Australasian Lawyer issue 2.04

IN-HOUSE 20 Who’s who in-house for 2015

australasianlawyer.com.au Issue 2.4

PERTH REPORT The latest from WA’s legal market NEW FRONTIERS TMT lawyers on embracing new technologies

ON THE INTERNATIONAL STAGE Ashurst chairman Ben Tidswell on the trends shaping the international legal market

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CONTENTS UPFRONT 04 News analysis

How big can law firms get?

06 Legal insight

The changing face of Australia’s legal profession

08 Appointments

20

10 Deals round-up

FEATURES

PERTH REPORT

26

The latest from WA’s legal market

IN

HOUSE

COVER STORY

ON THE INTERNATIONAL STAGE

Ashurst chairman Ben Tidswell on the trends shaping the international legal market

30

20

FEATURES PEOPLE

BUILDING A CITY

16

PEOPLE 46 The centre of everything

Clyde & Co partner Michael Cripps talks about life and legal practice in the world’s most populous city

BUSINESS STRATEGY 52 Does corporate volunteering really work?

Does letting staff go out and volunteer one day a year really create value for the charity?

54 Focus on strengths

Find out who’s who in-house for 2015

Why firms should focus energy and resources on nurturing the strengths of employees rather than ‘fixing’ weaknesses

42

AUSTRALASIANLAWYER.COM.AU

NEW FRONTIERS

CHECK IT OUT ONLINE

IN-HOUSE 20

Stockland general counsel Katherine Grace about working on some of Sydney’s most significant developments

FEATURES

TMT lawyers on embracing new technologies

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UPFRONT

EDITORIAL

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The new normal

I

t seems that the only constant in the Australasian legal market today is change – and things seem to be moving faster than ever before. No matter Kathryn Crossley where you look, firms are implementing new strategies and projects to gain an edge over the competition. There are apps, outsourcing services for in-house legal teams, alternative billing approaches, hitherto untried approaches to flexible work, and new service offerings for clients.

Given the range of new initiatives being adopted by firms, most days it feels like the very practice of law is being completely reinvented before our eyes.

For technology, media and telecommunications lawyers in particular, responding to a rapidly changing world is just part of their day-to-day.

Speaking with TMT practitioners for ‘New frontiers’ (on page 42) was in many ways a master class in working with uncertainty.

AUGUST 2O15 EDITORIAL Editor Kathryn Crossley Production Editors Roslyn Meredith Moira Daniels Carolin Wun

CONTRIBUTORS Samantha Woodhill Peter Baines Dr Tim Baker

ART & PRODUCTION Design Manager Daniel Williams Designer Kat Vargas Marla Morelos Photographer Peter Secheny Photography

SALES & MARKETING Sales Manager Paul Ferris Marketing and Communications Manager Lisa Narroway Traffic Coordinator Lou Gonzales

CORPORATE Chief Executive Officer Mike Shipley Chief Operating Officer George Walmsley Managing Director Justin Kennedy Chief Information Officer Colin Chan Human Resources Manager Julia Bookallil

EDITORIAL ENQUIRIES

Most days it feels like the practice of law is being completely reinvented before our eyes Of course, law firms are not the only ones grappling with the extent and speed of change in the marketplace. Looking in-house, meet many of the general counsel helping to steer their organisations through uncertain times in In-house 20 on page 30.

Meanwhile, Ashurst chairman Ben Tidswell speaks about his career and the trends shaping the international legal market on page 26.

Uncertainty can be a source of frustration or a source of innovation and inspiration, and in the pages of this issue of Australasian Lawyer you will meet plenty of practitioners who approach their roles from the latter perspective.

For these agile lawyers, making a mark rather than simply making it through, comes down to asking the right questions rather than having all the answers.

+61 2 8437 4702 kathryn.crossley@keymedia.com.au

SUBSCRIPTION ENQUIRIES

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ADVERTISING ENQUIRIES +61 2 8437 4703 paul.ferris@keymedia.com.au

Key Media www.keymedia.com.au Key Media Pty Ltd, regional head office, Level 10, 1–9 Chandos St, St Leonards, NSW 2065, Australia tel: +61 2 8437 4700 fax: +61 2 9439 4599 Offices in Sydney, Auckland, Denver, Toronto, Manila

Australasian Lawyer is part of an international family of B2B publications and websites for the legal industry AUSTRALASIAN LAWYER

Kathryn Crossley, editor

kathryn.crossley@keymedia.com.au T +61 2 8437 4702 samantha.woodhill@keymedia.com.au T +61 2 8437 4704

NZLAWYER kathryn.crossley@keymedia.com.au T +61 2 8437 4702 hannah.norton@keymedia.co.nz T +64 9 973 5195 Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as Australasian Lawyer magazine can accept no responsibility for loss

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UPFRONT

NEWS ANALYSIS

How big can law firms get?

Legal leaders share what’s driving the growth of some of the world’s biggest law firms, and whether the sky really is the limit for firm size.

THE WORLD’S biggest law firms are in growth mode, and for most this expansion comes down to clients.

According to PwC Australia and Asia Pacific legal services leader Tony O’Malley, international firms’ rapid expansion is about a search for relevance – both in terms of clients and talent. “As the business community globalises and consolidates, law firms have to be where their clients need them to be to give them support, otherwise they run the risk of losing relevance and losing relationships,” he says. “We’ve seen those global forces at work consolidating the market and we’ve seen a broader shift in the

Madrid, or perhaps all three of those places, we have offices there that can service them…

If you’re not a sufficient size or scale or reach, you clearly can’t do that,” he says.

Dentons global chairman, Joe Andrew, agrees. “For Dentons, growth has been a tool to get the quality that most businesses need in today’s marketplace. Our clients don’t care whether we have seven lawyers or 7,000 lawyers, as long as we have the one lawyer they need, in the location they need him or her, with the specific understanding of that clients’ business concerns and objectives. To get there, growth was and is an imperative,” he says.

“So long as they’re focused only on legal services, that will put a natural cap on the scale” Tony O’Malley, PWC buying power to clients. I think law firms have felt compelled to adapt their strategies to be able to better serve clients from an international platform.”

Baker & McKenzie’s Australia managing partner, Chris Freeland, agrees that client imperatives are a key factor in international firms’ rapid growth. “If you’ve got an Australian client who is looking to do business in Moscow or Johannesburg or

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Going for growth Of late, expansion has been a focus for a number of the world’s major law firms.

Dentons is a case in point. In January, it combined with China’s largest firm, Dacheng, adding 4,000 lawyers to its ranks in the process. Then in April, Dentons unveiled a merger deal with McKenna Long & Aldridge in the US, adding an additional 430 lawyers to the fold.

In doing so, the firm has pursued a trajectory inspired by accounting firms. “The reason that international accounting firms have succeeded with the path they have taken is that it has allowed them to provide the level and scope of service that many clients want and need. We believe there is room for a similar approach within the legal profession,” Andrew says. “We certainly aren’t afraid to be the first to do things differently and take an approach that more similarly aligns with one of the big accounting firms than with traditional law.”

The firm’s current global footprint comprises of 125 locations across more than 50 countries. The practice employs more than 6,600 lawyers, making it the biggest firm in the world by headcount. Dentons’ growth spurt looks set to continue, with additional reports that it is in talks with more than 20 firms in Latin America, Europe, Japan and

years as firms have been more flexible in their models, so for those that have been happy not to be economically integrated and use verein structures, they’ve been able to add to their network much more quickly,” he observes.

Challenges of scale

Australia, although Andrew says the firm has no specific number in mind: “Our strategy is about answering clients’ needs, not meeting artificial number targets,” he says.

Likewise, Baker & McKenzie has ongoing growth aspirations. “We are the most global of any of the firms and we think there is still room to grow. We opened an office in Brisbane last year; it’s no surprise that Africa is the next frontier for law firms globally,” Freeland says. “We absolutely, unashamedly are looking to grow.”

Limits to growth Although some international firms have set their sights on achieving scale, there are limits to their growth potential. O’Malley doubts that law firms will ever achieve a size and scale similar to that of the major accounting firms. “At the moment, their strategy is very much about international

global coverage around legal services and so long as they’re focused only on legal services, that will put a natural cap on the scale,” he predicts. “If you look at the market as it is now, the biggest of the international firms is around $2.5bn annual turnover, and there’s long been talk in the industry of a firm ultimately getting to around about $5bn annual turnover if they expand fully across all of the available markets,” he says. “If they were to diversify, then obviously there would be much bigger opportunities for them, but for them to diversify into areas where the Big Four are already operating will be a challenge for them because the Big Four are so well established and have a 20-year head start.”

In O’Malley’s view, international expansion for law firms can in some cases be a slow process due to the reluctance of partnerships to invest in new markets. “I think it’s become a little bit easier in recent

A number of international firms are in growth mode, but it is not a path without challenge. “It’s true that as you get bigger, some of the things that are much easier to do when you are in one office are much harder to do when you have 77 offices,” says Freeland. “Inevitably, when you are bigger it’s more difficult to communicate as easily and as smoothly. We think we do it pretty well but of course if you’re not sitting next to someone in the office next door, you bump into time zone and technology issues.”

From O’Malley’s perspective, size in itself is not the problem. He points to PwC’s 185,000 employees and its presence in 157 countries to illustrate that it is possible to find common values and approaches to working.

“I think for law firms as they internationalise, the biggest challenge is how do you ensure that you get the benefits of that expansion for clients and for your people?”

According to O’Malley, ensuring that international expansion delivers a consistent and high-quality experience for clients and also creates career development opportunities for lawyers is key to making firms’ growth strategies a success.

However, even if firms manage to succeed in making expansion work internally, they may be thwarted by external factors. O’Malley highlights the expansion of accounting firms’ legal functions as a likely source of competition for growing international firms.

For example, PwC Legal globally employs close to 2,600 lawyers and generates revenue in excess of half-a-billion dollars.

“I think there is an interesting question about what impact the Big Four will have on the market over time, and whether they in fact may be some of the cause of consolidation in the market in years to come.

Rather than the law firms growing to be like the Big Four, maybe the Big Four have a broader role to play.” AL

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UPFRONT

INDUSTRY TRENDS

The changing face of Australia’s legal profession A new study highlights the major shifts taking place in the Australian legal market MID-MARKET firms are expanding, more women are joining the profession, senior practitioners are delaying retirement, and the ranks of lawyers working in corporate and government are growing.

The latest Law Society National Profile, recently released by the Law Society of New South Wales, reveals just how much Australia’s legal profession has changed between 2011 and 2014.

THE NUMBER OF MALE AND FEMALE LAWYERS HAS ALMOST REACHED PARITY The number of female lawyers has been on the rise for some time, with women accounting for 59.1% of solicitors admitted in the past decade. As a result, the split between male and female lawyers in Australia will soon be even, although there are deviations from this in some states and territories.

In the NT and ACT there is a higher proportion of female lawyers (50.1% in NT and 53.6% in ACT), and Tasmania has a noticeably larger proportion of male lawyers (57.1%).

48.5% Female lawyers

41.9 yrs Average age of Australian lawyers

559

Aboriginal or Torres Strait Islander solicitors in Australia

41.6%

Of lawyers are registered in NSW

LAWYERS HAVE BEEN IN PRACTICE FOR LONGER Lawyers who have been in practice for 10 years or less now account for a smaller proportion of the Australian legal profession than they did in 2011, while the proportion of lawyers who were admitted more than 11 years ago has risen. SA and Tasmania are home to the highest proportion of experienced solicitors, with practitioners admitted 15-plus years ago accounting for 44% and 46.1% of the states’ lawyers respectively. In contrast, in 2014, Queensland and WA had the highest proportion of lawyers admitted to practice within the preceding five years: 30.4% and 29.8% respectively.

60%

40%

36.8% 36.8% 20.9%

20%

19.3%

20.7%

19.3% 10.8% 12.6%

10.4% 9.4%

51.5% Male lawyers

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2.9%

Of lawyers are based overseas

0% Years since admission

1 year or less

2–5 years

2011

6–10 years

11–14 years

2014

15 years or more

Northern Territory 533 lawyers 69 firms

THE PROFESSION IS GROWING

Queensland 10,380 lawyers 1,767 firms

In the three years between 2011 and 2014, the Australian legal industry has seen a 12% increase in the number of practising solicitors, and the number of law firms has grown by 9%.

New South Wales 27,575 lawyers 5,569 firms

NATIONAL TOTAL

South Australia 588 solicitors 876 firms

Western Australia 5,666 lawyers 422 firms

12,483 firms (up 9% since 2011) 66,211 practising lawyers (up 12% since 2011)

Victoria 16,214 lawyers 3,479 firms

THE PROPORTION OF LAWYERS WORKING IN CORPORATE AND GOVERNMENT IS GROWING

2.97%

9.61%

14.79%

4.38%

15.77%

2011 Private practice

72.98%

Corporate

2014 Government

Tasmania 503 lawyers 119 firms

THE NUMBER OF LARGER FIRMS IS ON THE RISE

Between 2011 and 2014 the number of lawyers in Australia has increased overall, and the proportion of lawyers working in-house at companies and in government has also grown. In 2011, there were 8,770 lawyers in the corporate sector; today there are 10,684. Likewise, the number of lawyers working in government has grown from 5,489 to 6,509. In this same period, the proportion of lawyers working in private practice has declined.

9.26%

Australian Capital Territory 1,752 lawyers 182 firms

The number of law firms in Australia has jumped 9% since 2011, when there were 8,234 private law firms. In particular, the number of law firms with 40 partners or more has grown by an impressive 300%. In contrast, sole practitioners experienced a 3% decline in reported numbers between 2011 and 2014.

Number of partners

Number of firms in 2011

Number of firms in 2014

40 or more

14

56

21 to 39

28

59

11 to 20

50

141

5 to 10

163

403

2 to 4

1,060

1,696

Sole practitioner

6,865

6,649

70.23%

Other

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UPFRONT

MARKET MOVEMENTS

Appointments NEW MANAGING PARTNER FOR TOP NZ FIRM Chapman Tripp has appointed Andy Nicholls as a new managing partner in the firm’s Wellington practice for a five-year term. He also joins the firm’s board.

A leading regulatory lawyer, Nicholls has been a partner at Chapman Tripp for 11 years. He advises clients in New Zealand and the Pacific Islands on regulatory and competition law issues in the electricity, gas, telecommunications and airport sectors.

Nicholls replaces Mark Reese, who was at the helm of the Wellington practice for a decade and has now returned to full-time legal practice as a partner in the firm’s banking and finance team.

The firm’s primary managing partner, Andrew Poole, will continue in his Auckland-based role until June 2016.

With Nicholls’ appointment, Poole’s title changes to chief executive partner.

