is important to work closely and cooperatively with the insurer to obtain consent,” he says. However, some cases do make it through the courts to a conclusion such as the Local Government Financial Services (LGFS) versus Standard & Poor’s (S&P), a division of ABN AMRO. The case, which was run by Piper Alderman and funded by IMF was decided in the Federal Court of Australia in early November in favour of the LGFS. The ruling means the councils will recover about A$30 million in losses following failed investments in complex synthetic derivatives known as constant proportion debt obligations, that were arranged by ABN AMRO by S&P and sold by LGFS in 2006. By far the biggest concern for companies in Australia within the class actions space is the increasing prevalence of shareholder action. Not surprising given that in 2011 the total value of settlements in
By far the biggest concern for companies in Australia within the class actions space is the increasing prevalence of shareholder action. shareholder class actions surpassed A$500 million. “Class actions and litigation funding are maturing and rapidly and continuous disclosure is the bedrock for a lot of those [shareholder] actions,” says Whittaker. Both Oz Minerals and Credit Corp found themselves involved in a shareholder class action as a result of this, and both settled. The growth of plaintiff firms and litigation funders is also causing corporates concern according to Farrant. “The availability of funding for class actions, and a number of specialist firms that work with the funders in providing that service, are key factors in the increase in shareholder class actions,” she says. “Previously the lawyers had to bank roll it, or the shareholders themselves, whereas now there are funders who will take that risk. That is the key thing contributing to the growth of that trend.”
Practical people with leading dispute resolution expertise Cooper Grace Ward’s litigation and dispute resolution group offers not only the best in technical expertise, but practical people who work as a team to deliver outstanding outcomes in complex commercial disputes. T: 61 7 3231 2444
Rocco Russo, Lead Partner Litigation and dispute resolution T 61 7 3231 2468 E rocco.russo@cgw.com.au
www.cgw.com.au
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litigation
Australasian Legal Business ISSUE 10.11
WHO WANTS TO BE A COMPANY DIRECTOR IN NEW ZEALAND? New Zealand has seen a steady stream of successful prosecutions of directors of finance companies. Simpson Grierson’s Anne Callinan looks at the lessons which can be drawn from this state of affairs.
I
t seems that hardly a week goes by in New Zealand without company directors being in the news. On a positive note, the NZX has recently introduced its Diversity Listing Rule under which listed companies will have to disclose the gender make-up of their boards of directors and officers as part of their annual report. A wider range of people (particularly women) are being encouraged to become directors. On a less positive note, potential candidates as directors will be well aware that there has been a steady stream of successful prosecutions of directors of finance companies for failing to meet their obligations, resulting in criminal convictions and sentences including imprisonment. Every current director, and every person considering becoming a director, needs to be aware of these prosecutions and the lessons from them. What has put the spotlight on directors? Prior to the GFC a mezzanine level of funding existed in New Zealand through finance companies. These finance companies were widely regarded by middle
class New Zealanders as a place to put their “nest eggs� and many people invested their retirement savings in them. The GFC led to the collapse of over 40 such finance companies, and the loss of many hundreds of millions of dollars in investor funds. This saw the New Zealand Securities Commission (now the Financial Markets Authority) investigate the failed finance companies and scrutinise the offers of securities made to the public by them, against the statutory requirements for these offers contained in the Securities Act 1978.
Every current director, and every person considering becoming a director, needs to be aware of these prosecutions and the lessons from them Broadly speaking, the Securities Act provides that directors can be convicted of a criminal offence, whether or not there is any intention to commit a crime and whether or not there is any dishonesty, if a material statement in an offer document is untrue. The defences available to directors against these strict liability offences are limited, but focus on the director being able to positively establish that they acted honestly and had reasonable grounds to believe the (untrue) statement in the offer documents. Although this legislation has existed in New Zealand for many years, until recently there have been few cases considering the
Australasian Legal Business ISSUE 10.11
obligations of directors when signing off on offer documents for raising funds from the public. That all changed with the onset of the GFC. There has now been a raft of prosecutions by the Financial Markets Authority against directors of the failed finance companies for alleged breaches of the Securities Act when making offers of securities to the public. This has seen criminal prosecutions of approximately 20 directors some of whom have included former Cabinet Ministers of the Crown and respected high profile business people. To date, all have been found wanting by the Courts, to a greater or lesser extent, and all the prosecutions have seen criminal convictions against the prosecuted directors, either as a result of guilty verdicts or guilty pleas. Sentences have ranged from community service and reparations, at the lower end of the scale, to home detention and imprisonment for six to seven years, at the higher end of the scale. Lessons for directors Key principles have emerged from the cases both in terms of general responsibilities of directors and specific responsibilities when making offers of securities to the public. The cases should give every director, or any person considering becoming a director in the future, pause for thought. It is critical that directors are aware of what is expected of them when carrying out their duties, and the consequences that could follow if they fail in these duties. While the principles that have emerged from the finance company cases are not novel, they should help re-focus directors on what is expected of them. Generally, directors must: • Understand the business of the company they direct. They must understand the fundamentals of the business, monitor performance and review financial statements regularly. Even a non-executive director is expected to have the ability to read and understand financial statements and to use that understanding when making decisions about matters such as insolvency and liquidity. • Have competence beyond their core area of expertise. Directors must be suitably qualified to be on the board and must have at least a basic knowledge of conventional accounting practice and concepts and should up skill if necessary. • Ensure appropriate reporting to them. • Exercise independent judgement when relying on management. While the Courts will recognise that directors direct and managers manage, that does not relieve directors of their obligation to exercise independent judgement and test the competence of management within areas in which management are relied on. • Obtain and use expert advice appropriately. This includes legal advice. Directors cannot rely solely on legal advice to fulfil their duties. Directors must pro-actively ask questions and test advice given to meet their obligations. • Fully understand documents they are signing. The directors cannot delegate this to management or advisers and must form their own opinions on the compliance of documents they are signing. Directors should ensure there is sufficient time for discussion at board meetings so that they fully understand the matters presented to them. Specifically, when making offers of securities to the public, directors must: • Consider the overall impression relayed by the offer document,
