Australasian Legal Business May 2009

ISSUE 7.5

Redundancies Now the pain really begins

International firms in Australia Is Australia yesterday’s frontier?

Insolvency and restructuring Still more to come

ALB new zealand 2009: AUSTRALASIAN LEGAL BUSINESS

Firms step up to the challenge n DEALS ROUNDUP n LATERAL MOVES n UK, US REPORTS n news analysis n MARKET STATS

www.legalbusinessonline.com

cover.indd 1

19/05/2009 12:56:37 PM

ifc.indd 1

19/05/2009 4:48:18 PM

www.legalbusinessonline.com Regional managing editor

George Walmsley Renu Prasad

Richard Szabo

China editor Yun Zhang

Asia editor

Joshua Scott Daniela Aroche

www.clanz.org

Rashida Yusofzai Liying Zhang

www.ibanet.org

www.apsma.com.au

Inter-Pacific Bar Association Corporate Counsel Forum www.ipba.org

Infosys manager Colin Chan

Legal product sales manager

Benn Sykes

BDM – Legal products Traffic manager

Asia editorial assistants Asia-Pacific Professional Services Marketing Association

Photographer

Mathew Hambrook

Production editor

Corporate Lawyers Association of New Zealand

Designer

Thilo Pulch

Editorial researcher

ALB is a sponsor of the International Bar Association Annual Conference Madrid 2009

Jacqui Alexander

Raymond Ohanesian

Australasia editor

ALB enjoys alliances with the following organisations

Design manager

Sub-editors

James Schwier Tim Stewart

Stacey Rudd

Marketing

Danielle Tan Jessica Lee

Sales director Justin Kennedy

Managing director Mike Shipley

www.cla.org.au

www.mlaanz.org

Editorial enquiries

Shanghai Inhouse Counsel Forum

Renu Prasad T (61) 2 8437 4700 renu.prasad@keymedia.com.au

www.beijinginhouse.com

Advertising enquiries Australia

www.scca.org.sg

ALB is the Asia-Pacific Legal Media Partner of the IPBA Annual Conference Manila 2009

Benn Sykes T (61) 2 8437 4745; F (61) 2 9439 4599 benn.sykes@keymedia.com.au

Hong Kong

Brenda Lau T (852) 2815 5988; F (852) 2815 5225 brenda@kmimail.com

Singapore

Vivian Cheah T (65) 6423 4631; F (65) 6423 4632 vivian.cheah@keymedia.com.sg

Event enquiries Subscriptions Australasian Legal Business is available by subscription.

Please call (61) 2 8437 4731 or visit www.legalbusinessonline.com Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permissionof the editor.

Contributions are invited, but copies of work should be kept, as Australasian Legal Business can accept no responsibility for loss.

Cover image: (left to right) Rob Fisher, Simpson Grierson; Roger Partridge, Bell Gully; Gary McDiarmid, Russell McVeagh; Clayton Kimpton, Kensington Swan; and Peter Chemis, Buddle Findlay

Australia

Stephanie Sudzina T (61) 2 8437 4727; F (61) 2 9439 4599 stephanie.sudzina@keymedia.com.au

Asia

Joel Ulbrecht T (852) 2815 5988; F (852) 2815 5225

Key Media International Ltd Australia

Level 10, 1 Chandos Street, St Leonards, NSW 2065 Australia T (61) 2 8437 4700; F (61) 2 9439 4599

Hong Kong

Unit 2706-08, 27/F, 118 Connaught Road West, Hong Kong T (852) 2815 5988; F (852) 2815 5225

Singapore

121, Telok Ayer Street #02-01, 068590 T (65) 6423 4631; F (65) 6423 4632 www.keymedia.com.sg

www.legalbusinessonline.com

Canada

100, Adelaide Street, West Suite 300 Toronto T (65) 6423 4631; F (65) 6423 4632 www.keymedia.com.sg

1

p01 - masthead.indd 1

20/05/2009 3:41:17 PM

ISSUE 7.5

EDITORIAL >>

Redundancies Now the pain really begins

International firms in Australia Is Australia yesterday’s frontier?

Insolvency and restructuring Still more to come

Here’s to big personalities

A

s a famous hamburger chain once unwisely put it, people are our most important ingredient. That statement might not involve the most felicitous choice of words, but the sentiment is one that rings true across all areas of business: a company is nothing more than the sum of the efforts of its people.

The same principle applies to law firms, but it is almost inevitably a “top down” observation: management speaking about their employees, or their team. That is a valid proposition, but perhaps the emphasis on “team” ideology has come at the expense of recognising the individual – particularly in leadership.

This is not a conventional proposition and one which is unlikely to be publicly embraced by managing partners. One cannot imagine Danny Gilbert, for example, eschewing the efforts of his lawyers in order to promote himself.

But would Gilbert + Tobin, that peculiar melting pot of social conscience and commercial acumen, be the same firm without Gilbert?

The issue comes to the fore in New Zealand. The Kiwis do not represent the largest market in the region, but they do have some of the biggest personalities that have added colour and distinction to the firms they represent: Bell Gully has its avowed free marketeer Roger Partridge, who is also this month’s LexisNexis feature profile; Chapman Tripp has the engaging and passionate Andrew Poole; and Russell McVeagh has the inimitable Gary McDiarmid, ever-ready with a new industry metaphor. “There are a few green shoots showing,” McDiarmid says in this issue’s New Zealand report, referring to the revival of M&A activity.

And there are many others, not necessarily managing partners or CEOs, who have contributed to the identity of their firms. It may not be correct to say their contribution is greater than those of their less-heralded colleagues.

But one thing is clear – the legal industry would be a far less interesting place without them.

ALB NEW ZEALAND 2009: AUSTRALASIAN LEGAL BUSINESS

FIRMS STEP UP TO THE CHALLENGE  DEALS ROUNDUP  LATERAL MOVES  UK, US REPORTS  NEWS ANALYSIS  MARKET STATS

www.legalbusinessonline.com cover.indd 1

19/05/2009 12:56:37 PM

IN THE FIRST PERSON “It is almost inconceivable that we will not see some more highly geared companies forced to undergo a major restructure or go into voluntary administration” Henry Davis York partner Roger Dobson

“I make it clear to firms that unless they are competitive and they keep me happy with the level of service and the costs, I will move work to another firm” Cadbury Australia-NZ general counsel Karen Perret

“The firms involved [in cut-throat pricing] are doing damage to themselves in the long term.

When the recovery comes, it will be difficult to raise those rates back to previous levels” Andrew Poole, Chapman Tripp

The Kiwis do not represent the largest market in the region, but they do have some of the biggest personalities that have added colour and distinction to the firms they represent

2

p02-03 - editors.indd 2

Australasian Legal Business ISSUE 7.5 7.4

20/05/2009 10:12:05 AM

y

o

�

at

l

p02-03 - editors.indd 3

20/05/2009 10:12:07 AM

CONTENTS >>

contents

ALB issue 7.5

60

30

44

COVER STORY 30 ALB Special Report: New Zealand 2009 Diversification, cut-throat pricing, more competition for government work: these are just some of the outcomes as New Zealand firms adjust to a new world order

ANALYSIS 14 Redundancies Layoffs lurk but opportunities still exist for self-starting lawyers 17 Insolvency: Saving the worst for last Are the current collection of distressed companies just the tip of the iceberg?

FEATURES 44 ALB-LexisNexis Managing Partner Series:

Roger Partridge, Bell Gully Having taken the reins at one of New Zealand’s biggest firms just as the credit crunch began to bite, Roger Partridge had his work cut out for him at Bell Gully 48 International firms in Australia As Dorsey & Whitney arrives on Australian shores, we ask if investment Down Under is paying dividends for international firms 52 In-house profile: Karen Perret, Cadbury Cadbury Australia-NZ General Counsel Karen Perret talks to ALB about getting the best value and service from law firms – and it’s not necessarily via a panel model

4

p04-05 - contents.indd 4

52

56 Case management ALB talks to experts about the smartest ways to optimise your case management systems

COLUMNS

60 China FDI: A two-way street?

There is no doubting the potency of outbound Chinese FDI, but what about investment flowing in the opposite direction?

21 US Report

REGULARS 8

DEALS

19 UK Report 25 Mergermarket M&A Update 64 Sign Off

COMMENTARY 22 Buddle Findlay

18 NEWS • Staff “relieved” at Allens Arthur Robinson salary freeze • Freehills salary freeze to last beyond 30 June • Minter Ellison adamant there will be no ‘GFC’ graduate redundancies • New firm strikes balance with tailored fees • Companies not living up to audit standards • No clerk cuts at Middletons, says firm • Lawyers and barristers to the fore as Victorian bushfire hearing gets under way

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 Legal Business can accept no responsibility for loss.

australasian legal business ISSUE 7.5

20/05/2009 3:47:25 PM

p04-05 - contents.indd 5

20/05/2009 3:47:28 PM

NEWS | deals >>

6

p6-13 deals.indd 6

Australasian Legal Business ISSUE 7.5

20/05/2009 2:24:05 PM

NEWS | deals >>

www.legalbusinessonline.com

p6-13 deals.indd 7

7

20/05/2009 2:24:08 PM

NEWS | deals >>

Lead lawyer: Tim McEwen Client: Macquarie Communications Infrastructure Management

deals in brief

Courtesy of OneSteel

Firm: Clifford Chance Lead lawyer: Brendan Moylan Client: Macquarie Communications Infrastructure Management

| TECHNOLOGY/ GOVERNMENT | ►► National Broadband Network plan A$43bn

• Funding to be part public and part private, and network will be wholesale and independent of Telstra

Firm: Mallesons Stephen Jaques Lead lawyer: Neil Carabine Client: Telstra Firm: Clayton Utz Lead lawyers: Caroline Lovell, Michael Reede Client: Optus Firm: Holding Redlich Lead lawyer: Chris Lovell Client: Acacia consortium

Caroline Lovell Clayton Utz

| PROPERTY, TRUSTS | Ian McGill

Firm: Corrs Chambers Westgarth Lead lawyer: Andrew Messenger Client: Department of Broadband, Communications and the Digital Economy’s independent expert panel Firm: Australian Government Solicitor Lead lawyer: John Scala, Garth Cooke Client: Department of Broadband, Communications and the Digital Economy’s independent expert panel • Deal sees establishment of

p6-13 deals.indd 8

• Partners from firms acting on the bid believe new plan will give Telstra a second chance at involvement, after being excluded from tendering for failing to submit business participation plan • Federal government expected to publish results of its implementation study, revealing CEO, COO and board

Firm: Allens AAR Arthur Robinson Lead lawyer: Ian McGill Client: Axia NetMedia

8

government-owned company and fibre optic cable roll out to 90% of Australian homes and businesses, and remainder connected via next generation wireless and satellite technology

►► Babcock & Brown Japan Property Trust breakaway A$2.3bn Firm: Freehills Lead lawyer: Justin O’Farrell, Damien Hazard (Australian law) Client: Babcock & Brown Japan Property Trust

• Deal involved B&B Japan Property Trust’s breakaway from Babcock & Brown, internalisation of trust management rights and arrangements with Japanese asset manager

Tim McEwen Freehills

• CPP Investment Board, Brendan Moylan comprising of Clifford Chance Colonial First State, Industry Funds Management and 3i Infrastructure, previously acquired UK utilities group AWG in 2006 • Deal sees CPP offering to purchase all Macquarie stapled securities, by way of a separate interconditional offer • CPP has agreed to transitional services agreement and ongoing advisory with Macquarie

• Internalisation to bring substantial fee reductions and arrangements designed to retain Japanese management

• Offer recommended by the independent directors of Macquarie but subject to shareholder approval

• Freehills recently acted on Abacus’ recapitalisation and low doc rights offering

| CAPITAL MARKETS |

| FINANCE/M&A | ►► CPP Investment- Macquarie Communications acquisition A$2bn Firm: Freshfields Bruckhaus Deringer Lead lawyers: David Higgins, Simon Weller Client: CPP Investment Board Firm: Allens Arthur Robinson Lead lawyer: Wendy Rae Client: CPP Investment Board

►► Westpac tier one hybrid raising A$900m Firm: Gilbert + Tobin Lead lawyers: Janine Ryan, John Williamson-Noble Client: Westpac Banking Corporation • Raising sees A$900m noninnovative tier one hybrid offer in conjunction with existing St George Bank hybrids • Deal follows Westpac’s A$47bn merger with St George, the largest corporate merger in Australian history

Firm: Freehills

Shunpei Tanaka NO&T

Firm: Nagashima Ohno & Tsunematsu Lead lawyer: Shunpei Tanaka (Japanese law) Client: Babcock & Brown Japan Property Trust

“Freehills has a long association with Macquarie Communications and really knows its assets. We acted on its 2002 float [A$300m] and have acted on its 2004 move from double to triple staple in establishing a Bermudan company, and its associated equity raising [A$800m]” Tim McEwen, Freehills Australasian Legal Business ISSUE 7.5

20/05/2009 2:24:11 PM

NEWS | deals >>

| MANUFACTURING/EQUITY | ►► OneSteel non-renounceable rights issue A$878m Firm: Allens Arthur Robinson Lead lawyers: Vijay Cugati, Tom Story, Andrew Finch Client: OneSteel Firm: Mallesons Stephen Jaques Lead lawyer: David Friedlander Client: UBS (underwriter) Firm: Sullivan & Cromwell Lead lawyer: Waldo Jones Client: OneSteel (US law)

Vijay Cugati AAR

David Friedlander Mallesons

• Deal sees OneSteel’s accelerated non-renounceable rights issue with A$240m institutional placement, and non-renounceable two-for-five pro-rata entitlement offer • Offer has a fully underwritten institutional component of A$319m and a retail component of not underwritten A$319m • Allens Arthur Robinson also recently advised on Wesfarmers’ A$4.6bn capital raising and Qantas’ A$500m raising

| PROJECT | ►► Peninsula Link project A$750m

Firm: Clayton Utz Lead lawyers: Brad Vann, Marko Misko Client: Victorian State Government • Peninsula Link project will Marko Misko see 25km road Clayton Utz link between EastLink in Victoria’s Carrum Downs, and the Mornington Peninsula Freeway in Mount Martha • Project represents first availability style PPP road project in Victoria and involves preparing request for tender and project documents, as well as providing strategic and commercial advice

www.legalbusinessonline.com

p6-13 deals.indd 9

| PROPERTY, EQUITY | ►► Dexus Property entitlement offer/ capital raising A$749m Firm: Freehills Lead lawyer: Tony Sparks, Philippa Stone Client: Credit Suisse, Deutsche Bank AG Tony Sparks (underwriters) Freehills Firm: Mallesons Stephen Jaques Lead lawyer: Susan Hilliard Client: Dexus Property Group • Offer made to investors in the US and marketed in New Zealand, the UK, Hong Kong, Singapore, Belgium, Denmark, France, Germany, Ireland, Holland, Norway, Sweden, Switzerland and the UAE • Proceeds expected to be used to pay down debt and fund acquisitions and developments

| ENERGY/EQUITY | ►► Contact Energy bond offer NZ$550m (A$434m) Firm: Bell Gully Lead lawyers: Andrew Brown, Hugh Kettle Client: Contact Energy • Bond offer involved raising NZ$550m (A$434m) through fiveyear unsecured, unsubordinated fixed rate bond offer • Offer received applications in excess of the original sought • Capital raised to support capital investment programme

| FINANCE | ►► AMP retail notes offer

A$293m Firm: Mallesons Stephen Jaques Lead lawyer: Evie Bruce, Greg Golding, Greg Hammond Client: AMP • Offer one of first listed retail debt issues undertaken in recent times • Deal consists of A$202m in Australian notes and NZ$115m (A$90.8m) in Kiwi notes, under new trans-Tasman mutual recognition scheme that allows issuers to

9

20/05/2009 2:24:14 PM

NEWS | deals >>

Client: Prime Media Group • Raising comprises of a 10 for seven renounceable accelerated pro rata entitlement offer and share placement to Seven Network • Prime’s major shareholder Paul Ramsay Holdings committed A$25m and Seven Network’s Network Investment Holdings has committed to subscribe up to 14.9% of Prime's capital base (A$25m)

| FINANCE/EQUITY | ►► Peet capital raising A$81.5m

Firm: Freehills Lead lawyer: Andrew Shearwood Client: Peet

offer notes in NZ using Australian prospectus

| FORESTRY, M&A | ►► GMO Renewable ResourcesGreen Triangle acquisition A$172m Firm: DLA Phillips Fox Lead lawyer: Carrie Follas, Martin Thomson Client: GMO Renewable Resources Firm: Auspine Legal Lead lawyer: Tri Duc Nguyen Client: Auspine

Carrie Follas DLA Phillips Fox

• US-Australian cross-border deal involved acquisition of 33,000 hectares of Victorian and South Australia softwood plantations (the Green Triangle Region) • Ownership of the trees is secured by registered forest property agreements and the transaction included wood supply and management arrangements, negotiation, and purchase documentation, regulatory compliance and due diligence • Deal required lawyers from Sydney, Melbourne, Adelaide and Auckland

10

p6-13 deals.indd 10

| M&A | ►► China Light and PowerRoaring 40s acquisition A$132m Firm: Clayton Utz Lead lawyer: Nick Miller Client: Hydro Tasmania • Strategic acquisition sees Nick Miller China Light and Clayton Utz Power acquire Roaring 40s China wind farm portfolio from joint venture partner Hydro Tasmania • Cross-border nature of deal, economic climate, and renewable energy market in China still being in early stages of development, created challenges for lawyers • Clayton Utz previously advised Hydro Tasmania on initial establishment of Roaring 40s joint venture in 2005 and 2007 acquisition of Momentum Energy

| MANUFACTURING/EQUITY | ►► Nuplex rights offer

A$122.8m Firm: Bell Gully Lead lawyer: James Gibson Client: First NZ Capital Securities (underwriter) Firm: DLA Phillips Fox Lead lawyers: Martin Wiseman, Rachel

Taylor, Catherine Merity Client: Nuplex (Kiwi and Australian law) Firm: Freehills Lead lawyer: Tony Martin Thomson Sparks DLA Phillips Fox Client: First NZ Capital Securities (Australian law) • Offer includes seven-for-one rights issue • Nuplex entered into a call option arrangement with First NZ with respect to further new shares to be issued upon completion of rights issue • First NZ to place new shares under top-up placement with institutional investors, who provided subunderwriting commitments under rights issue

| MEDIA/EQUITY | ►► Prime Media capital raising A$110m

Firm: Blake Dawson Lead lawyers: Bill Koeck, Anton Harris, Crystal Antica

Firm: Mallesons Stephen Jaques Lead lawyer: Barry McWilliams Client: UBS (lead manager)

Barry McWilliams

• Raising included Mallesons low-doc, accelerated rights issue

• Institutional component of the deal completed within three days on 30 March, raising A$64.4m, while retail component of offer at closed end of April

| EQUITY/M&A | ►► WCB-Australian Cheese Company acquisition/ rights issue A$105m Firm: Minter Ellison Lead lawyer: Timothy Watkin Client: Warrnambool Cheese & Butter Firm: Freehills Lead lawyer: Baden Furphy Client: National Foods

Timothy Watkin Minter Ellison

• Deal includes 50% stake

“We enjoyed the challenge of successfully finalising the institutional raising in such a short time frame.