PARTNER PROMOTIONS

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Presented by

LATERAL PARTNER APPOINTMENTS NAME

PRACTICE AREA

LEAVING

GOING TO

Brad Allen

Banking and finance

Clayton Utz

DibbsBarker

Lisa Anaf

Workplace relations

Norton Rose Fulbright

Mills Oakley

Brihony Boan

Property

K&L Gates

Gadens

David Cowling

Insolvency and restructuring

Clayton Utz

King & Wood Mallesons

Mark Dessi

Projects

Jemena

Hall & Wilcox

Stephen Etkind

Investment

Minter Ellison

Henry Davis York

Anna Feros

Commercial

Shepherd and Wedderburn

DibbsBarker

Trina Francis

Family law

Prime Lawyers

Keypoint Law

David Gilham

Banking and finance

Henry Davis York

McCullough Robertson

Kate Hay

Intellectual property

Griffith Hack

Corrs Chambers Westgarth

Jeff Krins

Workplace relations

HR Legal

M+K Lawyers

Tim L’Orange

Real estate

DLA Piper

Mills Oakley

Paul McCann

Litigation

Corrs Chambers Westgarth

Russells

Peter Murray

Taxation

KPMG Legal

Hall & Wilcox

FIRM

LAWYERS PROMOTED

Allens

Emin Altiparmak, Jo Folan, John Hedge, Jeremy QuanSing, Tim Stewart

Kon Nakousis

Projects and construction

Minter Ellison

Clyde & Co

Jamie Palmer

Corporate

DibbsBarker

Allen & Overy

Clyde & Co

Gareth Horne

John Perry

Building and construction

Hunt & Hunt

M+K Lawyers

Jol Rogers

Corporate

K&L Gates

Gadens

Gilbert + Tobin

Gail Christopher, Adam D’Andreti, Darren Fittler, Chris Williams

Matthew Swinn

Intellectual property

Corrs Chambers Westgarth

King & Wood Mallesons

Eugene Chen, Tom McMahon, James Morvell, Natasha Toholka

Robert Walker

Intellectual property and technology Baker & McKenzie

Hall & Wilcox Holding Redlich

Christine Jones, Breellen Warry

Lander & Rogers

Gregg McConnell, Katie Swain

Maddocks

Alicia Albury, Aaron Klockzo, Alicia Sheridan, Ian Temby, Stella Wild, Michael Winram

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Gadens

MANAGING PARTNER DEPARTS FOR BANKING ROLE Minter Ellison Rudd Watts managing partner Mark Weenink has resigned to take up the role of general manager (regulatory affairs, compliance) and general counsel at Westpac NZ. Weenink first joined the firm in 2007, and despite the GFC, the firm has seen steady growth in partners and clients since then. Matters the firm has worked on under Weenink’s leadership include major roles around the Pike River Tragedy, all of the PPPs in New Zealand to date, working with CERA on the Canterbury rebuild and Z Energy’s recent acquisition of Chevron NZ.

SENIOR ASSOCIATE APPOINTMENTS FIRM

LAWYERS PROMOTED OR LATERALLY APPOINTED

Nikki Akhurst-Rasa, Melinda Andrew, Barbara Casado, Ben Cotter, Michael Dent, Kirrilee Kennedy, Mark Lebbon, Amber Mahoney, Carl Newton, Jenny Nichols, Melissa Zen, Gemma Weiss Emily Booth, Lauren Freeman, Catherine Lah, Ivan Orola, Jarod Holding Redlich Sacks, Michael Stretton Charlotte Adol, Tamara Cook, Neisha Geisler, Kaitlyn Gulle, Lloyd Lander & Havlik, Kelly Kandelaars, Phil Kusiak, Hayley Marano, Jess O’Brien, Rogers Nuala Wiltshire Sophie Ball, Jasmin Barker-Mitchell, Libby Buchanan, Shannon Derbyshire, Stefan Fenk, Viviane Karoumbalis, Kate Kennedy, Maddocks Laura McAlister, Linda Mackinlay, Melissa Mallos, Suzanne Rizk, Andrew Wright Hall & Wilcox

OTHER NAME

FIRM/COMPANY

TITLE

Jess Alcantara Jhansi Barnett Jodylee Bartal Stephanie Bower Cassie Brain Stephanie Cheligoy Sean Costello Stephen D’Arcy Rachell Davey Tom DeGraaff John Douglas

Maddocks Maddocks Lander & Rogers Maddocks Lander & Rogers Maddocks Holding Redlich Maddocks Lander & Rogers Maddocks Maddocks

Special counsel Associate Special counsel Associate Special counsel Associate Special counsel Associate Special counsel Associate Special counsel

Sean Field Frances Hall Frank Hinoporos Georgia Hunt Meredith Kennedy Nathan Kennedy Julian Law Diana Lew Amelia Lynch Traci MacRae Joe Mancuso Rob Merrick Jessica Mort Rob Muir Todd Neal David Nguyen Matthew Payten Elisabeth Pickthall Tony Rutherford Joshua Same Tanya Smart Robert Stilling Steven Tang Andrew Thomson Julia Tonkin Louise Turner Jessica van Rooy Nick Whittington

Maddocks Maddocks Hall & Wilcox Maddocks Maddocks Hall & Wilcox Maddocks Lexvoco Lander & Rogers Maddocks Hall & Wilcox Herbert Smith Freehills Maddocks Lander & Rogers Maddocks Lexvoco Carter Newell Hall & Wilcox Gilbert + Tobin Maddocks Hall & Wilcox Maddocks Maddocks Lander & Rogers Maddocks Maddocks Gilbert + Tobin Maddocks

Special counsel Special counsel Special counsel Associate Associate Special counsel Associate Senior legal counsel Special counsel Associate Special counsel Global energy group co-head Associate Special counsel Special counsel Legal counsel Special counsel Special counsel Special counsel Special counsel Special counsel Associate Associate Advisor to Japan client practice Associate Associate Special counsel Associate

Mahlab Report 2015 Out Now. Download your free copy from www.mahlab.com.au/Report 2015 www.mahlab.com.au Sydney (02) 9241 1199 Melbourne (03) 9629 2111

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UPFRONT

TRANSACTIONS

Deals round-up $220m

Transaction

Value (A$)

Adviser

Client

Lead lawyer(s)

Adairs IPO

a2 Milk Company ASX listing

NZ$376m

Simpson Grierson

The a2 Milk Company Limited

Peter Hinton, Richard Watts, Jaron McVicar

Abacus Property Group and Goldman Sachs Group joint venture and acquisition of the Forum complex in St Leonards

$115m

Allens

Goldman Sachs

Mark Malinas, Emin Altiparmak

Herbert Smith Freehills

Abacus Property Group

Justin O’Farrell

Adairs IPO

$220m

Herbert Smith Freehills

Adairs Limited

Richard Loveridge

ADM Capital Australian agribusiness project

$23.5m

Allion Legal

ADM Capital

David Walker, Stephen Byrne

Aitken Investment Management High Conviction Fund launch

Undisclosed

Norton Rose Fulbright

Aitken Investment Management

Fadi Khoury

RMD Industries' sale of the ‘Brio’ sliding and folding door hardware business to Allegion

$24m

Simpson Grierson

RMD (NZ) Limited

Don Holborow

Atlas Iron costs arrangements and proposed capital raising

$180m

Ashurst

Atlas Iron

Antonella Pacitti

Australian Finance Group IPO

$257.8m

Herbert Smith Freehills

Australian Finance Group Ltd

David Gray, Michelle Palethorpe

AVJennings acquisition of Williamstown infill project

$350m

Maddocks

AVJennings

Nick Sparks, David Hartney

Bang & Olufsen sale of Australia and New Zealand operations to Emerald Group Investments

Undisclosed

Baker & McKenzie

Bang & Olufsen

Ben McLaughlin, Candice Heggelund

Bank of Queensland capital notes issue

$150m

Gilbert + Tobin

Joint lead managers: National Duncan McGrath Australia Bank, Westpac, Deutsche Bank

Bone Medical proposed acquisition of Takor Group and re-compliance listing on ASX

$3m

Bellanhouse Legal

Bone Medical Limited

Bryn Hardcastle, Deanna Carpenter

Burson Group acquisition of Metcash Automotive

$275m

Allens

Burson Group Limited

Tom Story, Julian Donnan, Rob Pick

Herbert Smith Freehills has advised on the successful $220m IPO of homewares retail giant, Adairs. Adairs, which operates 131 retail stores in Australia, listed on the ASX on 17 June with a market capitalisation of $400m at the offer price.

Prior to the listing, the firm advised Adairs on its corporate restructure and refinancing, separating Adairs from a partner business, Dusk.

The transaction was led up by Herbert Smith Freehills partner, Richard Loveridge, who predicted continued IPO activity for the remainder of this year.

“We hear a lot that retail is having its share of difficulties in the market but here we have a retail business that is going very strongly and has been particularly well received by investors,” he said. “I think the market has still got an appetite for good businesses.”

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MAKE SURE YOUR FIRM’S WORK IS RECOGNISED To ensure your firm and its lawyers get the recognition they deserve for their fantastic work, send all your deal details to kathryn.crossley@keymedia.com.au

Transaction

Value (A$)

Adviser

Client

Lead lawyer(s)

$2bn

California Public Employees’ Retirement System (CalPERS) AsiaPacific infrastructure partnership with QIC

$1bn

Clayton Utz

QIC

David Cominos

Minter Ellison

California Public Employees' Retirement System

Sam MacGibbon

CGU acquisition of 100% of shares i n Dynamiq

Undisclosed

DLA Piper

CGU Insurance

Mark Burger, Dylan Burke

Colgate-Palmolive on sale of laundry detergent brands

Undisclosed

King & Wood Mallesons

Colgate-Palmolive

Scott Bouvier

Crown Castle Australia acquisition by consortium led

by Macquarie Infrastructure and Real Assets

Crown Castle Australia acquisition by consortium led by Macquarie Infrastructure and Real Assets

$2bn

Allen & Overy

Crown Castle International Corp

Michael Reede

Herbert Smith Freehills

The financiers

Joel Rennie

Norton Rose Fulbright

Consortium led by Macquarie Adrian Ahern, Nigel Infrastructure and Real Assets Deed, Chris Redden, Dr Martyn Taylor and Nick Afaras

DBP debt refinancing

$245m

King & Wood Mallesons

DBP

Nicholas Creed

Finders Resources senior secured bank facilities for Wetar copper project in Indonesia

US$165m

Herbert Smith Freehills

BNP Paribas, Commonwealth Bank of Australia, Societe Generale Asia Limited, Hong Kong and Shanghai Banking Corporation Jakarta Branch

Joel Rennie

Norton Rose Fulbright

Finders Resources Limited

Chris Redden

Guangdong Rising Assets Management takeover bid for PanAust

$1.2bn

Herbert Smith Freehills

PanAust Limited

Tony Damian

GUD Holdings placement

$79.3m

Clayton Utz

Macquarie Capital (Australia)

Brendan Groves

Healthscope sale of Australian pathology business

$105m

Allens

Healthscope Limited

Emin Altiparmak

K&L Gates

Henderson Global Investors

Liz Gray

Henderson Global Investors’ Undisclosed acquisition of Perennial Fixed Interest Partners and Perennial Growth Management

A trio of firms have advised on the acquisition of Crown Castle Australia Limited. A Macquarie Infrastructure and Real Assets led consortium has acquired Crown Castle from its US-based parent and majority shareholder, Crown International, and from Todd Corporation in New Zealand.

Crown Castle, the largest independent telecommunications tower operator in Australia, owns and operates around 1,800 sites nationwide, leasing them to major telecommunications companies including Telstra and Optus.

Norton Rose Fulbright advised the consortium on the transaction, Allen & Overy acted for Crown Castle, and Herbert Smith Freehills advised the financiers.

The $2bn acquisition marks the largest telecommunications infrastructure deal since Telstra leased pits, pipes and copper lines to build the national broadband network in a deal worth over $11bn.

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11

UPFRONT

TRANSACTIONS Transaction

Adviser

Client

Lead lawyer(s)

IAG and Berkshire Hathaway strategic Undisclosed relationship

King & Wood Mallesons

Insurance Australia Group

Patrick Gunning

Ignite Energy investment in PT Bukit Asam

$30m

HWL Ebsworth Ignite Energy Resources

Matthew Reynolds

Independence Group acquisition of Sirius Resources

$1.8bn

Ashurst

Sirius Resources

Roger Davies

Japan Post acquisition of Toll Group

$6.5bn

Clayton Utz

Japan Post

Andrew Walker, Darryl McDonough

Herbert Smith Freehills

Toll Group

Rodd Levy, Simon Haddy

Simpson Grierson

Japan Post

Kevin Jaffe, Nick Wilson

Ashurst

Karara Mining Limited

Gaelan Cooney

King & Wood Mallesons

China Development Bank Nicholas Creed Corporation and Bank of China Limited

Norton Rose Fulbright

Ansteel Group Corporation

Jake Howard, James Stewart

Karara Mining refinancing

US$1.48bn

Leighton Holdings and Apollo Global Management joint venture financing

$900m

King & Wood Mallesons

Barclays

Richard Hayes

$2bn

Magellan Flagship Fund capital raising

$128m

Allens

Magellan Flagship Fund Limited

Julian Donnan

Moorebank Intermodal Terminal PPP

Minerals Corporation proposed acquisition of Megastar Millionaire re-compliance listing on ASX

$3m

Bellanhouse Legal

Minerals Corporation Limited

Bryn Hardcastle, Deanna Carpenter

Moorebank Intermodal Terminal PPP

$2bn

Corrs Chambers Westgarth

Aurizon

Stephanie Daveson

Herbert Smith Freehills

Moorebank Intermodal Company

Peter Paradise

King & Wood Mallesons

Qube and Aurizon

Mark Upfold, Stuart Dixon-Smith

Allens

Joint lead managers: Macquarie Capital (Australia), Merrill Lynch Equities (Australia), Morgan Stanley Australia Securities

Robert Pick, Julian Donnan

Ashurst

Novion Property Group

Garry Besson, Kylie Lane

Several major firms have acted on a $2bn freight hub development at Moorebank in Sydney’s south west. The development, which is roughly the size of the Sydney CBD, is designed to significantly support the growth of freight in Australia, provide a solution to freight congestion and reduce the number of freight trucks on road.

Herbert Smith Freehills advised Moorebank on all facets of the transaction, including construction, real estate, tax, stamp duty, environment and planning, OH&S, intellectual property and information technology.

King & Wood Mallesons acted for Qube and Corrs Chambers Westgarth advised Aurizon.

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Value (A$)

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National Australia Bank entitlement offer

$5.5bn

Novion Property Group and Federation $12bn Centres merger

Firm Profile

THE OFFLINE RESPONSE TO CYBER THREATS It shouldn’t come as a surprise to hear that cyber attacks are on the rise. A recent PwC Survey1 reported significant year-on-year increases of detected cyber security incidents, but - more alarmingly - noted that the figure of detected incidents is probably conservative: the most successful attacks go undetected, and many detected attacks go unreported for fear of regulatory action, reputational damage or financial impact.

