Australasian Legal Business (OzLB) Issue 8.1

ISSUE 8.1

ALB Special Report: Brisbane 2010 Back in business

Mid-tier mergers Is the consolidation game back on again?

Lockstep Out of step and out of date?

Ten firms to watch in 2010 DEALS ROUNDUP

US, UK REPORTS

LATERAL MOVES

Appointments

Capital markets M&A data

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ISSUE 8.1

EDITORial >>

ALB Special Report: Brisbane 2010 Back in business

Mid-tier mergers Is the consolidation game back on again?

Lockstep Out of step and out of date?

It’s democracy, stupid

Ten firms to watch in 2010 DEALS ROUNDUP

US, UK REPORTS

LATERAL MOVES

APPOINTMENTS

CAPITAL MARKETS M&A DATA

www.legalbusinessonline.com

IN THE FIRST PERSON

A

s we welcome in the New Year, Australian lawyers will be adjusting themselves to an altered political landscape. The ever-diplomatic Labor Prime Minister Kevin Rudd is now shadowed by newly elected Liberal Opposition leader Tony Abbott.

It would seem that some sections of the Australian legal community have watched the drama in the federal arena with dismay, and this is understandable.

What is now at stake is the Rudd Government’s controversial Emissions Trading Scheme legislation (ETS), which is a fundamental shift in both economic philosophy and practice for the region.

Lawyers and business leaders alike have spoken of the need for economic certainty, yet any hope of a quick and orderly passage of the ETS was demolished by the arrival of the new Opposition Leader. Now the matter threatens to drag on – possibly, to culmination in a double-dissolution election. It’s not exactly the ‘certain outcome’ that Australian business and their legal advisers wanted (although perhaps those in the derivatives business would be pleased).

There is a greater principle at stake here. The ETS Bill represents one of the most important and controversial policies in decades: Prime Minister Rudd has described climate change as the “great moral challenge of our time.” So is it not understandable that a consensus cannot be immediately reached?

For the legal community, this issue represents more than economic certainty or the revenues an ETS will (or will not) generate for law firms. Like all other law-abiding members of society, lawyers have the right to expect to leave a sustainable legacy for future generations – their children and grandchildren. Or even the next generation of legal practitioners.

We must not allow the gods of business expediency to dictate the course of democracy. Debate, disagreement and disorder are all products of a healthy, free society. It is time to view this issue from the standpoint of citizens in a democracy, not stakeholders in a law firm. The outcomes and rewards may not be as tangible as revenues and partner profits, but it will be good for the soul.

“The issue of billing has to tie in more closely with value for clients, and the issue of remuneration for staff has to tie in more closely with value to the employer” Joydeep Hor, Harmers Workplace Lawyers (pg 11)

“The big companies are still busy – you only need to drive around town to see all the Leighton signs round the place” John Moore, partner, Thynne & Macartney (p41)

“Get out of the office, go to the site – and write that time off!

You’ll never find out what you don’t know about a business unless you go and talk to the people on the ground”” Michael Anderson, general counsel, Star City (p55)

What is now at stake is the Rudd Government’s controversial Emissions Trading Scheme legislation, which is a fundamental shift in both economic philosophy and practice

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Australasian Legal Business ISSUE 8.1

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contents >>

contents

ALB issue 8.1

34

2010

48

COVER STORY 42 ALB Watchlist

Ten firms that are set to have a bigger year than most in 2010

ANALYSIS

COLUMNS

Perspective:

Michael Anderson, Star City

ALB discovers the unique challenges of being

11 Lockstep Lockstep pay – a dinosaur relic, or a critical part of building a collegiate firm?

counsel to a casino and hotel business

REGULARS

62 Capital Markets Deals Data

FEATURES

6

63 M&A Deals Data

10 Mid-tier mergers Mergers are back in vogue again – and Queensland is leading the way

34 ALB Special Report 2010: Brisbane Optimism returns to one of the nation’s most dynamic legal markets 48 Employment law New laws and new economic optimism spell a change of pace for employment lawyers 58 Marketing How are law firm marketing teams preparing for the New Year?