Low documented and accelerated raisings are becoming increasingly popular with our clients, as they provide the flexibility to raise capital quickly in a volatile market” Andrew Shearwood, Freehills Australasian Legal Business ISSUE 7.5

20/05/2009 2:24:20 PM

NEWS | deals >>

acquisition in ACC, consisting of A$50.6m equity raising as a fully underwritten 2 for three renounceable pro-rata offer

►► Your month at a glance Firm

Jurisdiction

Deal Name

Allens Arthur Robinson

Australia, UK

CPP Investment-Macquarie Communications acquisition

Australia

National Broadband Network plan

Australia, US

OneSteel non-renounceable rights issue

878

Auspine Legal

Australia, US

GMO Renewable Resources-Green Triangle acquisition

172 Forestry, M&A

Australian Government Solicitor

Australia

National Broadband Network plan

Baker & McKenzie

Australia

Eastern Star Gas equity placement

50 Energy, M&A

Australia

STW Communications rights issue

80

Equity

Australia, Thailand

TCC Land-Hyatt Regency acquisition

75

Property, M&A

New Zealand

Contact Energy bond offer

New Zealand, US

Freightways capital management initiatives

New Zealand

ITOCHU/Daiken Carter-Holt Harvey Kiwi MDF business acquisition

• Balance of funding provided through new debt facilities with National Australia Bank

| EQUITY | ►► STW Communications rights issue A$80m Firm: Baker & McKenzie Lead lawyers: Craig Andrade, Andrew Reilly (US law) Client: UBS (lead manager)

Bell Gully Craig Andrade Baker & McKenzie

Firm: Freehills Lead lawyers: Tony Sparks, Philippa Stone Client: STW Communications Group

• Accelerated rights issue included A$60m institutional component that was successfully completed on 23 April • Deal comes after Bakers’ recent work for Macquarie and UBS, the joint underwriters and lead managers to ConnectEast’s A$450m equity raising; Credit Suisse, Citi, JP Morgan and CommSec as placement agents to Commonwealth Bank’s A$2bn equity raising to acquire BankWest and St Andrews Australia

| PROPERTY/M&A | ►► TCC Land-Hyatt Regency acquisition A$75m

www.legalbusinessonline.com

p6-13 deals.indd 11

2,000 43,000

43,000

Finance, M&A Technology, government Manufacturing, equity

Technology, government

434 Energy, equity 36 Transport, equity N/A

Resources, M&A

Kiwi Income Properties raising

Australia, New Zealand

Nuplex rights offer

123

Manufacturing, equity

Blake Dawson

Australia

Prime Media capital raising

110

Media, equity

Australia, Thailand

TCC Land-Hyatt Regency acquisition

75

Property, M&A

Buddle Findlay

New Zealand

ITOCHU/Daiken Carter-Holt Harvey Kiwi MDF business acquisition

40 Property, equity

N/A Resources, M&A

Carter Newell

Australia

AGL Energy-Innamincka Petroleum farm-in

Clayton Utz

Australia, China

China Light and Power-Roaring 40s acquisition

Australia

National Broadband Network plan

Australia

Peninsula Link project

750

Australia, UK

Terra Firma-Consolidated Pastoral acquisition

N/A Finance, M&A

Clifford Chance

Australia, UK

CPP Investment- Macquarie Communications acquisition

Corrs Chambers Westgarth

Australia

National Broadband Network plan

DLA Phillips Fox

Australia, US

GMO Renewable Resources-Green Triangle acquisition

Australia, Philippines, Thailand

Fujitsu Australia-Supply Chain Consulting acquisition

New Zealand, US

Gilbarco-Postec equity acquisition

N/A

Energy, M&A

Australia, New Zealand

Nuplex rights offer

123

Manufacturing, equity

Australia, Philippines, Thailand

Fujitsu Australia-Supply Chain Consulting acquisition

New Zealand, US

Gilbarco-Postec equity acquisition

Firm: Blake Dawson Lead lawyer: John Stawyskyj Client: Grand Hotel Group

• Australia’s first major hotel transaction this year and follows TCC’s acquisitions of Novotel Rockford, the Pumphouse tavern and the Hyatt Canberra in late 2008

Practice

New Zealand, US

Firm: Baker & McKenzie Lead lawyer: Caroline Ho Client: TCC Land (Bangkok)

• Cross-border acquisition of Adelaide-based hotel from Bangkok hotel group

A$m

DLA Piper

20

Energy, M&A

132 Energy, M&A 43,000

2,000 43,000

Technology, government Project Finance, M&A Technology, government

172 Forestry, M&A 48 Technology, M&A

48 Technology, M&A N/A

Energy, M&A

►► CORRECTION

In issue 7.4’s Insurance practice area guide Mark Radford was listed as a leading lawyer from Baker & McKenzie. The correct text is as follows: Mark Radford; Colin Biggers & Paisley; Sydney; practice areas: insurance, reinsurance, compliance, products, M&A, government; reputation for providing practical, high quality, cost effective and innovative advice to clients; works closely with government and regulators on legislative changes, authorisations and licences, compliance breaches and developing codes of practice and dispute resolution facilities.

It was also stated that in Sydney Jocelyn Helen was mentioned for her product liability knowledge. This should have read as: Jocelyn Kellam was mentioned for her product liability knowledge.

11

20/05/2009 2:24:22 PM

NEWS | deals >>

| ENERGY/EQUITY |

►► Your month at a glance (cont) Firm

Jurisdiction

Deal Name

Freehills

Australia

AGL Energy-Innamincka Petroleum farm-in

Australia, Japan

Babcock & Brown Japan Property Trust breakaway

2,300 Property, trusts

Australia, UK

CPP Investment- Macquarie Communications acquisition

2,000

Australia

Dexus Property entitlement offer/capital raising

749

Property, equity

Australia, New Zealand

Nuplex rights offer

123

Manufacturing, equity

Australia

Peet capital raising

82

Finance, equity

Australia

STW Communications rights issue

80

Equity

Australia

WCB-Australian Cheese Company acquisition/ rights issue

Australia, UK

CPP Investment- Macquarie Communications acquisition

2,000

Finance, M&A

Australia, UK

Terra Firma-Consolidated Pastoral acquisition

N/A

Finance, M&A

Australia

Westpac tier one hybrid raising

900

Banking, equity

Freshfields Bruckhaus Deringer Gilbert + Tobin

A$m

Practice 20

105

Energy, M&A

Finance, M&A

Equity, M&A

HerbertGeer

Australia, US

WHK-Macquarie Group strategic partnership

30

Resources, M&A

Holding Redlich

Australia, Philippines, Thailand

Fujitsu Australia-Supply Chain Consulting acquisition

48

Technology, M&A

Australia

National Broadband Network plan

Australia

AMP retail notes offer

Australia

Avexa pro-rata renounceable rights issue

15

Australia

Dexus Property entitlement offer/capital raising

749

Australia

National Broadband Network plan

Australia, US

OneSteel non-renounceable rights issue

Australia

Peet capital raising

Australia

Unimin-Consolidate Rutile takeover bid

Mallesons Stephen Jaques

Minter Ellison

43,000

Technology, government

293 Finance Health, equity Property, equity Technology, government

878

Manufacturing, equity

82

Finance, equity

N/A

Resources, M&A

Australia

Thomas Bryson ASX listing

7

Securitisation

WCB-Australian Cheese Company acquisition/ rights issue

105

Equity, M&A

Australia, US

WHK-Macquarie Group strategic partnership

30

Nagashima Ohno & Tsunematsu

Australia, Japan

Babcock & Brown Japan Property Trust breakaway

Russell McVeagh

New Zealand, US

Freightways capital management initiatives

36

New Zealand, US

Kiwi Income Properties raising

40

Property, equity

Sidley Austin

New Zealand, US

Freightways capital management initiatives

36

Transport, equity

New Zealand, US

Kiwi Income Properties raising

Simpson Grierson

New Zealand, US

Gilbarco-Postec equity acquisition

Resources, M&A

2,300 Property, trusts

40 N/A

Transport, equity

Property, equity Energy, M&A

Skadden Arps

New Zealand, US

Kiwi Income Properties raising

40

Property, equity

Sullivan & Cromwell

New Zealand, US

Freightways capital management initiatives

36

Transport, equity

Australia, US

OneSteel non-renounceable rights issue

878

Manufacturing, equity

Australia, US

WHK-Macquarie Group strategic partnership

30

Resources, M&A

Does your firm’s deal information appear in this table?

12

p6-13 deals.indd 12

alb@keymedia.com.au

61 2 8437 4700

A$50m Firm: Baker & McKenzie Lead lawyer: David Holland, David Ryan, Andrew Reilly Client: Eastern Star Gas

Andrew Reilly

• Placement Baker & McKenzie announced on 17 March comprises of underwritten placement to institutional and sophisticated investors in Australia and overseas • Deal coincided with the company entering the ASX200 • Bakers recently advised Eastern Star on establishing level one American Depositary Receipt program, with a quotation on the International OTCQX

| TECHNOLOGY/M&A | ►► Fujitsu Australia-Supply Chain Consulting acquisition A$48m

43,000

Australia

Please contact

►► Eastern Star Gas equity placement

Firm: DLA Phillips Fox Lead lawyer: Mark Burger (Australian law) Client: Fujitsu Australia Firm: DLA Piper Lead lawyer: Chanvitaya Suvarnapunya (Thai law) Client: Fujitsu Australia Firm: Holding Redlich Lead lawyer: Dan Pearce Client: Supply Chain Consulting • Deal involved the acquisition of the entire issued share capital of Supply Chain Technologies and due diligence across Australia, Thailand and the Philippines • Follows on from Fujitsu’s acquisition of Telstra’s KAZ computer services business in March, which DLA Phillips Fox advised on

| FINANCE/M&A | ►► Terra Firma-Consolidated Pastoral acquisition Firm: Gilbert + Tobin Lead lawyer: Charles Bogle Client: CPH Management Australasian Legal Business ISSUE 7.5

20/05/2009 2:24:25 PM

NEWS | deals >>

Firm: Clayton Utz Lead lawyer: Heath Lewis Client: Terra Firma • Deal saw UK investment group Terra Firma’s acquisition of Northern Territory-based Consolidated Pastoral Company from CPH Management • Deal was M&A “highlight” for Gilbert + Tobin, after its recent work on Westpac’s A$47bn merger with St George

| RESOURCES/M&A | ►► ITOCHU/Daiken Carter Holt Harvey Kiwi MDF business acquisition Firm: Bell Gully Lead lawyer: David Boswell Client: Carter Holt Harvey Firm: Buddle Findlay David Boswell Lead lawyer: Simon Bell Gully Vodanovich Clients: ITOCHU Corporation, Daiken Corporation • Competitive sale process included joint purchase of both Carter Holt Harvey’s medium density fibreboard (MDF) business and Rangiora-based manufacturing plant • Regulatory approval obtained from Overseas Investment Office on 22 January

| PROPERTY/EQUITY | ►► Kiwi Income Properties raising A$39.5m Firm: Bell Gully Lead lawyer: Anna Buchly Client: Goldman Sachs JBWere Firm: Sidley Austin Client: Goldman Sachs JBWere (US law) Firm: Russell McVeagh Client: Kiwi Income Properties Firm: Skadden Client: Kiwi Income Properties (US law) • Raising proceeded through issuing new units in Kiwi Income Property Trust • Goldman Sachs JBWere acted as sole lead manager, placement agent, book runner and underwriter

| TRANSPORT/EQUITY | ►► Freightways capital management initiatives A$35.5m Firm: Bell Gully Lead lawyer: Anna Buchly Client: Goldman Sachs JBWere Firm: Sullivan & Cromwell Client: Goldman Sachs JBWere (US law) Firm: Russell McVeagh Client: Freightways Firm: Sidley Austin Client: Freightways • Raising part of Freightways’ capital management programme to reduce bank debt and strengthen balance sheets

“The success of the [Eastern Star Gas] offering shows that emerging companies can effectively tap equity markets during these challenging times”

David Holland, Baker & McKenzie

www.legalbusinessonline.com

p6-13 deals.indd 13

13

20/05/2009 2:24:29 PM

NEWS | analysis >>

Analysis >>

Redundancies roundup: lay-offs lurking, but opportunity still knocks Minter Ellison’s recent bombshell indicates 35 staff will lose their jobs in the latest wave of redundancies, but news and rumours of salary freezes and lay-offs have also reached other firms in recent months

W

hen Allens Arthur Robinson (AAR) recently announced its firm-wide salary freeze, it was simply due to a shrinking Australian legal market. Managing partner Michael Rose expects fewer firms to remain on legal services panels, and the focus to shift from billable hours to fixed fees.

“We have predicted, and been preparing for, a downturn in the legal services market. No business is immune to one of the largest recessions in living memory,” he says.

At the end of the day, firms are resorting to staff cuts because every 1% drop in revenue typically results in a 2.5–3% drop in firm profits. “Many city law firms have high fixed-cost structures, consisting of about 60% labour costs, 25% occupancy costs and 15% for other expenses. Occupancy is usually fixed and a 10% saving from the ‘other’ category is not going to make much of difference. So if revenue drops off, then savings have to come from the labour costs,” says Joel Barolsky of Beaton Consulting.

Deep cuts

Blake Dawson’s March review of its business, where it moved to lay off 89 staff (23 lawyers and 66 support staff), has perhaps been the most dramatic move so far. Earlier this year, the firm retrenched at least four property and finance lawyers.

“We believe that the measures we have taken will ensure the business remains competitive with the right 14

p15-17 news analysis.indd 14

mix of skills and experience for the current environment,” a spokesperson for the firm says.

Minter Ellison’s recent retrenchment of 35 staff (11 legal and 24 support staff) came swiftly in response to what its chief executive partner John Weber called a recent “softening” in demand for legal services. “The next financial year is going to be tough for our clients and the firm; we expect parts of the market to be soft and partner incomes to be lower next financial year. We regret the reduction in staff numbers but the decision was made to protect the firm’s position. We do not expect to have any further GFC-related redundancies,” he said in a written statement.

Other firms have also had to make staff cuts. Deacons laid off 15 property and finance lawyers, DLA Phillips Fox retrenched 12 Australian and Kiwi lawyers, while Macpherson + Kelley (M+K) made two commercial senior associates and one commercial junior lawyer redundant due to “poor performance” and insufficient work.

HWL Ebsworth laid off 17 staff – six lawyers, two graduates, three property paralegals and six personal assistants.

Hicksons Lawyers retrenched eight staff from across the firm, Herbert Geer has confirmed that it made “two or three” redundancies at its Brisbane and Melbourne offices, while Thomson Playford Cutlers (TPC) has laid off 19 legal staff and five non-legal staff in both Sydney and Adelaide offices.

There are also rumours that Tresscox Lawyers’ recent redundancies have affected more than one dozen staff, largely M&A junior lawyers.

Other firms have responded to the economic crisis by changing their graduate program. DLA Phillips Fox has cut its graduate intake, from 66 in 2008 to 43 in 2009, across its Australian and New Zealand offices. TPC, on the other hand, has deferred its 2009 graduate intake to 2010, while Corrs Chambers

Westgarth delayed the start date for 2009 recruits from February to April, and paid graduates A$2,300 in compensation.

M+K opted to reduce its annual graduate intake from seven to four, while Minter Ellison and Middletons were both the subject of rumours regarding cuts in graduate and seasonal clerk numbers, but have dismissed them.

Some firms have responded by providing more flexible working arrangements, purchased annual leave and career breaks to cut costs. AAR has offered voluntary redundancy packages, which include up to one year’s pay for long-serving staff, but the firm is resolute about having no redundancy targets.

M+K has explored subletting surplus office space to reduce rent, bringing an annual saving of A$250,000. The firm has saved A$120,000 through reducing use of external consultants, and a further A$80,000 per year on other operational expenses, such as library, entertainment and sponsorships. Maddocks, on the other hand, has implemented firmwide policies to minimise waste and duplication, changed recruitment processes to maximise the value of head-hunters, and more sparingly used external consultants, taxis, stationery, catering and subscriptions.

“We have made cost savings in excess of A$1m,” says the firm’s CEO David Rennick. “We have also looked hard at discretionary spending and encouraged our staff to make sacrifices and do everything possible to ensure the business’ survival. Our partners have said they are prepared to reduce profit expectations in favour of the long-term sustainability of the business.”

Other lawyers appear to be going solo and working remotely as in-house lawyers. “We are seeing that… a lot in the resources sector and the mid-cap of the sector has been quite hard hit. These companies are not looking to employ but get people in with contracts to assist,” says Ken Jagger of Balance Legal. ALB Australasian Legal Business ISSUE 7.5

20/05/2009 10:18:56 AM

NEWS | analysis >>

►► Law firm redundancies in numbers

Allens Arthur Robinson

Freehills

Redundancies: Voluntary redundancy package offered, including up to one year’s pay for longserving staff but no redundancy targets Graduates: 77 starting in March Other measures taken: Firm-wide salary freeze effective from 1 July, profit share for partners expected to drop, flexible working arrangements, purchased annual leave, career breaks

Redundancies: No plans for retrenchments Graduates: 116 Other measures taken: Firm-wide salary freeze effective since 20 March to remain in place, partners advised to expect drop in income drop in firm’s profitability, cancelled annual national partners’ conference, offered career breaks, flexible hours and purchased leave

Blake Dawson

Herbert Geer

Redundancies: 93 (27 lawyers and 66 support staff)

Corrs Chambers Westgarth

Graduates: Delayed start date for 09 recruits from February to April, A$2,300 paid in compensation

Deacons

Redundancies: 15 property and finance lawyers Graduates: 43 Other measures taken: Continues to invest in pro bono and sustainability initiatives

DLA Phillips Fox

Redundancies: 12 Australian and Kiwi lawyers Graduates: 43 in Australia and New Zealand – down from 66 in 2008

Redundancies: “Two or three” redundancies in Brisbane and Melbourne Graduates: Nine across Sydney, Melbourne and Brisbane offices Other measures taken: Flexible arrangements, staff leave, reduced spending on social events and cateringg

Hicksons Lawyers

Redundancies: Eight staff across the firm

HWL Ebsworth

Redundancies: 17 staff (six lawyers, three property paralegals, three graduates, six personal assistants) Graduates: 16

Macpherson + Kelley

Redundancies: Three Graduates: Down from seven to four Other measures taken: Sub-let surplus office space, saved A$120,000 by reducing use of external consultants, saved A$80,000 per year on other operational expenses

Maddocks

Graduates: Four in Sydney and 24 seasonal clerks in Melbourne Other measures taken: Flexible work options, job sharing, reduced profit expectations, more than A$1m saved from cut discretionary spending

Minter Ellison

Redundancies: 35 (11 legal and 24 support staff) Graduates: Unaffected Other measures taken: Cost reduction program

Thomson Playford Cutlers

Redundancies: 24 (five non-legal and 19 legal) in Adelaide and Sydney Graduate: Deferred 2009 graduate intake to 2010 Note: this table contains information available to ALB at time of publishing. Other firms may have taken similar measures that are not presented here.