At the same time, there has been a general awakening in the public consciousness of privacy issues, meaning that even if the operational or legal impact of a security incident can be contained, the damage to reputation and loss of public trust will be much harder to repair.

GETTING IT WRONG And yet, despite the growing threat and the heightening awareness of privacy and security risks, many organisations remain under-prepared, often for one or more of the following reasons: First, a culture remains among many organisations that ‘it won’t happen to us’, preferring to believe that cyber attacks are exclusive to global corporate giants like Sony, eBay or Home Depot or those operating in particularly sensitive sectors, such as healthcare, telecommunications or financial services. But as those traditional targets continue to take more effective security measures, small and medium organisations are increasingly at risk of attack for the very reason that their security practices and defences are unlikely to be as mature or sophisticated as those of a larger organisation.

Second, many businesses focus their attention on external threats, failing to recognise that security incidents can just as easily come from within - an opportunistic employee, service provider or someone else who we let in to our systems is just as likely to be behind a security incident as a rogue nation state or organised criminals.

Third, it is tempting to classify information security as an IT issue, ignoring the reality that a huge proportion of security incidents are the result of human error (or human malice) whether that’s attaching the wrong document to an email, falling for a phishing scam or deliberately circumventing security measures.

In the same way that a bad driver can negate a car’s advanced safety features, the most vulnerable part of an information security system is the person interacting with it, or actively looking for a way around it to make their job easier.

It’s for this reason that the word ‘cyber’ runs the risk of being over-used, and misleading - while it might be right to talk about ‘cyber threats’, the security measures put in place to respond to those threats shouldn’t be narrowed by the same adjective. IT measures will be an element of a good security plan, but so too will physical safeguards, employee training and well-implemented and monitored policies.

WHAT SHOULD ORGANISATIONS DO? Security obligations in Australian and New Zealand privacy legislation (among others) are defined by what is “reasonable”, “adequate” or “appropriate”. There is some useful regulatory guidance available to shed light on what these concepts mean in practice, but the steps that an organisation can take to put a security plan in place should be five-fold: 1. Audit the organisation’s data, so that there is a clear understanding of what information is held, how sensitive it is, what damage could be caused if security is breached, and what additional regulatory requirements might apply (eg, healthcare or financial information).

2. Implement security measures and safeguards that are appropriate given the information held and the harm that could be caused, taking into account legal obligations and regulatory guidance.

3. Prepare a response by ensuring that the organisation can quickly and effectively deal with the fall-out following an incident.

Part of that response will be operational in nature and dovetail with a disaster recovery plan - such as ensuring business continuity and restoring key systems and datasets but it should also have an external focus by identifying what regulators and other stakeholders might need to be notified, planning how communications with key customers and the public at large will be handled, and having a press release and media strategy printed and ready to go.

4. Test the response, in the same way that a disaster recovery plan or fire evacuation would be tested to make sure that it is effective and any deficiencies can be identified and addressed.

5. Update the plan regularly, by adapting it to take stock of security incidents and near misses, changing threats, new products or services that have been launched, and new systems and service providers used by the organisation.

1 PwC Global State of Information Security® Survey 2015, http://www.pwc.com/gx/en/ consulting-services/information-security-survey/

Allan Yeoman Allan is a partner in Buddle Findlay’s ICT practice and can be contacted on 64 9 363 1029 or allan.yeoman@buddlefindlay.com.

Buddle Findlay has produced a guide on information security entitled ‘Safe and Sound’, which discusses these issues in more detail. The guide is available at http://buddlefindlay.com/static/ Safeandsound.pdf.

www.buddlefindlay.com

UPFRONT

TRANSACTIONS $75.8m

Transaction

Stockland acquisition of retirement property portfolio from Masonic Homes Lander & Rogers has advised Stockland on the $75.8m acquisition of a major portfolio of retirement villages. The acquisition of the eight South Australian retirement villages from Masonic Homes contains 980 homes and currently has a development pipeline of an additional 130 dwellings, making it one of the largest retirement property deals so far this year.

The transaction is part of Stockland’s strategy to exit non-core villages and reinvest the funds into higher returning assets and development opportunities.

Minter Ellison acted for Masonic Homes.

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Value (A$)

Adviser

Client

Lead lawyer(s)

Programmed Maintenance Services $650m proposed acquisition of Skilled Group

Clayton Utz

Skilled Group

John Brewster, Rod Halstead

Scape Student Living Australia acquisition of Melbourne and Brisbane properties for student accommodation developments

Undisclosed

Herbert Smith Freehills

Scape Student Living Australia David Sinn

Standard Chartered Bank sale of PrimeCredit and Shenzhen PrimeCredit to consortium of China Travel Financial, Pepper Australia and York Capital Management Global Advisors

Undisclosed

King & Wood Mallesons

Consortium of China Travel Financial, Pepper Australia and York Capital Management Global Advisors

Anne-Marie Neagle

Stockland acquisition of retirement property portfolio from Masonic Homes

$75.8m

Lander & Rogers

Stockland

John Wells, Julian Olley

Minter Ellison

Masonic Homes

Louisa McClurg

Strides acquisition of part of Aspen Pharmaceuticals’ Australian generic drugs and over-the-counter business

$380m

Clarendon Lawyers

Strides

John Mann

SurfStitch Group acquisition of Magicseaweed and Stab Magazine

$37.5m

Herbert Smith Freehills

SurfStitch Group Limited

Bradley Russell, Ben Ward

Templeton Global Growth Fund capital raising

$64.7m

King & Wood Mallesons

Templeton Global Growth Fund Limited

Joe Muraca

Uranium Resources and Anatolia Energy merger

$88.7m

Minter Ellison

Uranium Resources, Inc

Ben Smith

Victorian emergency health services helicopter financing

Undisclosed

King & Wood Mallesons

National Australia Bank, Westpac

John Canning

Waterlogic Australia acquisition of Unlimited Water Pty Ltd

Undisclosed

DLA Piper

Waterlogic Australia Holdings

Dr Gerry Bean

Maddocks

Unlimited Water

Julian Smith

WestConnex design and construction $2.7bn contract

Allens

WestConnex Delivery Authority

Leighton O’Brien

Western Areas acquisition of Cosmos $24.5m Nickel Complex

Ashurst

Western Areas Ltd

Lorenzo Pacitti, Roger Davies

Clayton Utz

Glencore

Brett Cohen

Westpac Banking Group sell down of shareholding in BT Investment Management

$700m

Allen & Overy

BT Investment Management

Michael Parshall, Tony Sparks

Wild Acre Metals proposed acquisition of Nuheara and recompliance listing on ASX

$3m

Bellanhouse Legal

Wild Acre Metals Limited

Bryn Hardcastle, Shaun Hardcastle

IT INSIGHTS

10 Things All Firms Should Know About Office 365 It’s probably safe to assume all readers have heard of Office 365. It is the “fastestgrowing corporate product ever” according to Microsoft, and shows no sign of slowing up.

Yet it is still viewed with trepidation by a number of firms, with good reason. So here is a non-technical look at what you should know about Office 365 – the good, and the bad.

1. MORE THAN JUST EMAIL OR WORD IN THE CLOUD Touted as a full productivity software suite, some key features include: • Email – instead of an email server in your office, it is hosted by Microsoft • Office – all the applications you know including Word, Excel, PowerPoint, Outlook and more • Online Office – access to above apps via web browser • Storage – instead of saving to a PC or local drive, staff can save documents to SharePoint or OneDrive in the Cloud.

• Collaboration tools - including Skype for Business, online conferencing and Yammer.

2. COLLABORATION For many, increased collaboration is the most exciting part. Not only can employees share ‘presence’ information (such as whether they’re in a meeting), they can edit documents simultaneously (and see each other’s changes as they happen), send instant messages, conduct web meetings, and use private social-network tool, Yammer, for group discussions.

3. MOBILITY – 1 LICENSE, 5 DEVICES Mobility is no new concept. In a recent survey conducted by Huon IT, 61% of respondents listed mobility as a high priority. Office 365 helps achieve this by letting you install one license on up to five devices.

4. DATA SOVEREIGNTY A major handbrake to the adoption of Office 365 has been the requirement to keep all your data on Australian soil. Previous hosting out of Singapore meant it didn’t meet a lot of firms’ compliance obligations, however earlier this year Microsoft opened datacentres in Sydney and Melbourne.

5. INTERNET LIMITATIONS Another major consideration is internet availability. Firms with limited access can often use the basics such as email services, however if you use Citrix or want other features such as OneDrive and Skype, you may encounter performance hiccups. So if internet in your area isn’t up to par, you may choose to only use certain parts of the Office 365 à la carte menu and keep the rest on premise.

6. SMARTER DECISION MAKING WITH BUSINESS INTELLIGENCE The Enterprise version of Office 365 includes a tool called ‘Power BI’ which lets you gather data from multiple systems and even public sources, and analyse it to create meaningful reporting and live dashboards. I’ve seen clients’ reporting preparation reduce from days to mere minutes.

7. SECURITY By using Office 365 you are relinquishing the control of having your data on your hardware in your server room, which is an uncomfortable thought for many. But how secure is your system anyway? Does it rival Microsoft’s strict datacenter security, privacy protocols and compliance certifications? This is a personal decision each firm needs to make on their own.

Check out Microsoft’s ‘Trust Centre’ to read more.

365 is that you’re always up to date.

Anytime a new version comes out, you’re eligible to upgrade. However this comes with a risk – if your service is integrated with third party applications which aren’t compatible with the newer version, you can only stay on the old version for so long without facing support restrictions. So if you have apps which won’t quite keep up with Microsoft, be selective about which parts of your system you move into Office 365 versus the traditional model.

9. OPEX SUBSCRIPTION MODEL All Office 365 plans are on a monthly or annual subscription. This avoids costly upfront capital expenditures, however you still need to crunch the numbers – if your hardware isn’t due for replacement and you don’t need to upgrade to always have the latest versions, it might work out cheaper to buy a license outright and keep it on premise for the time being.

10. ENTERPRISE TOOLS Is Office 365 sophisticated enough for the bigger end of town? There are enterprise versions available which include advanced compliance features such as legal hold, better management of applications including group policy, document and email access controls. It also offers more robust services including SharePoint, Power BI and hosted voicemail. So it’s certainly promising, but firms should run a proof-ofconcept to ensure it ticks all the boxes.

I’ll give it to Microsoft... they’ve done well with this product. While it is certainly not right for everyone, Office 365 has hit the nail on the head with a broad portfolio catering for the majority of businesses.

DAMIAN HUON Damian Huon is CEO of Huon IT, an IT consultancy firm specialising in strategic technologies for legal firms.

8. ALWAYS UP TO DATE, BUT BEWARE… Another highly publicised benefit of Office

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15

PROFILE

KATHERINE GRACE

Building a city Stockland general counsel Katherine Grace talks to Samantha Woodhill about working on some of Sydney’s most significant developments

KATHERINE GRACE began life as a lawyer at Minter Ellison as a summer clerk, working on the King Street Wharf project as it was just kicking off. The project was her initiation into construction law, and she advised on the King Street Wharf project for six years in a number of roles. The billion-dollar project

“At the time it had been the biggest hole in the ground for 10 years,” she says. “I spent a lot of time in the finance team working both for the Big Four domestic banks and the two most active development banks from overseas, which pre-GFC which were the Bank of Scotland and HBOS.”

“The biggest challenge for me in the general counsel role in an organisation like this is the breadth of the organisation and the assets that we deal in” was a significant development for its day and one that helped to shape Grace’s career.

“We have kind of lost the relevance of doing billion-dollar projects now,” she observes. “[But] that was the biggest thing to happen in Sydney from an urban redevelopment at the time.” Since then, Grace has worked on some of Sydney’s most significant building developments.

Grace later moved into a projects team and found herself working for developers and advising on development financing.

The World Square redevelopment was among the projects that she acted on.

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After broadly advising Multiplex on their float in 2004, Grace took up her first in-house role with the property company, looking after all aspects of the company’s debt globally. At the time, Multiplex’s footprint spanned Australia, New Zealand, the UK and the Middle East.

“I went from being in a law firm to sitting in a finance and treasury team,” she says of the transition from a firm to in-house.

What followed was an intense period that saw Grace and her colleagues work on approximately $3.5bn in capital markets transactions in less than a year.

“Being able to bring legal to the table early in project work, which is what we do in property, is really valuable for the organisation�

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17

PROFILE

KATHERINE GRACE

“We ended up doing about $3.5bn worth of capital markets transactions in about 11 months.”

The GFC hits Following a year off to complete her master’s degree in public policy, Grace joined Pacific Capital Partners as legal counsel, where she worked to secure the redevelopment financing for the Top Ryde shopping centre redevelopment, which was completed in

zero, and her role focused on closing down projects and trying to recover funds. Two years into the job, she was promoted to general counsel and subsequently negotiated the company’s takeover by Blackstone, one of the largest property investors in the world.

“I had actually been offered a role that I had accepted even before the takeover arrived, so it was good timing because I had a three-month notice period and I negotiated the takeover in three months,” she says.

AT A GLANCE

9%

Retirement living ($1.5bn estimated end value)

50% Retail ($5.7bn value)

20% Residential ($19.8bn end value)

STOCKLAND’S ASSETS

8% Offices ($1bn value)

13% Logistics and business parks ($1.6bn value) Source: 1H15 Stockland Results Presentation

2007, about a month before the GFC struck.

From there, she took a role at Valad Property Group, working in its capital services division. A publicly listed RIET at the time, Valad had been running a profitable second-ranking financing debt book.

“Pre-GFC everyone was making a lot of money doing that. There was a big property boom, everything was going fantastic, and Valad was really successful running this mezzanine book; they were making a lot of money,” recalls Grace.

“Money was cheap and they were lending it out to property developers in Australia and New Zealand.”

But in the wake of the GFC, all of Valad’s European property assets were reduced to

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Her next role was as general counsel and company secretary at ASX 30 company Westfield Retail Trust, set up by Westfield Group to own 50% of all the retail assets owned by the company in Australia and New Zealand.

Last year, she joined Stockland as its general counsel and company secretary.

Working in a diverse environment Now, as general counsel and company secretary at Stockland, Australia’s largest diversified publicly listed company, Grace enjoys an extraordinarily broad role that sees her leading a large team of lawyers and sitting on the executive committee.

“The biggest challenge for me in the

general counsel role in an organisation like this is the breadth of the organisation and the assets that we deal in,” she says. “We are located across Australia in multiple jurisdictions and multiple asset classes.”

Grace’s Sydney-based legal team of 25 is split into the individual asset classes, divided among commercial property, industrial, residential, and retirement living.