PROFILES 30 ALB-LexisNexis Managing Partner series: Paul Hopkins, Carter Newell Paul Hopkins speaks about mergers, the corporate law firm model and how to build a nurturing firm culture

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54 ALB-Kensington Swan In-house

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DEALS

10 NEWS ANALYSIS 14 NEWS • Freehills unfreezes salaries despite more challenges in 2010 • Malaysia’s Zaid Ibrahim becomes first Asian law firm to open in Australia • PPS legislation will be “as big as the Trade Practices Act” • DLA Phillips Fox set for transformation, says new chairman • Legal Bill sets up potential new practice area • Australian bonds bounce back in second half of 2009 • Law firms’ placement program strengthen ties with China • Litigation work still to peak in 2010

13 Soapbox 15 US Report 17 UK Report 19 Legal traveller

COMMENTARY/PROFILES 24 Buddle Findlay

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 8.1

NEWS | deals >>

Client: Fisher & Paykel Appliances

deals in brief

• Bell Gully advised Fisher & Paykel in 2009 on NZ$143m pro-rata renounceable rights issue

• Largest Australian scrip deal seen in 2009 • Legal issues crossed jurisdictions including Canada, China, Hong Kong and US

Nicola Yeomans Freehills

• Minters has had relationship with BNZ for 10 years • Deal spanned New Zealand, Mexico, Thailand, Australia, Canada, Italy, US, UK and Singapore

| M&A | ►► Goodman Fielder – commercial fats and oils business divestment A$240m Firm: Freehills Lead lawyers: Rebecca MaslenStannage, Nicola Yeomans Client: Goodman Fielder Firm: Bell Gully Lead lawyer: Glenn Joblin Client: Goodman Fielder • Transaction structured as sale of assets including refining facilities around Australia • Bell Gully acted for Goodman Fielder in 2009 on sale of its Diamond pasta and meal solutions business and DYC vinegar business

| Banking & Finance |

• Dual Australian/New Zealand jurisdiction for the deal

►► NAB – GSJBW private wealth management acquisition

• Minters has had relationship with Goldman Sachs for more than 20 years

A$100m Firm: Mallesons Stephen Jaques Lead lawyers: Craig Semple, Diana Nicholson, Jonathan Hamer Client: NAB Firm: Minter Ellison Rudd Watts Lead lawyers: Cathy Quinn, Lloyd Kavanagh, Jennifer Mills Client: Goldman Sachs JB Were • Mallesons has also advised NAB on two Tier 1 hybrid issues worth A$500m and US$600m, and A$2bn placement

6

| Banking & Finance | ►► Fisher & Paykel Appliances refinancing NZ$575m Firm: Minter Ellison Rudd Watts Lead lawyers: Tom Fail, Kate Lane Client: BNZ-led syndicate Firm: Bell Gully Lead lawyers: Brynn Gilbertson, Gavin Macdonald, James Gibson

• Sale involved input from teams specialising across a variety of practice areas, including property, environment, IP, IT and competition

| M&A | ►► Eldorado – Sino Gold acquisition A$2.4bn Firm: Freehills Lead lawyer: Tony Damian Client: Eldorado Gold Firm: Fasken Martineau DuMoulin (Canada) Client: Eldorado Gold Firm: Allens Arthur Robinson Client: Sino Gold

| Energy & Resources, Capital Markets | ►► Woodside capital raising A$2.5bn

Firm: Freehills Lead lawyers: Philippa Stone, David Gray Client: Woodside Firm: Mallesons Stephen Jaques Lead lawyers: David Eliakim, David Friedlander Client: Joint lead managers • Citi, Credit Suisse and UBS acted as joint lead managers • Deal conceived and implemented in one week and involved Australian, US and Canadian counsel