2009 Winner BRW Client Choice Awards Best Australian Law Firm (Under $20 million) 2009 Winner Exceptional Services (All Australian Professional Service Firms) 2009 Finalist BRW-ANZ Private Business Award, Excellence in Customer Service

Swaab Attorneys Level 1 , 20 Hunter Street, Sydney NSW 2000 Ph 02 9233 5544 www.swaab.com.au www.legalbusinessonline.com

p15-17 news analysis.indd 15

15

20/05/2009 10:19:01 AM

NEWS | analysis >>

Analysis >>

Saving the

worst for last When will the next wave of insolvency work hit Australian practices?

W

hile a number of high profile companies have undergone restructuring or entered voluntary administration, for the most part they were already experiencing significant financial distress in early or mid-2008 – ominously, before the global economic downturn fully took effect. The implication is that the current batch of restructurings and corporate collapses are victims of the credit crunch and the full effects of the economic downturn remain to be seen.

“Companies such as Babcock & Brown, Allco and Centro were heavily geared and the credit crunch was enough to get them,” says Henry Davis York partner Roger Dobson. “In Australia, the economic downturn is only just getting underway.”

Exactly when we will see the next wave of restructuring is guesswork, although Dobson says it is likely that there will be more activity by the third or fourth quarter of this year. “I would be surprised if it didn’t happen.

There are a lot of companies that will need to refinance significant amounts of debt in the next 12 to 24 months, asset prices are under pressure and revenues are dramatically impacted.

It is almost inconceivable that we 16

p15-17 news analysis.indd 16

will not see some more highly geared companies forced to undergo a major restructure or go into voluntary administration.”

Restructuring and insolvency

Stephen Eno, Baker & McKenzie

A feature of the Australian market has been the absence, thus far, of any high profile company going into liquidation.

Babcock & Brown, Allco, Centro and PBL have all thus far been on the restructuring or administration side of the equation and although they are not out of woods just yet, they have evaded liquidation.

“Banks are all about maximising returns,” Dobson says. “In every instance I’ve seen, banks will try where they can to assist in a restructure. There may, of course,

be more cases in future where a restructure is not feasible.”

This is in contrast to the situation in Asia, where lawyers report that distressed companies have been heading towards insolvency more rapidly. Stephen Eno, head of Baker & McKenzie’s Asia Pacific banking & finance practice group, says the current climate is seeing struggling companies go from restructuring to insolvency far more quickly than they did during the last financial crisis to hit Asia. Part of the reason is that banks are less tolerant in the current climate because they have other, bigger, challenges. “If you look at some of the companies which have recently faced financial difficulties, it is remarkable – and slightly disturbing – how quickly provisional liquidators have been appointed,” he says.

However, Australia is in a slightly different situation, Dobson states.

“In Australia, directors can be held liable for insolvent trading and that’s in contrast to a lot of Asian jurisdictions which don’t have such legislation,” he says. “Most of the time it’s the directors themselves who are appointing administrators and the banks don’t have a say in the decision to pull the pin – other than to then take steps to protect their own position as best they can.”

Some have gone so far as to suggest that Australia’s insolvent trading laws are contributing to the rate of corporate failures. McCullough Robertson partner Scott Butler recently called for Australian regulators to provide greater flexibility to directors, pointing to initiatives in Britain where directors have a greater opportunity to continue trading if there is a reasonable prospect of avoiding insolvency.

“The [current Australian] legislation means that directors are walking a legal tightrope if they attempt to keep their businesses afloat rather than declaring insolvency,” he says. ALB

“It is almost inconceivable that we will not see some more highly geared companies forced to undergo a major restructure or go into voluntary administration” Roger Dobson, Henry Davis York Australasian Legal Business ISSUE 7.5

20/05/2009 10:19:04 AM

NEWS | analysis >>

www.legalbusinessonline.com

p15-17 news analysis.indd 17

17

20/05/2009 10:19:06 AM

NEWS | news >>

news in brief >> Australasian bodies condemn Fiji crisis Australian and New Zealand law bodies have condemned the legal crisis unfolding in Fiji and called for the reinstatement of the rule of law on the island.

The governing military regime has dismissed the country’s constitution as well as the judiciary and detained Fiji’s Law Society (FLS) president, Dorsami Naidu, after he publicly criticised the regime’s moves.

John Corcoran, the president of the Law Council of Australia (LCA), said that President Iloilo’s actions pose a direct threat to rule of law in Fiji and cannot be justified on any basis. He also expressed concern that, instead of calling an election, the president had suspended the constitution, dismissed the entire judiciary and reappointed Commodore Bainimarama as prime minister.

The LCA announced its support for Naidu following recent news of his arrest. Naidu was released after 24 hours in custody and said the dismissal of Fiji’s judiciary and challenge to free speech posed a threat to FLS’ members. The New Zealand Law Society has called for New Zealand lawyers to refuse appointments to any offices under the regime, as they often fill government legal posts in Fiji.

Lawyer chatter prompts new legal offer at Commonwealth Bank Commonwealth Bank has recently introduced a new Legal Offer, which includes a customised cash-flow lending service that complements the bank’s existing deposit base products.

The service is simple and flexible, allowing firms to borrow Stewart Creighton funds against their cash flow for a CBA variety of purposes, said Stewart Creighton, the bank’s market specialists general manager. He said the offer enables firms to reinvest in their business or grow by acquisition by using their own assets. This assists smaller firms with personal wealth management opportunities for partners and simplifies financial arrangements between partners and the firm, he said.

Law firms of varying sizes have expressed interest in the offer, but mid-tier players appear to be the most avid users. A ‘pilot’ offer during the past six months received positive feedback. The offer is currently available to Australian customers through Commonwealth Bank’s business banking network.

►► Correction

In the Energy and Resources Deal of the Year section of the ALB Australasian Law Awards 2009 feature in issue 7.4 of ALB, reference is made to Freehills and Vinson and Elkins as the firms acting on the Santos Petronas transaction. Those firms acted for Santos. The sole firm acting for Petronas in both the acquisition and the joint venture arrangements, Addisons, was omitted.

industry >>

Staff relieved at AAR I

t could have been worse. That seems to be the prevailing sentiment at Allens Arthur Robinson (AAR) following revelations that the firm intends to freeze salaries and offer redundancies on a voluntary basis.

“I’ve been speaking to other staff about it and there was a fair degree of relief about the announcement.

[Managing partner] Michael [Rose] has been visiting and briefing offices in person, and video recordings are posted on our intranet, so all our staff knows what’s happening.

He’s doing a remarkable job and has our admiration,” one anonymous source told ALB. Salary freezes will be effective from 1 July and profit share for partners is expected to drop. Policy changes have been made to encourage flexible working arrangements, purchased annual leave and career breaks to further cut costs. There is also a voluntary redundancy package being offered, which includes up to one year’s pay for long-serving staff.

The firm has not specified how long the salary freeze will last, but ruled out any redundancy targets. “The voluntary redundancy program has absolutely no targets in terms of numbers, positions or any specific roles in the firm – it is just one of a number of options being made available,” Rose said.

He said the firm’s plans across the Asia region would vary from country to country. “In Asia our response will most likely vary from office to office and country to country, depending on the nature of our practice, whether or not we have a joint venture and the impact of the downturn on the country concerned.” AAR is currently in a

“The steps we are taking are positioning the firm for the long term and inevitable recovery in the economy. These steps are not about enhancing short-term profitability” michael rose, Allens Arthur Robinson

18

p18-25 news.indd 18

number of joint ventures with local firms across the region. In Singapore the firm is in a formal joint-law venture with TSMP Law Corporation, in Thailand it has an alliance with Siam Premier, and in Indonesia it is allied with Widyawan & Partners.

Michael Rose The steps being AAR taken by the firm are all about maintaining growth in the long run according to Rose, who cited the firm’s recent intake of graduates as evidence. “We just took on 77 graduates last month and we have a pipeline running out for the next two years and we Australasian Legal Business ISSUE 7.5

20/05/2009 9:53:59 AM

p

R

NEWS | news >>

pay freeze

uk report Firms still floundering in credit crunch UK firms are still feeling the pressure to cost cut in the midst of the global recession and even Magic Circle firms have been forced to implement salary freezes across offices.

Clifford Chance recently reversed salary bands for its junior lawyers, with all associate pay frozen at current levels until the end of the 2009-10 financial year.

The move to effectively reduce salary rates across the firm will affect all non-partner lawyers and support staff across the firm’s global network, with the exception of trainees, who will still have their pay increased come their second year.

The initiative follows in the footsteps of Slaughter and May, and Freshfields Bruckhaus Deringer, who made a similar announcement in February, reversing salary bands for all junior lawyers with the exception of trainees.

Lovells has also jumped on the pay freeze bandwagon and will keep salaries for all lawyers, support staff and legal PAs at this year’s levels.

Only trainees who qualified in March will not see a reduction in their salaries, with the level remaining at £65,000.

Double cutbacks at Eversheds Eversheds has asked forthcoming trainees to defer their start dates, while simultaneously slashing numbers from its real estate practice group in a bid to cut costs in the economic slowdown.

The firm has offered 31 out of 73 of its September 2009 trainees £5,000 to defer entry or be employed as a paid paralegal for one year and soon afterwards cut 10 lawyers from its real estate division.

don’t intend to make any changes to that pipeline. The steps we are taking are positioning the firm for the longterm and inevitable recovery in the economy. These steps are not about enhancing short term profitability. We have a partnership that is very much focused on the longer term,” he said.

“Our firm has been one of the strongest performers in the Australian legal market over the last year and in Asia we’ve seen good work in a number of our offices, including Cambodia and Indonesia. However, we have predicted, and been preparing for, a downturn in the legal services market,” he said. “It’s a good plan, it’s working and it’s helping us grow in a softening market.” ALB www.legalbusinessonline.com

p18-25 news.indd 19

Magic Circle firm Linklaters also recently asked 15 volunteers to defer their start dates from September 2009 and March 2010, saying it would like to “fine tune” its trainee intakes.

Cameron McKenna welcomes new partners CMS Cameron McKenna has added 17 new partners to its ranks the new ‘office partner’ salary rung.

The new office partner position, which allows the firm three levels of partnership, was introduced last month as part of a shake-up and represents the first stage of progression for senior associates, followed by a three-year salaried gateway level before partners join the equity.

The office partner role has been used in Eastern Europe for several years but this is the first year it has been introduced in the City.

Herbert Smith swings the axe Herbert Smith has announced it is to slash up to 84 members of its City office and will be reversing all associate pay bands, with salaries to remain at 2008-09 levels as an added cost-cutting measure.

The cuts will reportedly be made across the firm’s corporate and real estate practice, with fee earners, professional support lawyers and paralegals all likely to be affected. Secretarial roles across all fee-earning areas and up to 21 support staff will also be at risk.

Middle East-focused firm, Trowers & Hamlins also made 17 members of staff redundant recently – all in its London office. This is the third consultation at the firm and brings the total number of redundancies at the firm to 28, with the cuts affecting both feeearning and support departments.



ROUNDUP • Linklaters project finance partner Stuart Salt is set to take over as managing partner of Emerging Europe, Middle East and North Africa (EEMENA) following the retirement of Nick Eastwell from the role after 20 years of service • Eric Schwartz – Dewey & LeBoeuf’s Paris former managing partner – will soon join arbitration senior counsel James Castello of King & Spalding to launch the Atlanta-based firm’s first office in France • Norton Rose has offered staff a part-time option of working four-day weeks on 85% of pay, or taking a sabbatical of up to 12 weeks on 30% of pay • SJ Berwin has its eye on an international title. The firm recently set up an office in Dubai less than a month after launching in Hong Kong • Ashurst recently unveiled its 2009 promotions, revealing a decrease in partner promotions – only 10 lawyers were made up this year compared with 17 in 2008 • Berwin Leighton Paisner has welcomed seven to its partnership, with real estate the biggest beneficiary

19

20/05/2009 9:54:00 AM

NEWS | news >>

news in brief >> Kensington Swan tops Legal Aid list In terms of recipients of fees paid by Legal Aid, Kensington Swan has been the top earning Kiwi firm for the past two-and-a-half years, having received NZ$5.6m (A$4.6m) for various Maori and treaty claims.

Treaty work also brought a healthy NZ$3.7m (A$3.02m) for Wellington firm Rainey Collins, while human rights litigation brought boutique firm Cooper Lawyers scooped an impressive NZ$4.4m (A$3.6m) in the same period.

The Legal Aid regime is expected to be reviewed, following complaints that the program is flawed and that Legal Aid rates are too low. Solicitor Sonja Cooper told ALB that the profit firms make from the fees is relatively small due to “huge” trial expenses that take away a “big chunk” of it.

Last year Coopers collected NZ$1.5m (A$1.2m) in legal aid fees, Kensington Swan received NZ$2.1m (A$1.7m), while Auckland barrister Charl Hirschfeld of Jamaica Chambers was at the front of the pack with NZ$2.3m (A$1.9m).

Foreign investors bought US$4.4bn of Asian equities in the week to 10 May, the biggest inflow since 2004 and the eighth largest ever Source: Merrill lynch innovation centre proves popular In Queensland, the Innovation Centre Sunshine Coast has received considerable interest from entrepreneurs who wish to realise their business plans. Brisbane firms Redchip Lawyers, Hemming + Hart Lawyers and Fisher Adams Kelly are just a few of the many law firms who have recently shown interest in basing themselves at the centre. They have already gained new clients and established referral networks across the region, according to the centre’s CEO Colin Graham.

Law firms have shown interest in contacting startup companies for possible work opportunities as well.

So far the centre has been in touch with eight to 10 large Brisbane firms and there is increasing interest from Sydney and Melbourne firms as well.

20

p18-25 news.indd 20

industry >>

Freehills salary freeze to last beyond end of June T

he Freehills staff salary freezes, which have been in effect since 20 March, will remain in place into the new financial year.

According to an internal email recently sent by Freehills managing partner Gavin Bell, the freeze affects all staff, business services and lawyers.

“After considering our forecast for next year and conducting a review, we have decided to place a freeze on all salaries, effective immediately, including this year’s 30 June review,” he said.

Partners have been advised to expect a drop in income due to a forecasted drop in the firm’s profitability for the next financial year. If the firm’s profit does not fall in 2010 the ‘upside’ will be shared with colleagues in an “equitable way”, but if the decline continues then tighter measures are expected.

Freehills has already cancelled its annual national partners’ conference, and offered voluntary flexible working options, such as career breaks, flexible hours and purchased leave. However, the firm said it has no plans to retrench anyone as it has already invested significant “effort” in recruitment.

Meanwhile, a spokesperson for the firm dismissed recent blog comments that Freehills Gavin Bell had not offered jobs to Freehills any summer clerks.

“It was untrue and completely wrong that we didn’t make offers,” the spokesperson said.

A number of top-tier firms have laid off staff in recent months, as the economic downturn has hit hard. ALB

WA >>

New firm strikes Balance with tailored fees

P

artner Ken Jagger left Freehills last year to start up his own Western Australian firm called Balance Legal.

In response to increasing scrutiny of “surprise bills” and high demand for certainty of fees, the firm tailors fees to its clients’ budgets, with a range of fixed rate options. It offers both external and internal seconded legal services to its clients, Ken Jagger and employs 11 lawyers. Balance Legal His inspiration came from positive feedback that clients gave after seconded Freehills lawyers began working in their offices.

“On the flip side, our lawyers enjoyed the secondment too, and it struck me as a potential gap in the Australian legal market that needed to be filled,” he said.

Jagger said this fee structure makes the firm more appealing to corporate

clients, who now have fewer resources at their disposal due to the global financial crisis. The recession has, in fact, helped the firm to find more shortterm work and “leave its mark”.

In addition to this, many Australian lawyers appear to be going solo and working remotely as in-house lawyers.

“We are seeing that happening a lot in the resources sector and the mid-cap of the sector has been quite hard hit. These companies are not looking to employ but to get people in with contracts to assist,” Jagger said. ALB

“We are seeing that happening a lot in the resources sector and the mid-cap of the sector has been quite hard hit. These companies are not looking to employ but to get people in with contracts to assist” Ken Jagger, Balance Legal Australasian Legal Business ISSUE 7.5

20/05/2009 9:54:04 AM

NEWS | news >>

governance >>

Companies not living up to audit standards

S

urprised” is how Minter Ellison partner Mark Standen described his reaction to new figures indicating that several listed companies are not complying with governance standards by failing to establish an independent internal audit function.

About 15% of listed companies surveyed said the final decision to hire or retrench the head of internal auditing rested with the chief financial officer, according to the 2009 Internal Audit Benchmarking Study. Standen said he was surprised there had not been more compliance and suggested there should be more communication between internal auditors and the Audit Committee.

The survey, from the Institute of Internal Auditors and Protiviti, also revealed the top three priorities of Australian internal audit teams for the next three years: fraud investigations, risk management attestation in accordance with new ASX Corporate Governance Principles and major project implementations. The findings also state that compliance standards need to be higher. ALB

us report Fresh wave of layoffs hit US firms US firms continue to crumble under the weight of the credit crunch, with O’Melveny & Myers, Pillsbury Winthrop Shaw Pittman, King & Spalding, Paul, Hastings, Janofsky & Walker, New York-based Chadbourne & Parke and Venable all recently announcing layoffs across their offices in response to the economic instability.

O’Melveny & Myers bid farewell to 90 lawyers, including associates and counsel, and 110 staffers in March, while King & Spalding laid off 37 associates and counsel as well as 85 staff firmwide, and Pillsbury saw 55 lawyers and 100 staff lose their jobs.

Paul Hastings, Chadbourne & Parke and Venable also slashed numbers by 131, 25 and 64 employees respectively.

Bryan Cave hunts for London merger US firm Bryan Cave has revealed it is searching for a UK counterpart to expand its budding presence in London.

The firm launched in the UK in 1982, but is reportedly keen to enter into a merger with a London-headquartered firm as a way to develop its standing in the European legal market.

The UK merger will be one of many changes to develop this year. The firm announced job cuts totaling 134 in February, and has been working to revamp its restructuring and outsourcing and

finance practices in the City following the hire of former Mourant chief executive Stephen Ball.

Redundancies comntinue at Bakers Baker & McKenzie has continued its slashing spree, recently making 38 associates and 86 support staff redundant in the US. The latest cuts come shortly after the firm initiated a second consultation in London, which is likely to lead to the loss of 85 jobs, including between 20 and 30 lawyers.

Six New York associates were already made redundant this year as the firm reviews its salary bill in response to the economic downturn.

Another US firm, Mayer Brown, also recently initiated a second round of job cuts, with 45 lawyers and 90 support across its US offices losing their jobs as a result of a review of its global operations.

Skadden loses lawyers to boutique Recent redundancies at Skadden, Arps, Slate, Meagher & Flom have reportedly prompted the departure of 11 of the US firm’s attorneys for new boutique BuckleySandler.

The Washington DC office of Skadden and the US offices of Gibson, Dunn & Crutcher both confirmed employee layoffs – 25 staff positions at Skadden’s DC office and 36 staff members across the nine US offices of Gibson, Dunn & Crutcher.

industry >>

Clerk cuts claim denied

by Middletons Lawyers

M

iddletons Lawyers has dismissed a rumour that the firm had allegedly halved seasonal clerk numbers for 2009/10 due to the global financial crisis.

