FAST FIRMS AUSTRALIA’S FASTESTGROWING LAW FIRMS australasianlawyer.com.au Issue 1.5
NEW ZEALAND REPORT NZ’S LAWYERS LOOK TO THE YEAR AHEAD EMPLOYMENT LAW THE REGULATORY PENDULUM CONTINUES TO SWING
BREAKING NEW GROUND Yahoo!7’s Jeremy Briscombe on working at the intersection of innovation and regulation
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Contents
14 COVER STORY
Breaking new ground Yahoo!7 general counsel Jeremy Briscombe on working at the intersection of innovation and regulation
FEATURES 20 | Fast firms Meet Australia’s fastest-growing law firms
38 48
TAKING IT TO THE NEXT LEVEL
Shane Barber on Truman Hoyle’s merger with Bird & Bird
28 | New Zealand Special Report NZ’s lawyers look to the year ahead
34
34 | Go your own way The former large law firm partners who left to open their own practices 42 | In search of the middle ground The regulatory pendulum continues to swing for employment lawyers
48 | The best of both worlds KWS Legal’s Michael Kadoury talks life in Jerusalem 52 | Verifying the votes Behind the scenes at Afghanistan’s recent presidential election audit with former NZ attorney-general Paul East QC
REGULARS 04 | Legal insight: Going green 06 | News analysis 08 | Deals round-up 12 | Appointments
NOVEMBER 2014 | 1
EDITOR’S LETTER / 1.5
TECHNOLOGY: UNDERESTIMATE IT AT YOUR PERIL Kathryn Crossley
Without planning it, this issue of Australasian Lawyer has taken on a bit of a technology theme. In this edition we speak to Jeremy Briscombe, general counsel at Yahoo!7, who spends most days grappling with the legal implications of new technologies (page 14); Shane Barber, who shares his thoughts on Truman Hoyle’s merger with international IT and IP specialist firm Bird & Bird (page 38); and Michael Kadoury, an Australian lawyer who advises start-ups and is now based in Jerusalem (page 48). I suppose technology can have a habit of sneaking up on you – just ask Western Union, which decided in around 1880 that it would not invest in the new, fandangled telephone; or Kodak, which prioritised its traditional film business over digital. “That’s very interesting, but it would never work in a law firm” is not an uncommon comment from lawyers in relation to practices in other industries. Sometimes that’s a fair conclusion, but the starting point should really be “How could we make this work for us?” It would be a mistake for law firms to think that many of the technologies their clients are implementing could not also be applied to legal practice, as many firms had initially determined at the advent of email. It may be that lawyers are naturally risk averse, but being a late adopter is a risk no firm can afford to take when innovation is happening at such a rapid pace. Of course, new technologies aren’t the panacea for all of the pressures facing law firms. However, innovations that help lawyers to better capture their time or more efficiently manage the discovery process can help insulate a firm at a time when clients are looking for greater value and firms’ profit margins are under pressure. Improvements in communication, especially video conferencing, allow lawyers to better communicate with clients and colleagues in other cities or on the other side of the world, and can open up new markets for firms and reduce outlays on international travel. The possibilities that new and evolving technologies present to firms are immense, but if we don’t embrace the innovations before us, we may never know.
COPY & FEATURES EDITOR Kathryn Crossley CONTRIBUTORS Ben Abbott, Dan Gregory, Kieran Flanagan, Sophie Schroder PRODUCTION EDITOR Roslyn Meredith
ART & PRODUCTION DESIGN MANAGER Daniel Williams DESIGNER Kat Vargas
SALES & MARKETING SALES MANAGER Paul Ferris MARKETING EXECUTIVE Alex Carr TRAFFIC MANAGER Abby Cayanan MARKETING AND COMMUNICATIONS MANAGER Lisa Narroway
CORPORATE CHIEF EXECUTIVE OFFICER Mike Shipley CHIEF OPERATING OFFICER George Walmsley MANAGING DIRECTOR Justin Kennedy CHIEF INFORMATION OFFICER Colin Chan HR MANAGER Julia Bookallil Editorial enquiries Kathryn Crossley tel: +61 2 8437 4702 kathryn.crossley@keymedia.com.au Advertising enquiries Paul Ferris tel: +61 2 8437 4703 paul.ferris@keymedia.com.au Subscriptions subscriptions@keymedia.com.au Key Media 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 Auckland, Toronto, Denver, Manila australasianlawyer.com.au 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
Kathryn Crossley, editor, Australasian Lawyer
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2 | NOVEMBER 2014
Printed on paper produced from 100% sustainable forestry, grown and managed specifically for the paper pulp industry
Most Innovative Australian Law Firm 2014 Financial Times Asia-Pacific Innovative Lawyers Awards
Most Innovative Law Firm 2014 BRW Client Choice Awards
Best Law Firm Revenue $50 to $200 million 2014 BRW Client Choice Awards
Innovation
Seeing what others haven’t seen.
Innovation involves taking conventional, established practices and making them better, smarter, more successful. At Gilbert + Tobin, we’ve been a leader in innovation in the legal market for over 25 years. We have assisted leading Australian and international businesses with innovative solutions to their commercial challenges. This is why Gilbert + Tobin has become the firm of choice for our clients’ most important work.
Sydney Melbourne Perth gtlaw.com.au
LEGAL INSIGHT
GOING GREEN
AVERAGE ANNUAL PAPER USAGE PER EMPLOYEE
Australia’s law firms have made great strides towards becoming more environmentally friendly, but research into the operation of firms reveals that there’s still some room for improvement FIRMS PRINTING ELECTRONICALLY RECEIVED DOCUMENTS FOR ARCHIVING
127kg 124.5kg 121.8kg FY2011
FIRMS’ REASONS FOR PRINTING ELECTRONICALLY RECEIVED DOCUMENTS
43% It’s the way we’ve always done it
FY2012
FY2013
AVERAGE ANNUAL CARBON EMISSIONS FROM BUSINESS TRAVEL PER LAW FIRM EMPLOYEE, BASED ON FIRM TYPE
42% Need to legally
80%
print some or all documents received electronically
20%
rarely print documents received electronically
RECYCLING IN LAW FIRMS
31% Quicker and easier to access
13% Clients expect it
4.09 tonnes
6% As a back-up
100%
recycle paper and cardboard
95% recycle glass
92% recycle
76% recycle
plastic
e-waste
4 | NOVEMBER 2014
0.53
tonnes Single-state firms
International firms
AVERAGE ANNUAL CARBON EMISSIONS FROM ELECTRICITY PER LAW FIRM EMPLOYEE
2.92 tonnes in FY2013 7%
from FY2012
AVERAGE ANNUAL CARBON EMISSIONS FROM BUSINESS TRAVEL PER LAW FIRM EMPLOYEE
1.93 tonnes in FY2013 12%
from FY2012
Sources: Legal Sector Environmental Insight: Report of AusLSA Members, Australian Legal Sector Alliance (2013); Streamlining the Law Firm: A white paper to explore the impact of digital and other trends in Australian law firms, Fuji Xerox (2012).
What is Practical Law and why do you need it?
Practical Law
A THOMSON REUTERS LEGAL SOLUTION
Practical Law provides online legal know how, including Precedents or Standard documents, which can be used as they are or tailored for international transactions, saving vast amounts of time. Resources are created and kept up-to-date by our team of editors and a range of expert contributors. Why do legal professionals outside of the UK and US use Practical Law? • To get a head start by accessing resources written in plain English, that can be easily tailored for use under the law of other jurisdictions • To save time when drafting documents – Practical Law has a massive bank of precedents for both English and US law that can form the starting point when drafting international legal documents
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• To understand local market practice, as well as compare differences in local laws and know the key questions to ask when instructing local counsel
As a sole general counsel, you don’t have a team of lawyers to provide support; Practical Law effectively became my legal team.
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See for yourself and take a Free Trial at: global.practicallaw.com/regional-portal/australia-new-zealand
• To save external spend by becoming a multi-jurisdictional resource for their company or firm • To advise confidently in unfamiliar jurisdictions, using comparative guides to the law worldwide, covering all the major economies • To keep on top of legal and regulatory developments by signing up for legal updates written by experts, telling what you need to know and why
NEWS ANALYSIS
Long way to the top The proliferation of new titles and roles for lawyers has become a feature of the Australian legal landscape in recent years. But what are the benefits for firms, and what does it mean for lawyers hoping to make partner? If a quick browse of profiles on LinkedIn is anything to go by, ‘lawyer’, ‘senior associate’, ‘special counsel’ and ‘partner’ are no longer the only titles available to legal practitioners. Positions such as ‘associate’, ‘managing associate’ and ‘executive counsel’ are increasingly in vogue. “What I have found is over the years there has been greater variety in what types of titles and promotions firms will use and offer,” says Mahlab NSW managing director Lisa Gazis. “I’ve seen the disappearance of the simple ‘lawyer’ title.” Gazis believes the proliferation of new titles in Australia in recent years can in part be attributed to the arrival of international firms, particularly US firms, which often have ‘associate’ titles. Another factor that contributed to the increased popularity of these new titles was the GFC. With partnership and advancement benchmarks getting higher, and some firms unable to promote as many lawyers as they could in better economic conditions, the introduction of new titles and roles has helped keep lawyers happy and confident about where their careers are heading and where they sit in the law firm hierarchy. “What firms are probably doing, given that the time to partnership is certainly a lot longer than what it was a generation of partners ago, is looking at ways that they can reward and recognise and continue to incentivise talented lawyers on the path to partnership,” observes Jane Lewis, director of people and development at Allens. Allens is one of the firms that has introduced new titles for its lawyers, promoting its first cohorts of 6 | NOVEMBER 2014
associates and managing associates on 1 July this year. Lewis explains that the introduction of these roles was part of a broader review within the firm to adapt the career model to better meet the changing demands in the marketplace. The review included shifting from a seniority model to a competencybased model, considering the gateways for promotion and the expectations of lawyers at each career phase. “One of the things that we identified was that time at senior associate could be a long time; you could be at senior associate once you were a four-year lawyer, and you could be at senior associate when you were a fifteen-year lawyer ... it made sense to call out an additional career stage,” Lewis says of the decision to introduce the managing associate position, which sits between senior associate and partner. “We saw that as having two key advantages: from a client perspective it would allow us to give clients choice in terms of how their matters are managed, so they could have a highly skilled senior lawyer who had the potential for partnership, rather than needing to necessarily rely on a partner for all matters; and the second thing was it would meet lawyers’ desires for clarity about where they were heading, and a greater challenge and reward along the path to partnership,” Lewis adds. In some situations, the introduction of such roles has also served to slow the advancement to partnership. According to Gazis, in situations where a firm cannot promote someone to partner at a particular point in time, such as when the business case for promotion in a particular practice area can’t be made,
AUSTRALASIANLAWYER.COM.AU
the introduction of an additional career milestone can be a good way to provide that lawyer with a new title and a pay increase while the firm works with that lawyer to aim for partnership at a later date. In contrast, Lewis says the introduction of the managing associate role at Allens is intended to reduce the time it takes to reach partner. “It’s definitely about providing greater recognition to people along the way,” she says. “It’s about being more deliberate; it’s about increasing the scope of responsibility and the autonomy that people have on track to partnership. But actually our intent is to reduce the time to partnership, not further extend it.” One of the firm’s first appointees to managing associate has since been promoted to partner, effective from next year. Gazis emphasises the need for firms to carefully manage the introduction of new roles. “Overall, I think that how they’re received depends a lot on the firm, and what information they give people before they introduce [the roles], and how they describe the actual title and what it means,” she says. “They want to feel like what’s happening in their firm is happening in all other firms, and everyone is moving along at the same pace. So, providing the firm can give them adequate information about why the title is being introduced, what it means, and that it’s not a halt on their career path, I think that a lot of lawyers are fine with it. There are some lawyers who do become concerned, but often it might be because they see that as an interruption to their career path, so it really depends upon the
“How they’re received depends a lot on the firm, and what information they give people before they introduce [the roles], and how they describe the actual title and what it means” Lisa Gazis, Mahlab reasons and what information the firms have given.” If explained to lawyers, promotion to these new roles can be viewed as a positive sign that their career aspirations are on track. Diversity in titles and roles offered by firms will likely increase in coming years. “Titles – like the names of practice groups and how practice groups are divided – change as business changes and conditions change, so I think that we will always see some form of change in titles … But that’s not necessarily a bad thing or a good thing; that’s just business change,” Gazis observes. “What we’re seeing at the moment is partnerships not growing the way they used to, and so what we’re more likely to see is more people holding those titles than in the past as firms try and accommodate those people, because they won’t be able to offer partnerships and they might still need to maintain that level of talent in the business,” Gazis predicts. “While we’ll see title changes, we’re also likely to see more people holding those titles.” AL NOVEMBER 2014 | 7
NEWS / DEALS
Deals round-up $1.04bn Cbus Property sale of Melbourne CBD buildings Cbus Property has sold two of its buildings in Melbourne’s CBD. CBW Building sold to the GPT Group and GPT Wholesale Office Fund for $608.1m, and 700 Bourke Street went to AMP Capital Wholesale Office Fund for $433.5m. Cbus Property sought advice from long-time adviser Gadens, which has been working on both properties since they were development sites. The firm also recently advised Cbus Property on the acquisition of another Melbourne location: 447 Collins Street.