David Eliakim Mallesons Stephen Jaques

• Freehills also advised Woodside Energy on its a$712.5m Otway divestment

| Banking & Finance | ►► Incitec US bond issue A$800m

Firm: Mallesons Stephen Jaques Lead lawyers: Ian Paterson, Alison Lansley, David Wood Client: Incitec Firm: Sullivan & Cromwell Client: Initial purchasers Firm: Sidley Austin Client: Initial purchasers • Bank of America Securities, Citigroup Global Markets and RBS Securities were initial purchasers • Mallesons has also advised on Incitec Pivot’s A$1.17bn equity capital raising, its A$1.68bn refinancing of bank loans, and Australasian Legal Business ISSUE 8.1

NEWS | deals >>

A$3.3bn acquisition of Dyno Nobel in June 2008

| Agriculture |

►► Your month at a glance Firm

Jurisdiction

Deal name

Allens Arthur Robinson

Australia

Lendlease – Lendlease Primelife Group acquisition

Australia, Canada, China, Hong Kong, US

Eldorado – Sino Gold acquisition

Australia, Japan

Challenger Life Company – Challenger Kenedix Japan Trust acquisition

157 M&A

Baker & McKenzie

Australia, China, Philippines

Zijin Mining – Indophil acquisition

545 Energy & resources, M&A

Bell Gully

Australia, New Zealand, Canada, Italy, Mexico, Singapore, Thailand, UK, US

Fisher & Paykel Appliances refinancing

460 Capital markets

Australia, New Zealand

Goodman Fielder – commercial fats and oils divestment

240 M&A

Australia, New Zealand

CSG – Konica Minolta Business Solutions acquisition

104 M&A

Australia, New Zealand

ANZ – Custodian businesses divestment

N/A M&A

Australia, Japan

Challenger Life Company – Challenger Kenedix Japan Trust acquisition

157 M&A

Carter Newell

Australia

Bow Energy capital raising

Chapman Tripp

New Zealand, China

Agria – REL merger

►► Agria – PGW investment NZ$120m

Firm: Simpson Grierson Lead lawyer: Michael Pollard Client: Agria Firm: Chapman Tripp Michael Pollard Lead lawyers: John Simpson Grierson Strowger, Hamish Foote Client: PGG Wrightson (PGW) • Agria’s first deal in New Zealand

Blake Dawson

• Agria was referred to Simpson Grierson by PricewaterhouseCoopers • Transaction included initial placement of 11.5%, participation in pro-rata rights offer and direct acquisition of rights from existing cornerstone investor Rural Portfolio Industries

A$m Practice 192 M&A 2,400 M&A

77 Capital markets 130 M&A

New Zealand

NZRPT – PGW investment

Clayton Utz

Australia

NBN Regional Backbone Blackspots program

250 Telecommunications

DLA Phillips Fox

Australia, New Zealand

CSG – Konica Minolta Business Solutions acquisition

104 M&A

Fasken Martineau DuMoulin

Australia, Canada, China, Hong Kong, US

Eldorado – Sino Gold acquisition

Freehills

Australia, New Zealand

Goodman Fielder – commercial fats and oils divestment

Firm: Mallesons Stephen Jaques Lead lawyers: Meredith Paynter, Mark McFarlane, Frank Brody, Sharon Henrick, Murray Kellock Client: JP Morgan