The response comes after someone claiming to be the friend of a seasonal clerk applicant wrote to Lawyers Weekly, accusing Middletons’ human resources manager of saying that “all the law firms were doing it [halving seasonal clerk numbers]” since work was “drying up”.

A spokesperson for the firm said the rumour was “incorrect”, adding: “Our firm has no plans for redundancies at the present time and has made none to date.” ALB www.legalbusinessonline.com

p18-25 news.indd 21



ROUNDUP • US firm McGuireWoods is to merge with the 36-lawyer firm of Grundberg Mocatta Rakison, gaining a London presence and adding to its 900 lawyers in 17 offices • Chicago firm Arnstein & Lehr has taken over seven-lawyer, Florida-based firm Fieldstone Shear & Denberg • Clifford Chance has made 24 transactional attorneys in New York redundant • Boston-based Edwards Angell Palmer & Dodge aid off approximately 25 lawyers and 35 staffers across six offices due to declining work • Jeffrey Stone and Peter Sacripanti will begin their roles as joint chairman of McDermott Will & Emery in January 2010, replacing incumbent chairman Harvey Freishtat who has held the position since 2003 • Linklaters recently hired UBS managing director Lewis Steinberg to co-head its US practice and head up its tax practice group • Chicago private equity partner Bert Krueger was recently nominated to succeed James Holzhauer as chairman of Mayer Brown. Holzhauer is stepping down after two years at the helm • Fried Frank Harris Shriver & Jacobson has confirmed it is to reduce its US workforce by a total of 99 people, losing 41 associates and 58 administrative staff

21

20/05/2009 9:54:05 AM

Firm Profile NEWS | news >>

Buddle Findlay

NZ COMMENTARY

Is your internet policy web 2.0 proof?

M

ost organisations now have email and internet policies in place. Many policies, however, have not been adapted to deal with the realities and sophistication of the Web 2.0 environment – the second generation of internet technology. Web 2.0 technology includes social networking websites such as Twitter, Face Book, My Space and YouTube, “commercial” internet websites such as eBay and Trade Me and other technologies (such as iPods and memory sticks) that allow employees to connect with work place equipment.

An illustration of the damage that can be caused was seen last month when a senior Telstra employee created a satirical Twitter page in the name of Australian Communications Minister, Stephen Conroy. Adverse media reports suggested that Telstra’s silencing of the employee backfired on Telstra (despite Telstra denying that it had done so).

Telstra has subsequently introduced guidelines for using such sites but the damage could have been avoided if they had been in place earlier.

Firms face two options to deal with the new technology: impose a blanket ban, or allow access on certain terms.

Imposing a ban Some employers have chosen to deal with the proliferation of Web 2.0 sites by imposing an outright ban on their use on work equipment. For example, in March this year Television New Zealand announced they were adopting this policy. Reasons can include: • Loss of staff productivity • Cost of broadband connection • Risk of slowing down the network and interfering with business activities • Potential civil and criminal liabilities • Risk to security and potential disclosure of corporate data • Risk to the employer’s professional reputation.

However, some commentators suggest that employers may eventually need to adjust these policies to reflect the expectations of the younger generation, arguing that taking a restrictive approach may make it difficult to recruit younger workers.

22

p18-25 news.indd 22

Allowing conditional access Other employers have embraced new Web 2.0 technologies by allowing employees to access them at work under certain circumstances. Some businesses see social networking sites as having invaluable global business networking capabilities and professional merits that are instant, convenient and cost efficient.

In particular, businesses that work closely with technology and young people may see these sites as a way to promote their forward-thinking, youthful image. But even if a business is not in that category, Web 2.0 technologies – and what follows them – will likely become the norm at some point.

Where employers choose to allow access to Web 2.0, it is critical that appropriate policies and procedures are implemented which specifically deal with this technology. Decisions affecting work place technology, and the access to and use of it, are too important to be made by default.

What should a sound Web 2.0 policy contain?

• The policy should specifically set out the employer’s policy on blogging, social networking sites and commercial sites such as Trade Me. Are they allowed or not? If reasonable use is permitted, define and give examples of “reasonable”.

• Clarify if separate user names and passwords are used, whether these are shared or secret. Employees should be notified if they are responsible for activities under their account and whether they must notify the employer of any breach in security.

• The section of the policy dealing with communication or general behaviour should explicitly deal with texting as well as computer usage.

• Set out what is permitted in terms of interconnection between employer’s equipment and software and the employee’s own portable devices such as iPods.

• The policy should cover the extent to which it is permissible for employees to refer to their work and colleagues in blogs or social networking sites.

For example, Telstra’s new guidelines

state that employees are expected to identify themselves as an employee of Telstra but disclaim that they are speaking on Telstra’s behalf.

• Employers might want to consider whether or not union related activity is permissible and appropriate on the workplace computer systems.

• If employees are encouraged to produce blogs as part of “marketing” and “advertising”, the employer may wish to obtain marketing/editorial control of such staff blogs.

While specific considerations apply to any new technology, overall, the ground rules for internet and email policies remain the same in the Web 2.0 environment. The policy should be well defined, easily accessible and, where possible, contained in one document.

The policy, and any changes to it, should be adequately communicated to staff including training where possible. Finally, technology use should be monitored regularly and policies enforced consistently to ensure compliance and avoid unnecessary and costly grievances.

This article was written by Sherridan Cook, a partner in the Auckland office and Alastair Sherriff a consultant in the Wellington office of Buddle Findlay, one of New Zealand’s leading law firms.

Sherridan specialises in all aspects of employment law and commercial dispute resolution.

Sherridan can be contacted by phone +64 9 357 1858 or email: sherridan.cook@ buddlefindlay.com.

Sherridan Cook, Buddle Findlay

Alastair advises on employment, health and safety in employment and can be contacted by phone: +64 4 498 7327 or email: alastair.sherrif@ buddlefindlay.com.

Alastair Sherriff, Buddle Findlay

Australasian Legal Business ISSUE 7.5

20/05/2009 9:54:06 AM

NEWS | news >>

010 0 010 0111010 01101010 0101010 0101011 01010111010111010 0 01011010 0110101010 1001 0100010011101001101010010101001 IT report 0101101010111010111010 0 01011010 01101 Autonomy bring out connectors for IDOL Autonomy have followed up the integration of their IDOL platform with iManage by releasing a bunch of IDOL connectors for popular legal software.

The move makes sense. Their engineers have already done the hard work while constructing the integration components for Vivisimo and it gives law firms an incentive to move across to the new platform.

The reality of the announcement is that it is really just the first stage of building connectors for legal software. So far we have a LexisNexis Interaction connector (useful to may firms), a Carpe Diem Time and Expense connector (less so for this region) and one for Practical Law Company’s Legal Knowhow Services which is relatively unheard of in the Asia Pacific region.

Billback merges Billback, the legal focussed expense management and cost recovery firm has merged with APS (Advanced Professional Solutions), a company specialising in practice management systems for accounting firms.

The merger occurred due to Billback being purchased by APS’s parent, Reckon Limited in January 2009 for AU$18 million.

Although most of us in the legal world have never heard of them, APS apparently is “the primary practice software supplier to 22% of the Top 100 accounting firms in the UK, over 60% of the Top 50 firms in New Zealand and over 70% of the Australia’s Top 100 firms.”

It will be interesting to see where this move takes Billback. They may expand their business model into the accounting world, or re-deploy their legal sales force to sell software to accountants.

Microsoft announce Exchange 2010 Microsoft have unveiled the latest incarnation of their Exchange mail and calendar server, Exchange 2010, and announced the commencement of a public beta program.

The intention is to release an integrated suite of office products at roughly the same time, including Microsoft Office 2010, Microsoft SharePoint Server 2010, Microsoft Visio 2010 and Microsoft Project 2010. The cynics amongst us would say that Microsoft are attempting to lock everyone in, with an integrated server/client strategy, now that their file formats have been opened up by the EU and others. Microsoft on the other hand, prefer to see it as giving “people a consistent experience

www.legalbusinessonline.com

p18-25 news.indd 23

across devices, making it easier to create and edit documents and collaborate from any location”.

Exchange will be the first of the new products, becoming available in late 2009. Microsoft Office 2010 and related products will hopefully reach the technical preview stage in the third quarter of 2009 and become available in the first half of 2010.

The new features in Exchange include: • Better performance on SANs and increased redundancy options • Mention of the availability of Microsoft hosted solutions • Better archiving • A new concept called MailTips to warn users “before they commit an e-mail faux pas such as sending mail to large distribution groups, to recipients who are out of the office or to recipients outside the organisation, helping protect against information leaks and reduce unnecessary e-mail messages”. Although this sounds like a nice idea, being warned every time you send an external email may become a tad annoying. But if it can stop people replying to all it accidentally it gets our vote • Ignore conversation. The ability to “mute” an email conversation where everyone is replying to all and you really don’t care.

• Better integration with voicemail As usual with Microsoft, we’ll wait and see if they can hit their own deadline.

BigHand tout super ROI BigHand are talking up one of the bigger digital dictation implementations in the region, with New Zealand firm Simpson Grierson moving across to their platform.

The move sees the software being rolled out to 220 layers and 90 secretaries, and the firm has espoused the usual benefits of being able to move jobs between offices and obtain visibilities of work queues.

The firm’s Information Services Director, Valerie Fogg, believes that the system will pay for itself within the year, although we’d love to see the calculations, as digital dictation is an area for which it is notoriously difficult to get accurate ROI figures.

Chris McLean is a specialist in legal technology having worked for numerous law firms both as a lawyer and support services director. You can find his website here: www.auslegal.com and contact him here: chris.mclean@auslegal.com

23

20/05/2009 9:54:12 AM

NEWS | news >>

news in brief >> Mallesons takes bite out of Krispy Kreme Mallesons Stephen Jaques recently sent a letter on behalf of client Arnott’s, threatening legal action against the local arm of US-based donut company Krispy Kreme, after a ‘limited edition’ donut named ‘Iced Dough-Vo’ was claimed to be a “blatant infringement” of an Arnotts’ biscuit brand.

Arnott’s was extremely concerned by this infringement of its Vo-Vo trademarks and was prepared to take all steps necessary in order to protect its Australian trademark rights and its extensive reputation in its brands, read the letter issued by Mallesons. The letter also stated that Krispy Kreme had until 24 April to cease selling the product or legal action will be taken.

However, the managing director of Krispy Kreme Australia, John McGuigan, a former Baker & McKenzie lawyer, said the company had sought legal advice and initially vowed to continue selling the product. In the end the parties settled their dispute by having Krispy Kreme will rename the product effective from 11 May.

Clients up for bid on new legal website Just as eBay revolutionalised online product auctioning, a new web portal aims to follow its example by helping lawyers defy geographic barriers to win new clients. Getalawyer provides an interactive interface for lawyers to communicate with clients who need legal advice and also gives them an opportunity to tender for work. A lawyer needs only to glance at the ‘help someone’ section or the detailed brief to find key information about the nature of the problem, how much the client is willing to spend and how many parties are bidding.

The website also provides lawyers with a ‘vehicle’ to source work and compete for it outside immediate geographic constraints, according to Getalawyer founder Ben Beukes. He said that a property lawyer based in the Sydney suburb of Randwick might end up getting conveyancing work from all over New South Wales and that junior barristers can compete with the more senior barristers – who tend to rely on well-established connections.

Annual subscription fees are still to be finalised before the website’s launch in May, but could be in the order of A$250. The site will be launched at: www.getalawyer.com.au the latest legal news For all the breaking legal news and opinion go to our website at www.legalbusinessonline.com

24

p18-25 news.indd 24

VICTORIA >>

Black Saturday hearing brings lawyers and barristers to the fore T

he Royal Commission into the tragic Black Saturday Victorian bushfires is under way, and sat for its first directions hearing in Melbourne’s County Court on 20 April.

So far, there have also been 26 community consultation sessions in 14 different areas affected by the blaze. Corrs Chambers Westgarth partners Val Gostencnik and Janet Whiting are instructing Owen Dixon Chambers West senior counsel Jack Rush, who is assisting the inquiry.

Corrs was chosen for its “expertise, resources and value for money”, according to Royal Commission chief executive Jane Brockington. She said the firm was selected from Melbourne firms by a three-step process to identify all possible conflicts of interest, and knowledge of public sector procurement and probity standards.

Australian Government Solicitor general counsel Tim Begbie is acting for the federal government, while Slater & Gordon litigation group leader Toby Borgeest is advising the United Firefighters Union of Australia.

Public Interest Law Clearing House lawyers Mat Tinkler and Caroline Adler are acting for about 30 individuals and community groups affected by the bushfires. There are also several Victorian barristers involved, including Melbourne Chambers barrister Allan Myers, and Flagstaff Chambers’ Neil Clelland and Garry Livermore, who are all acting for the Victorian State Government. ALB

►► Key legal advisors on Royal Commission into Black Saturday Firm: Corrs Chambers Westgarth Lead lawyer: Val Gostencnik, Janet Whiting Client: 2009 Victorian Bushfires Royal Commission Firm: Owen Dixon Chambers West Lead lawyer: Jack Rush, Jonathon Redwood Clients: Corrs Chambers Westgarth, 77 Victorian Councils, Municipal Association of Victoria Firm: Australian Government Solicitor Lead lawyer: Tim Begbie Client: Australian Commonwealth Government Firm: Slater & Gordon Lead lawyer: Toby Borgeest Client: United Firefighters Union of Australia Firm: Public Interest Law Clearing House Lead lawyers: Mat Tinkler, Caroline Adler Clients: Bushfire victims Firm: Melbourne Chambers Lead lawyers: Allan Myers, Chris Archibald, Neil Young Clients: Victorian State Government, SP Ausnet, 77 Victorian Councils, Municipal Association of Victoria Firm: Flagstaff Chambers Lead lawyer: Neil Clelland, Garry Livermore Client: Victorian State Government Firm: Aickin Chambers Lead lawyer: Jonathan Beach, Darren Bracken Client: SP Ausnet, Victorian Police Firm: William Crockett Chambers Lead lawyer: Gregory Lyon, Ian Hill Clients: 77 Victorian Councils, Municipal Association of Victoria, Victoria Police Firm: Joan Rosanove Chambers Lead lawyer: Wendy Harris Client: Insurance Council of Australia Australasian Legal Business ISSUE 7.5

20/05/2009 9:54:18 AM

NEWS | news >>

mergermarket M&A deals update

www.legalbusinessonline.com

p18-25 news.indd 25

25

20/05/2009 9:54:20 AM

NEWS | appointments >>

news in brief >> Kiwi firms still have the resources The global financial crisis has not stopped New Zealand law firms getting a slice of work arising out of increased prosecution under the Kiwi Resource Management Act (RMA).

While the economic downturn has affected aspects of the firm’s RMA practice, overall RMA litigation work flows are still strong, said Buddle Paul Beverley Buddle Findlay Findlay partner Paul Beverley. The firm is involved in consenting for infrastructure development, including two windfarms for Contact Energy and RMA water-related litigation – the Central Plains water cases in the South Island. There is also RMA work from the insolvency area, he said.

Figures from the Kiwi Environment Ministry reveal that between 1 May 2005 and 30 June 2008, there were 260 prosecutions – 52% up on the 171 prosecutions from 1 July 2001 to 30 April 2005.

However, the rise is due to tighter regulation rather than more felonies. Beverley pointed out a recent trend among some regional councils which are shifting their focus from educating delinquents to prosecuting them. aussie pair drink to kirin-lion nathan deal Mallesons Stephen Jaques and Blake Dawson have played a hand in helping Japanese brewer Kirin to finalise its acquisition of Australian-based Lion Nathan.

The deal, which will be effected by a scheme of arrangement and has the unanimous support of Lion Nathan’s independent directors, will see Kirin acquire the 54% of the Australian company it does not already own for A$2.5bn in cash. It is described as the company’s second largest acquisition in Australia, slightly behind the A$2.9bn acquisition of National Foods in 2008.

A Mallesons team led by Meredith Paynter, Greg Golding, Sharon Henrick, Judy Sullivan and Nuncio D’Angelo acted for Lion Nathan on the deal, while Ian Williams, Carl Della-Bosca, David Ryan and Vivian Chang from Blake Dawson represented Kirin.

New executive counsel roles for Freehills Some senior lawyers wish to progress further in their career, but prefer to steer clear of partnership.

Freehills has noticed this trend and responded by creating the new role of executive counsel.

The salaried position is separate from special counsel – a popular choice for senior lawyers aspiring for a higher non-partner role – and includes duties such as team leadership, legal management, practice management, client relationships and project management.

Freehills believes the role is an Australian first. Bell pointed to the firm’s research into other firms, which revealed that while equivalent roles exist in large international law firms, there is currently no such position at Australian firms. “We see the role as vital in ensuring that we keep our talented people and provide a variety of options for career fulfilment,” said managing partner Gavin Bell.

26

p26-28 appts.indd 26

appointments ►► LATERAL HIRES Name

Area of law

Organisation coming from

Organisation going to

Richard Best

Property

Professional Legal Group

Moray & Agnew

Michael Chaaya

Corporate, finance

Mallesons Stephen Jaques

Corrs Chambers Westgarth

Craig Hailes

Property, litigation

Mills Oakley

Macpherson + Kelley

Noela L’Estrange

Planning, employment

Australian Government Solicitor

Queensland Law Society

Kerree McIvor

Property

Professional Legal Group

Moray & Agnew

Graham Harold Murphy

Trade practices, health

Independent Bar

Western Australian Supreme Court

David Nolan

Litigation

Herceg Lawyers

Mills Oakley

Leanne Stewart

Alcohol beverages, corporate

Nixon Peabody

Piper Alderman

Athena Zissiadis

Property

Professional Legal Group

Moray & Agnew

►► Promotions Name

Area of law

Organisation

Daniel French

Technology, IT

Anthony Harper

Mark Leemen

Finance, equity

Skadden Arps

Adrian Tembel

Corporate, media

Thomson Playford Cutlers

Thomson Playford Cutlers

Tembel unveiled as new TPC chief executive partner After 17 years at Thomson Playford Cutlers (TPC), Adrian Tembel has been named the firm’s new chief executive partner. The move sees the former national Adrian Tembel head of corporate succeed outgoing Brett Goodridge, who leaves the firm to pursue other legal and non-legal business interests in Perth.

Tembel was voted in unanimously by his fellow partners who chose him for his experience, leadership skills, intimate knowledge of the firm and business acumen. Chairperson Loretta Reynolds said it was the board’s view that appointing someone who has built a career with the firm – and has an unrivalled understanding of its business – was critical.

In his new role, Tembel’s first priority will be to capitalise on the firm’s Melbourne, Sydney and Adelaide presence. “These are markets where we see long-term growth potential for the firm. The integration and expansion of our Melbourne office will no doubt be a focus for him,” Reynolds said.

Tembel plans to continue the firm’s transformation from an Adelaide firm to a “respected” mid-tier firm in the Australian marketplace.

Professional Legal

Moray & Agnew

Professional Legal Group moves to Moray & Agnew When Professional Legal Group (PLG) founder and principal Richard Best decided to move his team to Moray & Agnew’s Melbourne office, he was looking Richard Best for a good fit for his client base.