“The funny thing with working in the property sector is that pretty much everyone who works in the property sector deals with a lawyer at some point in time because you can’t buy and sell land or develop without dealing with a lawyer,” she observes. “It’s sort of different to other industries where the legal team might be providing very specific advice to people within the organisation.

“Being able to bring legal to the table early in project work, which is what we do in property, is really valuable for the organisation.”

In making the transition to an in-house team from a firm, lawyers expect to learn more about business but in many cases end up focusing only on the legal aspects.

At Stockland, Grace’s legal team proactively approaches business issues before legal problems. Making lawyers aware of different aspects of the business is therefore a priority.

“In our team we have spent a lot of time working with different representatives across the business who have actually come and explained at a much more conceptual level the drivers of our business and what we do an why we do that,” she says.

In partnership with external firms In dealing with developments across states, external firms are an important part of Grace’s legal strategy for Stockland. Having on-the-ground knowledge through an external firm is vital for the smooth running of transactions.

“We have a panel and we leverage the experience of our panel from a national perspective, and then we also have certain panel members that are state specific,

“The funny thing with working in the property sector is that pretty much everyone who works in the property sector deals with a lawyer at some point in time” particularly in states where you do have particular bespoke issues,” she explains.

“I think at the end of the day, when you have good relationships with the external law firms and you understand and know the partners that you work with, you can work interstate, and obviously technology makes it very easy now to run those sorts of projects across jurisdictions.”

In Grace’s view, external lawyers’ understanding of the business and of the issues faced by in-house legal teams is essential to a good working relationship.

“I think business partnering is a key word for all functional roles in corporates at the moment, so not just legal but accounting and finance teams, risk and compliance teams as well,” says Grace.

Future talent To Grace, the reductions in law firms’ graduate intakes may have significant implications for the pipeline of in-house talent. “A lot of toptier firms have been reducing their graduate intake over time,” she says.

“From an in-house perspective, my approach has always been to have someone spend some time in private practice first because it has a structure and a training program that we just don’t necessarily have the resources or the scale to offer in-house,” Grace adds.

“As those roles reduce over time, there’s going to be some really interesting shifts in the market in terms of how lawyers are trained and how they find those initial jobs and what that means for the industry.”

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FEATURE

PERTH

Perth Report Lawyers share the latest trends and developments from Western Australia’s legal market

IT HAS been a mixed year for lawyers in Perth. “The legal market in Perth continues to be a challenging one, with competition remaining high and workflows off from their peak and increasingly erratic,” says Gilbert + Tobin partner Justin Little.

“In general terms, clients continue to be cautious,” he adds.

Although the easing of activity in the mining and resources sector is well known, the work has not dried up in the way that the doom and gloom headlines have suggested. Local lawyers report that they are still seeing work from mining and resources clients, although the types of matters they are acting on have changed.

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Although the mining slowdown has had an impact, the Perth legal market has hardly ground to a halt. “Without doubt, the environment in Perth is challenging but there is a recognition amongst clients of the need to keep moving forwards and that quality projects and initiatives can still be progressed,” observes Allion Legal principal Philip Lucas.

Mining and resources: The show’s not over yet “Obviously, the downturn in the mining sector is having an impact on workflows across the board so what we are seeing is the boutique and mid-tier firms pushing up for the work that was once the sole domain of

“Perth will struggle to sustain the depth of services that are on offer at the moment and this needs to be honed by the market over the coming months” Philip Lucas, ALLION LEGAL the bigger top tier firms and equally, the top tier firms pushing down for work that was once solely targeted by mid-tier firms. This is a trend that is occurring nationally and, in many cases, internationally,” says Little.

He observes that many projects are encountering difficulty getting off the

ground: “We are certainly seeing less greenfield mining projects being developed, so work in that area has diminished significantly with only a small tier of quality assets attracting the necessary equity and debt financing for development,” he says.

According to Lucas, while greenfield project

Boutique / Specialised / Astute

A boutique law firm allionlegal.com

Allion Legal_HP-advert.indd 1

Sydney / Perth

13/07/2015 1:24:33 PM

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FEATURE

PERTH

funding is under pressure, brownfields projects are benefiting from continued interest, particularly from funders in the United Kingdom and North America.

In addition to financing, regulatory hurdles pose another barrier to mining projects. “I think that the regulatory burden on mining companies getting projects to development remains an industry-wide problem. The complexity of the approvals system and the timeframes involved in seeking and obtaining a myriad of project approvals is an additional obstacle that clients face in attracting capital to fund their projects. This is a problem when times are good; but it is an even bigger problem when coupled with lower commodity prices and cautious investor sentiment,” Little explains.

The height of the mining boom may have passed, but firms continue to act on a range of matters for clients in the sector, although the character of the work has shifted. Jackson McDonald CEO Malcolm Shelton-Agar reports that the challenging environment brought on by falling iron ore and oil prices, coupled with more day-to-day work being done in-house, has anecdotally resulted in more than a 20% drop in corporate commercial work for local firms.

This decline has given way to two common responses on the part of clients in the mining and resources sector. First, some are taking the opportunity to consolidate or acquire assets: “Workflows from mining and resources clients are softer, although there has been a mild uptick in M&A work,” observes Little. “This is particularly so in the gold and oil and gas sectors,” he says.

“The growth of M&A in the small and mid-cap resources space has been driven by the opportunities created by depressed commodity prices and market conditions.

There has also been a real growth in private equity activity in the Perth resources sector which is exciting because the industry here has typically been very reliant on the ASX

WESTERN AUSTRALIA’S ECONOMY

GROSS STATE PRODUCT GROWTH (%) 6

5.5% 3.75%

5 4

2.25%

3

5.0%

2.25%

2 YEAR 2013-14

2014-15

MINING IN WESTERN AUSTRALIA

90,206

Employees in 2013/14

$49.8bn

Value of domestic exports in 2013/14

2015-16

2016-17

2017-18

AGRICULTURE IN WESTERN AUSTRALIA

$141.9bn

27,789

Total value of exports in 2013/14

Employees in 2013/14

$92.2bn

$2.98bn

Value of international exports in 2013/14

Value of domestic exports in 2013/14

WESTERN AUSTRALIA’S EXPORTS BY INDUSTRY

1.3% Education and training 2.2% Public administration and safety 1.0% Administrative and support services 3.2% Professional, scientific and technical services

$7.2bn

Total value of exports in 2013/14

$4.2bn

Value of international exports in 2013/14

2.7% Healthcare and social assistance 0.5% Arts and recreation services 0.5% Other 5.2%

Agriculture, forestry and fishing

3.4% Rental, hiring and real estate 1.3% Financial and insurance services 0.6% Information media and telecommunications 3.6% Transport, postal and warehousing

52.5% Mining

1.5% Accommodation and food services 1.3% Retail trade 2.2% Wholesale trade 1.8% Electricity, gas, water and waste services

15.3%

Manufacturing

Source: Western Australia Department of Treasury; National Institute of Economic and Industry Research

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FEATURE

PERTH

“The market has had a lot of choice in deciding who their legal providers should be. One consequence of this choice has been a fragmentation of purchase decisions which seem to be largely price driven, in an oversupplied market” Malcolm Shelton-Agar, JACKSON MCDONALD for capital,” DLA Piper Perth partner Alex Jones adds.

The second common response has been for businesses under stress to restructure: “We are also seeing more work on the distressed asset side with increasing restructuring and divestment work,” Little says.

Jones has not observed a significant decline in work across the board in mining and resources, but has seen a jump in related construction litigation work: “The uplift in construction litigation is driven by the dwindling project pipeline. If there are no new opportunities for contractors on the horizon, there is less need to compromise outcomes to preserve relationships and more need to recover losses,” he explains.

Shelton-Agar agrees: “As the sector moves from construction to production, some clients are taking the opportunity to resolve and regularise any of their contractual disputes.”

Life after the boom Demand for legal hours has been falling, driven largely by declines in corporate and commercial work, Shelton-Agar says, explaining that drops in the price of iron ore and oil have put a lot of corporate activity on hold. However, falls in demand have not been consistent across the market,

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and Shelton-Agar has observed significant growth in areas such as dispute resolution, property, IT, not-for-profit, agribusiness and private business activity. “Those firms that have a broad offering across these markets should have done reasonably well,” he says.

Agribusiness work has been particularly focused on consolidation at the production level and in the supply chain, while private businesses owned by high net worth individuals or families have also been taking the opportunity to acquire assets.

Shelton-Agar also flags IP commercialisation as a growing source of work: “WA is quite an innovative state, we are seeing inventors who have got tried and tested products now ready for commercial sale either through research and education or in the international market.”

Government has also been a key driver of activity. “The government has become increasingly active in PPPs for schools, privatisation and construction,” he says.

The same uptick has not been seen in corporate finance work, where lawyers have reported difficult workflows with little to no IPO activity. Little has observed an increase in back door listings more recently, although Shelton-Agar contended that ASIC and ASX regulation has had an impact on the level of success of these types of transactions.

The competition continues When quizzed about the biggest challenges facing the Perth legal market, most practitioners flagged the continuing high levels of competition between firms.

“With the arrival in recent years of both national and international firms and disrupters, the market has had a lot of choice in deciding who their legal providers should be. One consequence of this choice has been a fragmentation of purchase decisions which seem to be largely price driven, in an oversupplied market,” says Shelton-Agar. “From a General Counsel’s perspective, the challenge would appear to be maintaining quality, continuity and corporate memory which historically were available in a less fragmented market due to ongoing trusted relationships. From a law firm perspective, the challenge is convincing General Counsel that a deeper and wider relationship is as important as price,” he adds.

“Perth will struggle to sustain the depth of services that are on offer at the moment and this needs to be honed by the market over the coming months. Those firms with agile structures will be best suited to the client-orientated market we now face,” says Lucas. “Those firms who have failed to keep their offering relevant and aligned to market conditions will struggle. I would not want to be a partner with a rack rate north of $700 per hour in this market.”

Jones likewise observes that the local market is a competitive one, and says that diversification and investing long term in client relationships is paying dividends for some firms. He predicts that frontrunners will soon appear: “The last few years have seen great change in the Perth legal market after a decade or more of stability.

As well as new entrants and international tie-ups, huge numbers of partners are moving laterally. The Perth legal market is reinventing itself and winners and losers will start to emerge.” AL

PEOPLE

BEN TIDSWELL

On the international stage NZ-trained lawyer and Ashurst chairman Ben Tidswell talks to Kathryn Crossley about his career path and the trends shaping the international legal market “I SUPPOSE it’s been quite a long journey, but it seems to have gone in a flash,” says Ben Tidswell of his path from law graduate to Ashurst chairman.

Against the backdrop of the aftermath of the 1987 stock market crash, Tidswell stepped into a graduate role at Bell Gully in Wellington, New Zealand.

Many legal practice areas were under pressure at the time, but for the new litigation lawyer, it was the perfect moment to begin his career. “There were some pretty extraordinary things going on in the economy, but it was fantastic for litigation; it was sort of a golden age of litigation,” he recalls. The Development Finance

most of those four years working on those sorts of things,” he says.

With a few years of practice under his belt, Tidswell took some time off for travel and spent time in South and Central America and New York. After more than a year on the road, he made his way to London, where he secured a role at Ashurst.

Aside from a six-month stint at Brick Court Chambers, and a brief return to Bell Gully, he has spent most of his career in this firm and in this city.

“The thing that really struck me about arriving in London was just the size of the market. The legal market is enormous, and the litigation market is so deep and so broad

“I think American firms are going through a phase of being more conscious of global opportunity” Corporation collapse was among the major matters he worked on during his early years of practice. “It was an absolute dream come true to walk into all of that, and I spent

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and intricate,” Tidswell says. “The whole system was so much more complicated than anything in New Zealand. The rule book in New Zealand was maybe two inches

thick; the rule book in England is more like 12 inches thick.”

The Ashurst that Tidswell first joined in 1993 looks very different to what it is now.

“In those days, it was a relatively small firm. I think it had about 40 partners, and it had offices in Brussels, Paris and Tokyo,” he recalls.

Having spent a few years working in London, Tidswell married and relocated with his wife back to Wellington, where he worked at Bell Gully on the Kapuni gas field case, among others.

Then London beckoned again and he was welcomed back to Ashurst in 1998 and almost immediately seconded to the government’s BSE inquiry into how ‘mad cow’ disease had made its way into humans as Creutzfeldt-Jakob disease.

The Ashurst that Tidswell had returned to after a few years in New Zealand was a very different one.

“By that stage, the firm had changed quite a lot. It had internationalised, and so it now had offices across Western Europe and opened an office in Singapore – it was a different place; it was a much more outward-looking business,” he recalls.

He was made a partner in 2000, and in 2013 when the firm merged with Australian Big Six practice Blake Dawson, he successfully ran for chairman on a platform of focusing on the firm’s market position and running the firm more efficiently to unlock its full potential.

Today, the firm has a considerably larger global footprint. The key challenge of being chairman of such a large firm is a very practical one, Tidswell says.

“Because we’ve got 28 offices in 16 countries, there is an awful lot of travel … in the 18 months I’ve been in this job, I’ve been to 25 of those offices.”

He is yet to visit the firm’s offices in Jeddah, Shanghai and Papua New Guinea, but expects to make it to at least two of those locations before the year is out.

Bringing two firms together In the 18 months since the Blake Dawson

“I can genuinely say there is a strong sense of a single firm�

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PEOPLE

BEN TIDSWELL merger went live, Tidswell has intently watched the integration of the two firms.

“The cultures have turned out to be really similar, and you sort of guess that beforehand and you have a pretty good sense of how it’s going to work, but you never really know until you start putting people in rooms together … I can genuinely say there is a strong sense of a single firm,” he says.

“We quite quickly got out of any sort of mentality of ‘the European business thinks this’ or ‘the Australian business thinks that’, and we banned the use of any of the legacy terms for firms, and we just started talking about the business as a whole business and thinking about how we could work together as partners, and that I think has been very successful.”

Although the crucial cultural match was already there, Tidswell explains that laying a solid groundwork before the merger went through was also an important factor in the deal’s success.

“One of the things we did, which I think was a bit different to what other people did, was spend quite a lot of time getting the structures right beforehand,” he says. “What it meant was the moment that we started, we could concentrate on the real bit of integration, which was trying to get partners talking to each other and cooperating and understanding each other’s businesses, and that of course is a lifelong project.”

prominent in Asia, Australia and New Zealand. In his view, the changing approach to financing is an issue for law firms broadly, not just a focus for finance lawyers. “It starts to change the way in which our clients operate, and therefore affects the whole business,” he says.

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The future of international firms in Australasia

Global legal trends The international legal market is undergoing dramatic changes, and it is difficult to name an aspect of legal practice that is not in a state of flux. To Tidswell, the increasing use of credit funds is one of the trends that will have a significant impact on law firms.