litigation This has seen criminal prosecutions of approximately 20 directors some of whom have included former Cabinet Ministers of the Crown and respected high profile business people. to ensure that no “untrue statements” are included. An untrue statement can include an affirmative statement or a material omission and whether a document contains an untrue statement will be assessed against the overall context of the offer document and the impression it conveys to investors. Directors will not be able to rely on the literal accuracy of statements in an offer document. • Consider who will read the offer document, from the perspective of a notional investor, who will be a prudent but non-expert person. • Not withhold material information even if to disclose it would be “noncommercial”. The interests of existing investors, and whether disclosure would discourage investment, cannot be taken into account when deciding whether to disclose information in an offer document. • Be aware that their obligations are on-going throughout the period the offer document is before the public. Going forward A law change is proposed to the Securities Act which would modify the offence provisions and require intentional breach or recklessness on the part of directors for criminal liability to arise. However, it is clear from the finance company cases that the Courts will hold directors to a high standard when assessing their conduct and, no matter what direction the legislation takes, it is timely for all directors to take heed of the principles emerging from the cases and think carefully about their obligations. For those thinking of becoming directors, and those already at the Board table, the recent cases are a timely reminder about the responsibilities they will assume.
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Anne Callinan is a litigation partner at Simpson Grierson specialising in competition and securities law.
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In-house Observations
Australasian Legal Business ISSUE 10.11
SOCIAL MEDIA – trolling for answers By Tony de Govrik, Legal Affairs & Communications Director, Australian Corporate Lawyers Association, the professional body for in-house lawyers.
W Tony de Govrik
e’ve all heard the saying in our schoolyard days “sticks and stones may break my bones…” So why is it that trolls on social media are having such an impact on persons’ lives? What controls should there be in the workplace to deter employees from engaging in negative comments on social media? And do we need new laws to deal with the emergence and continuing evolution of social media sites such as Twitter and Facebook? At one end of the spectrum we have the argument for freedom of speech while at the other end awaits legal minefields such as defamation and harassment laws. Recently international violence was generated by a controversial video posted on YouTube titled Innocence of Muslims. This created global discussion on what the limits of freedom of speech ought to be when it comes to criticism of religious beliefs and icons. Australian Foreign Minister, Bob Carr, bought into the discussion while attending the UN General Assembly meeting in New York in September. Carr rejected calls for a global ban on blasphemy on the ground that it was incompatible with Western traditions. What he may not have been aware of is that Australia “inherited” the common law of Britain in relation to blasphemy – although it is apparently limited to words which outrage and insult the feelings of Christians and not those of other religions. In addition, some States have introduced religious vilification laws. However, we can all sleep easy knowing that there has been no successful prosecution for blasphemy in Australia since 1871 when a poor soul by the name of Jones (no relation to Alan we believe) was sentenced to three years’ hard labour for publicly denying that the Bible was the word of God. Turning now to the other end of the spectrum – what are the protections, if any, afforded those on the receiving end of nasty trolls? The recent trolling of Sydney rugby league player Robbie Farrah about his deceased mother and the hospitalisation of television celebrity Charlotte Dawson after hateful and aggressive trolling have ignited debate on the need for further laws to control social media in the digital age. Farrah went so far as to message the Prime Minister, Julia Gillard, demanding that she “take some action and change these soft laws” – only to be left with egg all over his face when it was subsequently revealed that last year he had suggested in one of his tweets that the Prime Minister should get “a noose” for her birthday. Farrah was forced to issue an apology. In view of what is presently available, Julia Gillard and her State counterparts probably don’t need to do anything further to deal with internet trolls. Section 474.17 of the Commonwealth Criminal Code Act creates an offence, punishable by imprisonment for three years, of using a “carriage service” (which includes the internet) in a manner which a reasonable person would consider “menacing, harassing or offensive.” Queensland authorities have
been successful in prosecuting and jailing one internet troll on this basis. Another troll was given a suspended sentence when she pleaded guilty to a similar offence after posting comments and pornographic images on a Facebook tribute page for the murdered Sunshine Coast woman Justine Jones. Aside from the protections which are still afforded under the law of defamation, it would appear that there are adequate laws in place to deal with what might amount to the criminal actions of trolls. In-house counsel can play an important role in ensuring that their employer organisation can deal appropriately with the use of social media by employees. They should encourage their organisation to have a clearly defined policy on the use of social media both in the workplace and outside of it (if comments posted by employees are likely to impact the workplace). Perhaps we should all heed the words of revered Indian leader and pacifist Mahatma Gandhi who said “Nobody can hurt me without my permission.” Those who choose to engage in negative social media and come off second best, à la Charlotte Dawson, would also be well-advised to download for Christmas a copy of Christina Aguilera’s hit single “Beautiful” and mantra the lyric “words can’t bring me down.” If it’s not yet politically incorrect, may I wish readers a very Merry Christmas!