Best, who has been appointed as a property partner, had established the boutique firm after having worked as an in-house property lawyer at Coles Myer, but Moray & Agnew’s technology and working environment influenced his decision to abandon the solo route. He said he liked the firm’s extensive precedent systems, time recording practices and automated client reporting practices but, more importantly, was impressed with Moray & Agnew’s “holistic approach” to client service.

Property paralegals Athena Zissiadis and Kerree McIvor have also moved to Moray & Agnew, adding 14 years’ experience in property and conveyancing work. Best tops this with an additional four years’ experience in leasing, deal structuring, government projects and joint venture work. He recently acted on an A$8m residential development project in Yarrawonga, Victoria.

Australasian Legal Business ISSUE 7.5

19/05/2009 4:16:56 PM

NEWS | appointments >>

Skadden Arps

Lend Lease lead lawyer joins Skadden partnership When Skadden counsel Mark Leemen acted for Lend Lease on its recent A$302.5m equity raising, he did not realise he would soon be entering partnership.

Mark Leemen The promotion sees Leemen become just the second Australian partner at the US firm’s Sydney office, which has historically tended to hire US expatriates. He said it was a “big vote of confidence” by the firm’s management – not only in himself, but in the office and the Australian market.

Having worked for Skadden’s New York office, Leemen advised Lend Lease on US aspects of the raising, completing the deal in a tight timeframe despite fluctuations in the Australian and US markets.

He has also advised BHP on its US$3.3bn SECregistered shelf senior notes offering and Westfield on US securities law issues (A$2.9bn).

Mallesons

Corrs

Mallesons lawyer jumps ship for Corrs Michael Chaaya is not one to shy away from an opportunity and, after working as a senior associate at Mallesons Stephen Jaques for more than 11 years, he decided Michael Chaaya that moving to Corrs Chambers Westgarth would be his next challenge.

Already well acquainted with Corrs partners Christine Maher, Megan O’Rourke, Andrew Lumsden and Andrew Galvin, Chaaya was eventually approached about a corporate partner role by CEO John Denton. The main attraction was the firm’s plans to grow its financial services group; “strong” staff, client relationships and community involvement; and the management’s collaborative approach.

Corrs’ client base also attracted him, which includes financial institutions Suncorp and ANZ, among others. Most of Chaaya’s clients have been positive about his move, some of which are financial service entities and product providers, including: AXA, which he advised on the development; and National Australia Bank (NAB)/MLC, which he advised on its rationalisation project for life insurance and its legacy superannuation products.

He has also formerly been seconded as an in-house lawyer for Westpac, BT Financial Group, AMP and NAB/MLC. Mills Oakley

M+K

Mills Oakley partner returns to his roots Craig Hailes used to work at Macpherson + Kelley (M+K) as a young lawyer, but then moved to other firms, notably Mills Oakley’s Melbourne office, www.legalbusinessonline.com

p26-28 appts.indd 27

where he worked his way up to partnership. Eight years later his former workplace ‘grew’ on him and he decided to rejoin as property principal.

A few factors contributed to his return, the main ones being M+K’s Craig Hailes culture, values, practice areas, plans for national expansion and its “loyal” and “growing” client base. The average length of stay for a lawyer at M+K is 10 years and this fact alone is “remarkable”, Hailes said.

Hailes has advised a number of mining companies, developers, multi-storey buildings, landlords, and tenants on transactions, dispute resolution and leasing matters. His most recent transaction involved advising on the development and leasing of two bulk goods centres.

Chapman Tripp

Chapman Tripp partner to look at Overseas Investment Act Following Chapman Tripp’s push for Kiwi tax rule changes to encourage more Asia-Pacific financial investment and transactions into New Zealand, partner Tim Williams Tim Williams has been appointed to review New Zealand’s Overseas Investment Act. The Technical Reference Group will also consist of Simpson Grierson’s Don Holborow, Russell McVeagh’s Garth Sinclair, Minter Ellison Rudd Watts’ Andrew Monteith and Bell Gully’s Andrew Petersen. They will advise the Kiwi Government on the review, Don Holborow which is aimed at making foreign investment easier and more attractive, while ensuring the protection of land, assets and resources.

Williams previously advised the NZX on law and rule reforms, News Corporation on consent to hold 43% of Sky Network Television, and on an exemption for consolidation between INL and Sky, which was announced as ALB’s 2006 New Zealand Deal of the Year. He believes he was chosen for his experience as a regular applicant for Overseas Investment Office (OIO) consents, and procuring policy statements that saved OIO from making an “unnecessary” application. Williams has also made submissions on the treatment of New Zealand unit trusts.

Ags

Qld Law Society

Law Society snaps up top AGS lawyer Australian Government Solicitor’s (AGS) Noela L’Estrange has always considered herself a Queenslander, so she found the opportunity to become CEO of the Queensland Law Society too good to pass up.

The position was advertised and L’Estrange applied for it because she saw it as a good opportunity to work

in the profession, but more on the “representative, lobbying and service side”, she said.

Having worked for AGS for 11 years, L’Estrange more recently served as director of legal practice support in Noela L’estrange Canberra. Before that she was a law lecturer at Queensland University of Technology, human resources lawyer at Deacons’ Brisbane office and headed her own legal management consultancy called The Quality Curve.

L’Estrange returned to her home state in May to begin her three-year contract with the Queensland Law Society, where she was reunited with fellow former students Terry O’Gorman of Brisbane firm Robinson O’Gorman and Queensland Court of Appeal justice Margaret McMurdo.

Anthony Harper

Anthony Harper lawyer logs on for technology partnership role Daniel French is quite the technological whiz when it comes to advising on IT outsourcing, software development and e-commerce contracts. His desire Daniel French to specialise made him swap his job as in-house lawyer at AXA’s UK group for a technology senior associate role at Anthony Harper during 2003.

French has recently been promoted to partnership and will head the firm’s technology group. A key factor in his appointment has been his practical experience in the technology sector, given that many South Island lawyers do not have a specialisation in technology because most Kiwi lawyers are ‘generalists’.

In his new role, French will give special attention to increasing and accelerating the size and number of software and technology providers that the firm acts for. He has previously acted for EziBuy and Max Fashions on customising and licensing core retail systems from SAP and Ciber Novasoft.

Herceg Lawyers

Mills Oakley

Herceg principal leaves for Mills Oakley David Nolan, one of Herceg Lawyers’ principals, had often referred litigation work to Mills Oakley. As time passed he developed a fondness for the firm David Nolan and, after a meeting with the firm’s CEO John Nerurker, realised that working for Mills Oakley as a partner was the next step in his career.

When Nerurker approached Nolan about work opportunities, he seemed passionate about – and committed to – developing Mills Oakley into a full service firm, spanning across the Eastern Sea Board.

27

19/05/2009 4:17:08 PM

NEWS | appointments >>

The firm also seemed to be able to outmanoeuvre its competitors, Nolan said.

Although still in discussion with clients about the move, Nolan said they have responded very positively and see it as a “great opportunity”. He has previously acted on Capital Play’s US$1.8bn bid for three racetracks and associated gaming facilities in New York, Fluorotechnics’ recent IPO and rights issue and the sale of Gujarat NRE Resources (A$1.1bn).

Nixon Peabody

Piper Alderman

Wine, beer and spirits work lures Nixon Peabody lawyer When it comes to beverage alcohol law, Piper Alderman’s new corporate special counsel Leanne Stewart is a pro. She recently joined the firm after working as professional specialist Leanne Stewart at US firm Nixon Peabody’s beverage alcohol group.

Stewart’s choice of Piper Alderman was influenced by her previous interactions with the firm in her former capacity as counsel at the Australian Wine and Brandy Corporation. She had “great respect” for the firm’s reputation, client focus, working culture, and quality of work on offer in the wine, beer, spirits and food industries.

28

p26-28 appts.indd 28

In addition to her liquor expertise, Stewart is well versed in M&A, regulatory compliance, licensing, international trade and intellectual property. She formerly represented a major US wine exporter in releasing product containers seized in Europe due to labelling issues, and acted for a US private equity firm on licensing issues arising from its acquisition of a USand Canada-based restaurant chain.

Bell Gully

NZCC

Former Bell Gully partner to chair New Zealand Commerce Commission Mark Berry has had quite a career. He has been a Bell Gully partner, a Chapman Tripp consultant, and has practised at the Kiwi independent bar – now he has been appointed to chair the Kiwi Commerce Commission.

New Zealand’s minister of commerce, Simon Power, announced Berry’s appointment for a term of 18 months. Berry will lead an “extensive” work program, implementing the new regulatory regimes, following the passing of the Commerce Amendment Act late last year, according to Power.

Berry has been deputy chair of the Commerce Commission (1999–2001) and advised on the Goodman Fielder/Wattie merger, the BIL/Qantas/ JAL/American Airlines consortium’s initial stake in Air New Zealand, and various competition matters.

Independent Bar

WA Supreme Court

Ex-Blakes partner appointed to Western Australian Supreme Court Graham Harold Murphy, previously a partner with Blake Dawson in both Sydney and Perth, has been appointed to the Western Australian Supreme Court.

Murphy, who has also spent time with Clifford Chance in Europe, left Blakes in 1994 to join the Independent Bar. Christian Porter said that Murphy’s vast career spans many facets of the law, including trade practices, administration, maritime, medical negligence and contractual, statutory and constitutional interpretation. He has specialised in commercial litigation, principally in banks, mining companies and other public companies.

Murphy started his new role on 28 April.

For all the latest legal news and opinions log on to our website at www.legalbusinessonline.com

Australasian Legal Business ISSUE 7.5

19/05/2009 4:17:52 PM

Commercial Litigator - 6+ Yrs PQE - Auckland

Construction Litigation - 3+ Yrs PQE - Dubai

Boutique New Zealand law firm is looking to add a senior litigator to its Auckland team. Working in a collegial and team orientated environment you will be dealing with a broad range of commercial litigation including commercial contracts, construction, insurance and insolvency. Ideally you’ll have broad experience, excellent networking and client facing skills and at lest 6 years experience gained at a mid tier or top tier law firm. This position offers excellent career progression for the right candidate. Ref 74518

The Dubai office of a highly reputable British firm is seeking a midlevel construction litigator to join their busy team. The economic downturn has caused a dramatic increase in workload. Applicants should have at least four years post-qualified experience in construction litigation. Previous experience of working in the Gulf and/or the ability to speak Arabic would be preferred. Ref: 74667

Commercial Litigator (Intermediate/ Senior level) +4 Yrs PQE - Wellington Highly reputed and well established NZ law firm seek a commercial litigator with at least 4 years PQE to add to its litigation team in Wellington. The team acts for large corporate, state sector and local government clients. You will be advising on a wide range of commercial disputes in the areas including energy, networks and utilities; financial services; insolvency; trade practices, IP and commercial property as well as regulatory issues and judicial review. We are seeking lawyers at Senior Associate and Associate level with excellent academics, good drafting skills and the ability to work under pressure and make an impact in a high performing environment. The excellent working environment, non hierarchical structure and diverse range of work on offer make this a fantastic opportunity. Ref 73557

Middle East Litigator UAE - Competitive tax free salary Our client is an international firm with a well established office and reputation in the Gulf. They have a broad range of clients form a variety of different industries. With the economic downturn many of these clients are being forced to turn to the firm’s litigation department. To cope with the increasing demand they are looking to add a mid-level associate to their litigation department. Applicants must have at least 4 years post qualified experience working in the field of litigation, working for a reputable firm with an international standing. Previous experience of working in the Gulf and/or the ability to speak Arabic would be preferred. Ref: 74666

p26-28 appts.indd 29

Commercial Litigation - Partner Level - Boutique Firm - Sydney This well established and highly regarded boutique firm currently seek a partner level Commercial Litigation lawyer to join their team.

Working in a boutique and specialised environment you can utilise your skills and really make your mark. With a large commercial dispute resolution practice, this is an excellent opportunity for a career focused and motivated lawyer to play an integral role in shaping the future of the firm. Ref:74660

Workplace/Industrial Relations - 5+ Yrs PQE Melbourne Mid tier firm in Melbourne seeks a Senior Employment Lawyer to join its busy team. Acting for businesses in employment law, discrimination, industrial relations, and occupational health and safety matters, this role promises to be stimulating and challenging.

You will be a senior work place relations lawyer with a client base or someone with local market knowledge and strong business development skills. You will enjoy working in a great environment where work/life balance is not just an ideal, but a reality. Ref 74467

Call Kellie-Jane Baker in our Sydney office on (02) 9220 4400, Anna Wech in our New Zealand office on +64 4 972 3109 or Penny Forsyth or Iain Rainey in our London office on 02072208111 for more information today!

19/05/2009 4:17:56 PM

ALB special report | New Zealand 09 >>

ALB

new zealand 2009 AUSTRALASIAN LEGAL BUSINESS

30

p30-43special report nz.indd 30

Australasian Legal Business ISSUE 7.5

20/05/2009 11:56:04 AM

ALB special report | New Zealand 09 >>

Diversify or perish Diversification, cut-throat pricing, more competition for government work: these are just some of the outcomes as New Zealand firms adjust to a new world order

T

here’s a new flavour of the month in New Zealand. While firms are still keeping an eye on the M&A scene, what they would really like to talk about in 2009 is how much their practice does not rely on big corporate transactions. Diversity of practice areas has become the theme du jour – although firms point out that this diversity was present all along.

“The big deals were the icing on the cake,” says Russell McVeagh CEO Gary McDiarmid. “But we are highly diversified and have a very stable base of clients and practice areas.”

Undoubtedly, firms who have built up genuine depth across a range of practice areas are now reaping the rewards for their investment. Chapman Tripp, Buddle Findlay and Kensington Swan are regarded as being particularly well placed in this respect.

“We don’t put our eggs in one basket,” says Buddle Findlay national chairman Peter Chemis. “We have focused on building the size and quality of particular specialisations, such as insolvency, public law, health and environment. Other firms may have teams in these areas, but we believe the depth and quality of our client base in health, for example, is pre-eminent.”

At Bell Gully, the feeling was that the firm had become “a little skinny”, according to chairman Roger Partridge, so it moved last year to bring in six new partners in areas such as litigation, competition, resource management and energy.

“Strengthening the team at a time of economic uncertainty was a significant achievement,” he says.

have become accustomed to the healthy fees associated with large M&A deals – particularly when tendering for government work.

“In Wellington, margins are lower and clients are more price sensitive,” said one source. “There were some firms that didn’t take that into account in the past and billed the same in Wellington as they did in Auckland. Now that the big corporate transactions work has slowed down, they’re going to have to battle to find work in other areas.” The result, says the source, is some firms “ruthlessly cutting their own throats” when tendering for work.

Kensington Swan chairman Clayton Kimpton says that tendering for government work has become more competitive. However, he adds that his firm has not lost any work to rival firms through the tender process – rather, the firm’s tender success rate has increased.

“You don’t just walk in and get the work – you need to have been there, built relationships with central government, and developed a deep understanding of the relevant industry, business and environment. This is why Kensington Swan is one of the few large firms to continue to invest in its Wellington office,” Kimpton says. He believes a strong Wellington office is essential to building relationships, although he says that local and regional government work is also extremely important.

However, it is not just government work where firms are jostling for position. Chapman Tripp’s Andrew Poole says he has heard of “very unusual”

Price war

“A lot of our growth is expected to come from an increased awareness of the firm’s existence and its involvement in a number of high-profile transactions”

As competition for work hots up, fees have become a key battleground. Cost may not have been a major issue in the boom times of recent years, but clients are increasingly squeezing firms for more value for money. It is not an easy transition for those that www.legalbusinessonline.com

p30-43special report nz.indd 31

Wayne Hudson, Hudson Gavin Martin 31

20/05/2009 11:56:06 AM

ALB special report | New Zealand 09 >>

“The firms involved are doing damage to themselves in the long term. When the recovery comes, it will be difficult to raise those rates back to previous levels” Andrew Poole, Chapman Tripp pricing across the entire industry. “I can only surmise that this is a reflection of overcapacity and a need to secure revenue,” he says. Poole suspects this overcapacity may be linked to the promotion of salaried partners which occurred in prosperous years at some firms. “It may have been a smart thing to do in boom times, but it would presumably put pressure on the firm when times are lean,” he says. Whatever the reason, Poole says the cut-throat pricing is unsustainable. “The firms involved are doing damage to themselves in the long term. When the recovery comes, it will be difficult to raise those rates back to previous levels.”

Revenues

New Zealand firms do not release revenue figures, but they are prepared 32

p30-43special report nz.indd 32

to discuss the comparison between this year’s revenue performance to date and last year’s.

At Simpson Grierson, revenue is only down by a modest 3%, which chairman Rob Fisher attributes in part to the firm’s decision to pursue a broad range of specialisations. “Firms that have narrowed their area of practice don’t get the counterbalance of being broad based,” he says. “Our litigation team is flat out and we’re also extremely busy in the insolvency and construction disputes space.”

Gary McDiarmid says it is early days to make revenue predictions, but his prediction at present is that Russell McVeagh will be “slightly” down on last year. “M&A is well down, but other areas are well up – the net result is that we’ll be down slightly overall,” he says.

Other firms also paint a picture which is generally positive given the economic climate – indeed, in certain firms the word “buoyant” comes to mind. However, there was a reticence to speak on the record about success.

“There is a lot of hardship out there at the moment – we would consider it in poor taste to be seen to be boasting about revenue,” Buddle Findlay’s Chemis says.

Lay-offs

At Simpson Grierson, there have been no redundancies. “In our commercial property team there were a few vacancies we didn’t fill after people left through natural attrition – but there have been no redundancies and we’re still hiring,” Fisher says. “We recently welcomed back three senior associates Australasian Legal Business ISSUE 7.5

20/05/2009 11:56:10 AM

ALB special report | New Zealand 09 >>

from the UK – two from Linklaters and one from a US firm.”

At Kensington Swan, the focus is on retraining lawyers in more resilient practice areas. “We don’t want to lose lawyers,” Kimpton says. “We want to make this investment in people.

However, one question on all law firms’ minds is: ‘How long can we continue to invest? ’” It is the same story across the major firms – while hiring and particularly the replacement of departing lawyers has become more conservative, all managing partners who spoke to ALB said they had no plans to make redundancies. However, certain smaller firms are rumoured to have retrenched lawyers.

That does not mean overcapacity doesn’t exist. Russell McVeagh is reportedly encouraging the undertaking of more pro bono work as a way of keeping lawyers stimulated. Chemis says he expects that other firms will also go down the same path. “It’s law firm culture to stay busy – not having work is bad for morale. We’re all neurotic actors waiting for a part,” he says.