Australia, Canada, China, Hong Kong, US

Eldorado – Sino Gold acquisition

2,400 M&A

Australia

Woodside capital raising

2,500 Energy & resources, capital markets

Australia

Abacus capital raising

Firm: Blake Dawson Lead lawyer: Peter Stirling Client: ANZ

Australia, China, Philippines

Zijin Mining – Indophil acquisition

545 Energy & resources, M&A

Freshfields

Australia, Japan

Challenger Life Company – Challenger Kenedix Japan Trust acquisition

157 M&A

Gilbert + Tobin

Australia

Lendlease – Lendlease Primelife Group acquisition

192 M&A

HopgoodGanim

Australia

Bow Energy capital raising

Jones Young

New Zealand

Anchorage Capital Partners – TPF Restaurants acquisition

N/A M&A

Mallesons Stephen Jaques

Australia, New Zealand

NAB – GSJBW private wealth management acquisition

100 Banking & finance, M&A

Australia

Woodside capital raising

Australia, US

Incitec US bond issue

800 Banking & finance

Australia, New Zealand

ANZ – Custodian businesses divestment

N/A M&A

| M&A | ►► ANZ – Custodian businesses divestment Undisclosed

• Blake Dawson has relationship with ANZ stretching back 150 years • In the last year, Blake Dawson has advised ANZ on A$2bn capital raising, acquisition of ING Australia’s ING NZ’s life insurance and wealth management businesses, its acquisition of RBS assets, and A$2.85bn equity raising • Mallesons also advised JP Morgan on ING Infrastructure Fund’s A$700m capital raising and Lynas Corporation’s A$450m capital raising www.legalbusinessonline.com

96 Agriculture

2,400 M&A

240 M&A

91 Capital markets

77 Capital markets

2,500 Energy & resources, capital markets

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NEWS | deals >>

| M&A |

►► Your month at a glance (CONT) Firm

Jurisdiction

Deal name

Minter Ellison

Australia, China, Philippines

Zijin Mining – Indophil acquisition

A$m

545 Energy & resources, M&A

Practice

Minter Ellison Rudd Watts

Australia, New Zealand

NAB – GSJBW private wealth management acquisition

100 Banking & finance, M&A

Australia, New Zealand, Canada, Italy, Mexico, Singapore, Thailand, UK, US

Fisher & Paykel Appliances refinancing

460 Capital markets

New Zealand, China Agria – REL merger

130 M&A

New Zealand

Anchorage Capital Partners – TPF Restaurants acquisition

N/A M&A

Sidley Austin

Australia, US

Incitec US bond issue

800 Banking & finance

Simpson Grierson

New Zealand, China Agria – PGW investment

Sullivan & Cromwell

Australia, US

96 Agriculture

Incitec US bond issue

800 Banking & finance

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

Please contact

| M&A | ►► Challenger Life Company – Challenger Kenedix Japan Trust acquisition A$157m Firm: Allens Arthur Robinson Lead lawyer: Tom Story Client: Challenger Life Company (CLC) Firm: Freshfields Client: Challenger Life Company (CLC)

alb@keymedia.com.au

61 2 8437 4700

• Allens provided advice on the optimal transaction structure, negotiating the transaction implementation agreement regarding CKT’s ‘Tokumei Kumiai’ structure, via which CKT invests in the Japanese real estate market

| Telecommunications | ►► NBN Regional Backbone Blackspots program A$250m

Firm: Blake Dawson Lead lawyers: Michael Ryland, Sarah Dulhunty, Carl Della Bosca Client: Challenger Kenedix Japan Trust (CKT)

Firm: Clayton Utz Lead lawyer: Caroline Lovell Client: Federal Government

• Fort Street Advisers acting as financial adviser to CLC on this transaction

• Deal will see NextGen Networks build new broadband backbone infrastructure under a PPP

• Freshfields provided CLC with Japanese law advice in relation to the Japanese properties and management agreements

• Clayton Utz has been working on the NBN since April 2009

“The hope for me is that we get to have an ongoing role with Zijin and their investment in the project given that we've formed a really close relationship” John Tivey, Freehills 8