With banks facing constraints on their lending, he observes that the role they play in ordinary financing around the London market has diminished.

The partial shift in international finance from banking towards credit funds is pronounced in the UK, and a trend that Tidswell expects will become more

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Another trend Tidswell points to is a potential new wave of internationalisation on the part of US firms. “I think American firms are going through a phase of being more conscious of global opportunity; I think they are also tentative about it … they know that they need to be more international to compete, and they’ve seen some of their own become very strong in terms of international platforms, and they worry about keeping up with that.

“At the same time, they’re also finding it difficult to grow outside the US, because the US is such a profitable market and everywhere else they go is potentially dilutive for their partners, and it’s very difficult to convince their partners why they should do it,” he says.

“That’s a really interesting dynamic for the rest of the world as the American firms decide just how much investment they want to make internationally, how much they’re prepared to make, and where they want to make it,” he says.

In Tidswell’s view, the answers to those questions could have an impact for legal markets worldwide; as already demonstrated by the Australian experience, the arrival of quality competitors can affect market dynamics considerably.

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“I think most people would accept that probably there’s been a little bit of a gold rush mentality in Australia, as there tends to be pretty much anywhere where people start to invest,” Tidswell says of the influx of international firms into the local market.

In his view, Australia is an interesting market, and a strong Australian offering can be a significant benefit for firms, but the next phase for the now very competitive marketplace is differentiation.

“People have to think really hard about their offerings – do you become more of a boutique, or do you focus more on particular industries or particular clients, or do you build your offering around a particular type of practice?”

“For us, a lot of the strategy behind the merger was about the ability to deploy a large-scale resource in a proximate time zone to China, Tokyo, Southeast Asia and Indonesia, and so on” Although Australia has been a popular destination for international law firms, Tidswell does not expect that its neighbour across the Tasman will see a similar influx of international firms in the foreseeable future.

He cites global firms’ already significant presence in Australia as a key reason for this.

“For us, a lot of the strategy behind the merger was about the ability to deploy a

large-scale resource in a proximate time zone to China, Tokyo, Southeast Asia and Indonesia, and so on. Having done that successfully in Australia, I’m not sure we need any further incremental capability, so I struggle to see what the rationale would be for thinking about a New Zealand merger partner,” he says. “Which is not to diminish New Zealand – it’s a fabulous place that’s

obviously doing very well, but I actually think its characteristics are such that the best model for everyone at the moment, and probably for the foreseeable future, would be [referring work to] those strong local firms.”

For now, the only thing that may increase the prospect of more international firms entering New Zealand is demand from international firms’ major clients.

“If we did a huge amount of work for an existing client that wanted to be in New Zealand, we might think about it, but frankly I can’t think of a client who is likely to be doing that. Of course, we’ve got clients who do deals there but not on a really consistent basis, and we’re delighted of course to pick up the phone to a firm like Bell Gully or one of the other quality firms in New Zealand.”

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FEATURE

IN-HOUSE LEADERS

IN

HOUSE

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ANNETTE SPENCER

Find out who’s who in-house for 2015

GENERAL COUNSEL UBS AUSTRALIA Under Annette Spencer’s leadership, the 15-lawyer team provides legal advice to all areas of the business at UBS. Among the significant M&A transactions of the last financial year, the UBS legal team acted on the successful $28.5bn merger of Westfield Retail Trust with Westfield Group’s other operations. The restructure of the $70bn company was complex and ran into a number of regulatory issues, and attracted a great deal of media attention. Recently, Spencer and her team also worked on the PNG Government’s acquisition of a stake in Oil Search, worth $1.2bn.

The team at UBS is heavily involved in community initiatives and also volunteers with Variety – the Children’s Charity and various mentoring programs.

THIS LIST showcases the breadth and depth of talent working in-house across Australia and New Zealand, highlighting the in-house lawyers who are ahead of the pack, working on some of the biggest business deals and managing some of the most complex legal teams.

HOT LIST INDEX

NAME

PAGE

Matt Baumgurtel

31

John Blair

39

Charles Bolt

36

Nevenka Codevelle

37

Andrew Cordner

40

John Fitzgerald

38

Angela Flannery

40

Justin Forsell

33

Peter Hopkins

40

Ashe-lee Jegathesan

32

Cesilia Kim

37

Rebecca Lim

35

Carmel Mulhern

32

Craig Mulholland

33

Mei Ramsay

38

Carolyn Reynolds

38

Jeremy Salmond

34

Annette Spencer

31

Simon Tuxen

34

Dave Whiteridge

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MATT BAUMGURTEL GENERAL COUNSEL FOTOWATIO RENEWABLE VENTURES Since taking up the role in 2013, Matt Baumgurtel has been responsible for all legal and company secretariat functions in the Asia-Pacific region. He is responsible for the engagement of various stakeholder groups, including liaising with state and federal governments on renewable energy policy and community groups on various projects.

Providing strategic counsel and advice to the global board, Baumgurtel has played a fundamental role in the company’s Asia-Pacific expansion, leading on all legal aspects of development and financing, corporate governance and risk and compliance.

Working on a number of high profile renewable energy ventures, Baumgurtel has recently advised the business on the refinancing of the Moree Solar Farm and the successful completion of the Royalla Solar Farm projects.

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FEATURE

IN-HOUSE LEADERS

ASHE-LEE JEGATHESAN GENERAL COUNSEL M2 GROUP

CARMEL MULHERN GROUP GENERAL COUNSEL TELSTRA With lawyers located in Australia, Hong Kong, China, Singapore, Indonesia, the United Kingdom, Europe and the United States, Carmel Mulhern manages one of Australia’s leading in-house legal teams.

Her team is closely involved in helping to implement Telstra’s strategy, with a relentless focus on customer advocacy and innovation. The team has led a number of key transactions over the last 18 months, including the successful renegotiation of the National Broadband Network deal with the federal government and NBN Co, which is arguably one of the most complex transactions in Australian corporate history, and the sale of Telstra’s Hong Kong mobile operator CSL, which was one of the largest M&A transactions in the Asia-Pacific region in 2014.

Under Mulhern’s leadership, the legal team is also helping drive Telstra’s growth strategy with the recent acquisition of Pacnet, a provider of connectivity, managed services and data centre services in the Asia-Pacific region, and in supporting Telstra’s emerging new businesses in eHealth, Cloud and video analytics.

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Ashe-lee Jegathesan was appointed general counsel and company secretary of M2 Group Ltd in 2014, where she stepped into a company undergoing a significant growth spurt. At M2, her responsibilities include leading the legal and regulatory teams, as well as Risk and Compliance.

Since Jegathesan joined M2, she has led the company’s $250m acquisition of New Zealand’s third largest internet service provider Call Plus Group and related entity 2Talk Limited, with the entire transaction taking just over two weeks from beginning to end.

Immediately following this, Jegathesan and her team, in conjunction with their external counsel, advised the company on its $1.6bn all-share bid for iiNet. With over 20 years’ experience, Jegathesan has worked for global companies including Nortel Networks, 3D Networks and Melbourne IT Ltd. During her time at Melbourne IT, Jegathesan received the inaugural Women in Law ACLA In-house Award in recognition of her leadership of the global legal, policy and vendor management teams and her contribution to one of the company’s largest commercial undertakings, leading the new gTLD service delivery program. At Melbourne IT, she also led the divestiture of its global Digital Brand Services business (which included entities in eight countries, adding immense complexity to the transaction), which closed simultaneously with signing at a value which delivered significant returns to its shareholders.

DAVE WHITERIDGE CHIEF LEGAL COUNSEL NEW ZEALAND TRANSPORT AGENCY Led by chief legal counsel Dave Whiteridge, the Transport Agency legal team enjoys a varied role that sees them acting on complex regulatory, investment and infrastructure development work.

As legal advisors to New Zealand’s largest infrastructure developer, Whiteridge and his team have helped to deliver the country’s biggest roading project – the $1.4bn Waterview Connection – and the $1bn Transmission Gully project, which was the nation’s largest public private partnership.

The team has also been recognised for their collaborative partnering approach with their external legal providers, and their contribution to innovative transactions such as the use of a planning alliance to obtain the consents needed for the Ara Tuhono - Puhoi to Warkworth project, which involved lawyers as non-owner participants in the alliance.

One of his team also developed an impressive system for responding to more than 9,000 submissions received through its involvement in the Auckland Unitary Plan process and the more effective utilisation of external experts. They have recently helped to facilitate the successful transfer, integration and continued operation of a local council’s manual toll road into the Agency’s electronic tolling network.

CHARLES BOLT GENERAL COUNSEL FLETCHER BUILDING LIMITED As both general counsel and company secretary of Fletcher Building Group, Charles Bolt has played a vital role in restructuring the way in which legal services are delivered within the organisation. The strategy he set out saw the creation of a central legal function to reduce siloed thinking, improve cooperation between in-house lawyers, increase efficiency, and ensure an appropriate allocation of legal support across the company’s businesses.

Eighteen months on and the new structure has proved effective, with regional heads of legal reporting to Bolt in Auckland. Intra-company surveys have revealed a significant improvement in the organisation’s appreciation of and support for the newly-established function, and greater discipline has been introduced around the use of external law firms.

During and since implementation, the nowcentralised legal function has overseen the sale of Fletcher Building Group’s Pacific Steel to Bluescope Steel, managed the sale of a number of surplus properties and the acquisition of large tracts of land for residential development, and has successfully defended a trademark genericism claim in the High Court.

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FEATURE

IN-HOUSE LEADERS SIMON TUXEN GENERAL COUNSEL WESTFIELD CORPORATION

JEREMY SALMOND SOLICITOR AND MANAGER NEW ZEALAND TREASURY Few legal teams have had as interesting a ride in recent years as the lawyers behind New Zealand Treasury. Solicitor and manager Jeremy Salmond has overseen the Treasury’s legal work on the restructuring of Solid Energy; the Meridian, Mighty River and Genesis IPOs arising out of the mixed-ownership program; the block trade of Air New Zealand shares; and the response to the Christchurch earthquakes.

Since joining Treasury’s legal team more than a decade ago, Salmond has also advised on the Rugby World Cup joint venture and the government’s response to the GFC. More recently, Salmond and his colleagues have been providing significant support to the Treasury team, leading the government’s initiatives to develop a more innovative social housing sector.

In addition to running Treasury’s legal function, Salmond manages the ministerial advisory, administration and facilities teams.

Last year, Salmond spent six months on secondment to the Department of the Prime Minister and Cabinet, where he was acting Deputy Secretary of the Cabinet, and provided constitutional advice to the Prime Minister and Cabinet about good process and good government, as well as overseeing the awarding of the Royal New Zealand Honours. As a result of his experience, Salmond has become a vocal proponent of secondments for in-house lawyers working in government, and of the growing push within the bureaucracy to encourage thinking about how the system as a whole operates and can be improved.

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Prior to the demerger and merger in 2014, Simon Tuxen managed a team of more than 30 lawyers across three jurisdictions in his role as general counsel and company secretary of Westfield Group. Under his leadership, the Westfield Group in-house team was responsible for all legal issues involved in the corporate restructure that created Westfield Corporation and Scentre Group as separate listed entities.

The $29.3bn restructure was complex, attrac ting much controversy among shareholders and running into various regulatory problems, before the deal was eventually approved by shareholders. To make the deal a reality, Tuxen and his team oversaw production of scheme booklets and transaction documents, and took a lead role in complex negotiations with Westfield Retail Trust and regulators. Following the demerger, Tuxen assumed the role of General Counsel and Company Secretary with Westfield Corporation, the owner-operator of Westfield centres in the United States and the United Kingdom.

REBECCA LIM

CHIEF COMPLIANCE OFFICER AND GROUP GENERAL COUNSEL WESTPAC Managing 240 people across the Compliance, Legal and Secretariat functions, Rebecca Lim is responsible for supporting the Westpac Group globally through the provision of compliance, legal and secretariat services. Lim is also jointly responsible for Westpac’s regulatory change portfolio, overseeing the Group’s significant investment in global regulatory change projects.

Lim has led the functions through a diverse range of regulatory, legal and compliance matters as well as helping Westpac’s overall digital transformation through advising on the introduction of new services such as cardless cash at ATMs, tap and pay technology on mobile phones, digital signatures, e-conveyancing, and improved online banking.

In her 13 years with the bank, Lim has held a combination of senior business and legal roles within the organisation. In addition to working on the M&A, Group Corporate and Treasury legal teams, Lim also served as chief of staff for former CEO Gail Kelly, general manager of St. George Private Bank and general manager of HR for the St. George Banking Group.

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FEATURE

IN-HOUSE LEADERS CRAIG MULHOLLAND GENERAL COUNSEL ANZ NEW ZEALAND ANZ’s legal team comprises of 220 people spread across 34 countries.

Twenty-nine of those lawyers are based in the New Zealand market, which contributes around 25% of ANZ’s net profit globally. As general counsel and company secretary for the bank in New Zealand, Craig Mulholland provides legal support throughout the business and is constantly liaising with lawyers in other jurisdictions.

In addition to the wide range of issues Mulholland and his team advise on, they have recently been involved in updating the bank’s document suite so that documents are customer-focused and written in plain English. The project has been recognised with a number of WriteMark awards for plain English drafting. A highlight for the team was their involvement in the complex merger of two banks, the ANZ and the National Bank, to one bank with the migration to a single operating system and one brand – ANZ. Mulholland previously worked at Spark New Zealand, where he had a wide range of legal and commercial roles, including overseeing the legal requirements for the telco’s listing on the NZX, ASX and NYSE.

JUSTIN FORSELL CHIEF LEGAL COUNSEL, LEGAL & SECURITY DEPARTMENT NBN CO Jus tin Fo r s e l l is responsible for all legal and security aspects for NBN Co, the company charged with rolling out Australia’s broadband network. Most recently, Forsell and his team have been heavily involved in the renegotiation of the Definitive Agreements with Telstra enabling the company to roll out a multi-technology broadband network to all Australians by 2020. His team was also integral in the development and negotiation of a new national design and construction contract model structured to reward delivery partners for the quality, safety and speed of network delivery. Forsell played a key role in supporting NBN’s transition following the government’s change in policy and consequential appointment of new board members, and a new CEO and management team.

In 2014, Forsell was appointed to the Executive Committee and assumed responsibility for nbn group security in addition to the legal function.

In May, Forsell was named In-house Lawyer of the Year at the 2015 Australasian Law Awards, at which his team were also awarded Property, Infrastructure and Projects Deal of the Year.

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CESILIA KIM GENERAL COUNSEL SNOWY HYDRO In her role as general counsel at Snowy Hydro, Cesilia Kim manages a nimble six-member legal team. Kim’s lawyers are proof that you can never judge an in-house practice on size alone.