8 | NOVEMBER 2014
Transaction
Value (A$)
Adviser
Client
Lead lawyer(s)
Alsons Prime Investments takeover of Indophil Resources
$360m
Baker & McKenzie
Indophil Resources
Richard Lustig, Simon De Young
Boart Longyear recapitalisation
$387m
Ashurst
Bogart Longyear Limited
Sarah Dulhunty
King & Wood Mallesons
Bogart Longyear Limited board
David Friedlander
Minter Ellison
Centerbridge
Ron Forster, Ben Smith
Cbus Property sale of 700 Bourke Street to AMP Capital Wholesale Office Fund
$433.5m
Gadens
Cbus Property
Mark Poustie, Tony Greenaway
Cbus Property sale of CBW Building to GPT Group and GPT Wholesale Office Fund
$608.1m
Gadens
Cbus Property
Mark Poustie, Andrew Kennedy
Ceramic Fuel Cells rights issue
$13.7m
DLA Piper
Ceramic Fuel Cells Limited
Mark Burger, Dylan Burke
CHAMP Private Equity acquisition of Nuplex Specialties and Masterbatch
$127.5m
King & Wood Mallesons
CHAMP Private Equity
Mark McNamara, Michael Barker, Yuen-Yee Cho
China Merchants Bank fixed-term loan facility for Karara Mining
US$300m
Kott Gunning Lawyers
China Merchants Bank (Hong Kong Branch)
Louis van Aardt
Ashurst
Karara Mining
Gaelen Cooney
Coca-Cola Amatil Limited, The Coca-Cola Company and Coca-Cola Amatil Indonesia heads of agreement for share subscription
$566m
Ashurst
Coca-Cola Amatil Limited
Mark Stanbridge
Commonwealth Department of Defence procurement of centralised processing services
$940m
Clayton Utz
Department of Defence
Alexandra Wedutenko
Darwin Marine Industry Park project
Undisclosed
DLA Piper
Northern Territory Government
Scott Alden
JKW Law
Northern Territory Government
Danny Wauchope
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Transaction
Value (A$)
Adviser
Client
Lead lawyer(s)
Denham Capital investment in Auctus Minerals
US$200m
King & Wood Mallesons
Denham Capital
Mark McNamara
Doray Minerals and Mutiny Gold merger
$36m
Minter Ellison
Mutiny Gold
Adam Handley
Downer EDI acquisition of Tenix
$300m
Ashurst
Downer EDI
Mark Stanbridge
Clayton Utz
Salteri family and Olbia Pty Limited
Karen Evans-Cullen
DLA Piper
Dusit International
Dusadee Jittasaiyapan, Benjamin Hirasawa, Rod Besley
Dusit Thani Brookwater Golf & Spa Resort development
$550m
East West Link PPP
$6.8bn
Clayton Utz
Linking Melbourne Authority
Brad Vann
eCargo IPO
$224m
HWL Ebsworth
eCargo Holdings
Matthew Reynolds, Emma Cook
Exclusive Networks acquisition of WhiteGold Solutions
€25m
King & Wood Mallesons
Exclusive Networks
Nicola Charlston, Jérôme Jouhanneaud, Olivier Vermeulen
Findex acquisition of Crowe Horwath
Undisclosed
King & Wood Mallesons
Findex
Mark McNamara, Evie Bruce, Yuen-Yee Cho
Galaxy Resources sale of Jiangsu Lithium Carbonate Plant to Sichuan Tianqi Lithium Industries
US$122m
Allion Legal
Galaxy Resources Limited
Stuart Mengler, Phil Lucas
GPT sale of 818 Bourke Street Melbourne to Challenger FM Nominees
$152m
Gadens
GPT Group
Lui Scipioni, Rebecca Argyle
Growthpoint Properties refinancing
$925m
Allens
Syndicate lenders
Warwick Newell, Lisa Zhou
Gunns Tasmanian Forestry Estate sale to New Forests
Undisclosed
Ashurst
KordaMentha
Tiffany Barton
Huon Aquaculture IPO
$420m
Clayton Utz
Huon Aquaculture Group
Brendan Groves, John Brewster
Lazard Australia Private Equity buyout of Skybridge
Undisclosed
Allens
Lazard Australia Private Equity
Mark Malinas
Gunns Tasmanian Forestry Estate sale Ashurst advised KordaMentha, the receiver and manager of the Gunns Group of Companies, on the sale of the Gunns Tasmanian Forestry Estate. Negotiating an agreed allocation methodology on sale proceeds, a significant EOI process, and resolving issues of overlapping forestry rights in respect of included and excluded scheme assets added to the complexity of the sale. Ashurst’s work on the transaction also involved responding to a proposal to restructure the managed investment schemes operated by Gunns on a part of the estate, and supporting the liquidators’ application for court approval of the extinguishment of scheme interests so that the sale could proceed. The sale of the 175,000ha estate, which includes 100,000ha of hardwood and softwood plantations, takes New Forests to more than 500,000ha of forestland and plantations under management in Australia.
NOVEMBER 2014 | 9
NEWS / DEALS
Rabbitohs ownership change Peter Holmes à Court has sold his 37.5% stake in the South Sydney District Rugby League Football Club (the Rabbitohs) to a wholly-owned subsidiary of Consolidated Press Holdings. Partner David Morris, who led the DLA Piper team advising Peter Holmes à Court on the sale, previously advised Holmes à Court and Russell Crowe when they originally acquired the club in 2006. Earlier in the year, DLA Piper advised English Premier League football club Manchester City on its acquisition of A-League football club Melbourne Heart, now known as Melbourne City.
10 | NOVEMBER 2014
Transaction
Value (A$)
Adviser
Client
Lead lawyer(s)
Moree Solar Farm project
$164m
DLA Piper
Green Light Contractors
Jane Hider
North West Rail Link
$3.7bn
Allens
Consortium of financiers
Phillip Cornwell
Corrs Chambers Westgarth
MTR Corporation, John Holland, UGL Rail Services
Andrew Chew
Quest Serviced Apartments and The Ascott strategic investment partnership
$500m
Clayton Utz
Quest Serviced Apartments
Andrew Walker
Rabbitohs ownership change
Undisclosed
DLA Piper
Peter Holmes à Court
David Morris
Regis Healthcare IPO
$485.8m
Clayton Utz
Macquarie Capital, Evans and Partners, Morgans Corporate
Brendan Groves
Herbert Smith Freehills
Regis Healthcare
Michael Ziegelaar
Sime Darby Plantation takeover offer for New Britain Palm Oil
$1.97bn
Ashurst
New Britain Palm Oil Limited
Tim Glenn, Murray Wheater, Karen Davies
Skybus sale to Catalyst Investment and OP Trust
Undisclosed
HWL Ebsworth
Skybus
Peter Dreher, Tim Dorgan, Johnny Ho
State Street Bank and Trust Company S&P 500 ETF Trust ASX listing
Undisclosed
King & Wood Mallesons
State Street Bank and Trust Company
Susan Hilliard
Stockland sale of stake in Townsville Shopping Centre to AMP Capital managed fund
$228.7m
Lander & Rogers
Stockland
John Wells
Stockland acquisition of stake in Sugarland Shoppingtown from AMP Capital
$59.25m
Lander & Rogers
Stockland
Julian Olley
Tiger Resources acquisition of remaining shares in Kipoi Copper Project
US$111m
Norton Rose Fulbright
Tiger Resources Limited
James Stewart, Jake Howard
Veda Group acquisition of Kingsway Financial Assessments
Undisclosed
Allion Legal
Veda Group
Jon Cane
Woolworths’ syndicated fronted bank guarantee facility
$400m
King & Wood Mallesons
Woolworths
Yuen-Yee Cho, Elizabeth Hundt Russell
Firm Profile
The Financial Markets Conduct Act regime does it help or hinder trans-Tasman offerings? With the Financial Markets Conduct Regulations (FMC Regulations) being finalised on 3 November 2014, the Financial Markets Conduct Act (FMCA) regime is all ready to come into force on 1 December 2014. When it does, several pieces of current legislation will be repealed including the Securities Act, the Securities Markets Act, the Unit Trusts Act and the Superannuation Schemes Act. The language used in New Zealand’s financial market will change from “securities” to “financial products”, “securities markets” to “financial product markets”, “trustees” to “licensed supervisors”, and “managed investment schemes” will become a blanket term for the likes of KiwiSaver schemes, superannuation schemes and unit trusts. In addition, obligations of issuers and trustees will increase – with most being required to get licensed, improve governing documents and processes, and redo offer documentation to align with the new product disclosure statement and register entry combo. The FMCA does provide for a transition period of up to two years, under which issuers can continue to use “old” Securities Act documents or make an offer under the Securities Act regime after 1 December 2014. This will give market participants time to consider whether they want to jump through the required hoops to become a licensed manager or supervisor and how much time (and money) it will take to redraft existing offer documents and governing documents to comply with the new regime. Amongst all this change, one thing that is staying (substantively) the same is New Zealand’s transTasman mutual recognition scheme (the scheme under which securities, soon to be financial products, offered in Australia can be offered in New Zealand and vice-versa). The requirements in Part 5 of the Securities Act and the Securities (Mutual Recognition of Securities Offerings – Australia) Regulations will essentially be moved across to Subpart 6 of Part 9 of the FMCA and the FMC Regulations. This is reflected in the regulations Australia passed recently that amend its Corporations Act to take into account the new
regime, with most of the amendments relating to the new legislation names and terms used. The decision to keep the trans-Tasman mutual recognition scheme regime the way it is follows New Zealand’s trend of attempting to fall in line with current Australian legislation and procedures, as it attempts to narrow the gap between the two countries. So for those Australian issuers wishing to offer financial products in New Zealand, below is a recap of what will be required of you from 1 December 2014 under the new regime: • Your offer will need to be an Australian regulated offer • You will need to be entitled, under Australian securities legislation, to offer the financial products (which means the required disclosure document and notice has been lodged with the Australian regulator) • Before offering in New Zealand, you will need to lodge a notice with the Registrar of Financial Service Providers (Registrar) that states: - that you wish to make an offer under the recognition regime - the financial products to be offered and the length of the offer period in New Zealand and Australia - the full name and address of one or more persons resident or incorporated in New Zealand - that you submit to the jurisdiction of the courts of New Zealand - your New Zealand overseas offeror registration number (if any), and is accompanied by: - the Australian disclosure documents and any document that supplements them - a copy of any Australian exemption or declaration that is relevant to the offer - the constitution of the issuer or the registered scheme - a copy of any warning statement (required by FMC Regulation 271), and also: - is signed and dated by you (or your agent)
- states your name, the Australian registered scheme number (if any), the name of the person signing the notice on your behalf (if relevant) and the name of the person completing the notice and an address for communications. • Ongoing requirements during the offer period in New Zealand include: - remaining an Australian regulated offer - complying with Australian securities legislation - being open to the Australian public - providing, on request, a copy of the constitution of the issuer or the registered scheme - ensuring that none of your directors, senior managers or controlling owners are disqualified under section 14(2) of the Financial Service Providers (Registration and Dispute Resolution) Act - ensuring you have one person resident or incorporated in New Zealand - lodging notices with the Registrar in relation to certain events (set out in FMC Regulation 273). If you are an Australian issuer already offering in New Zealand, you will have the benefit of the two year transition period. This means that when you update your disclosure document after 1 December 2014 you can choose to either opt into the new regime by providing the relevant notice to the Registrar and registering your disclosure document on the new offers register or you can continue to offer under the existing regime and update your disclosure document on the Companies Office register. If you choose to opt into the new regime you will need to state this on your website. Lara Wood This article was written by Lara Wood, a senior associate in the Wellington office of Buddle Findlay, one of New Zealand’s leading law firms. Lara specialises in financial regulation, capital markets and securities, and funds management. Lara can be contacted on +64 4 498 7335 or lara.wood@buddlefindlay.com.
www.buddlefindlay.com
NEWS / APPOINTMENTS
Appointments
Presented by
LATERAL PARTNER APPOINTMENTS NAME
PRACTICE AREA
LEAVING
GOING TO
Scott Charaneka
Superannuation and wealth management
HWL Ebsworth
Thomson Geer
Richard Chew
IP and technology
Piper Alderman
Sparke Helmore
Stanley Drummond
Superannuation and wealth management
HWL Ebsworth
Thomson Geer
Rebecca Field
Banking and property finance
Ashurst
Corrs Chambers Westgarth
Alan Girle
Workplace relations and safety
Sparke Helmore
HWL Ebsworth
George Haros
IT, workplace relations, property, litigation, commercial law
Blue Rock Law
M+K Lawyers
Adeline Hiew
Financial services
Ashurst
Holding Redlich
Stephen Hill
Real estate
Fox Tucker
Minter Ellison
Carl Hinze
M&A
Dorsey & Whitney LLP
Holding Redlich
Dianne Hollyoak
Workplace relations and safety
Sparke Helmore
HWL Ebsworth
Peter Ickeringill
Corporate
Corrs Chambers Westgarth
Baker & McKenzie
Rob Kennett
Commercial litigation
HWL Ebsworth
Cowell Clarke
Tom Lennox
Banking and asset finance
Squire Patton Boggs
K&L Gates
Jacinta Long
Insurance
Sparke Helmore
Clyde & Co
Anne MacNamara
Financial services
Henry Davis York
Holding Redlich
Danielle Mildren
Real estate
Minter Ellison
Clayton Utz
Ren Niemann
Infrastructure and construction
Allens
McCullough Robertson
Alex Ninis
IT, workplace relations, property, litigation, commercial law
Blue Rock Law
M+K Lawyers
Matthew Pokarier
Insurance
Sparke Helmore
Clyde & Co
Dale Rayner
Banking and finance
Clifford Chance
Norton Rose Fulbright
Brendan Reilly
Construction
Allion Legal
Squire Patton Boggs
Lora Shaw
Government
HWL Ebsworth
Keypoint Law
Jon Simpson
Projects
Private consultant
Allion Legal
Peter Staniszewski
Banking and financial services
Finlaysons
HWL Ebsworth
Simon Taskunas
Real estate
Herbert Smith Freehills
Clayton Utz
Maxine Tills
Insurance
Sparke Helmore
Clyde & Co
Janet Whiting
Commercial litigation
Corrs Chambers Westgarth
Gilbert + Tobin
Ian Williams
Corporate M&A
Ashurst
Herbert Smith Freehills
Jennifer Wyborn
Workplace relations, employment and safety
Meyer Vandenberg Lawyers
Clayton Utz
12 | NOVEMBER 2014
AUSTRALASIANLAWYER.COM.AU
SENIOR ASSOCIATE APPOINTMENTS FIRM
LAWYERS PROMOTED OR LATERALLY APPOINTED
Allion Legal
Rebecca Cifelli
HWL Ebsworth
Kara Reynolds
Maddocks
Brigid Clark
PARTNER PROMOTIONS FIRM
LAWYERS PROMOTED
Allens
Nicholas Ng
Corrs Chambers Westgarth
Rhys Jewell
Sparke Helmore
Riaan Piek and Joanne Flitcroft
Ashurst’s Australia managing partner announces retirement After almost 30 years at the firm, including the past six years as its managing partner in Australia, Ashurst’s John Carrington retired from the firm’s partnership in October. There will be no successor to the role of Australian managing partner, and the responsibilities of the position will be shared across the firm’s Australia-based leadership group.