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THE ASIAN CENTURY TAKES SHAPE
Australian firms might have their sights set on China – but there’s plenty of action in other jurisdictions too. ALB reviews the highs and lows across Asia.
W
hen the Commonwealth government recently released its white paper Australia in the Asian Century, many firms found that it was simply an affirmation of what lawyers had already been saying for years. “All Australian companies looking for growth should have an Asian strategy. We are now firmly in the Asian Century and Australia needs to seize the opportunities in order to ensure a competitive future for our country to 2025 and beyond,” said Baker & McKenzie’s Chris Freeland. Unlike the government, which has been roundly criticised for pursuing rhetoric over action, Australian law firms certainly cannot be accused of idleness when it comes to pursuing engagement with Asia. If anything, they are more vulnerable to criticism to the opposite effect: mergers between Australians and global partners have developed with disconcerting speed. As Australia’s Asian Century progresses, it will be interesting to see who will emerge in the true leadership role: will government show the way, or will it be the business community and the professional services industry who break new ground in Asia? Certainly the latter seems to be leading the way at present. Much of the focus to date has been on China, but as Freeland notes, the Asian Century does not simply mean the Chinese
Century. “It is also important that Australia takes a wider view of Asia, beyond China. China is of course critical to Australia’s future, but there is also unprecedented growth and opportunity in the many countries in our region. For instance, the 10 ASEAN nations provide Australia with considerable opportunities, right on our doorstep,” he said. In that spirit, ALB will take a holistic approach to the somewhat ambitious task of reviewing the highlights of key Asian jurisdictions for 2012. We don’t purport to provide an exhaustive summary of the events in each market, but we hope to provide a flavour of the main themes. The growth markets of mainland China and Indonesia are an obvious starting point – but more established markets such as Singapore and Hong Kong also warrant attention.
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China Are the days of outrageous organic growth over for Chinese firms? Australian lawyers with a stake in cross-border work probably spend as much time analysing the Chinese economy as they do their own local market. It will be understood, then, that there is little that can be offered by way of definite reassurance as to the long term prosperity of the Chinese economy. Pessimists will point to a trail of increasingly soft economic indicators; optimists will point out that the latest target growth rate of 7.5 percent is still pretty solid. The pessimism seems to have increased in volume in recent weeks, including speculation that outgoing Premier Wen Jiabao will miss his growth target for the first time since taking office in 2003. Chinese firms are growing rapidly. ALB’s Fast 10 survey of the Chinese market in June 2012 found that China’s fastest growing firms grew lawyer headcount by an average of 61 percent and revenues by an average of 49 percent. As always, the average result conceals some of the more noteworthy individual statistics in the set: Beijing DHH Law Firm grew headcount by 169 percent (58 lawyers) and Zhong Yin grew its headcount by 175 percent (an astonishing 526 lawyers), although revenues at that firm for the
same period only grew by seven percent. Both of these firms grew headcount in pursuit of what is called (somewhat ambiguously) a “nationalisation” strategy; i.e. a strategy of building a national footprint by opening new offices. A preoccupation with size appears to be a recurring feature of this market. For example, Zhong Yin chairman Li Ju describes his firm’s key priorities as “scale, brand, internationalisation, and professionalisation” and goes on to state that scale comes first as the foundation of everything else. “We believe size is an indicator of a firm’s practice competence and comprehensive capability, and demonstrates the ability of internal management and cooperativeness,” he says. “But excessively fast speed without a proper support system will definitely go wrong.”