The downturn has meant some www.legalbusinessonline.com

p30-43special report nz.indd 33

►► New Zealand’s largest law firms Name

Led by

Partners

(excluding partners and paralegals)

Total number of lawyers

Lawyers

Offices

Bell Gully

Stephen Macliver (CEO), Roger Partridge (Chairman)

46

191

237

Auckland, Wellington

Buddle Findlay

Peter Chemis (National Chairman of Partners)

43

130

173 Auckland, Wellington, Christchurch

Chapman Tripp

Andrew Poole, Mark Reese (managing partners) Alastair Carruthers (CEO)

54

158

212

Auckland, Wellington, Christchurch

DLA Phillips Fox

Tony Crawford (CEO)

26

66

92

Auckland, Wellington

Duncan Cotterill

Janice Fredric (CEO)

33

85

118

Sydney, Auckland, Wellington, Christchurch, Nelson

Kensington Swan

Chris Heilbronn, (CEO) Clayton Kimpton (Chairman)

40

118

158

Auckland, Wellington

Minter Ellison Rudd Watts

Mark Weenink (CEO)

43

138

181

Auckland, Wellington

Russell McVeagh

Gary McDiarmid (CEO)

41

195

236

Auckland, Wellington

Simpson Grierson

Rob Fisher (Chairman)

47

194

241

Auckland, Wellington, Christchurch

* Figures supplied by firms themselves

33

20/05/2009 11:56:12 AM

ALB special report | New Zealand 09 >>

“You don’t just walk in and get the work – you need to have been there, built relationships with central government, and developed a deep understanding of the relevant industry, business and environment” Clayton Kimpton, Kensington Swan Boutique perspective

relief from the salary pressures of recent times. “For a long time wage inflation was higher than charge out inflation,” Kimpton says. “That is no longer the case, which is a much needed correction.”

34

p30-43special report nz.indd 34

As the times get tougher, should we spare a thought for the last batch of partners who left top-tier firms in order to start their own practice? IP and technology firm Hudson Gavin Martin, which opened its doors just before the start of the downturn, might seem vulnerable, but partner Wayne Hudson says that business has been strong. “Workflow for the firm has generally been on the increase since November 2008, which suggests there is still a fair bit of activity in the commercialisation and protection of innovation. Indeed, the firm is

currently recruiting and has grown in total numbers since opening,” he says.

The challenge for new boutique firms is, to use a cliché, to grab a larger slice of the pie: “A lot of our growth is expected to come from an increased awareness of the firm’s existence and its involvement in a number of high-profile transactions,” Hudson says. “Likewise we see ourselves providing an offering in the current market that will be attractive to large corporates looking for alternate models to undertake their work in the current climate.”

Australasian Legal Business ISSUE 7.5

20/05/2009 11:56:14 AM

ALB special report | New Zealand 09 >>

T

Tiers of An increasingly competitive market and claims of a ‘flight to quality’ have reignited the ever-smouldering rivalry between New Zealand’s ‘Big Three’ and their local competitors

www.legalbusinessonline.com

p30-43special report nz.indd 35

he UK has its ‘Magic Circle’, Australia has its ‘Big Six’ and the conventional view is that New Zealand has its ‘Big Three’ – Bell Gully, Russell McVeagh and Chapman Tripp. But as far as Simpson Grierson’s Rob Fisher is concerned, that ‘three’ should be a ‘four’. “If you look at the industry awards – including ALB’s own awards – and the fact that Simpson Grierson was the only New Zealand law firm to be featured on the Mergermarket legal advisory table for Australasian M&A transactions – it is clear that we are regarded by the market as top-tier,” he says.

One can sense a weariness in the voice of Buddle Findlay national chairman Peter Chemis when the subject comes up. “The [Big Three concept] is the perpetuation of a myth which has been part of the landscape for years,” he says. “We can accept that some firms may be pre-eminent in particular areas, but we take exception to the suggestion that [the three] are pre-eminent across the board.”

35

20/05/2009 11:56:16 AM

ALB special report | New Zealand 09 >>

Russell McVeagh CEO Gary McDiarmid says it is unfair to classify lawyers outside the ‘Big Three’ as somehow inferior, although he says that market opinion places the trio in a class of their own. “Across the various practice areas – the lawyers we see across the other side of the table are more often than not from two particular firms,” he says diplomatically.

Client perception

In June 2008, the NZ Corporate Lawyers Association (CLANZ) released key results from a survey undertaken by professional services consultancy Team Factors and Thomson-Reuters in which nearly 1,900 lawyers participated. Team Factors estimated that approximately 30% of the NZ in-house legal profession and 21% of the overall NZ legal profession participated in the research.

It involved detailed brand analysis – how the biggest firms are perceived by corporate and government clients across key brand attributes – with a high-level objective also to rank New Zealand’s 14 largest commercial firms against performance and pricing criteria. Respondents singled out Russell McVeagh, Chapman Tripp and Bell Gully as the firms delivering the highest overall performance, although Chapman Tripp was perceived to be less expensive than the other two.

Other firms such as Kensington Swan, Simpson Grierson and Buddle Findlay were also well regarded, but collectively

up work at the expense of the top-tier firms because clients are realising that our quality of work is just as high.”

Ronald Pol, director of Team Factors, agrees that perception matters. “If you want to get new clients, you need to know what prospective clients think about you too,” he says. “What clients and prospective clients say about the firm is part of its brand. What these people think about a firm’s brand will determine whether they instruct a firm, or not. Sophisticated clients will also select some firms perceived as absolute top quality for some work and will use other good firms for different work, often at a lower price.”

Flight to quality

While there is a consensus that clients are on the move, there are two variations of the story. One has clients abandoning the ‘Big Three’ in search of better value

“You’ll see existing clients wanting to continue with the arrangement, maybe asking to deal with a particular partner or a volume discount in return.

The market has become increasingly sophisticated” Gary McDiarmid, Russell McVeagh ranked distinctly below the first group.

Is it possible that these results reflect the self-reinforcing nature of market perception?

Chemis says that they are a function of “size and brand awareness”. “It’s not an observation on quality,” he says.

“You take the amount of shopping around that’s happening on panels for example. We are increasingly picking 36

p30-43special report nz.indd 36

for money. The other has the ‘Big Three’ actually increasing market share as clients take flight to the safety of top tier and peace of mind, which is apparently unobtainable elsewhere.

Chapman Tripp managing partner Andrew Poole says there has been a distinct flight to the top-tier. “Clients don’t just want legal advice – they want a trusted legal adviser and have become

more conservative in their choice,” he says. “They want the Chapman Tripp badge and the [advising] partner badge.”

Poole says he has seen more pitch activity from clients in the past two months than he saw in the previous two years. “There is some price pressure, but this is not uniform. There is also the view that it is worth paying more to get trusted advice,’ he says.

McDiarmid says his firm has also picked up new clients in recent times.

“Some of them are quite large and we know they have previously dealt elsewhere – generally the mid-tier,” he says. Russell McVeagh has attracted both transaction and corporate advisory work and has also observed a maturing in the market.

“Clients don’t tend to put work to tender as much,” McDiarmid says. “They have worked out who they want to deal with and where the value is. So you’ll see existing clients wanting to continue with the arrangement, maybe asking to deal with a particular partner or a volume discount in return. The market has become increasingly sophisticated.”

The other side of the story, of course, is firms like Buddle Findlay, who say they have picked up additional work from clients looking to maximise value.

Is this position irreconcilable with the ‘flight to quality’ theory? Perhaps not. As Kensington Swan chairman Clayton Kimpton points out, a ‘flight to quality’ does not necessarily mean a flight to the ‘Big Three’.

“Every large firm is pre-eminent in a particular area,” he says. “For example, we are known for our construction and infrastructure practice and we are getting a huge boost in that area, among others.”

Australasian Legal Business ISSUE 7.5

20/05/2009 11:56:18 AM

ALB special report | New Zealand 09 >>

www.legalbusinessonline.com

p30-43special report nz.indd 37

37

20/05/2009 11:56:20 AM

ALB special report | New Zealand 09 >>

The winds of change Adjustments in New Zealand market conditions and government regulation are making their presence felt on law firm workflows

T

he latest M&A statistics for New Zealand make grim reading for firms who rely on this activity as a key revenue source. Recent figures from Thomson-Reuters show the value of local mid-market deals were down by 85% in the first quarter of this year.

However, Russell McVeagh CEO Gary McDiarmid says there are a few “green shoots” starting to emerge, particularly around distressed M&A. “There is evidence of a fair bit of cash around and buying something often creates the need to sell something else,” he says.

While activity is clearly depressed, firms are reporting a surprisingly steady flow of work, perhaps driven by overseas investment. Buddle

38

p30-43special report nz.indd 38

Findlay started the year by advising on two major transactions – Suntory’s NZ$1.4bn acquisition of Frucor Beverages and Daiken’s purchase of Carter Holt Harvey’s Rangiora MDF plant – both, perhaps not coincidentally, involving Japanese buyers. “What this demonstrates is that there is money around and people willing to spend it,” says Peter Chemis, Buddle Findlay’s national chairman.

As with Australia, foreign investment can be a emotive issue, but there seems to have been a change of political heart.

John Key’s National Party government, which came to power last November, is reviewing the Overseas Investment Act with the idea of creating more avenues to encourage foreign investment. A

technical reference group – which includes lawyers from Chapman Tripp, Simpson Grierson, Russell McVeagh, Minter Ellison Rudd Watts and Bell Gully – is advising on the review. This step is seen by some as a considerable change from the previous government’s position on foreign investment and an indication of a more welcoming stance. Indeed, the Clark government’s intervention in last year’s NZ$1.7bn proposed stake acquisition by the Canada Pension Plan Investment Board in Auckland International Airport has not been quickly forgotten, with some lawyers believing that New Zealand’s international reputation has suffered.

Participation on the technical reference group was by government invitation only, but some firms have taken a more activist role. Chapman Tripp recently proposed changes to tax provisions outlined in New Zealand’s Portfolio Investment Entity (PIE) rules, part of a broader strategy to pursue what managing partner Andrew Poole describes as “thought leadership” in the market and to work

Australasian Legal Business ISSUE 7.5

20/05/2009 11:56:21 AM

ALB special report | New Zealand 09 >>

www.legalbusinessonline.com

p30-43special report nz.indd 39

39

20/05/2009 11:56:23 AM

ALB special report | New Zealand 09 >>

alongside the business community to achieve legislative reform.

New playing field

The New Zealand Government is forging ahead with a radical plan to replace Auckland’s seven local authorities with a single regionwide body. It is a move that has significant ramifications for firms and particularly Simpson Grierson, which has dominated the local government market and currently advises many of the local authorities which face the axe.

“We expect the new entity to test the market and we’re not taking anything for granted,” says Simpson Grierson chairman Rob Fisher. “That said, given our considerable experience we believe we’re well placed to continue providing services to the new council.” Fisher concedes that the volume of local government work may well decline as a result of the amalgamation.

“Certainly the rate payers would be hoping for cost savings, and that would include savings on legal spending,”

40

p30-43special report nz.indd 40

he says. Simpson Grierson will look to balance any loss of workflow with local government work from outside of Auckland, including from both Christchurch and New Plymouth.

New Zealand’s Resource Management Act is also up for review, with an aim to streamline the development approval process – an honourable objective, although one which might have a tendency to reduce lawyer involvement in the process.

“There is still going to be legal advice required, particularly of a strategic nature,” Fisher says. “We are very supportive of the objectives of [the reform]. If it can expedite the process and keep our clients out of courtroom battles, that is a positive thing.”

Emissions statement

Last year, New Zealand was at the forefront of the global push towards the introduction of emissions trading schemes, but with the change of government this position may be up for review.

“As it stands, the current scheme

covers forestry only,” Chemis says.

“Other aspects are on hold and under review. However, there is a general belief that the government is leaning towards have an emissions trading scheme of some description.” The result, he says, is that there is still some advisory activity on this front as clients prepare for the introduction of a scheme.

Bell Gully chairman Roger Partridge says he expects the main framework of the scheme will, to an extent, stay in place in the form passed by the previous government. Bell Gully remains busy advising clients in relation to other aspects of emissions trading, such as the acquisition of other forms of Kyoto-compliant units New Zealand’s PIE – or portfolio investment entity – regime is also continuing to generate work for firms.

“We’ve been quite busy restructuring existing funds into PIEs,” Chemis says. “There’s been a lot of client interest – it’s an obvious cash advantage which everyone is keen to benefit from.” ALB

Australasian Legal Business ISSUE 7.5

20/05/2009 11:56:25 AM

special focus | Chapman Tripp

Business restructuring – a New Zealand update

R

estructuring and insolvency professionals in New Zealand anticipate some big waves – but they just aren’t here yet. While finance company failures dominated the previous two years, 2009 has not been characterised by any major collapse.

Instead, the major news has been listed company rights issues (Nuplex, Fisher & Paykel Appliances, Sky City, Fletcher building) with proceeds being used to reduce bank debt.

Nevertheless, the big waves will come.

They will be propelled by: • Failure of some of the finance company moratoriums; • Borrower’s inability to refinance maturing term debt; and • Distressed businesses increased demand for working capital as a consequence of adverse trading conditions.

The New Zealand market will also need to deal with a number of important issues: • Expiry of the Crown retail guaranteed in October 2010 – the guarantee has been extended to deposits with finance companies as well as banks.

Many of these finance companies would have not survived without the benefit of the guarantee. Two Crown guaranteed finance companies have already failed; • Review and reform of financial regulations and regulatory agencies – Commerce Minister Simon Power has called for a significant review of the Securities Act. A Select Committee Inquiry into the collapse of the finance companies is also likely. Following a critical report by the Registrar of Companies, any inquiry is likely to scrutinize the performance of the corporate trustees; • Regulation of insolvency practitioners – in contrast to Australia, New Zealand’s insolvency practitioners are not regulated. If you cannot get a job as a taxi driver, you can still be an insolvency practitioner. There is a real problem with “cowboy” operators who often prefer the interests of the failed companies’ directors. Legislative attempts (section 280 Companies Act) to deal with the issue were poorly drafted, have failed to deal with the www.legalbusinessonline.com

p30-43special report nz.indd 41

issue and require reform. We have seen these “cowboy” liquidators reject the proofs of debt of significant Australian creditors on flimsy grounds.

The rejection of these claims has advantaged related party creditors.

On investigation it has become readily apparent that the liquidators expected the Australian creditors would conclude that cost and distance outweighed the benefits of challenge.

From a legal perspective, the economic downturn will see a sustained test of the Companies Act 1993 and the Personal Property Securities Act 1999 (PPSA).

New Zealand has enjoyed relatively benign economic conditions since that legislation was introduced. However, commentators are concerned that anomalies between the Companies Act, the PPSA and the Property Law Act 2007 may result in legal uncertainty and high enforcement costs for secured creditors. Many Australian companies exporting to New Zealand are unaware of the PPSA and the need to register a retention of title claim within 10 days of supplying the relevant goods. In fact, it is quite rare that Australian suppliers properly register their security interests and obtain the priority position that they expect on receivership, liquidation or voluntary administration of a New Zealand company.

Opinion is also divided on whether New Zealand’s voluntary administration regime (introduced November 2007) will replicate the Australian success. In the first 18 months only 42 companies entered voluntary administration, resulting in 16 deeds of company arrangement. The key difference between the Australian and New Zealand regimes is New Zealand’s retention of the Crown preference for certain tax debts (GST and PAYE).

Accordingly, New Zealand company directors do not have the prospect of personal liability for unpaid tax debt and are therefore not similarly incentivised to take action when a company is unable to meet its tax debt.

Australian creditors involved in New Zealand voluntary administrations may be surprised that the directors have allowed the company’s position to deteriorate so markedly before calling in

the administrators. They should also be aware that directors are rarely pursued by liquidators for reckless or insolvent trading, primarily because liquidators do not have sufficient funding to advance such claims. However, as part of the November 2007 law change, a creditor that funds a liquidator can now gain priority for 100% of its claim from any recovery, as well as the funding that it provided.

Finally, distressed debt investors have begun to show some interest in New Zealand. Primarily that interest is focused on distressed property assets but there is still a wide difference in the bidask spread. However, if the distressed debt market in Australia develops (as some commentators predict), there will undoubtedly be activity in New Zealand.

Michael Harper is a Finance Partner at Chapman Tripp and is recognised as a leading lawyer in the restructuring and insolvency area.

41

20/05/2009 11:56:25 AM

Firm Profile

Duncan Cotterill.

Duncan Cotterill on ANZAC Tax

P

lenty of law firms talk the talk about closer economic ties and the instrinsic links between New Zealand and Australia. But few demonstrate their knowledge on both sides of the Tasman.

Duncan Cotterill is one of the exceptions, having successfully established a high-powered trans-Tasman taxation team headed by Bruce Patterson (Auckland), Grant Pearson (Wellington) and Special Counsel Mike Aitken (Sydney).

Patterson: “We always had our sights on the trans-Tasman tax market, because there was no one else in that space. While others have talked about closer economic relations and many a word has been written about a common heritage, few professional firms have staked out this complex area of law and regulation.”

It’s an impressive line-up. Patterson is regarded as a pragmatic and commercially savvy practitioner, Pearson joined the team in 2004 from an extensive consulting and tax litigation background, while the addition of Aitken, ex Minter Ellison, is a real coup and provides much needed tax dispute support in Sydney.

Pearson says that while New Zealand and Australia look much the same, it is surprising just how far apart they are from a legal and regulatory perspective.

“It’s a common trap; assuming life is the same on the other side. It’s not!”

For a start, there are the unexpected taxes.

New Zealand has a unitary system of government whereas Australia has a federal system. “New Zealanders don’t intuitively understand the impact of the federal system. It can be an expensive learning process,” according to Patterson.

For example, all Australian States impose significant stamp duty on property transactions and each state is different. And then there’s payroll tax, duty on new cars, land tax, even a parking space levy for the owners of “liable spaces”.

New Zealand has some surprises as well. Although New Zealand doesn’t have a comprehensive Capital Gains Tax,

42

p30-43special report nz.indd 42

it does have a selective capital gains system waiting for the unprepared. There are also fundamental differences, for example in New Zealand Unit Trusts are taxed as companies and Limited Liability Partnerships are not. Completely the opposite to Australia.

GST has the same name, but its implementation has major differences.

Aitken: “There’s no integration between the two systems, other than information sharing – so it’s no surprise that issues arise. The ATO has no sympathy for unprepared New Zealanders and I’m sure the IRD in New Zealand has the same attitude to Australians – it’s not a competitive thing, just the way it is”.

The need to be savvy in both jurisdictions was underlined when New Zealand Revenue Minister Hon Peter Dunne recently warned that he will be keeping a close eye on international tax arrangements, allocation of debt and equity, and transfer pricing – all of which have become more important in determining the ability of the tax system to deliver the revenues needed to fund government programmes.

There are rules in place in both countries to prevent the movement of profit to the other disguised as capital or deductible expenses. Loans are subject to thin capitalisation rules. Trading between related parties is affected by the transfer pricing rules and there is a complex inter-relationship between the Australian debt/equity rules and the New Zealand financial arrangement rules.

Pearson says businesses must nail these issues early or else double or unfunded tax will result. We spend a lot of time straddling the two systems – we advise clients how to organise their affairs tailored to legislation on both sides of the Tasman. There’s no one-sided template for this type of work.”