Clyde & Co launches Brisbane office with lateral hires
OTHER FIRM
LAWYERS PROMOTED OR LATERALLY APPOINTED
TITLE
Alicia Albury
Maddocks
Special counsel
Anne-Marie Allgrove
Baker & McKenzie
Global leader of the Information Technology & Communications Practice & Industry Group
Justine Ansell
M+K Lawyers
Special counsel
Anne Cregan
Gilbert + Tobin
Special counsel
Tom Darbyshire
Kott Gunning
Managing partner
Rebecca French
DLA Piper
Consultant
Anne Hurley
HHG Legal Group
Counsel and real estate team leader
Clyde & Co announced the opening of its Brisbane office in October and revealed the lateral hire of three partners from Sparke Helmore. The team comprising Matthew Pokarier, Jacinta Long and Maxine Tills will focus on all classes of insurance (particularly professional, directors and officers, product and general liability) as well as commercial litigation – with significant experience across the insurance, accounting, financial services, engineering, construction and corporate sectors. The firm has also announced plans to hire a further 20 lawyers in Brisbane before the end of this year, which will boost Clyde & Co’s staff in Australia to over 100.
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NOVEMBER 2014 | 13
PROFILE / JEREMY BRISCOMBE
Breaking new ground Yahoo!7 general counsel Jeremy Briscombe talks to Australasian Lawyer about working at the intersection of innovation and regulation “It’s very difficult to predict the future in a role like this,” says Jeremy Briscombe, general counsel for Yahoo!7. “It’s a really interesting place to work; a very different environment to any other media business that I’ve worked in before.” Looking at the range of matters he manages, it is easy to understand why. Any day could bring asset acquisition and disposal work, defamation litigation work related to search engine results, and work on projects associated with the commercialisation of user data, overseeing of the New Zealand business, or responding to requests from law enforcement and security agencies for access to information from email and instant messenger services. “I was probably surprised at first at how different the digital media space is to traditional media. There are some issues that overlap, the type of publication issues you have around defamation, contempt of court and those types of things, but other than that the businesses – one could be mining and the other could 14 | NOVEMBER 2014
be manufacturing, they’re that different,” he says. When his work takes him into uncharted territory, Briscombe says a back-to-basics approach is the best way to deal with novel matters and new technologies. “You go back to your first principles and you take it apart from there,” he says. Another point of difference is that Briscombe and his legal team of two senior legal counsel and two paralegals are all employed by Yahoo!, rather than the joint venture, due to governance rules in the initial joint venture document. The legal team is essentially “loaned out” to the joint venture, although 85% to 90% of the team’s work is for the joint venture. “It does get tricky at times where there may be a dispute between the shareholders or between a shareholder and the joint venture itself, so I have to be very careful in terms of which hat I’m wearing and how I’m advising,” he says. “There’s a lot of scope for conflict of interest, but I’ve set up some rules around that and just have to play it with a very straight bat.”
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NOVEMBER 2014 | 15
PROFILE / JEREMY BRISCOMBE
“It is very easy for lawyers, even very commercial lawyers, to sit back and say, ‘Here’s the advice, here are the commercial alternatives, but ultimately it’s your decision’, and push it back to the client as their decision”
16 | NOVEMBER 2014
SEEING THINGS FROM THE CLIENT’S PERSPECTIVE Briscombe has worked in-house from an early stage in his career. Having joined Allen Allen & Hemsley as it then was in 1996, he did rotations with the firm’s commercial and finance teams. It was on the commercial team that he worked for a number of the firm’s media clients. By the end of 1997 he had landed his first in-house role with the Fox Studios development in Moore Park. “It was a really fascinating role because we didn’t have huge budgets; we just needed to do everything,” he recalls, adding that the role was a mix of commercial work, pure legal work and project management, with tasks ranging from film and television co-production agreements and construction agreements for a theme park ride, to retail leasing agreements. “Even though it looks like a media role, it was a very, very broad business,” he says of his three years at Fox Studios. Seeking new challenges, Briscombe then headed to the UK where he joined pan-European pay TV channel Fox Kids Europe, initially working as a lawyer before moving into business affairs, where he remained when the channel was later acquired by Disney. As director business and legal affairs, and later vice president, business affairs, Briscombe focused on the financing, structuring and negotiation of production and co-production agreements.
According to Briscombe, his time in business affairs gave him an opportunity to see the work from a client’s perspective. “It was a nice way to step over the other side of the fence and build some empathy for my clients, because all of a sudden I was the client and I was instructing my in-house lawyers,” he says. “It is very easy for lawyers, even very commercial lawyers, to sit back and say, ‘Here’s the advice, here are the commercial alternatives, but ultimately it’s your decision’, and push it back to the client as their decision, but when it really is your decision and you’re evaluated on it you take it a lot more seriously,” he says. Returning to Australia for family reasons in 2008, Briscombe found a challenged market. “It was a very difficult time to come to Australia,” he recalls. “The GFC had hit, and at first I hadn’t intended to look for a legal job but to try and find that type of role I’d been doing in London on the business side, but it’s such a smaller market here.” After completing a master’s degree, he began looking for legal roles in the media, and landed a temporary role at Channel 7 before the opportunity at Yahoo!7 arose. Although working overseas was a valuable experience, Briscombe cautions other lawyers about the return to Australia: “It’s a really important thing to do, and I think the experience is great, especially in a market like Europe … but you want to have a re-entry plan.”
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“I wouldn’t even know where to start with appointing external counsel, because there’s no knowledge in the market; the deals haven’t been done before” KEEPING IT IN-HOUSE The innovative work undertaken by Yahoo!7’s legal team means it is not always easy to engage external advisers on matters. “I wouldn’t even know where to start with appointing external counsel, because there’s no knowledge in the market; the deals haven’t been done before,” Briscombe says. “For us the work requires so much direct commercial and operational knowledge that just can’t be found in external counsel … it would not be efficient from either a time or cost point of view to brief that type of work out,” he says, adding that it’s the challenging and highly technical work that motivates his legal team. Another reason why external legal advice is infrequently sought is that Briscombe is able to tap into Yahoo!’s global legal team. “It works out as a great resource for us. There’s work that we will do in this market which they may not be doing in other markets, but more often than not work we’ll be doing in this market will be a little bit behind what’s happening, especially in the States or Asia,” he says. “We definitely get to stand on the shoulders of giants there. These people have seen a lot of the issues before, will have very good precedents, and it’s a very collegiate team globally … there’s a lot of back and forth between the teams.” When the organisation does use external firms, Briscombe says it’s usually in circumstances where the legal team’s skill sets end, or where the scale of a private firm is needed. M&A work, litigation, and specialised areas such as industrial relations are matters on which advice from a firm may be sought. In those situations, Briscombe says his team usually weighs in a lot and works closely with the external firm, rather than simply handing a matter over. When working with an outside firm, he says he values lawyers who invest the time in understanding the commercial and operational drivers in his business. “Maybe for the lawyer that you assign to
that you’ve got to wipe off half their time for the initial contract, but the fact is that the work will flow after that because they’ve made the investment in understanding our business, therefore they’ll be the people that we go to.” Four years into the role, Briscombe says he’s still being challenged by the work, developing his skills and seeing new types of work. “For me, the day-today joy hasn’t reduced,” he says. “There’s always stuff that not only have I not come across before, but maybe no one in the market or in the territory has come across, or even globally sometimes. You’re always breaking some new ground.” AL
TRENDS TO WATCH 1. LAW ENFORCEMENT AND SECURITY AGENCIES SEEKING ACCESS TO DATA “We’re entering into an interesting period around the extent to which government wants access to people’s personal information,” Briscombe observes. “There’s obvious drivers for that: the world has become a lot more unstable and security is becoming a real issue, but often those things can really be an excuse for winding down people’s civil protections. It will be interesting to see with some of the new data retention laws that come in around access to information what shape they take … we want to work cooperatively with law enforcement, but we do have a high duty to protect information that people trust us with when they use our services.” 2. COMMERCIAL USE OF DATA “I think it’s inevitable if you’re going to provide effectively free services to people and you do it as a business, you’ve got to find some return, and from a customer point of view you’ve got to be very sensitive,” he says. “I think all of the digital businesses need to make sure that they build the trust of users that [their data] is not going to be used in a way that people find objectionable.” 3. THE MOVE TO MOBILE “The most rapid change that’s happening at the moment is the move from desktop to mobile, and while Yahoo!, Google, Facebook, all these businesses offer their products across both, from a purely business point of view they’re not equal … the revenue that you can generate from mobile is a fraction of what you can generate from desktop. Part of that is the format; you just don’t have the real estate,” Briscombe explains. “They are actually very disruptive business models; even if they appear to be in the same space, it’s not. The traditional digital media businesses, the ones that will survive the shift, will be the ones that will be able to adapt to mobile.”
NOVEMBER 2014 | 17
Mills Oakley: Why clients want credibility from firms The crowded Australasian legal services market has placed clients in the box seat when it comes to reviewing panel arrangements, cutting old ties and building new relationships with firms. While there have been many new market entrants in the past ten years, there is nothing new about the values which underscore a healthy firm-client relationship: credibility, reliability and trust. Mills Oakley CEO John Nerurker says that credibility is one of the first things clients look for in a firm. “Clients have a great deal of autonomy in deciding which firms to brief, but in our experience the flipside is that they also want to be able to justify that decision internally if the need arises.” Nerurker continues: “So they want to be comfortable that they would be able to explain to their board, or their management, why they chose to engage a particular law firm.” Mills Oakley has 30 ASX 200 clients, has been recognised in the Asia Pacific Legal 500 and is a member of the Commonwealth Government’s Legal Services Multi-Use List, all facts which the firm regularly references in its pitches to clients. “Our objective is to make it easier for clients to find the kind of information they need to make an appropriate business case within their organisation for using Mills Oakley,” says Nerurker. The second issue which Nerurker says that clients regularly raise is scale. “Again, I think this ties in with the question of credibility,” he says. “You might have a firm which looks terrific on paper; the partners might be first class. But if it’s a small firm and they’re swamped, or someone has gone on leave, the client is left high and dry – not a great look for anyone when there’s a critical transaction
needing to be completed. That’s why clients regularly ask about our bench strength. They know that lawyers are human; they get sick, they move roles – they want to know that their firm can handle all these challenges yet still provide a high level service.” Mills Oakley has 60 partners and over 350 staff based in Brisbane, Sydney, Canberra and Melbourne. The firm has consistently been named as one of the fastest growing law firms in Australia by both the legal and mainstream press over the past eight years. “We’re proud of our growth story, but we also think there is a very practical benefit for clients to work with a firm with our scale,” says Nerurker. “What it means is that clients can have confidence that when they engage us, they are engaging a firm with the depth of resourcing to cope with the peaks and troughs of their requirements.” Depth of resourcing – and particularly quality resourcing - may be something typically associated with traditional top tier firms, but times have changed. There is no longer any reason to pay top tier rates for top tier service. This issue is a passion for Nerurker, who has spent his ten years at the helm of Mills
John Nerurker CEO, Mills Oakley
Oakley building a formidable talent base lured from leading international and top tier firms. “Our experts in our leading practice areas are of the same calibre as those in tier one firms,” says Nerurker. “The difference is that you won’t be paying tier one rates at Mills Oakley. We don’t have the usual large firm overheads, and our clients are the direct beneficiaries of this.” Credibility, bench strength and value for money: these are the three values which place Mills Oakley in good stead to meet the demands of a rapidly evolving market. “We’ve been serving clients for 150 years, and we hope to be doing that for another 150 years into the future,” concludes Nerurker.
Thursday 21st May 2015 Shangri-La Hotel, Sydney
FAST FIRMS
20 | NOVEMBER 2014
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FAST FIRMS Supported by
It’s been a challenging few years for the Australian legal market, but while some firms have experienced a downturn, others have enjoyed increased revenue and grown their headcounts. Australasian Lawyer profiles the country’s fastest-growing law firms It’s a time of incredible change for the world’s lawyers, no matter who you speak to. Growing in-house teams, clients being more selective with what work they send to firms, and increased pricing pressures are all causing firms to step back and evaluate their strategies. The 2013/14 financial year could really be described as a tale of two types of law firms. On the one hand, some firms responded to these challenges by refocusing their offerings on selected practice areas, which was sometimes accompanied by a reduction in headcounts but often an increase in revenue. The second approach was growth. Through lateral hires and acquisitions of other firms, these firms have grown their headcounts, and with it their customer base and revenue. This year’s Fast Firms list showcases firms that have achieved growth in a range of ways. Although the result – increased revenue and/or headcount – is always the same, firms’ journeys to that point have been varied, and serve as a reminder that there is more than one way to take a firm forwards. AL
NOVEMBER 2014 | 21
FAST FIRMS
FASTEST-GROWING FIRMS BY REVENUE FIRM
2013 REVENUE
2014 REVENUE
GROWTH*
1
Mills Oakley
$57.9m
$76.5m
32%
2
HWL Ebsworth Lawyers
$151.0m
$183.0m
21%
3
People + Culture Strategies
$4.2m
$5.2m
20%
4
Wotton + Kearney
$28.0m
$33.0m
18%
5
Hall & Wilcox
$44.4m
$52.0m
17%
6
Moray & Agnew
$86.8m
$100.0m
15%
7
CBP Lawyers
$55.0m
$63.2m
15%
8
Marque Lawyers
$6.8m
$7.7m
12%
9
Thomson Geer
$92.9m
$101.6m
9%
10
Gilbert + Tobin
$162.1m
$176.5m
9% *rounded to nearest whole number
FASTEST-GROWING FIRMS BY HEADCOUNT % CHANGE*
LAWYERS (EXCL. PARTNERS) 2013
LAWYERS (EXCL. PARTNERS) 2014
% CHANGE*
ALL LAWYERS 2013
ALL LAWYERS 2014
% CHANGE*
57
36%
100
139
39%
142
196
38%
62
82
32%
146
203
39%
208
285
37%
CBP Lawyers
48
58
21%
120
158
32%
168
216
29%
HWL Ebsworth
154
185
20%
268
334
25%
422
519
23%
HopgoodGanim
33
34
2%
87
106
22%
120
140
17%
Hall & Wilcox
37
42
14%
89
104
17%
126
146
16%
Cowell Clarke
14
14
0%
23
27
17%
37
41
11%
AdventBalance
n.a.
n.a.
n.a.