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Some commentators have suggested that Chinese firms are more likely to grow through acquisition and hires as opposed to organic growth. Mei Xiangrong, the managing partner of Yingke, for example, told ALB that China’s top 50 largest firms in terms of size now earn 70 percent of the fees in the Beijing market. “Sustainable development can only be achieved through expansion and merger,” Mei concluded. Wang Guangren, managing partner of Shandong Zhongcheng. is another who believes that the gap between big and small firms is enlarging dramatically. “It is for sure that the next 10 years will be a decade of industry consolidation,” says Wang. “Law firms should quickly react to this trend, speeding up the development of size, brand and professionalisation to build the ‘air craft carrier’ of the industry.” The “air craft carrier” metaphor appears to be somewhat popular in this market. Jiang Qi, DHH’s managing partner also picked up this theme to describe leading national firm network Elite Chinese Legal Alliance.“We position this league as the combined fleet of the
Some commentators have suggested that Chinese firms are more likely to grow through acquisition and hires as opposed to organic growth.
cruisers in the legal industry. By combined, we mean the firms are independent, and by cruisers, we mean they are mediumsized, not the super big aircraft carrier groups,” says Jiang. “Together in the fleet, the cruisers can fight the aircraft carriers.” Australians must be wondering if Chinese firms will be aiming their guns at the HMAS King & Wood Mallesons, currently the largest “aircraft carrier” in the Chinese market. Another important trend is the expansion of Chinese firms both to build a full service capacity and to build that offering overseas. The latter growth has been remarkable in some cases – for example, Yingke has added no less than six international offices (Sao Paolo, Seoul, London, New York, Warsaw and Istanbul) in the past year. As Chinese companies spread their wings abroad, their legal advisors are enthusiastic about following suit. Wang Guangren told ALB that providing a “full service practice cross-regionally” was a necessity. “The Chinese market has great potential. Only
LARGEST INTERNATIONAL FIRMS – CHINA Note: “Total fee earners” includes foreign counsel, patent attorneys and other time keepers not included under the “lawyers” column. For this reason, the total figure may not be the sum of the first two columns. Rank
Firm
Home Jurisdiction
Partners
Lawyers
Total fee earners
1
King & Wood Mallesons
China/Australia
192
826
1018
2
Baker & McKenzie
U.S.
20
74
94
3
Hogan Lovells
UK/U.S.
11
69
80
4
Linklaters
UK
10
56
72
5
O’Melveny & Myers
UK
8
39
70
6
DLA Piper
UK/U.S.
11
57
68
7
Clifford Chance*
UK
10
50
67
8
Freshfields Bruckhaus Deringer
UK
6
N/A
60
9
Pinsent Masons
UK
8
18
46
10
Herbert Smith Freehills
UK
7
38
45
11
Allen & Overy*
UK
9
22
39
12
Orrick, Herrington & Sutcliffe
U.S.
5
16
37
13
Mayer Brown JSM
U.S.
8
26
37
14
Sidley Austin
U.S.
5
16
32
15
Shearman & Sterling
U.S.
4
26
30
*Information obtained from law firm website
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Chinese firms have to go international just as the Western firms did. It is inevitable and necessary. the big and strong ones can take the most market opportunities,” he says. “The best sized, most specialised, strongest branded and internationalised firms need to be created by mergers.” Chen Wen, managing partner of Zhonglun W&D, says that overseas investments and acquisitions by Chinese companies have offered Chinese law firms unprecedented growth opportunities. He notes that the dominance of the major international law firms and accounting agencies is the result of their previous development accompanying the expansion of Western multinationals. “Chinese firms have to go international just as the Western firms did. It is inevitable and necessary,” says Chen. “Chinese firms should never miss this historical opportunity.”
Who hares wins. We’re delighted to announce that Fox Tucker has been named among ALB’s Fast 10 for 2011-12, recognising us as one of the fastest growing firms in Australia and New Zealand. That growth is coming through outstanding results. Results through outstanding people. Congratulations all. [The race continues.]