Summary

Bruce Patterson

Grant Pearson

Mike Aitken

Trans-tasman trade and the movement of people and capital are increasing. The scale of opportunity is unparalleled. But clearly capturing those opportunities requires planning, cunning and good advice. www.DuncanCotterill.com Australasian Legal Business ISSUE 7.5

20/05/2009 11:56:27 AM

p30-43special report nz.indd 43

20/05/2009 11:56:29 AM

profile | managing partner >>

►► BELL GULLY – QUICK FACTS

CEO: Stephen Macliver Chairman: Roger Partridge Number of partners: 46 Number of lawyers: 191 Offices: Auckland and Wellington

44

p44-46 man partner.indd 44

Australasian Legal Business ISSUE 7.5

19/05/2009 4:12:00 PM

profile | managing partner >>

<des this m

<im Note NZ. T

alb/LEXISNEXIS 2009 managing partnerS series

Roger Partridge, Bell Gully:

INC INC

The Partridge paradigm

<box

<stan

Having taken on the Bell Gully chairmanship just as the credit crunch was beginning to bite, Roger Partridge has had to lead the firm towards a new business criterion. He shares the story with ALB

P

acking fruit and vegetables in a grocery was how the chairman of one of New Zealand’s largest corporate law firms started his working life. “I was a card-carrying union member – but union membership was compulsory then,” says Roger Partridge. “I’m not sure I would have joined otherwise.”

The erstwhile grocery storeman has come a long way since then. After joining Bell Gully in 1982 and working his way up through the management ranks, Partridge now finds himself at the helm of one of New Zealand’s top law firms. Or should that be New Zealand’s top law firm?

“We strive to be the best of the best,” Partridge says. “There is a real passion within Bell Gully to work with the best and to be the best: to set the standard.

We are a competitive lot and in a market of this size you cannot rest on your laurels for even a moment.”

‘The best’ can be a subjective concept and particularly so in a market where firms traditionally do not disclose their revenues. One industry review recently estimated that Bell Gully pulled in NZ$105m in revenue last year, in second place behind Russell McVeagh, but Partridge says the Bell Gully figure is inaccurate. www.legalbusinessonline.com

p44-46 man partner.indd 45

“In terms of what differentiates Bell Gully – clients tell us the distinguishing point is that we are easy to work with, practical and have a solution focus,” he says.

Transformation

Partridge has been at the helm of Bell Gully for 18 months, in which time the economic environment has undergone a drastic transformation. “There’s been a paradigm change for the firm,” Partridge says. “It means an end to annual increases in charge-out rates and a focus on expenses that has not in the past been a strategic need for professional services firms. On the other hand, there has been an easing off in the pressures to increase staff numbers and gearing to cope with everincreasing work levels.”

Like many other firms, Bell Gully has compensated for a drop in M&A work by turning its attention to litigation, insolvency, and equity and debt capital markets work. “We are also gearing up in other growth areas in the New Zealand market including, importantly, projects and infrastructure,” Partridge says. Like his counterparts at Chapman Tripp and Russell McVeagh, Patridge says that he has also observed the “flight to quality” syndrome.

Under Partridge’s leadership, Bell Gully has made a concerted effort to build up particular areas of specialisation. Last year the firm brought in six new partners – “the biggest number we’ve brought into the firm in a decade” – specialising in areas such as litigation, competition, resource management and energy, resulting in a net gain of four partners or nearly a 10% increase in the partnership.

“Overall, there was a feeling that we had become a little skinny, and we needed to refresh and look at the medium term,” Partridge says. He is proud that the firm has made this investment in people and strengthened its team at a time of economic uncertainty. But was this also an acknowledgment that the firm might have neglected certain practice areas during the boom years and was in need of reorientation? Partridge prefers to describe the appointments as an expansion. “Our litigation practice, for example, was already comparatively large – we’re building on one of our strengths,” he says.

Carbon trading scheme

Bell Gully has maintained a high profile in the emissions trading space, 45

19/05/2009 4:12:07 PM

profile | managing partner >>

particularly courtesy of the presence of prominent specialist Simon Watt. This time last year, New Zealand was at the vanguard of emissions trading policy and looked set to beat Australia to the punch in introducing a comprehensive scheme, but a change of government has led some observers to fear the scheme will be put on the back burner.

But Partridge says he does not expect the scheme to be canned. “The ETS is still currently in place in the form in which it was passed under the Labour-led government – so in that respect there has not yet been a change in tack,” he says. “The National [government] set up a select committee to review the scheme and underlying principles – it is likely to lead to some change, but we expect the main framework of the ETS will to an extent stay in place in its current form.”

Bell Gully’s emissions trading practice is still ticking over. “Many clients have decided to await the outcome of the Select Committee Review before acquiring further units and pushing ahead on all of their commercial strategies for minimising the impact of the ETS,” Partridge says.

“However, we have continued to be instructed throughout this period on matters associated with the review, advising on the acquisition of GIS (Green Investment Scheme) AAUs from Eastern European countries, the acquisition of other Kyoto-compliant units, establishment of other projects and carbon funds and development of standardised ISDA-documentation for use in New Zealand.”

Technology and ideology

The IT budgets of many firms have been the first casualties of an industrywide push to curtail expenditure.

Bell Gully has moved in the opposite direction. “In 2008 we replaced every desktop and laptop, and upgraded our document management system,” Partridge says. “We are currently implementing the second phase of that project which will provide a total matter-centric framework for managing information.”

46

p44-46 man partner.indd 46

“It means an end to annual increases in charge-out rates and a focus on expenses that has not in the past been a strategic need for professional services firms” Partridge is a believer in free market ideology and is a director of the Legal Research Foundation, a private law reform body, as well as a member of the NZ Business Roundtable.

He believes that New Zealand is over-regulated and less regulation would promote more job growth and economic prosperity. Partridge nominates resource management and employment law as two areas in

particular need of reform. “With the new government, we are starting to see a more facilitative environment which will encourage [economic] activity,” he says.

When he’s not saving the world from over-regulation, Partridge pursues other hobbies including skiing, fishing, contemporary NZ art and photography.

“But Bell Gully and my family are my major focus,” he says. ALB Australasian Legal Business ISSUE 7.5

19/05/2009 4:12:18 PM

p44-46 man partner.indd 47

19/05/2009 4:12:21 PM

FEATURE | international firms >>

Think local, act global What does the future hold for Australia’s small community of international firms? That’s the question many commentators found themselves asking when Dorsey & Whitney slipped into Sydney earlier this year. ALB talks to the main players to find out

T

o practice Australian law, or not to practice Australian law, that seems to be the question. While the range of work undertaken by international firms varies greatly, the key distinction is whether they enter the Australian market as a domestic service provider, or as a satellite of their homeland operations.

Tony O’Reilly, a partner at UK export Kennedys, says his firm’s largely Australian clientele was one of the reasons for expanding into the southern hemisphere, and hence the practise of Australian law was a natural progression. On the other 48

p48-51 international.indd 48

hand, the latest US recruit, Dorsey & Whitney, will follow its American predecessors Skadden, Sullivan Cromwell and Sidley Austin in practising US law only. Their primary focus in the Australian market involves representing Australian clients in cross-border transactions such as M&A and corporate finance.

For firms whose US and UK counterparts pull in some of the largest revenues in the world, this tendency towards boutique operations in Australia is a notable contrast. Most international firms have carved out a niche in the Australian market, such as Australasian Legal Business ISSUE 7.5

20/05/2009 3:56:53 PM

FEATURE | international firms >>

the Canadian import Stikeman Elliot.

“Our Canadian offices have some US capabilities, but we’re not in competition with anyone else here. We practise only Canadian law. We’re much more like the US firms in Sydney in that respect,” says managing principal Brian Hansen.

The other option involves a focus on practice-oriented niche areas, the classic example being Holman Fenwick Willan’s shipping practice. “The entry into the Australian market was a natural step for Holman Fenwick Willan and consistent with the firm’s business model of being represented in major international trade centres,” partner Gavin Villely says.

Why carve a niche?

International firms that reported revenues in the billions in 2008 would hardly be considered averse to

in the first place, when cross-border interaction has been considerably eased by technology in the past decade. But the international firms claim that client needs have lured them to Australian shores. Deitz says that the Skadden Arps decision to open an office was client-led. “It was simply more efficient to service them [Australian resource companies] on the ground here by Adrian Deitz, opening an office. Any Skadden Arps future expansion will be client-led – we’ll commit the resources necessary to ensure our clients get the service they require,” he adds.

Alternatively, the location of Australia can provide another incentive, as many firms continue to seek access to the growing Asia-Pacific

“It was simply more efficient to service them [Australian resource companies] on the ground here by opening an office. Any future expansion will be client-led, we’ll commit the resources necessary to ensure our clients get the service they require” Adrian Deitz, Skadden competition. And yet, interestingly, the international firms that have ventured into the Australian market have avoided trespassing on local legal territory. “We purposely want to limit our practice to that [US law] market, and work in conjunction with Australian firms,” says John Estes, a partner with Sullivan & Cromwell.

Similarly, Adrian Deitz of Skadden Arps notes that his firm “enjoys excellent relationships with the major Australian firms and doesn't want to jeopardize those relationships by competing with them”. “We have no plans to practice Australian law. We would rather continue to play to our strengths and work collaboratively with them on major cross-border transactions,” he says.

One might then John Chrisman, question the need to Dorsey & Whitney open Australian offices www.legalbusinessonline.com

p48-51 international.indd 49

markets. John Chrisman, from the newly opened Dorsey & Whitney office, claims his firm sees Australia as an excellent base for serving its clients in China and India. “That is certainly a factor in our decision to locate in Sydney,” he says.

Chrisman maintains that the decision to open the Sydney office last month, in the midst of a looming recession, was a sound one. “The key is that our clients are looking for us to be where they need us and this is part of that effort,” he says.

Chrisman sees a key role to be played

by Dorsey’s Sydney office in their broader Asia-Pacific operations. “We believe that the Asia-Pacific region will experience substantial growth during the foreseeable future and that the region continues to warrant a significant investment by our firm,” he says. “Australia is a strong, developed economy in a region where most countries’ economies are just emerging and, accordingly, will give balance to our regional presence.”

The common thread between the firms is a consensus on the maturity of the Australian market. As Waldo Jones, head of Sullivan & Cromwell’s Sydney office, explains: “The market is only so large in Australia… It’s not like Asia and Europe, which are viewed as offering potentially large future growth opportunities for international firms. Australia is a relatively stable economy, and is likely to grow at slower but steadier rates over time. This is a reflection on how we view our firm’s prospects for growth in the Australian market.”

One firm which has crossed the line is Jones Day, who in 2006 expanded their US-only practice to domestic M&A work. “We aren’t too concerned with the introduction of other US firms, since they focus on cross-border transactions and the like,” partner Chris Ahern says.

►► International firms in Australia Firm

Australian office location(s) and year of opening

Partners

Lawyers

Baker & McKenzie

Sydney (1964), Melbourne (1982)

91

260

Sullivan & Cromwell

Melbourne (1983), Sydney (2001)

1

10

Skadden, Arps, Slate, Meagher & Flom

Sydney (1989)

2

5

Stikeman Elliot

Sydney (1997)

1

1

Jones Day

Sydney (1998)

4

10

Holman Fenwick & Willan

Melbourne (2006)

7

13

Kennedys

Sydney (2006)

9

5

Sidley Austin

Sydney (2007)

2

3

Austin Haworth & Lexon

Sydney(2007)

1

22

Dorsey & Whitney

Sydney (2009)

1

2

49

20/05/2009 3:56:58 PM

FEATURE | international firms >>

“We’re a small M&A firm with toptier clients, and as such, are much more likely to compete with [firms such as] Freehills.”

Effect of the GFC

How will the global financial crisis affect international firms in Australia? “It hasn’t impacted our plans for Dorsey in Australia,” Chrisman says. “We opened the office in 2009 despite the recession. We believe that the Asia-Pacific region will be the world’s growth engine for foreseeable future.” There is similar attitude at Kennedys, according to O’Reilly. “I would say the economic climate hasn’t impacted on us, primarily because we are litigation-focused.

That tends to be less driven by economic John Estes, issues,” he says.

Sullivan & Indeed, the turmoil in Cromwell international commodity and freight markets has generated litigious work for Holman Fenwick

50

p48-51 international.indd 50

“I think that in these times, clients want to make sure that they’re getting the absolute rock-bottom for every deal, and this has led to hesitation in closing” Chris Ahern, Jones Day Willan. “The main impact, however, is in the projects area, where projects have been either deferred or cancelled.

When the economic circumstances turn, the projects will come back on stream,” Villely says.

Others claim that the relative strength of the Australian economy has buffered the blows of the global recession. “Our completed deal list since the crisis started last September compares very favourably with other offices in the Skadden system,” Deitz says. “The Australian economy and financial system has proved to be remarkably resilient, and that has resulted in deal flow out of Australia

being significantly higher than most other regions.”

However, different firms are evidently experiencing different trends in transactional work, as Ahern explains that while M&A transactions have been put in motion by Jones Day, many have fallen short of a reaching a conclusion. “I think that in these times, clients want to make sure that they’re getting the absolute rockbottom for every deal, and this has led to hesitation in closing.”

On the other hand, Stikeman Elliot’s Hansen notes: “While the number of securities transactions from Asia has reduced dramatically [since the

Australasian Legal Business ISSUE 7.5

20/05/2009 3:56:59 PM

FEATURE | international firms >>

GFC began], there has been recent significant activity in the M&A sector, both out of Australia and China. As one sector falls back with market conditions, other forms of business find market conditions beneficial.”

Estes agrees, saying that “the nature of the transactional work Sullivan & Cromwell undertakes for our Australian clients tracks economic conditions”. “Where the credit markets are frozen, the impetus for Australian corporates to raise debt in the international markets has been significantly reduced,” he says.

But Estes recognises the need for capital to prevail in such times and the need for strength in balance sheets.

“Australian corporates have returned to raising more equity in the past year.

Our work has shifted from the debt side of things, to more on the equity side,” he says.

A rising trend for the future?

Dorsey & Whitney has modest expectations for their new Sydney office – Chrisman hopes to have three

www.legalbusinessonline.com

p48-51 international.indd 51

or four lawyers in Sydney and the office will borrow from its Hong Kong counterpart when necessary.

It seems the chosen path for future investment in Australia will involve further regional and global agreements, such as the ‘best friend’ Waldo Jones, relationship of Herbert Sullivan & Smith with Freehills Cromwell and Corrs Chambers Westgarth. Other international firms may veto the expense of a local office in favour of membership of a global organisation, such as Lex Mundi, MSI Global Alliance or Terralex. The Australian market is often overlooked as international firms relocate partners to Asia and the Middle East, in anticipation of growing work in insolvency, restructuring and corporate advisory.

This outlook could imply that Australia is yesterday’s frontier for international firms. After all, the arrival of Baker & McKenzie and

Sullivan & Cromwell on Australian shores occurred decades before the internet and the ease of video conferencing. International firms such as Coudert Brothers and Pillsbury Winthrop have seen fit to depart Australian shores – or in the case of the former, depart altogether.

But Estes claims that for Sullivan & Cromwell at least, Australian offices still have a strong role to play.

“Clients in the Australian market value close interaction with their advisors. And more so than other markets, time zones factor into the equation,” he says.

“Given the presence of us and a couple of competitors in the market, it may be more difficult for new international law firms to enter Australia and attract a sufficient volume of work to justify the presence of an office here,” Estes acknowledges.

“But for us, being here and being established in Australia and having the franchise we’ve developed over 25 years means that we are very much here to stay.” ALB

51

20/05/2009 3:57:06 PM

FEATURE | interview >>

52

p52-55 in-house interview.indd 52

Australasian Legal Business ISSUE 7.5

20/05/2009 9:59:56 AM

FEATURE | interview >>

in-house perspective

The best bar none Cadbury Australia-NZ GC Karen Perret talks to ALB about getting the best value and service from law firms

K

aren Perret’s first few weeks as general counsel at Cadbury must have been a fiery induction. Not only did she learn of her promotion to the role while on maternity leave, but when she returned to work one of her first key challenges was coordinating the legal aspects of Cadbury’s A$1.2bn sale of its Schweppes beverages business in Australia to Japan’s Asahi Breweries.

“The legal issues associated with the sale were extremely complex and interesting – for example, the need to separate the beverages business from the confectionery business – but I loved every minute of it,” Perret says.

Panel system

In 2007, Cadbury appointed a formal legal panel for its Australian operations for the first time and Freehills, Mallesons and Corrs have been the main recipients of work so far under this arrangement. Cadbury had previously used an informal panel of firms and the objective in establishing a formal panel was to test whether more beneficial terms could be reached with firms. It is an experiment which may well have run its course.

“While we did extract some benefits, I’m not convinced that there is any real www.legalbusinessonline.com

p52-55 in-house interview.indd 53

advantage in having a formal panel,” Perret says. “I think all of the benefits we got through the panel we could have secured in any event outside of the process. When the arrangement ends later this year, at this stage, I am unlikely to continue with it.”

Perret sees an advantage in having a range of firms with which to work, beyond the usual conflict considerations: “From my perspective, the key to maximising the benefit from external legal providers at the minimum cost is to have a number of law firms to choose from – both top-tier and mid-tier – and to actively manage each of them in terms of their service delivery and cost,” she says.

“I make it clear to firms that unless they are competitive, and they keep

me happy with the level of service and the costs, I will move work to another firm. It is important to then actually follow through with that threat if you are going to keep law firms on their toes.”

Perret praises long-standing advisor Freehills for their work on the sale of the Schweppes beverages business: “Historically we have engaged Freehills for their industrial relations expertise. They have had a close working history with Cadbury and know our business and our people very well,” she says. “On the Schweppes transaction we worked mainly with the corporate team with [partner] Martin Shakinovsky and Kristin Stammer’s IP team, who were very easy to work with.”

“I’m not convinced that there is any real advantage in having a formal panel. I think all of the benefits we got through the panel we could have secured in any event outside of the process. When the arrangement ends later this year, at this stage, I am unlikely to continue with it” 53

20/05/2009 9:59:59 AM

FEATURE | interview >>

“With Cadbury being such an iconic brand, protecting and enforcing our intellectual property is also a focus area for the legal team. We are very much involved in product innovation and development” The individual and the brand

“If you get the partner, you’ll get the client.” That has been the recruitment policy behind some successful midsize firms of late, and the premise is that clients relate more strongly to the individual lawyer rather than the firm brand – a philosophy Perret agrees with. “I am a big believer that the best way to keep costs down and to get the most practical, commercial advice at the lowest cost, is to choose the individual, not the firm,” she says. “That means briefing specific types of work to specific individuals who you know can deliver what you need in the way you want.

Locking yourself into selected panel firms can limit your ability to do this.”

Perret points to the efficiency with which an appropriately experienced lawyer can handle a query without needing to do additional research or consulting with colleagues, effectively “managing the query in a lean manner”. She also takes the time to meet most of the individual lawyers working on Cadbury matters to ensure the matter is being handled in as cost effective a manner as possible.

Firms often pride themselves on handling the big transactions for clients, 54

p52-55 in-house interview.indd 54

but Perret says the smaller matters also warrant attention: “From my point of view it’s of interest to see how firms resource the smaller matters. It’s an opportunity for us to get to know firms and get comfortable with using them.” The result, she says is a “lost opportunity” for firms that concentrate only on winning the major work.

Workflow

Much of the work flowing through Perret’s team has an IP theme.