130
144
11%
130
144
11%
Moray & Agnew
69
74
7%
177
189
7%
246
263
7%
Wotton + Kearney
13
15
15%
74
76
3%
87
91
5%
PARTNERS 2013
PARTNERS 2014
Mills Oakley
42
Thomson Geer
FIRM
*rounded to nearest whole number
Here’s a closer look at the 10 fastestgrowing firms by revenue for 2014 22 | NOVEMBER 2014
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GILBERT + TOBIN
10
Partners: 68 (0% increase) Lawyers: 227 (0.1% increase) Revenue: $176.5m (9% increase)
Danny Gilbert Managing partner
Although Gilbert + Tobin has recruited a number of industry leaders across a range of practice areas over the past year, the firm’s partner and lawyer headcounts have remained steady. The strategy of seeking high-profile recruits has helped to deliver a 9% increase in revenue in the last financial year, taking the firm to $176.5m, up from $162.1m in FY2012/13. The firm worked on a number of significant deals, including the Woolworths Holdings Limited (South Africa) $2.15bn acquisition of David Jones by a scheme of arrangement, and advising the joint lead managers on the $3.6bn Healthscope IPO.
THOMSON GEER
9
Partners: 82 (32% increase) Lawyers: 203 (39% increase) Revenue: $101.6m (9% increase)
Adrian Tembel Chief executive partner
The merger of Thomson Lawyers and Herbert Geer was one of the biggest of 2014. The deal, which was finalised in March, created a firm with more than 80 partners and in excess of $100m in revenue. Chief executive partner Adrian Tembel told Australasian Lawyer earlier in the year that he had future plans to grow the firm: “The merger has given us bigger scale, and with bigger scale there is more capital freed up to invest. Our ability to move on opportunities has never been greater.” One such opportunity that the firm is eyeing is the opening of a Perth office, so the firm may also be a contender for the 2015 Fast Firms list.
NOVEMBER 2014 | 23
FAST FIRMS
MARQUE LAWYERS
8
Partners: 8 (0% increase) Lawyers: 17 (0% increase) Revenue: $7.7m (12% increase)
Michael Bradley Managing partner
When Marque Lawyers opened its doors in 2008, it had four partners, plus six lawyers and staff. The founding partners set out to reinvent the way law was practised, and sought a different approach to running their firm. “We agreed that every single decision we were going to make in how we were going to run our business, we would completely ignore the way things were done, the conventional wisdom, and just work it out for ourselves … that, I think, gave us a huge amount of freedom mentally to just be able to approach everything with a blank page,” says managing partner Michael Bradley. Taking an alternative approach appears to have worked well for the firm, which enjoyed a 12% increase in revenue over the last year.
CBP LAWYERS
7
Partners: 58 (21% increase) Lawyers: 158 (32% increase) Revenue: $63.2m (15% increase) CBP Lawyers ended FY2013 with close to $55m in revenue. One year on, the firm reported a 15% jump in earnings. The increase in revenue over the past year has also been accompanied by a 29% increase in overall headcount for partners and lawyers. CBP’s November 2013 merger with Hemming + Hart Lawyers added six partners and 15 lawyers, and a planning, government, infrastructure and environment team from Herbert Geer joined in the following month, bringing an additional three partners and seven lawyers. Dunstan de Souza Managing partner
MORAY & AGNEW
6
Partners: 74 (7% increase) Lawyers: 189 (7% increase) Revenue: $100m (15% increase)
Michael Pitt Managing partner
24 | NOVEMBER 2014
Moray & Agnew is one of the Australian firms that achieved considerable growth in both revenue and headcount over the past year. With a focus on streamlining management, reducing costs and improving efficiency, the firm reached triple-digit revenue for the first time. The firm’s increased partner and lawyer headcount has been achieved through a combination of organic growth and lateral hires, including a DLA Piper government and administrative law team led by partner Norman Abrams and special counsel Lazarus Dobelsky, who joined the firm’s Melbourne office in May, while DibbsBarker partner Peter Crethary and his team of five joined the firm in Brisbane.
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HALL & WILCOX
5
Partners: 42 (14% increase) Lawyers: 104 (17% increase) Revenue: $52m (17% increase)
Tony Macvean Managing partner
Among the highlights of the past year for Hall & Wilcox was its expansion into Sydney. In February the firm acquired the Sydney office of New Zealand law firm Duncan Cotterill, which included three partners, plus lawyers and support staff. In May, the Sydney team was joined by a team from McCabes, adding another two partners, plus lawyers and support staff. Sydney is now home to seven Hall & Wilcox partners and there are plans to grow the team further. However, not all of the headcount growth is as a result of Sydney – the firm has also increased the team through a combination of organic growth and lateral hires. A strong year across all of the firm’s practice areas led to a 17% increase in revenue, taking the firm’s income over the $52m mark.
WOTTON + KEARNEY
4
Partners: 15 (15% increase) Lawyers: 76 (3% increase) Revenue: $33m (18% increase)
David Kearney Chief executive partner
The 2013/14 financial year opened strongly for Wotton + Kearney. The firm launched its Brisbane office in July 2013 with an initial headcount of one partner, one senior counsel and two lawyers. In the 12 months since, the Brisbane office has doubled in size, and is expected to continue growing. In its first year, the new Brisbane location contributed 5% to the firm’s total revenue. Overall, Wotton + Kearney achieved 18% revenue growth, earning $33m, up from $28m in the previous financial year. The firm attributes much of this growth to its insurance focus, which has helped to differentiate the firm and enabled it to capture a greater market share of insurance work.
NOVEMBER 2014 | 25
FAST FIRMS
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PEOPLE + CULTURE STRATEGIES
3
Partners: 4 (0% increase) Lawyers: 7 (13% decrease) Revenue: $5.2m (20% increase)
Joydeep Hor Managing partner
It’s been quite a year for People + Culture Strategies, with the four-year-old firm achieving 20% revenue growth. Now in the new financial year, the firm has already expanded into Melbourne with three lawyers, and has plans to expand its Victorian practice. Further office openings are also on the cards. PCS aims to become a national firm and has plans to expand into Brisbane and Perth in the next 18 months. Managing principal Joydeep Hor says he hopes the firm will continue its double-digit growth. “PCS will continue to grow in the next 12–24 months as a result of acquiring senior practitioners in the employment law space, with portable practices on a national basis, and also expand the range of services currently provided,” Hor says.
HWL EBSWORTH LAWYERS
2
Partners: 185 (20% increase) Lawyers: 334 (25% increase) Revenue: $183m (21% increase)
Juan Martinez Managing partner
Through a number of lateral hires and the strategic acquisitions of other law firms, in a relatively short period of time HWL Ebsworth has grown to one of the largest legal partnerships in Australia. The firm began the 2013/14 financial year with 154 partners and ended the year with 185. Likewise, lawyer numbers grew from 268 to 334. The acquisition of an Adelaide law firm contributed to this growth in 2014. The firm acquired Kelly & Co after a unanimous vote in April. The 14 Kelly & Co partners and their legal and support teams joined HWL Ebsworth in July, forming the foundation of its new Adelaide office. The firm’s strategy has paid off, with a 21% increase in revenue over the past year.
MILLS OAKLEY
1
Partners: 57 (36% increase) Lawyers: 139 (39% increase) Revenue: $76.5m (32% increase)
John Nerurker CEO
26 | NOVEMBER 2014
In only a decade, Mills Oakley has been transformed from a single-office firm to a national legal brand. Under the leadership of CEO John Nerurker, the firm has grown from a partnership of 16 to 57, and added offices in Sydney, Brisbane, and most recently Canberra. The firm owes much of its success to its lateral hiring, which has brought in talent from top-tier firms, along with many of those partners’ clients. The strategy appears to be paying off: Mills Oakley has enjoyed double-digit growth every year for the past 10 years, a feat that few other firms can claim. This year has been no different: the firm’s revenue has increased by an impressive 32%, and it is also the fastest-growing firm in terms of headcount, which is up 38% overall from the previous year.
SPECIAL REPORT / NEW ZEALAND
New Zealand Special Report With 2014 coming to a close, New Zealand’s law firms reflect on a strong year and share their predictions for the year ahead.
“It’s quite a different story to the one that could be told by any firm two years ago,” says Chapman Tripp’s managing partner Andrew Poole about New Zealand’s legal market. The past 12 months have seen firms enjoy a relatively even spread of work across practice areas, with an increase in corporate activity and continuing work in areas such as construction and litigation. Despite the sense of momentum, firms have remained circumspect about the underlying market 28 | NOVEMBER 2014
dynamics. “It’s a reasonable economic climate; there are more deals around, and that’s fuelling more legal work, but the fundamentals haven’t really changed,” says Buddle Findlay national chairman Peter Chemis, citing pressures that would also be familiar to Australian firms, such as increased pricing pressure and the growth of in-house teams. “Our revenues are the strongest they’ve ever been, but you’re just not quite sure where it’s going, and you have to run very fast to
AUSTRALASIANLAWYER.COM.AU
ACROSS THE BOARD
maintain them. None of us can be pessimistic, but practice is very different.” In Poole’s opinion, “the pricing pressure is no less acute than it has been, and there is exactly the same level of capacity in the market that there has been in New Zealand for years. “I don’t see the market as a whole as having changed fundamentally,” he says, “and I think it’s still a scenario where revenue standing still or moving forward slightly is a positive story.”
When it comes to workflows, corporate is the area firms usually mention first. “If you look at the market as a whole, you would call it steady to more buoyant, and that’s a reflection of business confidence being particularly high, and that’s been most evident in the corporate work that’s come through,” says Poole. “You know that when corporate starts to get more buoyant, the economy is genuinely starting to recover,” he adds, citing good activity across equity capital markets, IPO and M&A work. Increased corporate activity for New Zealand’s lawyers is also good news for Australian firms. “It is traditionally the case that the New Zealand market leads the Australian legal market by six to nine months, sometimes 12 months,” says Poole. “Australian managing partners are always pleased to hear when the New Zealand market is starting to do well after a flat patch, because, like night follows day, the Australian market will pick up as well.” According to Bell Gully chairman Roger Partridge, capital markets has been a standout performer. “We’ve had a number of listings, and in fact an unprecedented number of listings, looking back over the last 10 years or so.” In contrast, firms’ opinions on M&A work were mixed. In Russell McVeagh CEO Gary McDiarmid’s view, M&A work continued to be reasonably patchy in 2014, with a number of relatively small deals but only a few very large transactions taking place. While international parties have played a major role in some of the biggest deals of 2014, New Zealand firms noticed a decline in work coming from the Australian firms. Although the NZ economy is performing strongly in world terms, “what doesn’t help is one of the biggest trading partners, being Australia, is not feeling so good, so that rubs off on the commercial sense and then inevitably onto the legal sector”, McDiarmid says. Meanwhile, local businesses are likely to
Andrew Poole Chapman Tripp
“The pricing pressure is no less acute than it has been, and there is exactly the same level of capacity in the market that there has been in New Zealand for years” NOVEMBER 2014 | 29
SPECIAL REPORT / NEW ZEALAND
“The outlook for the New Zealand economy is better than at any time in the last seven or eight years” Roger Partridge Bell Gully
30 | NOVEMBER 2014
contribute to the increase in M&A activity in 2015. “We’re seeing reasonably high levels of investment, but I think we’ll see New Zealand businesses looking at strategic acquisitions: their balance sheets are in great shape, the economy is growing, and so I think we’ll see more strategic M&A,” Partridge predicts. Construction and infrastructure have also been strong performers for firms in 2014, and while the Christchurch rebuild has dominated many of the headlines around infrastructure work, “it’s not just Christchurch infrastructure; it’s infrastructure nationally”, says Partridge. Other projects that have kept firms busy this year include the $1bn Transmission Gully PPP and a number of irrigation projects around Christchurch. It is a similar story in property, with commercial and larger residential projects in Auckland adding to the rebuild work stemming from Christchurch. Yet what makes 2014 such an unusual year is the continuing work in insolvency and litigation. “Traditionally what we would see in an economy that’s really starting to boom is insolvency work and litigation work drop off, and corporate, property and finance work pick up. So we’ve seen that recovery in the teams that were quieter through the low cycle in the economy, but we haven’t seen a corresponding drop-off in the other parts of the business,” says Poole. “It may be that we’re not going to see quite the levelling off, including the traditional downturn in litigation in a much more buoyant economy. That’s because we’ve got such active regulators with a raft of fresh laws and regulations post-GFC. So we may actually see a much more even workflow in firms over the next few years, compared with what we would have expected historically coming out of a lower time in the economy.” Likewise, Simpson Grierson chairman Kevin Jaffe has observed an even spread of work across the firm’s practice areas. “It is difficult to pick out particular practice areas, clients or sectors which have been unusually
quiet,” he says. “Generally, demand has been pretty solid across the firm.”
AFTER THE ELECTION As with any election, New Zealand’s firms experienced a slowdown in work in the lead-up to the September poll. Now, with the campaigning over and the National Party returned to power, business as usual has resumed. Firms characterised the election result as a business-friendly one, and McDiarmid observes that the announcement was quickly followed by an increase in confidence. “One of the best immediate indicators of sentiment was the share market … from the moment the election result was announced the market lifted,” he says. The conclusion of the election is likewise good news for overseas investors, with the government intending to pursue international agreements such as a free trade agreement with South Korea, and the Trans-Pacific Partnership. “The political stability following the election and the prospect of a lower exchange rate will mean continued interest from international investors in New Zealand, across a range of sectors,” says Jaffe. In the new parliament, the National Party needs just one extra vote to get a majority in the House, and it has coalition agreements with three parties. Whereas in the previous parliament there was some legislation that the government had been unable to progress, that is not expected to be the case in this parliament. A number of legislative reforms are expected over the coming year, and firms anticipate that these changes will generate additional work. “One of the features of the election is that we won’t see some reforms unwound as might have happened if there’d been a change in government,” adds Partridge. “I think there’s a combination of change that will be pro growth, particularly in the resources and housing area, and there will be the status quo in areas which might have acted as something of a handbrake on growth, so I think there are twin effects which will hopefully have an impact on ensuring the economy continues to grow.”