L 14, 100 King William St Adelaide SA 5000 p: +61 8 8124 1811 www.foxtucker.com.au
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iNDONESIA Indonesia is emerging as one of Asia’s hottest investment destinations – but will the nation’s notoriously fragile infrastructure live up to the challenge? While international firms are not permitted to practise in Indonesia in their own right, an increasingly popular option is to operate in association with a local partner firm. Perhaps the best known association of this kind has been Baker & McKenzie’s association with Hadiputranto, Hadinoto & Partners – the country’s largest law firm – but many other international firms have followed suit. More recently formed alliances include Hogan Lovells’ association with Hermawan Juniarto and last year’s tie between Norton Rose Australia and Susandarini & Partners. Australia’s own Allens is well known for its long term association with Widyawan & Partners while Ashurst also has deep relationships in this market, most recently in the form of a relationship with Oentoeng Suria & Partners. Both Allens and the old Blake Dawson have had associations with Indonesia for over 20 years. Much has been said about the status of Indonesia as the region’s new star economy, with some going so far as to suggest that the “I” in BRIC should stand for Indonesia, and not the cooling Indian economy. However, the country is also notorious for its infrastructure backlog. To tackle this problem, Indonesia last year passed the Land Acquisition Law, which is set to reduce uncertainty in acquiring land for development, and allow for the acceleration of road, port and airport projects. “The Land Acquisition Law is an important
milestone for infrastructure development,” says Ken Hawkes, partner at White & Case. “In the past, with no compulsory acquisition for land to support public infrastructure or other governmental uses, there was only the ability to acquire land privately and for negotiated prices. Projects that placed a heavy emphasis on land – such as toll roads – had to rely on separate negotiations with many land owners. Luke Devine, a consultant with Baker & McKenzie, agrees on the importance of the law. “Land acquisition risk has been the single-largest problem in recent years which has held back the development of infrastructure projects, particularly in those land-intensive projects such as toll roads and transmission lines for power projects,” he says. “Having a clear, streamlined process with clear deadlines for the steps involved in the land acquisition process will significantly help turn a number of these projects from plan to reality.” It is hoped that the law will also encourage the development of an extensive PPP programme.
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LARGEST FIRMS – INDONESIA Note: “Total fee earners” includes forei gn counsel, patent attorneys and other time keepers not included under the “lawyers” column. For this reason, the total figure may not be the sum of the first two columns. Rank
Firm
Partners
Lawyers
Total fee earners
1
Hadiputranto, Hadinoto & Partners/Baker & McKenzie
16
86
106
2
Ali Budiardjo, Nugroho, Reksodiputro
15
65
104
3
Lubis Ganie Surowidjojo
7
93
100
4
Assegaf Hamzah & Partners
9
41
60
5
Soewito Suhardiman Eddymurthy Kardono
7
45
58
6
Hanafiah Ponggawa & Partners
9
44
56
7
Soemadipradja & Taher
8
36
48
8
Makarim & Taira*
8
30
46
9
Mochtar Karuwin Komar
5
40
45
10
Melli Darsa & Co
5
35
40
*Information obtained from law firm website
hong kong Some of the world’s finest firms have converged on Hong Kong in search of a piece of dwindling pie. Who will emerge victorious and who will be the casualties of this war? Given Hong Kong’s status as the world’s top IPO market in recent years, it is no surprise that this market has become a priority target for international firms looking to expand. While the Hong Kong market has long been dominated by Magic Circle firms, the past three years have seen the emergence of a clear challenge from the U.S. and several well known American names have launched domestic law practices. Add the fact that many of these firms have chosen to bolster their ranks by poaching from the Magic Circle and you’ve got the seeds of an intriguing rivalry. Unfortunately Hong Kong’s halo has slipped in recent times and the market looks set to lose its top IPO ranking for the first time in three years. It’s not a great time to be scrambling for work and some have suggested that only a few law firms will emerge from these uncertain times unscathed. So who are the big movers in this market? The list includes Davis Polk & Wardwell, Latham & Watkins, Cleary Gottlieb, Shearman & Sterling, Milbank and Weil Gotshal, all of whom “went local” in 2010. The following year saw Simpson Thacher & Bartlett and Chicago’s Kirkland & Ellis follow suit while Boston’s Ropes & Gray joined the club last month.
The significance of these moves can be seen in the calibre of these firms and the fact that their arrival has set off a flurry of lateral movements. A major factor helping U.S. firms make their Hong Kong practices competitive so quickly has been their willingness to offer ‘New York rates’, the standard pay scale for Wall Street lawyers. “In comparison to Magic Circle and top tier law firms, U.S. firms can offer increased salaries, sometimes doubling those of the Magic Circle,” said Marc Burrage, regional director of recruitment firm Hays in Hong Kong. Smaller U.S. law firms are also now moving into the Hong Kong market. Washington D.C.based Akin Gump is in the process of opening its Hong Kong office, hoping to win work advising U.S. business looking to expand into China, and Chinese firms looking at outbound international acquisitions. They acknowledge though that they will be unlikely to give the likes of Davis Polk and Simpson Thacher a major run for their money. “Akin Gump does not expect to compete
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One of the most striking examples of the perceived anti-competitiveness of certain industry sectors is French hypermarket giant Carrefour’s attempted entry into Hong Kong over 10 years ago. Dominated by the supermarket duopoly of ParknShop and Wellcome, owned respectively by Hutchison Whampoa and Jardine Matheson, media reports indicate that the two closed ranks, forcing suppliers to ostracise Carrefour for lowering prices below theirs. The French retailer eventually pulled out, providing the Hong Kong Consumer Council with a list of 22 companies that allegedly applied pressure on it to not cut prices. A challenger to ParknShop and Wellcome is yet to be seen. The public debate is clearly very polarised between those that cite the fact that Hong Kong consistently scores as one of the freest economies in the world with vigorous competition, and others who use the Carrefour example to suggest that there are markets which are unfairly dominated by a few major players.