Snowy Hydro has more than 1,500 employees, one million customers and has the biggest renewable energy generation capacity in the country. Kim’s team responds to the company’s diverse legal needs with minimal assistance from external firms, including providing strategic legal advice and leading negotiations for significant acquisitions.

Under Kim’s leadership, in the last 12 months the legal team has completed the $605m acquisition of Lumo and other energy market assets from Infratil, and obtained ACCC clearance for Snowy Hydro’s $234m acquisition of Colongra Power Station without any external legal advice.

NEVENKA CODEVELLE GENERAL COUNSEL APA GROUP APA Group’s general counsel, Nevenka Codevelle has been playing a critical role in what has been a significant time in the company’s development. In the last year alone, her legal team advised on more than $1bn in capital projects, which included the $140m Eastern Goldfields Pipeline and groundwork for a proposed $1bn gas pipeline project to connect the Northern Territory and eastern Australia.

Other recent transaction highlights have included the US$5bn QCLNG Pipeline acquisition, which was funded through a number of capital raisings and ranked as Australia’s second largest deal for 2014. The work of Codevelle’s legal team assisted APA Group in passing the $10bn market capitalisation threshold to take its place in the ASX30.

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FEATURE

IN-HOUSE LEADERS CAROLYN REYNOLDS GENERAL COUNSEL FEDERATION CENTRES In her role with Federation Centres, a retail real estate investment trust, Carolyn Reynolds oversees all legal, company secretarial, compliance and risk functions. Reynolds and her legal team played a central role in advising Federation Centres on its recently announced merger with Novion Property Group.

The combination has created one of Australia’s biggest real estate investment trusts and a top 10 listed manager of retail assets globally, which has more than $22bn in assets under management.

Previously a partner at Minter Ellison, Reynolds has over 20 years’ experience as a corporate lawyer, advising on Las Vegas Sands Corp’s successful bid to operate and develop the Marina Bay Sands Integrated Resort in Singapore.

JOHN FITZGERALD

MEI RAMSAY

GENERAL COUNSEL AGL ENERGY LIMITED

GROUP GENERAL COUNSEL AND COMPANY SECRETARY MEDIBANK PRIVATE LIMITED

John Fitzgerald and his experienced team of 15 lawyers enjoy a broad remit at AGL, advising on everything from initiatives for retail electricity customers to billion-dollar acquisitions.

His team made waves last year when the power giant applied for authorisation of its $1.5bn acquisition of government-owned Macquarie Generation. AGL’s successful application for the merger approval, despite the ACCC’s opposition to the deal, made it a landmark event in competition law.

Together with their external lawyers, Fitzgerald and the AGL legal team have also advised on the Nyngan solar power generation project, the largest of its kind in the country, as well as the development of the 242MW Diamantina Po w e r Station, and Australia’s biggest above-ground gas storage facility.

Fitzgerald’s lawyers were also lead advisors on AGL’s $1.5bn gas sales contract with the ESSOBHP joint venture.

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Mei Ramsay was appointed Group General Counsel of Medibank Private Limited in 2011 and was appointed Company Secretary, by the Board, in 2014.

Ramsay was the lead lawyer responsible for Medibank’s Initial Public Offering on the Stock Exchange. The company listed in November 2014, after 38 years as a Government Business Enterprise, at a market value of $5.728bn. The IPO sold 2.75 billion shares, making it the largest listed health insurance company in Australia.

Outside the office, she is currently president of the Victorian branch of the Australian Corporate Lawyers Association and sits on the national board of directors.

Ramsay has over 20 years’ experience in the legal profession, working in both private practice and in-house. Before joining Medibank, she was the General Counsel and Company Secretary for the Asia Pacific Distribution Operations of Cummins Inc, and held senior legal positions at Coles Myer and Southcorp.

JOHN BLAIR GENERAL COUNSEL AIR NEW ZEALAND The dynamic and complex airline industry provides endless variety and challenge for John Blair and his legal team. After 19 years he still relishes the role, claiming it “the best GC role in New Zealand”. Regular contact with many parts of the business and with external lawyers around the world keeps every day interesting.

Blair includes the successful defences of the air cargo class action and the related ACCC prosecution in the Federal Court of Australia last year as some highlights of his career, alongside being exonerated by the European Commission and the US Department of Justice on the same issues.

Blair has worked on a wide range of other major matters, including Air New Zealand’s alliance with Virgin Australia and earlier attempts to establish an alliance with Qantas. The hard times have also been worked through, like the fallout following the collapse of Ansett in 2001 on the same day that 9/11 hit the airline industry.

The tragic aircraft accident in France claiming five New Zealand lives proved a different and challenging experience and reminder of how important so many roles in the industry can be.

In addition to running the legal team, Blair is responsible for Air New Zealand’s crucial insurance program, and also manages board and stock exchange issues as the company secretary.

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FEATURE

IN-HOUSE LEADERS ANGELA FLANNERY GENERAL COUNSEL DEPARTMENT OF COMMUNICATIONS Since her appointment as general counsel of the Department of Communications in 2013, Angela Flannery and her team have been predominantly focused on the colossal task of advising on the changes to the national broadband network (NBN) project, which will now be delivered under a multi-technology model.

Flannery was the primary legal negotiator for the Department in amending NBN Co’s agreements with Telstra and Optus. She also played a pivotal role in negotiating amendments to key agreements between the Commonwealth and Telstra. In addition, she took a lead role in structuring the regulatory approach for the agreements between NBN Co and Telstra, and negotiating with the ACCC over implementation. Earlier this year, Flannery and her team finalised the Department of Communications’ new regulatory instruments to support the deal.

This work was completed against the backdrop of the team working on a number of other significant legal matters, such as implementation of the Communications’ portfolio ‘red tape’ reduction initiatives, assisting in the establishment of the new Children’s e-Safety Commissioner, the Government’s spectrum review and the integration into the Department of the statutory authority, the Telecommunications Universal Service Management Agency, which ceased on 30 June this year.

PETER HOPKINS

ANDREW CORDNER

GENERAL COUNSEL (AUSTRALASIA) AIG

GROUP GENERAL COUNSEL FONTERRA CO-OPERATIVE GROUP LIMITED

Peter Hopkins heads up the AIG Australasia corporate legal team consisting of eight experienced and highlyqualified members. His team manages all legal and regulatory matters for AIG’s operations in Australia, New Zealand and Papua New Guinea. The team’s scope is incredibly diverse and covers everything from managing regulatory visits to planning catastrophe modelling workshops. In addition to the Australasia role, Hopkins supports the AIG business across Asia-Pacific for legal matters involving reinsurance and AIG’s multi-national accounts business.

Hopkins’ team also leads the firm’s Asia-Pacific pro bono practice and is working with DLA Piper and Thomson Reuters Foundation on a substantial global research program to support victims of human trafficking in accessing compensation. Under Hopkins’ leadership, the AIG Australasia legal team has developed into a full service in-house operating model, which allows AIG to pursue business-focused legal solutions whilst managing its reliance on external corporate counsel.

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Andrew Cordner heads up a highly experienced legal team in New Zealand and offshore supporting New Zealand’s largest company with diverse international operations and sales of dairy ingredients and products into over 100 markets. At Fonterra, his legal team is seen as trusted business advisors and enablers, taking a proactive approach to the needs of the business and leadership in the business and in decision-making processes.

The team has had significant involvement in recent key strategic transactions for Fonterra including its new global partnership with Beingmate; the China dairy farm hub alliance with Abbott Laboratories; the securing of a longterm milk supply agreement with Woolworths in Australia; and reshaping of its DPA alliance with Nestlé in Latin America. The legal team has also had a critical role in Fonterra’s response to its WPC80 precautionary recall.

Cordner and the team are currently focused on building a stronger and more collaborative culture within the team and with their external law firms and actively building their external relationships with regulators and others. As part of refreshing ways of working in the team and its operating model with the business, the Fonterra legal team is promoting innovative cost-effective legal service models such as the ‘virtual secondee’, where secondees from Fonterra’s external law firms sit within their firms, but responsibility for oversight of the work falls on lawyers in the legal team and not on the supervising partners at the external firm.

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FEATURE

TECHNOLOGY, MEDIA & TELECOMMUNICATIONS

New frontiers TMT lawyers share the challenges and opportunities involved in helping clients embrace new technologies

THE DEVELOPMENT of every new piece of technology brings with it new legal questions, and with tech-hungry clients keen to embrace new tools and ways of working, TMT lawyers are busier than ever. Whether it’s the rise of as-a-service strategies, growing concerns about data security, industry changes brought on by the NBN, or uncertainty around the increasing prevalence of 3D printing and the Internet of Things, practitioners have been active in helping their clients chart the way forwards.

does the technology look like? In the past, customers were very prescriptive in telling vendors how to do their job, but customers now realise that they have to give the vendor greater freedom in order to deliver the most efficient solution,” she says.

“In the past, the vendors would try to lock the customer in to a certain timeframe or a certain solution, and what that meant in practice is if the solution became less viable or it became out-moded, then the customer had to wear that risk, and the corporates

“One shouldn’t ignore how the NBN is going to transform clearly the end user experience, but also how it is going to transform the industry” Angus Henderson, WEBB HENDERSON Outcomes focused “One of the key trends over the last year is that customers are now moving to more of an as-a-service strategy,” observes Gilbert + Tobin partner Bernadette Jew. “Customers are buying services rather than buying a technology solution or a technology component,” she says.

“The major focus is on what does the service need to achieve, rather than what

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don’t want to wear that risk anymore,” Jew explains. “So what they’re looking for much more is flexibility to change the service to meet their requirements over time, and so what that means is that we need to take a fresh approach to contracting to give them the flexibility that they want.”

As a result of this new approach, TMT lawyers are able to take a more simplified contracting approach and focus on the

performance metrics – getting the service to align with business outcomes – rather than on the detail of how a service is delivered.

“We work with our clients on quite a few sophisticated, balanced score cards to make sure the service delivery is aligning to the business outcomes and that it’s measuring the success of the vendor relationship,” Jew says.

In a recent large transaction, Jew says she wrote all of the change control provisions

time to get absolutely all of the details nailed down before they sign the contract,” she says.

As a result, lawyers contract in stages: “We work with the client to lock down all of the price-sensitive details upfront and then we basically contract in stages and document the supporting documentation on a progressive basis,” she says, adding that the detailed supporting documentation is typically worked out in a three-month phase after signing, although staged contracting can go on for as long as two or three years. Jew says that new technologies, such as the ability for multiple team members to work concurrently on the same document, greatly assist with the task of rapid contracting.

Over time, Jew predicts that this more flexible and agile approach to technology contracting will lead to a reduction in disputes. “If things aren’t working, people are just going to move onto another solution much more quickly. Going forward, they will be less locked into a particular solution and they will be more agile to simply go and buy another service.”

NBN 2.0

before the main contract, “because I needed to know how I was going to manage change through the life of the contract. In this kind of disruptive environment it’s all about managing change effectively.” An important aspect of the flexibility focus is pricing, and Jew says that her team looks closely at giving parties an agreement that ensures the pricing is aligned with market developments.

The new outlook has already had an impact on the lifespan of agreements, with

clients entering into longer-term contracts that establish strategic relationships with their suppliers, but that also allow for regular changes as technologies and business requirements evolve.

The shift away from contractual certainty in favour of flexibility has also impacted the pace at which agreements are put together.

“Because we’re in this environment of such rapid disruption, it means that clients have to move really quickly and they don’t have

The renegotiation of the National Broadband Network (NBN) agreements has been a dominant feature of the past year for firms such as Webb Henderson. Although much of the focus has been on the renegotiation of the NBN agreements as the project switched to a multi-technology model, partner Angus Henderson also emphasised the NBN’s likely flow-on effects for the sector. “One shouldn’t ignore how the NBN is going to transform clearly the end user experience, but also how it is going to transform the industry, because the NBN is all about a level playing field where potentially you’re no longer going to have a market which is as skewed towards the larger players as it has been in the past,” he says, pointing to the rise of players like iiNet that might once have been described as mid-tier companies but who are now stepping into the realm of the top-tier telcos in terms of size.

Henderson predicted that the NBN would create a more competitive environment that would see consolidation of ISPs, as

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FEATURE

TECHNOLOGY, MEDIA & TELECOMMUNICATIONS TMT NEW ZEALAND Buddle Findlay partners Allan Yeoman and Philip Wood shed some light on recent TMT developments from across the ditch.

What have been the key trends in TMT in New Zealand from the past 12 months?

Agile methodology has been fairly common at the smaller end of the IT market for a while, but it’s being seen more and more at the enterprise and government level, and lawyers are being asked to help guide their clients through what can be a mindset change for some.

The rise in cloud uptake continues, and New Zealand has a strong tech start-up sector which (led by the likes of Vend and Xero) is driving a lot of work with new product launches, capital raising, IPOs, expansion into new markets and commercial partnerships. There’s also a much stronger awareness of cybersecurity threats and privacy issues generally, and those issues are coming up more often in both transactional and compliance contexts.

Allan Yeoman

Are there any particular technologies that have been driving work for firms?

Obviously the range and quality of cloud services and ‘as-a-service’ offerings keeps growing, so it’s becoming a more and more common feature of IT projects. At the same time, businesses and the public sector have become increasingly confident in their use of cloud and its benefits, so we are seeing an increased uptake of those types of services. The same can be said for open source software, where there’s been a general thawing of some of the nervousness around that and a better recognition of the benefits it can offer.

What work have you been seeing in the media space?

It’s been a very interesting time in the New Zealand media sector over the past 12 months – there have been three new SVOD entrants (Neon, Lightbox and Netflix), and new methods of content delivery are raising questions about how some of the traditional broadcasting and content regulation in New Zealand should apply. Traditional media outlets face a number of challenges – TV broadcasters with exclusive content rights face competition from offshore content providers, which is raising a number of legal questions; and print publishers are making a push into cross-platform use of content with companies like NZME and NBR driving video and radio content.

Which regulatory changes do you anticipate will generate work over the year ahead?

In the media sector, there’s going to be a review of the way in which online content is regulated which may clarify some of the current issues around online delivery of content versus traditional broadcasting. In the IT sector, the government has previously indicated that they will be reforming New Zealand’s Privacy Act, and the general expectation is that it will pick up a lot of the same changes as Australia’s recent privacy reforms.

A lot of organisations will be looking to understand what those changes mean for them. It’s also expected that there might be a general (or even official) ‘relaxation’ of policy and guidance on the public sector’s use of cloud computing, which would further fuel the growth of that type of work.

Philip Wood

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What types of projects do you expect clients will focus on in the year ahead?