LOOKING TO 2015 Improving market confidence and the govern ment’s legislative and investment agenda are likely to be key drivers of work for firms in the year ahead. Changes to health and safety laws are expected to generate work for firms as the new
SPECIAL REPORT / NEW ZEALAND
SNAPSHOT: NZ’S LEGAL MARKET “Our corporate team was very busy for the first half of the year, with a lot of M&A and capital markets activity in the tech and agri-business sectors in particular. There has been a lot of regulatory change this year, particularly around financial services, which has been good for lawyers across a number of our practice areas. Our litigators have been particularly busy this year, on the back of a number of major cases. We also do a lot in the local government sector, which provides good consistent work, particularly for our resource management teams.” – Kevin Jaffe, Simpson Grierson “We’re in a cycle now that won’t change. People are hoping it will change and that we’ll get more legal work and in-house teams will shrink, but in my view that’s not going to change any time soon. The law firms that specialise, that have the best senior staff, that provide the best service, that work collaboratively with clients, are prepared to reciprocate business and work in partnership and understand their business will succeed and do well. You might see some change in the big firms over the next five years. You might see there being less firms or less successful firms amongst that big group.” – Peter Chemis, Buddle Findlay “Something that has been consistent for years now, which has been welcome for top-tier law firms, is that whilst it has been relatively quiet for commercial activity, litigation, regulatory and civil litigation, has remained quite strong through that whole period. That continues to be very busy.” – Gary McDiarmid, Russell McVeagh
32 | NOVEMBER 2014
regulations impact not only on businesses but also the directors and senior officers of companies. “The overhaul of New Zealand’s health and safety regime will come into effect next year and will create significant new obligations on directors and organisations,” Jaffe says, adding that this is one of the areas his firm will be targeting for growth in 2015. Anticipated amendments to the Resource Management Act are expected to free up the supply of land in major cities for further housing develop ment, and social housing reforms are also on the cards – a boon for property lawyers, who will also see ongoing work from the Christchurch rebuild. “We also expect continued strong investment in major development and infrastructure projects, particularly around Auckland and Christchurch but increasingly in the regions as well. This will keep our resource management, construction and property lawyers busy,” Jaffe predicts. Changes to the Financial Markets Conduct Act, which have been dubbed a once-in-a-generation change to New Zealand’s securities laws, will require the rewriting of all disclosure documents for financial products, equity and debt securities and managed investment products and derivatives, and will keep firms busy for at least the next 12 months. Growth in general corporate and commercial work is also expected and will likely lead to a lift in related practice areas such as finance, and additional capital markets activity. “I don’t think there’s any shortage of capital at the moment, but I think it’s a matter of people being prepared to take that next step … there’s every indication that it will take off next year,” McDiarmid observes. “New Zealand is in for a sustained period of economic growth.” However, after an extended period of activity, insolvency work is expected to tail off. “The only thing sitting on the horizon that might cause that to be different is the falling milk price on the global market and what impact that will have on current debt levels in the dairy sector amongst farmers,” says Poole. In Partridge’s view, “the outlook for the New Zealand economy is better than at any time in the last seven or eight years: growth prospects are strong; we’ve got stable government; confidence levels remain high. “The legal business has never been easy,” he says, “and it will remain very competitive, but I think we’re more positive looking at the next 12 months.” AL
AUSTRALASIANLAWYER.COM.AU
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Residential
$4bn
$40bn
10%
infrastructure repair
estimated rebuild cost
15% 50% 25%
Commercial
130,000
residential properties to be repaired or replaced
70%
of CBD buildings demolished or awaiting demolition
Source: Christchurch Central Development Unit
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NOVEMBER 2014 | 33
FEATURE / GO YOUR OWN WAY
Go your own way Starting a law firm – it can be an appealing idea for many. Australasian Lawyer spoke to some former large law firm partners who left to open their own practices
“I’d always contemplated that at some point in my career I’d have my own practice and I’d work in a smaller firm environment,” says former DLA Phillips Fox partner Matt Hay of the decision to launch his own firm, Succeed Legal, earlier this year. Whether it stems from an entrepreneurial spirit, a desire to change the things that frustrate them about law firm life, or having greater control over their practice, there is no shortage of former partners of large law firms who go on to open their own firms. For Greenwood Roche Chisnall partner John Greenwood, the prospect of setting up something completely new was one of the reasons why he finally took the plunge. “It was quite a buzz at the time,” he says. “It still is, actually.”
DOING THINGS DIFFERENTLY For the partners interviewed by Australasian Lawyer, the desire to have a greater say in how their firms were run featured prominently in the decision to go out on their own. “[Partners in large firms] have the liability of a partner, but they don’t necessarily have the ability to manage or control the business that they are the proprietors of, and I think there’s a 34 | NOVEMBER 2014
natural tension there,” says Yeldham Price O’Brien Lusk director Tim Price, a former partner at DLA Phillips Fox, as it then was. Greater flexibility and the ability to take on work without being limited by conflicts, which often arise in large firms, were also pros from Price’s perspective. For Hay, the decision to leave his former firm stemmed from consideration of how his practice fitted in with the firm’s overall aspirations. “My desire to continue to do that [private client] practice and to grow that part of my practice wasn’t entirely in alignment with what the firm wanted to do in terms of becoming primarily a business-focused law firm,” he says. “Whilst I’m sure they were disappointed to lose me as a partner, I think the opportunity to be able to refocus their offering was a positive aspect of my departure.” Like other former partners of large law firms, Marque Lawyers managing partner Michael Bradley nominates time costing as one of his reasons for seeking out an avenue to do things differently, saying time costing is “completely crazy and doesn’t work for anybody”. Other factors include the way law firms and lawyers present themselves to and
AUSTRALASIANLAWYER.COM.AU
“When you’re inside a large firm looking out, you really do wonder: if you don’t have that name … will anyone send you work?” Tim Price, Yeldham Price O’Brien Lusk
communicate with clients, and the “internally competitive business model” that exists in larger firms. Although he had previously spent four years as managing partner at Gadens, Bradley felt the changes he was seeking wouldn’t have been possible at his former firm or in another established practice; they were fundamental ones that underpinned the values of the organisation. For Bradley and Marque’s other founding partners, it was easier to create a new organisation with a particular set of values than to try to change the values of an existing firm.
A LEAP OF FAITH Of course, the most daunting prospect of opening a firm is the uncertainty about whether clients will follow. “When you’re inside a large firm looking out, you really do wonder: if you don’t have that name … will anyone send you work?” Price says. While almost all of his clients followed him to YPOL, Price says he was surprised by their response to the new firm. “What was refreshing and really interesting was that clients were extremely suppor tive, very interested, and in a sense appreciative that you were doing it because you were able to
offer them the same sort of service that they were used to in terms of quality, but at a significantly better price and in a much more efficient and seemingly approachable way.” Other lawyers interviewed also reported that a significant number of clients followed them to their new firms and reacted positively to the new practices.
FLEXIBILITY AND FREEDOM The process of starting a law firm may seem overwhelming to those just embarking on that journey. “There were obvious logistical challenges,” says Price. “Coming from a large law firm where you never have to think about turning off the lights at the end of the day, or how your computer works, or who decorated your office, and then actually having to do literally all of those things is an interesting change.” But for those who have lived to tell the tale, it is not as difficult as expected. “At the end of the day, if you’ve got a laptop, a practising certificate and a suit, you can practise as a lawyer,” observes W Advisers principal Mark Wilson. And for those practitioners who miss having other colleagues to consult and confer with in practice areas outside their own,
NOVEMBER 2014 | 35
FEATURE / GO YOUR OWN WAY
Wilson advises forming connections with other boutique firms. “The boutique community is very vibrant, and by chatting [with lawyers in other boutique firms] you can recreate in a virtual way the same sorts of groups of expertise that you have in larger firms.” Although he found the logistics of setting up a firm were relatively straightforward, Bradley says putting the new firm’s philosophy into effect proved more difficult. “I think the biggest challenge in the early years for us was getting our own heads around the philosophy that we had decided to pursue, which required us to completely re-educate ourselves as well as our clients in the way that we think,” he says. “We made the decision when we started that we were going to reinvent everything,” Bradley recalls. “As a matter of principle we agreed that every single decision we were going to make in how we were going to run our business, we would completely ignore the way things were done, the conventional wisdom, and just work it out for ourselves … that I think gave us a huge amount of freedom mentally to just be able to approach everything with a blank page.” Although Marque has adopted a number of conventional law firm practices, such as using similar computer systems, being prepared to explore every question afresh and work out the answer that suited the firm best was liberating and has produced great results for the firm, Bradley says. What Bradley appreciates most about running his own firm is being able to pick his team. “The nicest thing of all is that you get to choose who you work with. It is an amazing luxury, and it is such a source of joy because it means that you end up in a position where every person you work with is someone you like. Not many people have that,” he says. For Wilson, the ability to set his own direction and work style, and then build a team around that, is one of the things he has enjoyed most about establishing his firm. “At a larger firm there’s a fair bit of choosing your turf and staying within your
“Whilst I’m sure they were disappointed to lose me as a partner, I think the opportunity to be able to refocus their offering was a positive aspect of my departure” Matt Hay, Succeed Legal 36 | NOVEMBER 2014
turf … I relish the opportunity to have a broader practice area,” he says. When asked what’s next for his firm, Greenwood says the plan is to try to stay small. “We want to maintain our culture; we don’t want it stretched too far. [Once a firm gets to a certain size] I think you start to lose that intimacy and that connection, which is all-important in any working environ ment,” he says. “As soon as you start stretching the numbers, then you’re going to talk about ‘well, we need three or four managers to look after us’, when at the moment we manage our own show completely.” Price and Bradley likewise have no desire for their firms to become significantly larger.
KEEPING AN EYE ON THE COMPETITION But how do these large law firms view practices opened by their alumni? “It’s a very competitive environment so I think they see them negatively, at least initially,” says Price, adding that this view does not always persist. “I know from my experience in this firm that a number of other large firms would not regard us as competitors but as very useful participants in the legal market, because they’re able to send us oneoff tasks for clients and they’ll know that we’ll be able to provide those clients with a good service where they can’t for conflict reasons and the like.” According to Hay, his former employer even refers matters, particularly private client work, to his new firm, and, likewise, Succeed Legal refers transactions that are beyond the firm’s capacity to DLA Phillips Fox. Regardless of the relationships between big firms and the start-ups, Bradley believes these boutiques run by ex-partners of large law firms are a trend big firms should take seriously. “As more people break away, start firms and succeed, then obviously that’s sending a pretty powerful message back to their peers that it’s possible … If I was running a big firm, I would be worried about that because a firm’s goodwill largely rests in the hands of the partners, so if you start losing a few of them because they want to do something different, that would become an existential risk.”
‘FORTUNE FAVOURS THE BRAVE’ Lawyers considering opening their own practices will often consider questions like where to open their offices, who to hire, what areas their firms will
AUSTRALASIANLAWYER.COM.AU
specialise in, and so on, but Bradley says there’s a more fundamental question that needs to be asked first: why do it? “It’s easy to decide you hate what you’re doing and that you want to do something different, but if you don’t know what that thing is, then you’re not likely to end up much better off,” he says. “Not every new starter has succeeded; there are quite a few that haven’t … and I think it’s mostly because they didn’t work out what they were doing or why they were doing it.” Once plans are laid, law firm founders emphasise that the move should not be delayed for too long. “From the point of view of a person who is sitting in a large law firm today and thinking about ‘what do I do about my future?’, if they’re interested in backing themselves, then they ought to have a go, and it’s not as hard as they might think it is,” says Price. “My advice is that they should think seriously about it and they probably shouldn’t leave it too long … now that I’ve done it, I wish I’d done it earlier.” Wilson echoes that sentiment. “I would encourage
“It’s been a real buzz, and every day you turn up to work with a smile on your face” John Greenwood, Greenwood Roche Chisnall them not to leave it too long before they did it … fortune favours the brave,” he says. For those practitioners who are concerned about what they would do next if their start-up did not work out, Wilson observes that, depending on the circumstances, some firms will tell departing partners that there is always a place for them if they wish to return. Although starting a firm from scratch is not without its challenges, Greenwood has no regrets about his decision to take a different path. “It’s been a real buzz, and every day you turn up to work with a smile on your face.” AL
START-UP FIRMS AT A GLANCE Greenwood Roche Chisnall
Marque Lawyers
Succeed Legal
W Advisers
Yeldham Price O’Brien Lusk
Opened
2005
2008
2014
2011
2007
Opening headcount
3 partners, 5 or 6 lawyers, and support staff
4 partners, 6 lawyers and staff
4
1 principal, 1 associate
4 directors and 10 professional staff
Founding partners’ former firms
Chapman Tripp, Bell Gully
Gadens
DLA Phillips Fox
Allens, Gilbert + Tobin, Linklaters, Atanaskovic Hartnell
DLA Phillips Fox, Minter Ellison
Current headcount
10 partners, almost 40 lawyers, and support staff
8 partners, 35 lawyers and staff
4, but with plans to grow the firm
1 principal, 4 associates
5 directors and almost 30 professional staff
Head of Dispute Resolution
Baldwins invites applications from experienced litigation lawyers with 10 to 15 years’ experience to apply for this senior leadership position in the Dispute Resolution Department in our Auckland office. We are looking for a person with substantial litigation experience, preferably in the contentious aspects of intellectual property.
Baldwins is a leading New Zealand specialist intellectual property law and patent attorney practice. Our teams of successful and dynamic lawyers and patent attorneys combine technical and legal expertise to advise clients on management of their intellectual property portfolios. We have a diverse range of clients from New Zealand start-ups to some of the country’s most successful companies, as well as multi-national corporations.