A major new development in the market will be Hong Kong’s first cross border competition act. with the major international law firms in Hong Kong on all listing and corporate work,” said Gregory Puff, the firm’s senior Hong Kong partner. Last but not least is Australia’s own contribution to all this upheaval, with Mallesons and King & Wood tying the knot earlier this year to create one of the region’s largest superfirms. Hong Kong will be very the epicentre for this new outfit and not just in a geographical and cultural sense: the Hong Kong operations of the two firms are the only part of the firm that will enjoy full financial integration. Global Managing Partner Stuart Fuller has relocated to Hong Kong. COMPETITION A major new development in the market will be Hong Kong’s first cross border competition act. Broad-reaching in scope, it bars a substantial amount of anti-competitive activity including cartels and bid rigging, and possesses significant enforcement powers. Prior to the bill, the only sector that was regulated by antitrust conventions was the telecom and broadcasting industry. LARGEST INTERNATIONAL FIRMS – HONG KONG
Note: “Total fee earners” includes foreign counsel, patent attorneys and other time keepers not included under the “lawyers” column. For this reason, the total figure may not be the sum of the first two columns. Rank
Firm
Home Jurisdiction
Partners
Lawyers
Total fee-earners
1
Mayer Brown JSM
U.S.
63
121
200
2
Baker & McKenzie
U.S.
51
127
178
3
Linklaters
UK
26
133
164
4
Clifford Chance*
UK
27
57
164
5
King & Wood Mallesons
China/Australia
34
129
163
6
DLA Piper
UK/U.S.
33
94
127
7
Freshfields Bruckhaus Deringer
UK
18
N/A
125
8
Allen & Overy*
UK
15
35
99
9
Sidley Austin
U.S.
17
48
96
10
Herbert Smith Freehills
UK
17
73
90
11
Hogan Lovells
UK/U.S.
17
72
89
12
Reed Smith Richards Butler
U.S.
26
54
88
13
Norton Rose
UK
19
50
69
14
Kirkland & Ellis
U.S.
18
26
58
15
Latham & Watkins
U.S.
11
35
46
*Information obtained from law firm website
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japan The world’s second biggest IPO takes to the skies. The biggest show in town in Japan this year was the mammoth Japan Airlines (JAL) IPO, which was expected to raise about 663 billion yen (US$8.5 billion). That’s the world’s second largest this year, eclipsed only by Facebook’s US$16 billion float in May. However, like Facebook, JAL has had a lukewarm response by investors to date. JAL’s relisting marks the company’s return from its bankruptcy filing in 2010, when it had more than US$25 billion in debt. Following a state-backed US$11 billion injection, the carrier has emerged as the most profitable airline in the world, according to Reuters, although critics have questioned the appropriateness of the government’s intervention and suggested that allowing the airline to sink or swim of its own accord would ultimately have been a fairer outcome.
According to the prospectus, Sullivan & Cromwell is U.S. counsel to JAL, while Anderson Mori & Tomotsune and Simpson Thacher & Bartlett are advising the international joint lead managers – Daiwa Capital Markets Europe, Merrill Lynch International, and Morgan Stanley & Co International. Local firm Nagashima Ohno & Tsunematsu has clinched the key advisory role as domestic counsel to JAL on this deal. Anderson Mori & Tomotsune and Nagashima Ohno & Tsunematsu are part of Japan’s “big four” firms, the other two members of which are Mori Hamada & Matsumoto and Nishimura & Asahi.