We’d expect to continue to see more of a move towards ‘as-a-service’ models as businesses look to free themselves up from large infrastructure investment and maintenance costs. There’s a lot of focus on cybersecurity issues at the moment, and this is getting more and more attention at the board level. Even if privacy law reforms aren’t forthcoming, we are seeing clients taking a much more cautious approach to anything which might give rise to privacy or security issues. The media sector looks set to continue to change shape and size – it’s a fairly crowded market in certain respects and while there might be some consolidation, it wouldn’t be surprising to see existing players launch new offerings and cross-platform plays, or be joined by new entrants.

demonstrated by recent bids for iiNet. Webb Henderson partner Ara Margossian agrees: “The NBN is a bit of a game-changer,” he says. “We’re moving to a new model and that has basically involved a lot of the telcos that will use the NBN as an input to provide services looking to build out scale, because the way the economics of the NBN works is that it favours companies with scale… the flow-on has actually begun already where at the retail level there’s increased consolidation in the sector,” he explains.

Henderson concurs: “Companies are seeking scale in preparation for the NBN and they get that scale in one of two ways: either by organically growing quickly… but now we’re seeing some acquisitions, whether it’s bolt-ons to expand into adjacent areas or it’s acquisitions in their main field of interest to bulk up in preparation for the NBN.” Margossian also observes that telco players are thinking carefully about how to respond to the disruption to their traditional business models that will be brought on by the entry of players like Netflix. “Telcos don’t want to sit between the NBN at the bottom and then Netflix at the top and just provide the connectivity on a commoditised basis; they want to be able to move up into those higher layers and capture more of the value,” he explains, adding that many businesses are considering a move away from solely providing broadband and telephony.

“Businesses are looking at what I’d describe as complementary transactions in adjacent markets, which are linked to developments in the NBN space,” he says.

The NBN has also generated increased activity in the infrastructure space as players buy, sell or combine assets. “We’re seeing a lot of players in that market looking to do transactions that involve upgrading those networks, and then related to that we’re seeing some deals to build undersea cable capacity into Asia and into the US as well, which would have the effect of trying to bring down one of the input costs, in this case international connectivity, in anticipation of the higher usage that’s expected in an NBN environment,” Margossian says. “You’ve got a lot of telcos buying big international capacity

now and looking to build cable systems themselves or take a stake in cable systems.”

Looking to the future of the NBN, Henderson flags the government’s response to the Vertigan review of the communications sector, which has indicated a multi-phase approach that may include structural changes to the NBN in 2017, including a possible privatisation of the NBN.

The data minefield Lawyers continued to receive a number of client questions around data use and analysis this year, with changes to data protection laws contributing to the high volume of work.

Concerns about the privacy implications of using cloud services, particularly services where the data is sent outside Australia, are also driving work, Bird & Bird partner Hamish Fraser says. “Often what’s happening

which is ostensibly a way out, might be subject to some interesting questions.”

Unknown implications Fraser highlights the Internet of Things and 3D printing as two key areas to watch in the coming years. In his view, the Internet of Things, which refers to the network connectivity of devices such as phones and even household appliances that allows them to share data, raises a range of questions about how those vast amounts of data are collected and treated. He observes that the future of the Internet of Things raises huge question marks from a contract, risk and compliance perspective. “I’m not seeing a lot of work on it yet but I’m sensing that people are worried about the amount of data that they’ve got and how do they keep that secure,” he says.

“Because we’re in this environment of such rapid disruption, it means that clients have to move really quickly and they don’t have time to get absolutely all of the details nailed down before they sign the contract” Bernadette Jew, GILBERT + TOBIN is because they’re clickwrap agreements, because they’re online, someone in the IT department is actually already using the cloud service… and legal didn’t even get a look in, and even if they did, is it really negotiable?” he says.

Although the proper analysis of big data holds plenty of opportunities for organisations, anonymising it is a key area of concern for a number of clients. “You can do what you like with personal information if you can properly anonymise it, but I think anonymising might be a bit harder than people think… re-identification or identification of people I think is a lot easier or a lot more able to be done than people think,” Fraser observes. “De-identification,

Although the Internet of Things has been attracting a considerable amount of attention, Fraser predicts that 3D printing is more of a sleeper issue, not just in relation to intellectual property, but across a range of areas. “It does stand to change the way you think about everyday products,” he says, likening the rise of 3D printing to the impact of MP3s on the music industry. “It disintermediates the entire supply chain… that has the potential to revolutionise a lot of things,” he explains.

Fraser anticipates that remodelling the supply chain would bring about considerable work for lawyers and raise a number of interesting questions. “From a lawyer’s perspective, we’ve got some fascinating issues around risk, and contracting models and responsibility.” AL

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PROFILE

MICHAEL CRIPPS

The centre of everything Clyde & Co partner Michael Cripps speaks to Australasian Lawyer about life and legal practice in the world’s most populous city

“IT’S THE financial and commercial centre of the world’s second-largest economy,” says Clyde & Co partner Michael Cripps of Shanghai, the city where he has lived and worked for over 17 years.

“In terms of market capitalisation you’ve got the world’s second-largest market cap equity markets and you’ve got the continuation of international and multinational investments into and out of China, but certainly in the last few years big pronounced increases in the activities of Chinese companies investing

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“Professionally it’s a very exciting city to live in and work in” internationally,” he says. “So when you add all that together, professionally it’s a very exciting city to live in and work in.”

Cripps currently heads Clyde & Co’s China corporate practice, which is spread across the firm’s offices in Shanghai, Beijing, Hong Kong and Chongquing. The bulk of his work comprises transactional matters for

multinational companies active in China, some of which are entering the market for the first time.

A large component of Cripps’ work involves M&A, financing arrangements, anti-trust filings, and general commercial work around procurement, licensing and outsourcing.

Of late, the key sectors for activity have

mean in a bad way. I just mean everyone now understands the importance of getting the compliance side of things right as they move into a transaction.”

The road to Shanghai Cripps first came to China as a diplomat but later made the switch to legal practice. After completing his law degree, he began his career as a diplomat, joining the Department of Foreign Affairs and Trade as a graduate, where he learnt Mandarin and later became an accredited interpreter. This led to a three-year posting as vice consul at the Australian Consulate in Hong Kong, followed by a role at Allens Arthur Robinson’s newly launched Shanghai office in 1993, where he later made partner.

In 2005, he returned to Sydney to work as the group general counsel of Insurance Australia Group, a role that included a significant focus on IAG’s work in China and Asia more broadly.

After five years back in Australia, Cripps’ wife received an offer to become the general counsel at the Shanghai Stock Exchange, and the couple returned to the city and Cripps became a partner at Clyde & Co in 2011.

CAREER TIMELINE

1986 Completed law degree at University of Sydney

1989 Became an accredited DFAT Mandarin interpreter

1993 Joined Allens Arthur Robinson’s new office in Shanghai

1987 Joined Department of Foreign Affairs and Trade (DFAT) as career diplomat

1991 Began posting as vice consul at Australian Consulate General in Hong Kong

Life in a booming legal market

been healthcare, insurance, and trade and commodities, he says.

According to Cripps, transactions in China frequently involve a high degree of focus on compliance. “Globally, compliance is a massive issue for everyone in every jurisdiction, but I think the increased focus in China internally on compliance in the last couple of years and international players here in China has meant that transactionally that issue is front and centre in a way perhaps that it wouldn’t be in other jurisdictions,” he observes. “I don’t

Eighteen months ago, Clyde & Co, in conjunction with a local partner, was awarded a joint law venture (JLV) licence. “That JLV had the clear mandate approved by the Ministry of Justice to practise domestic PRC law and to employ PRC qualified and licensed practitioners,” Cripps explains, adding that to date only a handful of JLV licences have been awarded.

Although it is a different model to the King & Wood Mallesons or the Dentons-Dacheng tie-up, Cripps says the Clyde & Co Westlink JLV is exactly the same in terms of what it delivers: international legal services but also the full suite of domestic PRC services.

“To have PRC domestic capability as an

2005 Became group general counsel of Insurance Australia Group in Sydney

2011 Returned to Shanghai and became partner at Clyde & Co

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PROFILE

MICHAEL CRIPPS

integral, branded part of the offering within China is very important and really quite a breakthrough,” he says.

The JLV gives Clyde & Co an edge in the busy Shanghai legal market. Cripps estimates that the city is home to approximately 150 international law firms. “You’ve got loads and loads of mid-sized firms that have decided to set up shop, as well as those much smaller firms,” he says.

Despite the high density of international firms, the competition is increasingly coming from domestic firms. “The focus on the domestic legal players has been increasing really rapidly in the last five years. Twenty years ago one could argue that China did not have a legal services market – that would be a little bit inaccurate but not wildly so. The only law firms were state-owned firms that had been around for some time and were almost more like public notaries,” Cripps explains.

Since then, the local legal market has grown considerably, with the encouragement of the government. “It’s no longer international players leading the way in the development of legal services; it’s the other way around now,” he says. But while China now has numerous established, leading domestic law firms, international firms and the expertise they bring are still welcome.

Looking at the accounting sector, Cripps believes it is unlikely that in the next 10 years a domestic Chinese accounting firm will join the ranks of the 20 biggest firms internationally. But it is a different scenario in the legal sector, with the likes of King & Wood and Denton Dacheng strongly positioned on the global legal stage.

– what we would know as a clear set of laws and rules that are impartially administered by courts and judges,” Cripps says.

“That sounds a little worn perhaps, but developments in the past six months have shown that it’s being accorded the absolute highest priority in terms of national development here.”

He predicts that the Chinese government would like to end up with a cultural approach to rule of law, very similar to that in Singapore.

“It’s not going to happen overnight, but the government sees that as an imperative, as crucial for the development of the country and the wellbeing of the society, and that’s a big difference. That hasn’t always been the case … What that means is that they’ve really fired the starting gun on a true legal

“It’s no longer international players leading the way in the development of legal services; it’s the other way around now” services sector in China,” he explains.

“They’re wanting to use the rule of law to begin to sort out pollution issues, to sort out corruption issues, and once you start using rule of law rather than political campaigns to deal with these sorts of issues, you create enormous amounts of work for professionals – lawyers and judges. That’s a big trend, and one that hasn’t been reported on that much, but it’s big, and if you’re a young PRC law graduate today, it’s actually a very exciting time to be coming into the market.”

The rise of the rule of law

The China-Australia Free Trade Agreement

The emergence of a local legal services market is not the only significant development currently underway in China.

“The government has publicly stated that they wish to instil and introduce, as they call it, a ‘rule of law with Chinese characteristics’

Moves towards enhancing the role of the rule of law is not the only significant change underway in the Chinese market.

The recently signed China-Australia Free Trade Agreement (ChAFTA) is expected to prompt even greater trade and investment

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between Australia and its biggest trading partner. Ten years in the making, the deal will bring about a range of tariff cuts.

Approximately 85% of goods exported by Australia will now be tariff-free. This number is expected to rise to 95% when the agreement has been fully implemented. Tariff reductions have been agreed on Australian exports of dairy, beef, sheep products, wine, coal, copper, alloys and certain types of grain. Over time, some grain tariffs will be eliminated altogether.

For Chinese manufacturers and exporters, the next five years will see Australian tariffs reduced to zero for imported clothing, footwear, steel, aluminium, plastics and processed food.

“I think the perception here in China is that there will be increased investment from China

into Australia … I think there is the hope from China that there are some significant investment flows from Australia into China,” Cripps observes.

Financial services is another key sector poised to benefit from the agreement. The ChAFTA includes a cooperation agreement between the Australian Prudential Regulatory Authority and the China Banking Regulatory Commission in relation to foreign exchange regulation, money laundering, terrorism financing, funds investment and private equity. The deal also includes a commitment to expediting financial institutions’ applications to establish subsidiaries and branches.

The insurance, healthcare, and hospitality and tourism sectors are also poised to benefit from the deal.

“It is certainly being perceived in China as an absolute breakthrough, and not just a rhetorical exercise,” Cripps says.

THE RULE OF LAW IN CHINA The newly released Rule of Law Index offers insights into how the rule of law is experienced by the general public in 102 countries around the world. The World Justice Project surveyed more than 100,000 households and experts on a range of factors, such as constraints on government powers, fundamental rights, civil justice and criminal justice. Below is a snapshot of China’s performance in the rankings, and key areas that the report highlighted for improvement:

71st

Global rule of law ranking

on government powers 87th Constraints 41st Key areas to be addressed: Non-governmental checks; lawful transition of power

Absence of corruption Key areas to be addressed: Corruption in the judiciary; corruption in the executive branch

government 87th Open Key area to be addressed:

rights 99th Fundamental Key areas to be addressed:

and security 38th Order Key area to be addressed:

enforcement 66th Regulatory Key areas to be addressed:

justice 67th Civil Key area to be addressed:

justice 47th Criminal Key area to be addressed:

Civic participation

Respect for due process; no expropriation without adequate compensation

Freedom of expression; freedom of association

No improper government influence

Absence of violent redress

No improper government influence

Source: Rule of Law Index 2015, World Justice Project

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PROFILE

MICHAEL MICHALANDOS

An unlikely combination He’s an employment lawyer by day but a comic book writer by night. Baker & McKenzie partner Michael Michalandos tells Samantha Woodhill about his life in comics and legal practice

ICONIC AMERICAN comic book characters Superman and Captain America were created by children from migrant families who felt powerless when the war hit in Germany and struggled to come to grips with American culture.

Michael Michalandos, partner at Baker & McKenzie and son of a Greek immigrant family, was encouraged to read such comics by his father as a child, as a way to learn English.

Years later, as a junior solicitor, he created his own comic book series loosely based on the lives of the clients he represented.

resulted, was about a bull who in the first issue gets bored of farm life and walks off the farm, only to realise that the famer is in trouble and may lose the property, so he attempts to save it.

Michalandos says that, at the time, he remembers losing sleep at the prospect of the loss of the family farm, but the bank eventually gave his clients a lot more time.

“When I’m dealing with a legal issue, I’ll sit down and sketch it out – it’s the easiest way for me to understand it,” he says. “Most of the stuff I write is comedy; I kicked off the comic

“When I’m dealing with a legal issue, I’ll sit down and sketch it out – it’s the easiest way for me to understand it” “One of my first jobs was to act for a group of farmers who were losing their farm,” he says. “The partner basically threw the matter at me and said, ‘you deal with it’, and they really didn’t have much of a legal case. So my first job at the firm was to, in effect, write a story about why the bank shouldn’t sell this farm from underneath this family.”

Greener Pastures, the satirical comic that

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book in what I think was a difficult period in my working life, to say the least. I was working long hours. And I tend to find that my best comic book writing tends to happen when I have had a really bad day at work.”

As an employment lawyer, Michalandos says a lot of what he does day to day can be fairly negative, but writing comic books is a therapeutic way to combat that. “I think our

job is such that, if you don’t have a creative outlet, it can be quite destructive,” he says.

“Most lawyers have some sort of outlet.”