The successful candidate will have: • Litigation (including courtroom) experience in intellectual property law and commercial litigation • Demonstrated leadership ability • Experience in alternative dispute resolution such as mediation and arbitration • Excellent verbal and written communication skills • Strong organisational skills • A positive frame of mind and a drive for personal development
• A team player with the ability to work collaboratively with clients and other staff across the firm • Ability to develop client relationships and grow business • Client focussed with sound networking skills
Applications close on 28 November 2014. You must be eligible to work in New Zealand to apply for this role. If you are interested, please email your CV, with copies of your academic transcripts, and a covering letter by email to:
This role has high career progression potential. We offer ongoing development and training opportunities, competitive remuneration and a positive and professional working environment.
Lee Callaghan HR Manager lee.callaghan@baldwins.com
NOVEMBER 2014 | 37
PROFILE / SHANE BARBER
Taking it to the next level Shane Barber talks to Kathryn Crossley about Truman Hoyle’s merger with Bird & Bird There are few signs of the Bird & Bird merger when I visit Shane Barber at Truman Hoyle’s office. The building directory downstairs and the sign in reception still read “Truman Hoyle”, and apart from a book about the history of Bird & Bird in reception, you could almost be forgiven for thinking that Bird & Bird’s first office in Australia was still some time away from launching. Truman Hoyle’s managing partner, now the newly appointed Australia managing partner for Bird & Bird, explains that the firm only has a few days left under the old branding; when the office reopens on Monday morning, it will officially be part of the international firm, and have the name on the door to match. This fanfare-free view characterises the two firms’ approach to the merger. “It’s something that we’ve been working towards for nearly two years. We signed our cooperation agreement in March 2013, and we’ve been building towards a merger and full financial integration since then,” Barber says. “That was always the plan, but there were no time constraints put on that plan. It was always going to be at a time that made sense for both firms, and now is that time.” Taking the time to ensure that the merger was right from the beginning appears to have been a priority for both parties, and Barber says announcing the cooperation agreement in 2013 gave Truman Hoyle and Bird & Bird space to work out many of the 38 | NOVEMBER 2014
alignment issues before the merger was finalised, reducing the pressure to quickly finalise the deal before the information got out. “We’ve found in our two years of working with them that our people are very similar kinds of people. We feel very comfortable with them, and I think they do with us as well,” Barber says. And he observes that Bird & Bird’s “measured and orderly approach” to the market will make for a happy combination.
PERFECT MATCH Larger Australian firms are no stranger to merger enquiries from international firms, and Truman Hoyle is no exception. Although some queries led to more detailed discussions with a couple of firms, Truman Hoyle’s previous international suitors were more generalist corporate firms, rather than IP and IT specialists. “The narrative has to work for both firms,” Barber says. “For us, we’re very much a specialist neweconomy legal and regulatory advisory firm. Bird & Bird is very much that on a global scale. The merger with Bird & Bird makes sense at every level.” Barber believes this combination is emblematic of the shift in international mergers with Australian firms. “From here on in we will continue to see international firms coming into the market, but we should expect that those firms won’t be generalist firms,” he predicts. “Increasingly they’ll be specialist firms in different areas, and we’re already seeing that
AUSTRALASIANLAWYER.COM.AU
NOVEMBER 2014 | 39
PROFILE / SHANE BARBER
Australian practices in intellectual property, particularly contentious work, and transactional work for technology clients. The firm also plans to double its Sydney headcount over the next year or so to approximately 20 partners and 40 lawyers. “Two or three [lawyers] to one [partner] is a really nice size,” Barber says; it’s a ratio in line with the leverage at Truman Hoyle now. “The difficulty with very high ratios is that they’re an unsatisfactory experience for the client, and they’re certainly unsatisfactory for the lawyer, and they are quite exhausting for the partner,” Barber explains. After that, an additional office may be on the cards. Barber says the firm is exploring the idea of a Melbourne office: “Melbourne is another strong market in Australia where technology and intellectual property issues are very much the focus of business.”
“The narrative has to work for both firms… The merger with Bird & Bird makes sense at every level”
A NEW CAREER HIGHLIGHT
with Quinn Emanuel in relation to litigation, and Seyfarth Shaw in relation to employment law, Bird & Bird in relation to information technology and intellectual property, Clyde & Co in relation to insurance.”
TAKING ON THE WORLD So what’s next for Bird & Bird Australia? Truman Hoyle’s focus on TMT, renewable energy and the new economy will continue under the international brand, and there are plans to build up the existing
“Truman Hoyle was for me all about having a go at building what for me would be the ideal law firm, practising in the ideal areas of law, in the ideal way with the ideal people, and it has been a very enjoyable experience,” Barber reflects. “Those first five years when we were changing the character of the firm in every way really was a great way to have a creative outlet, which I really needed, and I’m sure many lawyers are the same,” he says. With the task of growing Truman Hoyle now at an end, Barber says the Bird & Bird transaction has joined the list as one of the most satisfying things he has done in his career, and he looks forward to the opportunities the merger will be able to provide, particularly to the firm’s younger staff. He recalls a partners meeting about the merger opportunity in December 2012: “We were talking about it and then one of my partners was looking out the door at the people diligently working away in their workstations and said, ‘Look, I think this is something we ought to do for their benefit … they’re great, loyal staff and I think the investment is worthwhile’.”
CAREER TIMELINE 1990
1993
1995
2000
2003
Begins Joins Gilbert + Tobin as Joins Optus as Joins PwC Legal Joins Truman Hoyle as practising law the firm’s 10th employed corporate counsel, and as a partner managing partner and at Baker & lawyer, working in oversees the launch of and Asiarecrafts the firm into a McKenzie property and then the C-series satellites Pacific head specialist legal and regulatory information technology and the Optus float of TMT law adviser to the new economy
40 | NOVEMBER 2014
2014
Truman Hoyle announces Bird & Bird merger; Barber is named Australia managing partner
AUSTRALASIANLAWYER.COM.AU
STRIKING A BALANCE Despite having managed Truman Hoyle since 2003, Barber has also continued to practise law, and believes that practising has aided and complemented his management of the firm. “You really get to be in the shoes of the people at the coalface of a law firm. I think you certainly get their respect, because the same demands that you have of others, you have of yourself,” he says. “My practice now is the busiest it’s ever been … The majority of my day is spent practising – a full billable day – and I really like that,” says Barber, who undertakes telecommunications regulatory work, advises on M&A matters in the TMT space, and acts for start-ups in the TMT sector. “I tend to squash management around the edges of things, and in a firm like Truman Hoyle you can do that and people chip in. The challenge for me will be to see that inside Bird & Bird I’m able to properly leverage the much more extensive resources they have to continue to do that, because it’s what I enjoy.” When asked how he manages full-time practice and his work as managing partner, Barber says he
“From here on in we will continue to see international firms coming into the market, but we should expect that those firms won’t be generalist firms” writes a lot of lists, one for each month, week, day, and sometimes even afternoon, in order to keep on top of everything. For him, the other key to thriving under such a workload is avoiding taking work home on weekends. “It’s beneficial to take time out and do physical exercise, spend time with your family, and just do the things that make life the special thing that it is, otherwise you will find that time passes very quickly,” he says. “You could just sit there 24/7 and work, but no one is going to thank you for it, and no one’s even noticing … and the things that were worrying you two months ago, you can’t even recall them today,” he observes. “Life only happens once.” AL
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AUSTRALIA’S NUMBER 1 LAW SCHOOL NOVEMBER 2014 | 41
FEATURE / EMPLOYMENT LAW
In search of the middle ground After a decade advising clients on employment law’s swinging regulatory pendulum, it appears that Australia’s employment lawyers in 2014 are benefiting from the existing Fair Work regime, and the current instability. Ben Abbott reports
Ask any leading partner in employment law how they would describe the current era in their chosen field, and it may be difficult for them to find the right words. Despite the federal government’s attempts to badge its efforts to date as workplace ‘reform’, for lawyers the words ‘stagnation’ and ‘instability’ seem more apt. However, this is – as they readily admit – not a bad thing for legal business. With a long decade of change that has involved WorkChoices (2005), the Fair Work Act (2009) and a string of amendments to that Act under the Labor government in 2013, Australia now has a new government that is cautiously attempting to find the middle ground, while navigating the treacherous waters of public opinion and an unpredictable senate, where the bulk of its amendments are 42 | NOVEMBER 2014
currently held up. In a busy period of limbo, employment lawyers are left advising on the full gamut of Fair Work issues, while helping clients prepare for whatever comes next.
THE POLITICAL PENDULUM Employment lawyers with a long-term view say the current era of workplace change really started with WorkChoices, which was not, in fact, good for firms. “WorkChoices killed off a lot of work for law firms,” explains Australian Business Lawyers & Advisors partner Joe Murphy. “Unfair dismissals went away for companies with less than 100 employees, and while there was a very brief peak in work, some of that bread-and-butter work went away, and some promised areas like breach of
AUSTRALASIANLAWYER.COM.AU
contract, for example, didn’t take off like predicted.” The following Labor government overhauled what lawyers call the ‘very plain’ and possibly ‘brutal’ aspects of WorkChoices. With the introduction of the Fair Work Act, the pendulum swung – some say much too far – back the other way. However, this marked a resurgence in work for firms – one that is still very much continuing. “The Fair Work era has been very good for law firms,” Murphy says. “We are still seeing the usual gamut of employment claims, from discrimination claims, to general protection claims, unfair dismissals and breach of contract. It’s a steady feast that keeps coming in and doesn’t seem to subside in any way.” With detractors zeroing in on the Fair Work regime’s perceived impacts on Australia’s produc
tivity and economic competitiveness, the search is now on for the middle ground – one that, for lawyers at least, still seems a long way off. “In the last year or so you’d have to say it [reform] has stagnated a little bit,” says Harmers Workplace Lawyers’ Michael Harmer. With most measures – including the Fair Work Amendment Bill 2014 and the construction industry-focused Building and Construction Industry (Improving Productivity) Bill 2013 – held up in the senate, the jury is still out on the eventual outcome for these reforms. And though both are considered important, Corrs Chambers Westgarth partner John Tuck says that, in the end, “the fundamental framework remains the same”. Enter the upcoming Productivity Commission review. This is expected to analyse Australia’s entire
NOVEMBER 2014 | 43
FEATURE / EMPLOYMENT LAW
JUSTICE SERVED IN WORKPLACE HARASSMENT CASES
“There are more [regulatory] changes on the horizon, and more instability in the sense that people are guessing really what is next” Joe Murphy, Australasian Business Lawyers & Advisors
For Harmers Workplace Lawyers, the landmark Richardson v Oracle Corporation Pty Ltd decision this year was one the firm was certainly pleased to have run. Raising the bar for damages in workplace sexual harassment cases, it awarded former Oracle IT executive Rebecca Richardson $130,000 plus costs on appeal in the Federal Court for harassment she endured at the hands of a co-worker. An initial decision by the Court had only awarded Richardson $18,000 plus costs, an amount described by the Court on appeal as “manifestly inadequate”. “It [the decision] has significantly raised the standard for damages in the whole area of sexual harassment and discrimination,” says chairman Michael Harmer. “It has been an important step forward in that whole area of law in the country.” Harmer says the decision provides clients with a clearer foundation for governance and compliance, while setting the scene for more significant damages awards in future and encouraging more worthy litigation. “The area has been constrained by the compressed levels of damages, but there is the potential for increased activity and attention from clients,” Harmer says. It is also expected to boost the amounts for which clients settle out of court. The decision was followed by the Federal Court’s Vergara v Ewin decision, in which a victim of workplace sexual assault was awarded half a million dollars. Harmer says his firm has been engaged in a number of high-level sexual harassment matters this year involving CEOs, where it was engaged to deal with the matters so as not to compromise business reputation. “There’s been some challenging work in that area over the last 12 months,” he says. workplace relations framework once more to provide recommendations for change, and lawyers are actively encouraging their clients to get involved in the process, in order to influence the government’s policies at the next election. “There are more changes on the horizon, and more instability in the sense that people are guessing really what is next,” Murphy says. “It will continue for the foreseeable future. The only way we are going to get a resolution to this constant chipping away is if the federal government is going to take a particular industrial relations policy to the next election, and if they have a mandate to make certain amendments, that will hopefully put to bed some of the problems.”
THE REWARDS OF AWARDS With new legislation held up, much of the focus is on the four-yearly review of modern awards currently being undertaken by the Fair Work Commission (FWC). In August 2014, Australian Business Lawyers & Advisors CEO Nigel Ward led a legal team to victory in the Federal Court, defending the FWC’s May 44 | NOVEMBER 2014
decision to cut penalty rates for casual workers in the restaurant and catering industry. The Court upheld that, upon application, penalty-rate entitlements could be reduced on Sundays from 75% to 50%, in a decision with important ramifications for the ongoing modern-award review process and other service industries. Michael Harmer says the decision in May has spawned “quite a number of challenges” to penalty rates in various industries, and that “the time was nigh” for employers who wished their current arrangements to be reviewed. The review is slated to happen every four years under the Fair Work Act. Murphy, who advises the NSW Business Chamber (the firm’s parent company), as well as Australian Business Industrial and the Australian Chamber of Commerce and Industry, says that although the FWC would prefer the review was “wrapped up as soon as possible”, in reality, work for law firms could end up lasting throughout most of next year, due to the inevitably adversarial encounters with different parties involved in the process. Harmer agrees. “Because the review will stretch
Australian Business Lawyers & Advisors is an awardwinning law firm supporting businesses in workplace relations, corporate and commercial law and property law. Whether representing ASX top 20 companies, small businesses or conducting major test cases for leading employer associations, ABLA works hard to live by its motto “experts make things simple.� Workplace law involves much more than legal capability. Done well, it also requires an understanding of human resource management, industrial/union relations and how workplace culture is formed and changed. This expertise, together with our understanding of front line leadership and the drivers of employee performance, ideally place us to assist you in your business. Our workplace relations practices in Sydney and Brisbane offer employers a full suite of employment law services and training as well as wider employee relations and strong industrial relations capabilities.