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LARGEST FIRMS – japan Note: “Total fee earners” includes foreign counsel, patent attorneys and other time keepers not included under the “lawyers” column. For this reason, the total figure may not be the sum of the first two columns. Rank
Firm
Partners
Lawyers
Total fee earners
1
Nishimura & Asahi
91
317
463
2
Nagashima Ohno & Tsunematsu
82
227
340
3
Anderson Mori & Tomotsune
83
206
323
4
TMI Associates*
66 (includes patent attorneys)
215 (includes patent attorneys)
311
5
Mori Hamada & Matsumoto*
95
189
307
6
City-Yuwa partners*
36
75
120
7
Oh-Ebashi LPC & Partners
36
66
109
8
Atsumi & Sakai
37
53
94
9
Kitahama Partners*
30
45
85
10
Nakamura & Partners
32
48
84
*Information obtained from law firm website
Japan’s broader problems are well documented: years of deflation, an ageing population, a strong yen, the March 2011 earthquake, tsunami and nuclear meltdown, a record trade deficit of $54 billion, and a net debt GDP ratio that “places it in a slightly better position than Greece, but worse than Italy” according to Professor Mitsuhiro Fukao, Professor of Economics, Faculty of Business and Commerce, Keio University. However, there is an increasing sense of cautious optimism about the world’s third-largest economy. “Around two percent of Japan’s GDP was disrupted by the earthquake, tsunami and nuclear disaster,” says Fukao. “The direct impact of the earthquake was much smaller than the global financial crisis in 2008 and 2009. The economy is rebounding.” Junzaburo Kiuchi, corporate partner at Freshfields Bruckhaus Deringer’s Tokyo office says that outbound M&A is particularly strong. “In 2011, Japanese companies made around 800 cross border acquisitions valued at over $89 billion. This was the largest number of cross border M&A deals on record since 2000. We would expect this trend to continue and surpass 2011,” says Kiuchi.
SOUTH KOREA International firms are lining up to participate in the long awaited liberalisation of the South Korean legal services market A three stage liberalisation of the South Korean legal services market is now underway. Stage one will see international firms permitted to open offices to advise on cross-border work; stage two permits fee sharing between international and domestic firms and stage three will permit Korean and foreign lawyers to go into partnership together and allow foreign law firms to employ Korean lawyers. Stage one is currently underway and stage three is expected to be implemented no later than 2017. A number of international firms – notably U.S. firms in particular – have applied to open Korean offices pursuant to stage one. Firms which had been granted approval at the time of writing included Sheppard, Mullin, Richter & Hampton, Clifford Chance and Ropes & Gray. However, there is also a long list of firms who are awaiting approval: these include Cleary Gottlieb, Simpson Thacher & Bartlett and DLA Piper to name but a few.
Some commentators have estimated that South Korea’s legal services market is worth upwards of US$2 billion. According to business news website InvestChosun, the top earning domestic firms in this market in 2011 were Kim & Chang (earning an estimated 500 billion won or US$440 million); Bae, Kim and Lee (170 billion won) while the remaining members of Korea’s “Big Five” law firms (Shin & Kim, Lee & Ko, and Yulchon) all topped the 100 billion won mark. Meanwhile, the South Korean government has downgraded its growth forecast for the national economy to three percent, citing global uncertainty and faltering exports.
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LARGEST FIRMS – south korea Note: “Total fee earners” includes foreign counsel, patent attorneys and other time keepers not included under the “lawyers” column. For this reason, the total figure may not be the sum of the first two columns. Rank
Firm
Partners
Lawyers
Total fee earners
1
Kim & Chang
120
N/A
800
2
Lee & Ko
128
225
436
3
Shin & Kim
115
156
350
4
Yoon & Yang*
100
154
301
5
Yulchon
90
170
293
6
Bae, Kim & Lee*
99
157
280
7
Barun Law*
54
101
168
8
Jipyong & Jisung*
N/A
N/A
130
9
Hwang Mok Park*
33
49
124
10
Kim, Choi & Lim*
N/A
N/A
109
*Information obtained from law firm website
South Korean government has downgraded its growth forecast for the national economy to three percent, citing global uncertainty and faltering exports.
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MALAYSIA IPOs boom – but it’s all relative Two very large IPOs have seen this jurisdiction overtake Hong Kong as the largest Asian IPO market for 2012. The IPOs, worth over US$5 billion together, are for palm oil plantation operator Felda and Integrated Healthcare Holdings, one of Asia’s largest hospital operators. However, lawyers have warned that the rise of Malaysia should be seen in the context of sluggish equity markets activity elsewhere rather than exceptional activity in Kuala Lumpur. That said, Malaysian IPO activity is expected to continue strongly this year with Westports Malaysia pondering a US$1 billion float. The Malaysian equity market is dominated by local investors and a large domestic pension fund system, which may explain why it has defied the gloom which has beset financial markets such as Singapore, where motor racing firm Formula One decided to postpone its near US$3 billion flotation. Meanwhile Trowers & Hamlins has received approval from the Malaysia Investment Development Authority (MIDA) to open a non-trading representative office, the first foreign firm to open in this way in Malaysia. Currently, foreign law firms are prohibited from directly representing clients in Malaysia, however a bill proposing the liberalisation of the legal services sector was before the parliament at the time of writing. The bill would allow a number of foreign law firms to open offices in Malaysia, create joint ventures with local firms and allow foreign lawyers to be employed by Malaysian firms. LARGEST FIRMS – malaysia Note: “Total fee earners” includes foreign counsel, patent attorneys and other time keepers not included under the “lawyers” column. For this reason, the total figure may not be the sum of the first two columns. Rank
Firm
Partners
Lawyers
Total fee earners
1
Shearn Delamore*
86
63
151
2
Zaid Ibrahim & Co
45
83
128
3
Skrine*
41
57
103
4
Shook Lin & Bok*
28
52
80
5
Wong & Partners/Baker & McKenzie
11
47
79
6
Zul Rafique & Partners
37
41
78
7
Azmi & Associates
11
50
61
8
Raja, Darryl & Loh
18
37
55
9
Rahmat Lim & Partners
13
28
41
10
Albar & Partners
12
24
36
*Information obtained from law firm website
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SINGAPORE Earlier this year, Allen & Overy was reportedly in talks with local firm Allen & Gledhill to explore the possibility with a tie up, but these talks did not produce any result. Allen & Gledhill had previously been in an alliance with Linklaters for over 10 years. Australians will be interested to note that in addition to adding several Minters partners to its ranks in Perth, U.S. firm Squire Sanders has also been active in Singapore. In February, the firm announced it had lured three partners from U.S. rival Bryan Cave in Hong Kong and Singapore, who would spearhead a new Singapore presence for the firm.