“With Cadbury being such an iconic brand, protecting and enforcing our intellectual property is also a focus area for the legal team. We are very much involved in product innovation and development, and at all stages of new product launches, whether at the concept stage and ultimately through to reviewing artwork, advertising and point of sale material,” she says.

Another key area is trade practices.

“As an FMCG company, as you would expect we have a strong trade practices focus and assist with promotions, sponsorship arrangements and the like, providing extensive legal support to the sales, strategy and marketing teams for example,” Perret says.

The diversity of expertise in Perret’s team means that outsourcing occurs on a limited basis. “We tend to limit outsourcing to large scale M&A and litigation which we don’t have the resources to do in house or specialist areas such as industrial relations and taxation,” she says. “We also sometimes use external law firms as ‘arms and legs’ for matters requiring very long and complicated agreements with a lot of drafting needing to be done in a short time frame. That frees us up to make sure the agreement being reached is one that works best for the business rather than merely focusing on how it is being documented.”

The current economic climate has increased the workload for the team, although not dramatically. However, this additional work has mainly been in areas such as those relating to the creditworthiness of counterparties and trading terms, but Perret says that on the whole this has not been a key driver of legal work. “We are currently reconfiguring our chocolate and candy operations in Australia and New Zealand for example, and it is this kind of more strategic initiative that is occupying our time,” she says. ALB Australasian Legal Business ISSUE 7.5

20/05/2009 10:00:03 AM

FEATURE | interview >>

www.legalbusinessonline.com

p52-55 in-house interview.indd 55

55

20/05/2009 10:00:04 AM

FEATURE | caseflow >>

Case management:

Far more than high volume process driven functions

The term case management is often misunderstood to be a system for high volume and process driven work, but Brian Smith of Caseflow suggests that modern systems offer much more

A

few years ago, when the term ‘litigation support’ first emerged, it was often perceived as a description of products designed to address several areas of litigation. Back then, and even now, it could have applied to transcript analysis, discovery, scanning and optical character recognition, or a case-by-case structured database with user entered cross references and keywords.

A case management system is often regarded as a system that is deployed when a firm engages in high volume, process driven matters. Although case management systems were likely to have originally been developed to handle this type of work, in recent years they have far surpassed this, and are now finding acceptance as the third “must have” system within firms.

Case management systems now sit alongside the two other major systems within a firm, namely; the practice management system and the content (Document) management system. No longer are case management systems just limited to the sausage machine or ‘process’ work they have been historically tagged with.

Overseas firms, especially in the UK, also regard case management systems as 56

p56-59 caseflow.indd 56

a must have. It is not just a question of whether they need a case management system, but also which is the best for their firm. The benefits attached to having an integrated case management system extend to most practice areas within a firm – not just the highly automated areas.

There is currently a strong view held by firms that ‘a little bit of case management for everyone’ offers the best balance. However, exactly what is a modern ‘best of breed’ case management system? It is actually where it fits within today’s law firm and how it can be utilised at many differing levels.

Most firms now employ sophisticated document management and practice management systems. For a best of breed case management system to be highly effective, it must seamlessly integrate with document management and practice management systems – failing this, the case management system becomes an orphaned legacy piece of software that can plague firms.

On the flip side, a case management system can be as simple as having the ability to store, update and easily access the full database of clauses that any law firm uses on a day-to-day basis. All users can make use of a centralised, firm-

wide clause library, regardless of what area they work in. The role of a case management system can also extend to add document assembly functions, which can automate letters to various parties or automate completion of court or other regulatory documents. These all appear to be simple tasks, but why not just handle them from a single system, and re-use the firm’s central repository of clauses instead? Often one finds that firms deploy multiple independent systems to address these “micro-tasks” within the firm, only to end up with a plethora of systems that are difficult for staff to deploy and manage.

When a lawyer produces documents using document assembly, it sends out a notice that requires a response within a certain timeframe, and adds a reminder to the calendar, email or task list that is part of the case management system. These mini-workflow tasks have always been possible through the use of macros and other custom-built software, and are now firmly in the camp of the case management system as well.

They can easily be expanded to produce multiple documents, as well as track the reminders and deadlines.

Many knowledge/precedent managers would know many horror stories about Australasian Legal Business ISSUE 7.5

20/05/2009 4:14:00 PM

FEATURE | caseflow >>

the misuse of clauses within firms. A firm depends on many things to be successful and its knowledge base would be one of the most fundamental parts.

It partly lies within the repository of clauses, which may involve hundreds – if not thousands – of individual clauses spread across the many practices.

With respect to standard clauses, also called auto-text, firms fall into one of the following categories: • firms where each person, team or practice group maintains their own little knowledge base that will sometimes be shared and stored to enable easy access. These are usually individual mini-documents containing the clauses or a series of master documents from which the user cuts and pastes • firms whose IT departments have developed their own in-house clause library • firms who have evaluated and purchased a specialist clause library system The first group are living on the edge, little silos of knowledge spread around

www.legalbusinessonline.com

p56-59 caseflow.indd 57

the firm. Some departments will manage it well and others say they do not have the time to do it well. Cutting and pasting is to be avoided at all costs, as there is no oversight or management of the knowledge and professional staff can waste countless hours reviewing the same content and finding the same errors. Those that say they do not have the time, will eventually see that it is not good for business and they should make time to streamline their processes, so they can do even better.

The second group are on the right track, but software development, in any form, is best left to developers.

Developers often tell clients and potential clients a joke: “I won’t write contracts if they don’t develop software.”

The moral of the story is that they should stick to their knitting – law firms should not try to become software developers, just as software developers should not try to become law firms.

The third group have done a good job in selecting a commercial product, but why stop at the clause library? Different users in a firm will have different needs.

57

20/05/2009 4:14:02 PM

FEATURE | caseflow >>

The trick to getting IT systems right is to deliver the right components to the right people, but in doing so, one runs the risk of buying product X just for department A. When department B likes what they see happening in department A and discover that they have a need for similar functionality, the immediate response is to try to make product X fit the needs of department B. In this situation it can be a matter of luck that the chosen product might be adaptable and capable of handling the increased work load, but then again it may not. The solution? Find a product that has credentials with the right sized firms, and can demonstrate the ability to handle different types of work. It is also important to ensure that it will scale to grow with the firm, integrates with key systems, and shares its features and knowledge across the firm in a centrally managed way.

Five years ago, case management systems were only for the high volume areas. Firms had clause libraries from one supplier, a document automation/assembly

system from another supplier. Now the horizon has changed and the way forward is continuing to change.

Case management systems are expanding to include many of these independent functions and absorb the features previously provided by specialist products. The practice group or department just needs a clause library that is able to use the same clauses used by the users. The document assembly system that is used to complete basic forms, simple templates and regulatory documents should be in the same document assembly system that is used across the firm, regardless of the area of law, complexity or volume.

The database used to track tasks and provide client reporting can even be a basis to establish a client extranet, in areas that require tight management and reporting. They should offer access to the same database to simply and effectively capture a few key dates, with the ultimate goal of simplifying client reporting tasks.

The case management system can

save support staff up to half a day each week or fortnight from gathering matter statistics to populate spreadsheets for clients. A firm employing even this basic level of case management will improve productivity, accuracy and efficiency, and most importantly, mitigate risk.

Presuming this base level of case management system can be upgraded with higher levels of features and functions, this benefit alone is enough of a purchase incentive. In addition to this, an entry-level system is relatively inexpensive to buy and requires very little support and training to implement.

It is becoming evident that most firms, not only want, but also need some form of case management. As firms around the world are tightening their belts and their continued emphasis is placed on producing more with less, making a good case for a good case management system. ALB Brian Smith is a director and founder of Caseflow and has been designing and developing software for law firms for more than 25 years.

Suite 606, 343, Lt. Collins Street, Melbourne Victoria 3000, AUSTRALIA TEL: +613 9029 6303 FAX: +613 8610 1662 • AUSTRALIA • ASIA • UNITED KINGDOM

www.dtassociates.com.au 58

p56-59 caseflow.indd 58

Australasian Legal Business ISSUE 7.5

20/05/2009 4:14:05 PM

Earn 6 cle/cpd points

masterclass series

Contractual Risk In-depth case review of Environmental Systems Pty Ltd v Peerless Holdings Pty Ltd Clarifying the changing definition of consequential loss Strategies for risk management and risk mitigation Drafting water-tight indemnity clauses Understand the scope of recoverable loss or damage Risk mitigation strategies to protect your client’s interests The litigator’s perspective: ensuring contract enforceability and removing contractual ambiguity

Bob Baxt partner Freehills

Michael Beaumont partner Herbert Geer John Cooper partner Allens Arthur Robinson Robert Gregory partner Maddocks

Examination of areas of potential risk Ashley Jones partner Deacons Jacinta Long partner Sparke Helmore

Brisbane: Wednesday 10 June 2009 Stamford Plaza, cnr Edward & Margaret Streets Sydney: Wednesday 17 June 2009 Sir Stamford at Circular Quay, 93 Macquarie Street

Lisa Ashcroft partner Arnold Bloch Leibler

Melbourne: Wednesday 24 June 2009 Stamford Plaza, 111 Little Collins Street

Jayne Steele partner Herbert Geer

All sessions run 9am—5pm

TEAM DISCOUNT: Buy 3 seats and get the 4th FREE How to register

www.albmasterclass.com

Visit: Phone: Michael Cullen on (02) 8437 4704 E-mail: michael.cullen@keymedia.com.au

p56-59 caseflow.indd 59

Official online partner

Official publication

Organised by

20/05/2009 4:14:14 PM

FEATURE | China FDI >>

China FDI: A two-way street?

As lawyers ponder Hunan Valin Iron & Steel Group’s A$1.2bn investment in Fortescue Metals and Chinalco’s US$19.5bn courting of Rio Tinto, there is no doubting the potency of the outbound Chinese FDI juggernaut. But it also pays to keep an eye on investment flowing in the opposite direction

60

p60-63 fdi.indd 60

T

he sheer power of China’s acquisitive capability means that outbound FDI from Australia to China is dwarfed by the inbound stream the other way, says Mallesons partner Stephen Minns. And while the level of inbound FDI is on the rise, he says that the outbound work has been more modest.

“Australian investment is going into a whole range of industries – manufacturing, consumer products, financial services for example,” Minns says.

Outbound investment from China into Australia has been almost exclusively in the resources sector.

“Certainly the outbound work is a lot more significant than what it was even a year ago, and the importance of resources [for China] and the decline in prices has made Australian assets more attractive,” he says. And while there has been some uncertainty among purchasers as to the right time to buy and some occasionally unrealistic valuations from vendors,

there is no evidence of a stalemate between buyers and sellers. “The Chinese are definitely interested in investing now – and they’re not about to wait,” Minns says.

Waiting, however, is not always a matter of choice, with the ultimate approval usually resting with Australian treasurer Wayne Swan and the Foreign Investment Review Board (FIRB), which is currently reviewing a backlog of highly significant proposed deals. “It’s clear that the government wants to be comfortable Stephen Minns, that Australian Mallesons companies continue to operate independently,” Minns says.

The challenge for legal advisors is to structure deals in a way that reflects this requirement – not an easy feat and one which requires some layers of complexity.

“There is a strong desire on the part of the Chinese companies Australasian Legal Business ISSUE 7.5

19/05/2009 4:06:17 PM

FEATURE | China FDI >>

to understand these regulatory requirements so that their deals can go ahead,” Minns says, describing this as one of the most important parts of his work. The issue of protecting national interest, of course, is not limited to Australia. China also vets foreign investment and recently vetoed a bid by US-based soft drink giant Coca-Cola to take control of China Huiyuan Juice, China’s biggest juice maker. It is a decision that was seen by some commentators as a reflection of renewed Chinese nationalism and a corresponding aversion to large-scale foreign investment.

However, Zhang Danian, managing partner at Baker & McKenzie’s Shanghai office, says there was more to the decision than sentiment. “What the Coke/Huiyuan rejection shows is that government authorities will increasingly vet proposed foreign investments thoroughly on both national security and antitrust grounds. In addition, it is clear that the PRC authorities will take concerns of small and medium competitors

www.legalbusinessonline.com

p60-63 fdi.indd 61

as well as any possible threat to Chinese consumers very seriously in determining whether to grant antitrust approval,” he says.

Investment into China

It is no surprise that outbound Chinese investment continues to dominate headlines in Australia. But as lawyers from other parts of the region point out, Chinese FDI is not necessarily a one-way street – and nor is investment limited to M&A. M&A is the type of FDI which generally attracts the most discussion, but there are other forms of FDI that also warrant attention, such as franchising and greenfield investment.

Stanley Jia, managing partner at Baker & McKenzie's Beijing office, says there are several drivers for greenfield investments in China, which could take the structure of wholly-owned foreign enterprises as well as joint ventures. “A greenfield investment is attractive to those foreign investors who would like to avoid inheriting legacy issues and historical liabilities of an M&A target,”

he says. “Whether a foreign investor would consider greenfield to be a more suitable investment option will depend on how steep start-up costs are as Zhang Danian, compared to acquisition Baker & McKenzie costs, the importance of having an already-established sales and distribution networks, and whether there is a tight timeline for starting up the business.”

Another significant type of FDI into China is franchising or licensing agreements, according to Zhang.

“This is attractive for companies that are interested in building brand recognition without the need to invest considerable manpower or capital in a foreign jurisdiction, especially if companies are able to work through concerns of possible IP infringement,” he says. “This will be an attractive means of FDI this year, especially for foreign companies hesitant to invest in a new market during volatile economic times.”

61

19/05/2009 4:06:19 PM

FEATURE | China FDI >>

Strategic investment

There is no doubt which way the investment tide is flowing for Australian lawyers – but are lawyers overseas also seeing the same focus Jingzhou Tao, on outbound China Jones Day investment?

“There is not so much a shift of work towards China outbound investment, but rather more attention given to it,” says Jingzhou Tao, a partner at Jones Day in Beijing. “While inbound investment has been going on for a long time, outbound investment activities in recent times – such as Chinalco, Minmetals and Lenovo – have received much attention due to their novelty and large values.

Indeed for some firms, outbound Chinese investment is nothing new at all. “For our firm, this is not a shift,” Jia says. “We have already been advising Chinese clients with their investments abroad for a number of years now.”

What has changed, perhaps, is the volume of work. “The volume and size

62

p60-63 fdi.indd 62

of overseas investments by Chinese companies will definitely continue to increase,” he says. “This is just in line with the Chinese government's policy of encouraging Chinese companies to ‘go global’ and invest overseas. In addition, compared to their western counterparts, many Chinese companies are in much better financial shape and equipped to take advantage of the low valuations of targets now.”

Outbound Chinese investment is beginning to take a strategic bent.

“Chinese companies have been making outbound investments for the purposes of gaining brand recognition as well Stanley Jia, as access to overseas Baker & McKenzie distribution networks and technological know-how in the technology and automotive sectors,” Jia says. “In the technology sector, notable transactions include Lenovo’s acquisition of IBM’s personal computer division in 2005. More recently, Beijing West Industries announced that it

would acquire the US-based Delphi Corporation’s global suspension and brakes business, giving the Chinese automaker access to Delphi’s patents and markets.”

A shift in balance

Lawyers advising on inbound investment have found themselves dealing with a new playing field, which complicates negotiations. Jingzhou Tao describes a shift in power towards local Chinese companies.

“For a start, foreign companies who used to be cash rich are now finding their financial resources drying up; two, there is often a discrepancy between Chinese and foreign parties in their value assessment of the same Chinese assets; and three, the recent awareness of China’s huge market potential has put [Chinese parties] in a position to impose conditions in a deal,” he says. “Only five years ago, the roles were the reverse and it was the foreign company that had the upper-hand.

These factors cause renegotiation or sometimes the end of negotiations.” ALB

Australasian Legal Business ISSUE 7.5

19/05/2009 4:06:26 PM

p60-63 fdi.indd 63

19/05/2009 4:06:29 PM

Sign off >> ►► The world’s top 10 airports Rank

Come fly with me

T

ravelling for business plays a big part in many lawyers’ lives, as demonstrated by our Business Class Travel feature on pages 66–70, and, according to Skytrax, these airports are the best around.

Airport

I

Why/Facilities

1 Hong Kong International Airport

Efficiency and comfort

2 Singapore

Massage/swimming, Ambassador Transit Hotel in Terminals 1, 2 and 3.

3 Seoul

Business centre, shower and massage services, hair salon

4 Kuala Lumpur

Facilities for passengers, comfort and cleanliness of terminals

5 Munich

Miniature golf, a 60-seat cinema, and cosmetic and physiotherapy services

6 Kansai

WiFi and internet facilities, check in ease, transport services

7 Copenhagen

Transport services, auto machine check-in facilities, restaurants.

8 Zurich

Shopping, airport views, ease of facilities

9 Helsinki

Helpful staff

10 Cape Town

Spacious terminal spaces, helpful staff

t appears Eversheds is into staff protection. The UK firm recently requested that associates stay in the safety of their own homes during the G20 summit period, stating that they put “staff safety first” as anti-capitalist protesters threatened to overthrow the City of London.

Those who attended Eversheds’ Cheapside office on the edge of the City were also asked to dress down for two days of the summit.

The firm is one of three UK firms who briefed staff on safety precautions.

Clifford Chance warned staff to be prepared to work from home and to avoid its Coleman Street office, while Ashurst urged staff to take public transport rather than drive into work to avoid the risk of being spotted by protesters.

Source: SkyTrax

A passion for fashion

Asia-Pacific, Japan banking fees fall

I

t seems even lawyers have been swept away by the spirit of Australian Fashion Week.

The offices of leading commercial law firm Kemp Strang doubled as a catwalk and cocktail lounge recently as the firm became the venue for the Leona Edmiston Winter 2009 collection.

The glamorous night was a fundraising event for the Wayside Chapel in Kings Cross, Sydney.

• Year-on-year decline of 28.4% for fees in AsiaPacific, Japan (excluding Central Asia) region • Equity market, M&A and syndicated loans are down. Loans hit most – 35.6% decline Debt market was only segment to experience increase in fees, posting gain of 48.8% from same quarter last year • Mizuho Financial Group topped investment banking fee charts in Asia-Pacific, Japan (excluding Central Asia), with US$136m in revenues (3.7% increase from fees earned in same period last year) • Top fee destination is from the M&A market, with 49.7% of total fees paid for in the AsiaPacific, Japan (excluding Central Asia) region

Crime doesn’t pay for jailed US lawyer A

former partner with a prominent New Orleans law firm, Adams and Reese, has landed himself behind bars after pleading guilty to stealing millions of dollars from the firm and a casino operator.

The partner, James Perdigao, 46, pleaded guilty to charges that included fraud and money laundering. He was sentenced to just over 15 years in prison and ordered to repay about $23 million.

Perdigao was awaiting trial in the fraud case last year when a grand jury pressed new charges, stating that he hacked into his former firm’s computer system and stole confidential correspondence between prosecutors and the firm. He resigned from Adams and Reese in September 2004.

64

p64 - signoff.indd 64

Australasian Legal Business ISSUE 7.5

20/05/2009 10:14:36 AM

ibc.indd 1

20/05/2009 12:39:47 PM

obc.indd 1

20/05/2009 12:40:39 PM