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FEATURE / EMPLOYMENT LAW
A ‘STEADY FEAST’: UNFAIR DISMISSALS AND GENERAL PROTECTION CLAIMS UNFAIR DISMISSALS
GENERAL PROTECTIONS
September quarter
4,048
879
December quarter
3,768
900
March quarter
3,510
880
Clients
Predominantly SMEs, high net worth individuals, and family owned businesses
ASX 200 companies, financial institutions, government, and heritage clients
Unfair dismissal claims have continued to occupy lawyers throughout 2014, with claims having broken through the 4,000 barrier in the September quarter last year. However, the key trend noted by employment law practitioners is an uptick in the use of the general protection provisions of the Fair Work Act. Lawyers expect general protection claims to increase, with additional ‘bolt-on’ claims like underpayment claims or other incidental breaches also on the increase. Note: Table shows claims lodged with Fair Work Commission, Jul 2013–Mar 2014
WHERE DID ALL THE BULLIES GO?
900
The number of expected anti-bullying claims per quarter under laws introduced from 1 January 2014
151
The actual number of anti-bullying claims received by the Fair Work Commission in the March quarter
46 | NOVEMBER 2014
into 2015, many of the significant material decisions on vital issues will come down next year,” he says. “That will mean that it remains a major area of focus, as we are advising fairly major employers looking to make progress and innovation in awards reform.” For Australian Business Lawyers, the FWC review means assisting with strategy and applications, preparing submissions, and almost daily appearances in court by one or a number of the firm’s practitioners on behalf of its clients, as the firm chooses to do its own advocacy rather than engaging barristers.
THREE AREAS TO WATCH Amidst the uncertainty, firms continue to advise clients on hot-button issues that are either on the increase, or in some cases are not as important as expected.
are now adept at compliance and managing those issues.”
PARENTAL LEAVE AND PREGNANCY With 1 July 2015 looming as the date for the introduction of Tony Abbott’s signature Paid Parental Leave Scheme, the area of parental leave and pregnancy is due to come to the fore for lawyers next year. Discrimination around pregnancy in particular is topical. “Employers are confused about how to do the right thing,” says Murphy. “It’s a minefield for employers, who risk falling into error because they are not across the rights and entitlements that do apply for employees who fall pregnant.” Employees are also confused, and Murphy expects “an increase in claims, that will be resolved but not successful in a legal sense”.
AN UPTICK IN ANTI-BULLYING? REDUNDANCY AND RESTRUCTURING The calendar year 2014 began with highprofile government decisions not to assist the likes of carmaker Toyota and SPC Ardmona, putting restructuring-related employment issues high on the agenda for business clients. Corrs partner John Tuck says restructuring work was a key trend for employment lawyers, particularly due to the tailing off of the mining boom, and its effect on manufacturing. However, redundancy itself may not be a large source of work. Redundancy is “becoming a part of working life,” Murphy says. “People are being regularly made redundant, and I think that the way the legislation is set up, businesses
A new anti-bullying jurisdiction that came into force on 1 January 2014 has been some what of a disappointment for firms. There were only 151 claims in the first quarter of its operation – much less than the 900 or so predicted. Michael Harmer says the first decision of the FWC in May “shed great light” on the extent of the anti-bullying qualification, and employers with the right processes, policies and procedures could now move forward confidently. He says it clarified what is and what isn’t bullying, and in regard to management action showed “it doesn’t have to be perfect, just objectively reasonable”. AL
The Health and Safety Reform Bill New Zealand’s workplace health and safety system is facing a major overhaul with the introduction of the Health and Safety Reform Bill (Bill) into Parliament in March this year. This article discusses a few of the key changes organisations can expect if the Bill is passed next year. WHY THE CHANGE? While a reform of workplace health and safety laws has been needed for some time, this need became strikingly more apparent after the Pike River Tragedy. The Royal Commission of Inquiry into the tragedy, along with the Independent Task Force set up to review New Zealand’s health and safety system, made various recommendations to the New Zealand Government in a bid to change the health and safety legislative framework in New Zealand. One of these recommendations was the introduction of new legislation to govern workplace health and safety. So in March 2013, Parliament introduced the Health and Safety Reform Bill. The Bill is largely based on the Australian Model Work Health and Safety Act, which was passed in most Australian states in 2012. The Bill is currently being reviewed by the Select Committee and is likely to be in force by the third quarter of 2015.
WHAT’S CHANGING? The Bill introduces new terms, new duties and higher penalties, along with stronger enforcement tools and court powers. New key terms introduced by the Bill include: • “Person conducting a business or undertaking” (PCBU): this phrase is a catch-all for workplaces and businesses and is designed to reflect new ways of doing business which have been established since
the existing legislation was passed 22 years ago. A PCBU excludes “volunteer associations” and occupiers of a home. • “Officer”: an officer of a PCBU not only includes directors of PCBUs, but also includes partners of partnerships and “any other person, who makes decisions that affects the whole, or a substantial part, of the PCBU (for example, the chief executive)”. • “Worker”: a worker means a “person who carries out work in any capacity for a PCBU”, including a contractor or subcontractor, a person gaining work experience, and a volunteer.
WHAT ARE THE NEW DUTIES? The primary duty on a PCBU under the proposed legislation is to ensure, so far as is reasonably practicable, the health and safety of workers employed or engaged (or caused to be employed or engaged) while the workers are at work. PCBUs will also have the duty of consulting with other persons who have a duty in relation to the same matter, including contractors and subcontractors and their employees when working on the same project. In terms of officers, they will have due diligence duties that are completely new to New Zealand workplace health and safety law. These duties include: • keeping up to date knowledge of workplace health and safety matters • gaining an understanding of the
nature, hazards and risks • ensuring the person running the business has and uses appropriate resources and processes to manage workplace health and safety risks • ensuring there is appropriate reporting • ensuring legal compliance • verifying the use of these resources and processes. It’s therefore important for organisations to identify who their officers are and ensure that these officers are meeting their proposed due diligence duties before the legislation comes into force.
OTHER CHANGES The Bill also contains extensive worker participation provisions requiring, amongst other things, engagement with workers who carry out work for the PCBU and who are directly affected by that work. Health and safety representatives will be given broad powers under the proposed worker participation provisions.
PENALTIES Penalties will increase under the proposed legislation, with a maximum fine of $3m for a PCBU and $600,000 and/or 5 years’ imprisonment for an officer who engages in reckless conduct in relation to health and safety.
FURTHER INFORMATION The changes are extensive and we’ve only provided you with a brief summary in this article. So if you’d like any more information, please contact John Rooney, Partner, Simpson Grierson.
John Rooney Partner Simpson Grierson +64 9 977 5070 john.rooney@ simpsongrierson.com
NOVEMBER 2014 | 47
PROFILE / MICHAEL KADOURY
The best of
both worlds Jerusalem may seem an unlikely first destination for a start-up Australian firm with international aspirations, but as KWS Legal senior partner Michael Kadoury explains, it’s a perfect match
48 | NOVEMBER 2014
AUSTRALASIANLAWYER.COM.AU
“Behind Silicon Valley, this is the second biggest place for start-ups in the world,” says Michael Kadoury of his adopted home. “You really have the best of both worlds in Israel, in that it’s got the old and the new, especially Jerusalem. You’ve got a very old city … but at the same time it’s a city that’s embracing technology,” he says. When asked what makes it such an innovative nation, he cites conflicts and compulsory army service as possible drivers: “Because of the pressure cooker that is here in Israel … it makes people rush to just try to achieve what they want in terms of their life goals.” For Kadoury, who specialises in start-ups, Israel was an ideal place to expand KWS Legal, which first opened in Sydney in 2011. “Australia is great on commercialising technology, and that’s where our strength is … whereas Israel is great on creating new technology, but I think they’re a little weaker on commercialising, and that’s why I’m seeing a lot of synergy between the two cultures.” When Israel opened its legal market to foreign firms in 2012, KWS Legal was one of the first to open an office. “We’re the third foreign firm to open up in Israel officially with the Israeli Bar Association, and we’re the first Australian firm,” says Kadoury, who speaks Hebrew and can also understand Arabic. The move appears to have been a successful one, with the firm acting on a number of transactions between the two countries. “Since the beginning of this calendar year we’ve had 11 Israeli companies that have opened up or done big deals in Australia, and two Australian companies that have moved to Israel. We’ve been able to do some of the largest trade deals in terms of private company deals between Australia and Israel,” Kadoury says. In fact, KWS Legal has negotiated and overseen 12% of the annual trade from Australia to Israel, and 5% of trade from Israel to Australia. KWS has also been working with three other Australian law firms to set up an Israel-Australia investment fund to increase trade and collaboration between the two countries, particularly in the property and technology spaces. While 70% of the firm’s Israeli client base comprises local start-ups that have grown to the expansion stage, KWS has also picked up government work and a variety of matters for individuals, such as divorce, cross-border litigation, wills and estate matters. The Jerusalem office has also undertaken work on behalf of Australian companies doing
NOVEMBER 2014 | 49
PROFILE / MICHAEL KADOURY
business in Israel, and both Australian and Israeli embassies have referred work to the firm’s offices.
MAKING OUTSOURCING WORK Tapping into the wealth of foreign legal expertise living locally in Israel has allowed the firm to take on a broad range of international work. KWS Legal has a network of 30 to 40 foreign-trained (including Australian-trained) lawyers based in Israel that it brings in to work on particular matters. The firm has also used local lawyers as paralegals on Australian matters. Kadoury says outsourcing has been popular with most clients as lawyers’ wages are lower in Israel and the firm has been able to pass the savings on. Outsourcing is hardly a new trend in the legal industry, but it is a practice that can be difficult to manage. “In our industry you’ve got to be careful who you bring in,” Kadoury warns. “The advantage of being here when we’re doing outsourcing is that I can actually meet the applicant, select them properly; it’s not just some random team overseas that you don’t know … we’re interviewing the people, we’re managing them, and the work gets done properly.” When it comes to outsourcing, Kadoury emphasises the importance of knowing exactly what work you need to have done, and doing a careful cost-benefit analysis. “There are areas that it just won’t be appropriate for and then there are areas where it makes a lot of sense to do it,” he says.
“You really have the best of both worlds in Israel, in that it’s got the old and the new, especially Jerusalem. You’ve got a very old city … but at the same time it’s a city that’s embracing technology” THE SIX-DAY WEEK The six-day working week stands out for Kadoury as one of the biggest changes to adapt to when working in Israel. “One of the advantages that I’ve got being Jewish and religious is that on Saturdays you’re not allowed to use phones at all, so you get one complete day of true rest, and there is no computer or phone around you. You’re just relaxing for one day, and that gives you the energy for the rest of the week,” he says. In Israel’s legal industry, fixed-fee billing is the norm and hourly fees are rare, yet when it comes to drafting, Kadoury says the Australian plain-English approach has proved popular with clients, who often 50 | NOVEMBER 2014
receive American-style legalese-laden contracts from local lawyers. “When we come in it’s quite fresh, and it is appreciated,” he says. In another contrast with Australia, Kadoury says it can take a month or longer to set up a company in Israel. Israel’s tight-knit network of in-house lawyers has also been a positive for the firm as it establishes itself locally. “One of the great things about being in a smaller country is that everyone talks to the next person … if you do a good job for one of them, you’ve got five others before the end of the week.”
GROWTH PLANS Although the firm has grown to three offices since opening in 2011, KWS Legal has further expansion plans. “Within the year we’re hoping to have a full national firm,” Kadoury says, listing Adelaide, Darwin, Perth and Brisbane as locations where the firm will soon be opening. Further international locations are also on the cards, with New Zealand and American offices to be launched in the next year or so, and opportunities in France, South Africa and the UK also being explored. “My approach to business is to treat the law firm like any other technology start-up. The advice I give to our clients I give to ourselves, and that’s what we’re doing,” Kadoury says of the firm’s expansion plans. “Now the balance is keeping our culture and our core values intact as we grow.” In Jerusalem, KWS Legal is already in the due diligence stage of acquiring a French-Israeli property law firm that has been operating in Israel for 20 years. The two firms are now working in the same office, and after the acquisition the total KWS headcount in Israel will be nine full-time employees. When asked how he manages the time differences, Kadoury admits that serving his Australia and America-based clients from Israel sometimes comes at the cost of sleep, but technology and the ability to work from home when needed have allowed him to make it work. “I don’t think we could have done what we’re doing today even six years ago … Technology has definitely pushed us to the next level.” He says the other secret is the high number of working mothers employed by the firm in Australia. “A lot of our lawyers might leave work at three to do school pick-ups, and then feed the kids, put them to sleep, then at eight or nine o’clock at night jump back on the phone and they can talk to me during a comfortable time for them, which works great for us
AUSTRALASIANLAWYER.COM.AU
here in Israel, so it’s a win-win. Our clients love it because it means that they can talk to their lawyers during work hours and get things turned around very quickly,” he says. Kadoury and his family are planning to spend at least five years in Israel, but after that the firm’s expansion plans mean that another international move may be on the cards. “I’ve got a lot of JewishAustralian lawyers who want to come to Israel … We’ve hired a couple of lawyers in Melbourne now who know that that’s their plan, and that’s great for us because they get trained over there and then they can move out here in the future, which may free me up to either move back [to Australia] or somewhere else.”