International firms are showing a renewed interest in the Singapore market. A key point of interest in Singapore will be a mooted expansion of the number of international law firms permitted to practise domestic law in this market. Currently six firms - Allen & Overy, Clifford Chance, Herbert Smith, Latham & Watkins, Norton Rose and White & Case have this privilege, although several other international firms such as Baker & McKenzie are also able to tap the local market via joint ventures.
this year, Allen & Overy was reportedly in talks with local firm Allen & Gledhill to explore the possibility with a tie up, but these talks did not produce any result. LARGEST INTERNATIONAL FIRMS – Singapore
Note: “Total fee earners” includes foreign counsel, patent attorneys and other time keepers not included under the “lawyers” column. For this reason, the total figure may not be the sum of the first two columns. Rank
Firm
Home Jurisdiction
Partners
Lawyers
Total fee earners
1
Baker & McKenzie. Wong & Leow
Singapore/U.S.
22
63
102
2
Allen & Overy*
UK
9
46
61
3
Norton Rose
UK
17
42
59
4
Herbert Smith Freehills
UK
10
34
44
5
Watson, Farley & Williams
UK
12
30
42
6
Ashurst
UK
10
32
42
7
Clifford Chance*
UK
14
39
42
8
O’Melveny & Myers
U.S.
5
19
24
9
Hogan Lovells
UK/U.S.
8
N/A
24
10
Berwin Leighton Paisner
UK
8
10
21
11
DLA Piper
UK/U.S.
6
12
18
12
Pinsent Masons
UK
4
11
18
13
Eversheds
UK
5
9
14
14
Sidley Austin
U.S.
2
7
12
15
Gibson, Dunn & Crutcher
U.S.
3
4
10
*Information obtained from law firm website
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Australasian Legal Business ISSUE 10.11
india International firms are losing patience with the stalled liberalisation process in India. Commentators have suggested that policy paralysis and a cooling economy have seen an outflow of money from India as investors switch to more favoured Southeast Asian destinations such as Indonesia. Corruption scandals and high inflation have added to India’s woes, which have seen growth slow to a three-year low while the fiscal deficit widened to 5.9 percent of GDP in the last financial year.
Both Allen & Overy’s alliance with local firm Trilegal and Clifford Chance’s alliance with AZB were terminated after India’s much anticipated legal services market liberalisation failed to eventuate. At time of printing, the Indian government had not issued a revised timeline for the liberalisation to occur.
LARGEST FIRMS – india Note: “Total fee earners” includes foreign counsel, patent attorneys and other time keepers not included under the “lawyers” column. For this reason, the total figure may not be the sum of the first two columns. Rank
Firm
Partners
Lawyers
Total fee earners
1
Amarchand & Mangaldas & Suresh A Shroff & Co
68
467
533
2
Khaitan & Co
58
242
300
3
Luthra & Luthra
44
246
290
4
J Sagar Associates
53
196
250
5
AZB & Partners*
19
221
240
6
Desai & Diwanji
17
156
173
7
Fox Mandal
36
122
162
8
Trilegal
20
131
151
9
M.V. Kini & Company
8
150
150
10
DSK Legal
14
147
147
11
Kochhar & Co*
34
78
112
12
Economic Laws Practice
19
80
99
13
Mulla & Mulla & Craigie Blunt & Caroe
14
122
86
14
Nishith Desai & Associates*
N/A
N/A
69
15
Juris Corp
13
51
64
16
Surana & Surana International Lawyers
9
75
60
17
Thiru & Thiru
7
53
60
18
Krishnamurthy and Co
7
50
57
19
Singhania & Partners
12
44
56
20
IndusLaw
10
44
54
*Information obtained from law firm website
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