Finding a fan base After some years of working on the comic with an artist friend and spending their weekends at various comic fairs, Greener Pastures had developed a reasonable fan base, with one New Zealand fan even getting a tattooing of the bovine protagonist. “He actually shaved half his chest and tattooed this

to do training strips for their staff,” he says.

In Japan and France comic books are seen as an important and relatively mainstream art form, but in Australia, even today comics are seen as more of a subculture. While Michalandos was once directed to remove comic book paraphernalia from his office, he says the influx of superhero movies is helping people to see comic books in a different light.

Michalandos works hard to make sure people understand the value of comics and what they can convey. “I think we have a fairly narrow perception of how comic books can be useful as an education or training tool. You can capture a whole lot more information and convey it more readily I think in artwork than you can writing things out,” he says.

“One day I’ll be writing my advices in comic book form.” AL

GREENER PASTURES

character to his left breast and put a nipple ring through its nose and sent me the photo,” Michalandos says.

“We won awards; we used to get some really great letters from fans who read the comic book – you just don’t get that sort of feedback from clients.”

He says he even sold a signed comic book to Neil Finn, who was a big fan of the series.

The comic has had success in Australia and overseas but is still not quite a crowdpleaser on the home front. Michalandos’ two

teenage daughters, who both inherited their father’s love of comic books, are yet read his ‘uncool’ comics.

Comics and clients In legal practice, Michalandos has drawn on his comic-writing experience to design comics and workshop presentations for clients. He says he’s found that clients are often looking for ways to communicate things like OHS policies to their staff.

“One of my clients called me and asked me

Set in country NSW, Greener Pastures is the story of a heroic bull named Trevor Bovis who becomes so bored of farm life that he heads for the bright lights and culture of Sydney.

Eventually transforming from a wide-eyed country boy into a streetwise cynic, he finds out that humans eat meat and joins an animal activist group.

Over time, the good and bad in the society he has entered begins to reveal itself to Trevor.

Trevor’s adventures in the Big Smoke lead him to encounter militant vegetarians, a madman who thinks he’s the biblical Noah, fast food, fast women, fast getaways, monkeys, pussycats, toilet training, and where animals go when they’re cooked.

Michalandos self-published Greener Pastures together with friend and artist Tim McEwen.

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FEATURES

VOLUNTEERING

DOES CORPORATE VOLUNTEERING REALLY WORK? Does letting staff go out and volunteer one day a year really create value for the charity? Peter Baines outlines a different approach to corporate volunteering – one that all parties can truly benefit from I OFTEN get asked the question: Does corp­ orate volunteering really work? To put it simply, it can, but it often doesn’t – and even if it is working, it’s very unlikely to be reaching its full potential.

Corporate volunteering, in the traditional sense, is when businesses give their staff one work day to volunteer with their charity of choice – a tactic that is probably wasting both the company’s time and that of the charity partner.

You may ask, “How can this be a waste of time for the charity? We are skilled professionals working for free to make a difference.”

Put yourself in the charity’s shoes, and consider that you have a well-meaning, highly qualified individual turn up for the day to help. Just for one day. Once a year.

After you get the introductions out of the way, have shared a coffee and arranged a security pass, the charity has approximately six hours worth of productive time left before you leave their office and return again, perhaps, in a year’s time. No one stands to get much value out of this type of relationship because, really, how can they?

One of two things is likely to happen when staff members participate in corporate volun­ teering. Those who take the day off and work productively with a charity have most likely

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been doing some sort of volunteering for several years, and it is already part of their life. The business giving them the day off just allows them to go on company time. The other likely scenario is that the employee’s volunteering day is spent at the beach, where they’ll be working hard on catching waves or getting a tan.

So, can it work?

The answer is yes, it can work. Just like any

other initiative the company takes, if there is a considered strategy behind the program, there is a greater chance of success and a meaningful value exchange between both parties.

In Doing Good by Doing Good, I share a number of examples as to how corporate volun­ teering can work, from large firms down to small businesses and even sole practitioners.

Often the most effective resource you can offer a charity or not-for-profit is those

skills you use on a daily basis. If you are an accoun­tant, lawyer or provider of professional ser­vices, there is a strong chance that you are better at providing those services than you are at building houses or mending leaking roofs.

Sashi Veale of Sashi Veale and Associates is an accountant who, for years, has been sup­

Oz Harvest is a wonderful organisation that collects food that would otherwise go into landfill and provides it to those in need of nutritious meals. They not only welcome an army of corporate volunteers on a short-term basis, but their growth and even survival is dependent upon those volunteers.

Often the most effective resource you can offer a charity or not-for-profit is those skills that you utilise on a daily basis and get financially rewarded for porting charities by preparing the financial accounts for a select number of charities on a voluntary basis. She does this above and beyond her commercial work, and, although I haven’t seen Sashi on the end of a hammer, I have a strong suspicion that the value she brings to the charities she supports is far greater through her provision of ‘voluntary’ pro­fessional services. After all, this is what the charities she supports need.

Part of the argument around the corporate volunteering is, if the firm that I’m a partner of only offers our professional services on a pro bono basis, do we miss out on the engagement and the shared experience of actually ‘getting our hands dirty’?

After all, isn’t part of a good corporate social responsibility program the shared experience that leads to higher levels of staff engagement, improved morale and increased staff retention, and if so, how is doing more of what they do, but for no fee, achieving that outcome?

This is where a strategic approach is re­quired. Ask those internally who are par­ ticipating in the program: “Who is this volunteering really for?” If the honest answer is the charity partner, then the provision of professional services they are in need of will achieve that outcome. If it is more akin to a team-building exercise, and the charity is the vehicle for that program, then the direction of the program is different. The latter is not wrong, just a different approach with a different outcome.

It’s about getting the strategy right, and this is where the opportunity to create a mean­ingful experience really exists.

Is one day per year helpful?

Let’s return to the concept of volunteering one day per year. You might be the senior executive or director of an organisation with 400 people. You offer each of them one day off a year to volunteer with their charity of choice, or perhaps with the charity your business supports. The first question to ask is how many of those 400 staff actually avail them­ selves of the day and use it for the intended purpose? Of those, how many are providing meaningful assistance to the charity they are working with? And finally, how many of those who don’t take it would be happy to see it used by someone who was interested and did have the relationship? This is where we can leverage some real value.

If two-thirds of the staff donated their day back to the organisation, and those days were taken consecutively by one person to work at one organisation, this would give the charity a dedicated full-time worker for the entire year.

Now we start to see real value for the charity.

What flows back to your business? A story of meaningful change – one person working full-time leading a project within a charity can bring about real change.

So, does this mean there is no place for the group volunteering days when we all put the overalls on and insert a paintbrush into our right hand? No, it does not.

One of the most memorable days I have had working with a corporate team was when I led 103 members of AIA Insurance into the Khlong Toei slums of Bangkok in Thailand.

For close to eight hours, 103 Australians toiled away in a place they had never been to and were unlikely to ever return to, for people they had never met nor were likely to meet again, but they had one of the richest shared experiences you can imagine.

KEY QUESTIONS If you have volunteering as part of your CSR platform or you are looking to introduce it, ask yourself a number of questions: Is there a strategy behind our corporate volunteering?

Is it aligned to our values?

Who is it really designed to benefit, and are those who are meant to benefit from the program in fact doing so?

Can we re-engineer our volunteering to create a multiplier effect or shared experience?

What is the return to our business, and how are we measuring it?

If you can answer the last of the questions above in the affirmative and clearly articulate the program’s positive return to your business, then you are well ahead of 90% of organisations that are engaged in corporate volunteering.

If your answer to the final question is in the negative, then you are missing opportunities and failing to capitalise on the returns you could be bringing in.

It’s not only in the communities’ interests for you to get this right – it is in your interest as well.

Peter Baines, OAM, became passionate about sustainable leadership after he was part of the natural disaster response team for the 2004 Boxing Day tsunami. Today, he helps businesses build effective sustainable leadership. He is the author of Doing Good by Doing Good. Find out more at www.peterbaines.com.au.

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FEATURES

PERFORMANCE

FOCUS ON STRENGTHS Imagine if you focused energy and resources on nurturing the strengths of your employees rather than pumping money into ‘fixing’ their weaknesses.

Tim Baker explains that the focus on overcoming weaknesses is the path of most resistance, and that boosting employees’ innate strengths is more worthwhile – for them and the business MARY ENTERED Sandra’s office with some trepidation, knowing that she was about to be appraised for her performance on the job after six months. Mary was concerned about Sandra’s appraisal of her work. Sandra is an accountant in a professional services firm.

Sandra began with the question, “Now that you’ve been in this job for six months, what are the tasks you enjoy doing the most?”

Mary was blindsided; she wasn’t expecting this kind of question first up. She thought carefully for a moment and responded, “I guess most of the time I like dealing with our clients.”

“Approximately how much of your day is taken up with clients?” Sandra asked.

“Not too much; maybe one in eight hours,” replied Mary.

“What is it about the client contact that you enjoy, Mary?” probed Sandra.

“I enjoy communicating with them to provide solutions to their problems. I find that it energises me and I feel useful,” Mary replied.

“Yes, I agree this is one of your strengths,” Sandra said. “I get great feedback regularly from some of our valued clients. How can we work together to provide you with the opportunity to do more of this? Could I delegate more of the routine accounting work to one of the administrative assistants in the office and move you into a client liaison role? Perhaps we could make you the first point of contact for client requests, and that may entail you being out on the road more.

That won’t happen overnight but we can work towards this.”

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“That would be great, Sandra,” Mary replied. “I would really appreciate that opportunity!”

The world of work, which mirrors society at large, is obsessed with spotting and overcoming employees’ weaknesses.

We are socialised at an early age to focus on overcoming our weaknesses rather than building on our strengths. You will always get a better return on investment in time and effort by investing in the development of your strengths than by trying to overcome your weaknesses.

Our obsession with overcoming weaknesses Think about it: all things being equal, spending an hour developing a strength or talent is a far better use of your time than spending an

hour trying to correct a deficiency. You will learn faster, gain greater traction, and be more efficient and effective in building on a talent than in trying to overcome a weakness. As the saying goes, what seems common sense is not always common practice. We are told at school to lift our grades in subjects we struggle with and maintain the good grades we get in subjects that come easily. When we enter the workforce, the traditional performance appraisal devotes a disproportionate amount of time to our weak areas and very little time to what we do well. So it is little wonder that we are obsessed with our weaknesses and take our talents for granted.

In his 2007 book Strengths Finder 2.0, Tom Rath says Gallup has surveyed over 10 million people worldwide since the 1990s on the topic of employee engagement; that

is, how positive and productive people are at work. Only a third of those surveyed ‘strongly agreed’ with the statement “At work, I have the opportunity to do what I do best every day”. Of those who ‘strongly disagreed’ or ‘disagreed’ with this statement – that is, those who felt they did not focus on what they did best – none were emotionally engaged in their jobs.

The message is clear: if you want to engage the hearts and minds of people at work, you need to give them the opportunity to exercise their strengths and talents at work.

To further illustrate the point, Gallup’s research suggests that employees who are given the opportunity to utilise their strengths are considerably more committed to their work than those who are not given the same opportunity. These same people who exercise their strengths at work report having a better quality of life than others who do not get the same opportunity. It appears that focusing on strengths has considerable benefits for the individual, the organisation where they work,

nesses, but managers are preoccupied with pouring resources and support into the development of these weaknesses. Most learning and development programs are designed to overcome weaknesses. As Rath puts it, these programs “help us to become who we are not”. For example, if you are poor with numbers you are sent on a course to develop accounting skills. Or if you are appraised as being poor at dealing with people, you are sent on courses to enhance your “emotional intelligence”. Our whole life seems to be devoted to overcoming weaknesses, and this is more often than not done at the expense of developing our talents.

On top of this, our heroes in society are those who have overcome massive obstacles. People who excel despite a physical disability, individuals who triumph over barriers such as age, discrimination, and economic circumstances – our lives are filled with such stories. These stories are undeniably inspirational. But they teach us

You will always get a better return on investment in time and effort by investing in the development of your strengths than by trying to overcome your weaknesses and society. This is the rationale for holding a conversation about an employee’s strengths.

While it is true that a lot of what we do in the workplace is hard work, giving people a chance to exercise their innate talents can be significantly beneficial to employees, the organisation, and society in general. Yet performance appraisals are generally geared towards overcoming employees’ weaknesses.

I am not suggesting that we do not discuss these weaknesses or opportunities for growth.

In fact, the next conversation in my ‘Five Conversations Framework’ does just that.

What I am saying is this: we need to redress this imbalance in focusing on weaknesses by discussing strengths and talents.

Not only are traditional performance appraisals obsessed with identifying weak-

that overcoming obstacles is more virtuous than capitalising on our strengths and talents.

On the other hand, we take for granted those who have natural talent. We do not value the effort they put in to exploit those talents. We do not see – or want to see – the hard work put into activities in which people have a natural advantage.

Inspirational stories create powerful myths in our society. Overcoming shortcomings is romanticised to such an extent that it is considered an essential element of our culture.

Movies, books, TV series and the like are filled with the underdog beating the odds. This leads us to idolise those people who succeed despite their lack of natural ability. There is no room for us to celebrate individuals who use their innate talents for achievement.

We therefore emulate the underdog. We believe that the way ahead is to overcome our weaknesses. Capitalising on our strengths is a secondary consideration. (Unfortunately, though, overcoming our weaknesses instead of building on our strengths is the path of most resistance.)

So it is little wonder this idea is embraced when it comes to assessment of performance in the workplace. It raises questions such as “What are your weaknesses?”, “How can you overcome these?”, and “What can we as a business do to assist you in this regard?”

We do not really consider the alternative questions: “What are your strengths?”, “How can you capitalise on these in your job?”, or “What can we as a business do to help you to exercise your strengths in this organisation?”

The traditional performance appraisal system is more concerned with the first than the second set of questions.

I remember as a child devoting hours, days, weeks, months and years to trying to bowl like the great Australian cricket fast bowler Dennis Lillee. I was not alone in that; thousands of others practised with the same dedication. Hours were spent in the cricket nets. Sooner or later it dawned upon me that no matter how hard I worked at my fast bowling, being a great fast bowler was not on the cards for me. I now think to myself, “Imagine if I had spent that time working as hard on my innate talents. What may have come of that, I wonder?”

This is an extract from Tim Baker’s book, “The End of the Performance Review: A New Approach to Appraising Employee Performance” (Palgrave Macmillan).

Tim Baker is an international authority on performance in the workplace and author of six books on the subject. Tim was voted one of the 50 Most Talented Global Training & Development Leaders by the World HRD Congress in 2013. In a nutshell, Tim has conducted over 2,430 seminars, workshops, keynote addresses and coaching programs to over 45,000 people in 11 countries across 21 industry groups. You can go to www.winnersatwork.com. au to find more information, or contact Tim directly at tim@winnersatwork.com.au.

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