KWS LEGAL’S EXPANSION PLANS Jerusalem 2013
USA 2015/16
LIFE IN JERUSALEM For Kadoury, relocating has not only provided business opportunities but also fulfilled his longheld dream of living in Israel. “It’s still got that oldcountry lifestyle that you would have had in Australia years back. The values are here,” he says. “We had our fourth baby here in Israel, and all the neighbours chipped in and made food for us for the month after the baby was born. Everyone just jumps in and helps,” he says. “Culturally, it’s been great for the kids. It’s a great country to raise children, but it also means I can be home a lot more. Having to do a lot of international travel, being based in Israel as opposed to Australia you can be back literally the next day if you’re doing a trip to Europe,” he says. Although he now lives closer to Europe, Kadoury admits to missing Bondi Beach. “Jerusalem has no beach, so that’s probably been the second-hardest thing after having to work on Sunday,” he says. “The flipside is I’m able to watch rugby league live here through internet streaming; I wouldn’t have moved here if I couldn’t do that,” says the third-generation South Sydney Rabbitohs supporter. “Coming out of a peaceful country like Australia, war is a shock,” he admits. “It’s a big cultural shock to suddenly have air-raid sirens going off and kids freaking out.” Although security tensions make headlines in Australia, it usually has no real impact on day-to-day life. “It sounds a lot worse when you’re reading things from Australia. They focus on one suburb probably when they look at what’s going on. When you’re living here you don’t see much of it,” he says. “I think you get used to things. It took me a while to understand that when you’re going into a shopping centre here they check your bags going in, not going
Darwin 2015
Brisbane 2016
Perth 2015/16
Sydney 2011 Adelaide 2015 Melbourne 2014
New Zealand 2016
Also exploring future office locations in France, South Africa and the UK
out … It’s those little things that you do notice.” Kadoury recounts the story of a meeting he had at the Diamond Exchange in Tel Aviv when an air-raid siren went off. “What ended up happening is you’ve got 50 people, complete strangers, all in a bomb shelter stuck there for about 10 minutes – I ended up picking up two new clients as a result of just sitting there chatting away. It’s stuff that just wouldn’t happen anywhere else in the world,” he says. Thinking about the firm’s Arab clients and the tensions in the region, Kadoury believes that business has an important part to play in bringing about peace. “Having more trade I think will ultimately be the solution to get things moving in the right direction in this area of the world … when people are doing business together they get beyond a lot of those issues.” AL
“Behind Silicon Valley, this is the second biggest place for start-ups in the world”
NOVEMBER 2014 | 51
PROFILE / PAUL EAST
Verifying the votes Former New Zealand attorney-general Paul East QC talks to Australasian Lawyer about auditing Afghanistan’s recent presidential election
Paul East QC
52 | NOVEMBER 2014
Paul East’s impressive career has seen him represent New Zealand at the International Court of Justice in relation to nuclear testing in the South Pacific, and take a question of parliamentary privilege to the Privy Council. In post-political life, election observation work took him overseas again to play a leadership role in election missions to other parts of the Commonwealth. “I was deputy leader of the mission that went to Sri Lanka at the time when the Tamil Tigers were in control of the north and east of Sri Lanka, and I led the mission that went to Batticola, which was the Tamil Tigers’ main town in the east during the election campaign,” he says. Then, in 2008, he led the Commonwealth Observer Mission to Kenya when the announce ment of the election results was met with riots that displaced people from their homes and led to the deaths of more than 1,000 people. East now works as a consultant at Bell Gully, primarily advising on public law issues and inbound investment matters, but his electoral experience saw him heading overseas again this year, this time as part of the team auditing Afghanistan’s recent presidential election. Afghanistan had previously held a presidential poll in April, but with none of the candidates securing a majority, a run-off election between the
two candidates who received the most votes was held in June. This time Afghanistan’s Independent Election Commission was able to announce preliminary results, but the candidates Abdullah Abdullah and Ashraf Ghani Ahmadzai were at loggerheads and both alleging election fraud. With the impasse causing instability, US Secretary of State John Kerry brokered a deal between the parties: the election result would be audited by the United Nations. “There are often observations of elections that take place at the time of the election, but to my knowledge that’s the first time there’s been an audit of a presidential election after it has taken place, certainly under the auspices of the UN,” East says. East’s invitation to participate in the audit process came from former New Zealand prime minister Helen Clark, now administrator of the United Nations Development Programme, which had been tasked with overseeing the audit. Within a week East joined dozens of election specialists from around the world in Kabul. The audit was conducted in warehouses in the Independent Election Commission compound, with election specialists working in two shifts. The audit team checked almost 23,000 ballot boxes, each of which contained 600 votes. Two
AUSTRALASIANLAWYER.COM.AU
bundles of 50 votes (one for each candidate) would be removed from a ballot box and checked. Other paperwork from the ballot box would also be checked for fraud, and where there were irregularities there would be a full recount of the ballot box. According to East, approximately one in every five or six ballot boxes was recounted. “Regrettably, on a fair number of occasions we found that the same hand had marked many of the ballot papers,” he says. “There was further indication of fraud in a more general sense because there were a million votes more cast in the presidential run-off election where there were only two candidates than there had been in the primary election where there’d been many more candidates. Generally, the number of ballots cast in a presidential run-off drops; it doesn’t increase. But in fact it increased by about a million votes, so that led to suspicions as well.” At the conclusion of the audit, which took close to three weeks, Ashraf Ghani Ahmadzai was named president. “Both sides were responsible for the fraudulent activity, or their agents or people were, so I think the end result probably fairly reflected the situation,” East says. “One always wants to see an election conducted in a manner where there’s very little argument once the results are posted, but I can see that there is room for [an election audit process] and it seemed to work on this particular occasion,” he says. “If there is reason to doubt the result of an election because of fraud, then I think an audit is a very simple way of dealing with the matter, although it is quite time-consuming and does pose difficulties in manpower and logistics. I think it does bring some finality to the result, as long as you can get the candidates to accept it, and on this occasion both of the candidates have accepted the result. Of course it would be very different if one of them refused to accept the result.
AFGHANISTAN’S 2014 PRESIDENTIAL ELECTION
7.12 million
22,828
voters
1,206
ballot boxes audited
ballot boxes invalidated
55.27%
of the vote received by Ashraf Ghani Ahmadzai
“I’m full of admiration for the Afghani people because they voted under very difficult circum stances,” East reflects. “The Taliban were utterly opposed to the vote – there was a lot of violence conducted around the election – and election officials themselves by and large did an excellent job in very difficult circumstances. The second ballot box that I opened had none of the ballot papers used at all, and the report from the polling station said that the returning officer had been killed and the polling station had been closed shortly after it had opened in the morning,” he recalls. Looking to Afghanistan’s next election, East says there are a number of challenges, such as the low literacy rate, that need to be addressed. “The geography makes it very difficult to conduct elections, but I think in a more general sense it really needs more developed infrastructure; it needs to build up its public service and it needs to build up its judiciary, and there needs to be a clear separation of power between the executive and the government and the judiciary, and obviously it’s starting from a very difficult base,” he observes. “There’s a lot of work to be done, and until that happens I think there’s going to be continuing instability in the country, which is a great shame because it could be a very prosperous country … but it’s held back to a great extent by recent events and the difficulties it’s faced.” AL
ELECTION TIMELINE JAN
FEB
5 APRIL 2014 Presidential and provincial council elections. No presidential candidate obtains a majority of votes.
MAR
APR
MAY
14 JUNE 2014 Independent Election Commission of Afghanistan holds run-off election between Abdullah Abdullah and Ashraf Ghani Ahmadzai, the two candidates who received the most votes in the April election.
JUN
7 JULY 2014 IEC announces preliminary results. A candidate alleges election fraud.
JUL
AUG
12 JULY 2014 Abdullah Abdullah and Ashraf Ghani Ahmadzai agree to election audit.
SEP
OCT
21 SEPTEMBER 2014 IEC announces result, declaring Ashraf Ghani Ahmadzai the new president.
NOV
DEC
29 SEPTEMBER 2014 Ashraf Ghani Ahmadzai is sworn in as president, and Abdullah Abdullah becomes chief executive.
Source: United Nations Assistance Mission in Afghanistan
NOVEMBER 2014 | 53
BUSINESS STRATEGY / LEADERSHIP
Why fearlessness often leads to failure In this extract from their book Selfish, Scared & Stupid, Dan Gregory and Kieran Flanagan reveal how being fearless – while idealised to a great extent – can lead to sloppy mistakes and poor decisions
54 | NOVEMBER 2014
AUSTRALASIANLAWYER.COM.AU
Throughout history, the headlines and accolades have always belonged to the fearless. We celebrate the heroic souls who dismiss personal safety and stride forth into the fray against odds that seem insurmountable. St George and the dragon, Jason and the Argonauts, Odd and the Frost Giants – almost every culture has its myths and legends lionising bravery and self-sacrifice. Australians, too, have a history of finding national cohesiveness in some pretty catastrophic military losses – Gallipoli the most obvious. So, what is it that we find so enticing about bravery and fearlessness when most of us in reality prefer lives of relative safety and comfort? Certainly, part of it has its origins in our evolutionary history: adrenaline in the correct doses is a highly addictive substance, hence our obsession with horror films and roller coasters. However, one of the more significant reasons the fearless are so admired is that they very much represent the outliers in the human experience. Few of us regularly seek out truly risky situations. For instance, most of us prefer job security to the unknown of the entrepreneurial lifestyle; and though many of us do travel, most prefer to settle within a short drive from where we grew up. Also, we are mostly inclined to base our judgment on past experience instead of speculating with the new, however compelling. In truth, we love to look at the adventurous road, but mostly from the comfort of the safe path. But is that such a bad thing? Can fear be a factor in achievement? And is the favouring of heroism and persistence over contrary data and good judgment actually a formula for success or simply a way to have stories told about you in the past tense? As is the case with many such questions, it kind of depends.
FEAR IS ONE OF THE REASONS WE HAVE SURVIVED Fear, it turns out, is actually quite a useful emotion when it is appropriately applied. An overly curious nature mixed with naivety and overconfidence can be a recipe for disaster. Sending a canary into a mine to test for the presence of gas, while cruel, is actually a pretty savvy thing to do. In this case, fear not only ensures the survival of many miners; it also increases the chances of eventual success while reducing costs – miners are rather more expensive than songbirds.
Published by Wiley, Selfish, Scared & Stupid is available from October 2014 in paperback, RRP $25.95, from www.selfish scaredandstupid.com
What’s more, many of our latent fears – spiders, heights, water – are based on our survival; all have their origins in some pretty rational concerns. Where fear can undermine leadership is when it becomes paralysing, when judgment is replaced by constant evaluation and data-seeking. The truth is, in any decision we make we never have the complete picture or enough information. This, it turns out, is why good judgment is so critical to good leadership.
FEAR CAN BE AN AIDE TO JUDGMENT One of the things that particularly defines leadership is a willingness and ability to make decisions and back them. What this really means is embracing ownership of the results. One of the burdens of leadership is that when you do achieve a success, it’s your team who won, but should failure be the outcome, you lost. This makes good judgment one of a leader’s key accountabilities. While the soldiers who fought at Gallipoli are considered heroes despite their eventual loss, we don’t look quite so favourably on those who had them fighting what was, literally, an uphill battle. So fear must necessarily be a part of this equation. It has us identify and weigh up risks, and consider more than just the possibility of success and account for it. One of the criticisms we often make of strategic business plans is that the margins allowed for error are so slim. In other words, success is only guaranteed if everything goes exactly according to plan. Of course, this is statistically unlikely, and a far better approach is to stack the odds of success in your favour by implementing systems and processes that allow for success, even on those
One of the burdens of leadership is that when you do achieve a success, it’s your team who won, but should failure be the outcome, you lost NOVEMBER 2014 | 55
BUSINESS STRATEGY / LEADERSHIP
Failure is often cited as being critical to success. But this is far more than a twee catchphrase of the eternally optimistic; it is a recognition that failure, rather than being a result, is a constant feature of the results we produce daily and should therefore be accounted for days when not everything goes as it should. Failure is often cited as being critical to success. But this is far more than a twee catchphrase of the eternally optimistic; it is a recognition that failure, rather than being a result, is a constant feature of the results we produce daily, and should therefore be accounted for.
LEARN TO SEE FEAR AS A LEVER FOR POSITIVE CHANGE
Kieran Flanagan and Dan Gregory are behavioural researchers and strategists. An author, educator and corporate coach, Flanagan is chief creative officer at The Impossible Institute, while Gregory is a regular on ABC’s Gruen Planet and president and CEO of The Impossible Institute, an innovation and engagement think tank.
56 | NOVEMBER 2014
If we accept that fear has a lot of downsides, how can we turn this around and use fear as an asset in achieving positive change, in order to generate the behavioural change we so desire? How can we generate an opposite fear, one that is linked to not changing? TEDx speaker Kelly McGonigal and other health psychologists assert that, contrary to popular belief, not all stress (which is essentially a fear of possible outcomes) is necessarily bad. They further state that stressful experiences can be used to promote adaptive responses, and that individuals can be trained to think of stress arousal as a way of maximising performance. The long and short of it is that reframing fear as an asset may not only remove impediments to performance but can actually serve to heighten and lift it. Fear (and its close cousin, stress) is suffering from some bad PR and really needs some rebranding. We all need reminding that sometimes fear has been the good guy, and it has certainly been a considerable asset in the armoury of social change. AIDS awareness campaigns have featured Grim Reapers in bowling alleys, bowling victims down like tenpins, in an effort to shift the fear of not having sex, to having sex; and immunisation and anti-immunisation campaigners have traded blows
in a war of fears, each trying to tip the argument in their own favour. Rory Sutherland, vice chairman of Ogilvy Group UK, famously tells the story of Atatürk, a military leader in the then Ottoman Empire and later the first president of Turkey, who in an effort to stabilise the food supply added an additional carbohydrate to the mix – in this case potatoes – flipping the fear of eating potatoes into a fear of not eating them. In fact, by decreeing them a ‘royal’ vegetable that no commoner was to eat, he also ensured that not only was the fear flipped but a desire to eat them was achieved. Rather than seeing fear as one-sided, these examples show that, by seeking to defeat or decrease the fear that was limiting them, people found that a better, or more compelling, strategy was to increase the fear on the other side of the equation.
REBALANCE THE FEAR This is perhaps the most important point. We are not advocating that you ignore your fears or throw yourself at them as part of a midlife extreme-sport crisis, nor are we suggesting they are all irrational and imaginary. What we are suggesting is that they can be useful for driving change and shifting behaviour, and this relies on shifting the balance of the fear equation from one side to the other. For instance, if you are afraid to go for a jog because you’re looking a little wobbly around the middle (after a few too many ice creams) and are scared that people might laugh at ‘the fat guy in tight-fitting exercise gear’, that’s one side of the fear ledger. But if a chainsaw-wielding madman were storming through your house, you would not only jog but hurdle, parkour, long-jump and sprint, all while dialling for the emergency services. (And if anyone did choose to criticise you at this juncture, you would happily use them as an obstacle to slow down the chainsaw-wielding maniac.) Next time you’re quaking in your boots and wishing you had picked up that ‘clinical strength’ antiperspirant, stop to consider fear not as a barrier to success but possibly as one of the most over looked and underutilised motivators we have for driving us to success. Then set about reframing your fear. The trick is to see fear – when appropriate – as a useful tool of leadership rather than as something to avoid. AL
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