►► NZRPT – REL merger NZ$163m

Firm: Minter Ellison Rudd Watts Lead lawyers: Lloyd Kavanagh, Marie Kissick Client: New Zealand Rural Property Trust (NZRPT) Firm: Chapman Tripp Lead lawyer: John Holland Client: Rural Equities Limited (REL) • Deal secured unanimous support of REL shareholders and 96% support of NZRPT shareholders • Board of Rural Equities may consider a listing on the NZX this year

| Capital markets | ►► Abacus capital raising A$91m

| Capital Markets | ►► Bow Energy capital raising A$77m Firm: HopgoodGanim Lead lawyer: Nicole Radice Client: Bow Energy Firm: Carter Newell Client: Underwriter • Deal underwritten

by Wilson HTM Corporate Finance to A$10m • Bow Energy has been a client of Nicole Radice HopgoodGanim HopgoodGanim since its inception in 2004, when the firm advised on its spin-off from Arrow Energy and listing on the ASX • HopgoodGanim also advised Bow Energy on a A$6m placement and A$7.8m rights issue last year, a conjunctive ancillary agreement relating to native title for the Gunyah coal-seam-gas project, and its 30MW power station at Blackwater in central Queensland

Firm: Freehills Lead lawyer: Justin O’Farrell Client: Abacus Property Group • Freehills worked with Abacus on its cornerstone placement to the Kirsh Group followed by a low-doc rights offering to raise A$200m

| M&A, Energy & Resources | ►► Zijin Mining – Indophil acquisition A$545m Firm: Freehills Lead lawyer: John Tivey Client: Indophil Firm: Baker & McKenzie Lead lawyer: Richard Lustig Client: Indophil Firm: Minter Ellison Client: Zijin Mining • China’s Zijin also advised by Charltons Hong Kong, Yorac Arroyo Chua Caedo & Coronel in the Philippines; Fujian Zenith in PRC • Freehills advised Indophil Resources on the acquisition of interests in the Tampakan Copper Project Australasian Legal Business ISSUE 8.1

NEWS | deals >>

www.legalbusinessonline.com

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NEWS | analysis >>

Analysis >>

Mid-tier mergers: the second wave?

Brisbane

Bill Fazio, Herbert Geer and Greg Meek, formerly CEO of Nicol Robinson Halletts

In 2010 will mid-size firms continue along the path towards consolidation?

B

ack in mid-2008 the pace of mid-tier mergers was beginning to accelerate. Cridlands linked up with Morgan Buckley in the Northern Territory, Herbert Geer joined with Nicol Robinson Halletts in Brisbane, Thomson Playford merged with Cutler Hughes & Harris in Sydney and Thynne & Macartney linked with Biggs & Biggs in Brisbane.

Then along came the global financial crisis, forcing firms to retreat into their shells and knocking the biggest merger of them all – Mallesons and Clifford Chance – off the radar. Partners at Mallesons have been ducking questions about the engagement ever since, but mid-tier firms have been more forthcoming.

Two months after the meltdown of Lehman Brothers and at the height of the gloom, Middletons entered a three-way merger with Salter Power and Franklyn Legal in Western Australia, while Thomson Playford entered into a second merger, with Dibbs Abbott Stillman in Melbourne.

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Ever since, a steady trickle of mergers has permeated the market. Two small Melbourne firms, Wisewoulds Lawyers and Mahonys Solicitors, joined forces last July; and Brisbane’s Cooper Grace Ward finalised its merger with Bain Gasteen in December.

Law firms have continued to pursue mergers in spite of the downturn – or perhaps because of it. One explanation is that the GFC would have given smaller firms more reliant on frontend practice areas cause to rethink strategy, recognising the benefits of being part of a larger firm with the natural hedge afforded by a full-service offering.

“Many firms prefer to be the dominant partner in a merger,” said John Nerurker, CEO of Mills Oakley.

“The downturn may have meant that attractive smaller firms were more receptive to proposals than they would have been in the past. We could also see another spate of mergers as midtier firms look to capitalise on market dissatisfaction with top-tier firms.”

The mergers of NRH, Biggs & Biggs, Bain Gasteen and Stubbs Barbeler in the Sunshine State raise the question of whether this market is ripe for consolidation. Brisbane firms appear to be more focussed on their home state than their interstate counterparts.

While many Melbourne firms have advanced northwards, usually via mergers with local firms (think Mills Oakley, HWL Ebsworth, and Herbert Geer), there has been no widespread move seen in the other direction.

Exceptions to this, however, include McCullough Robertson’s expansion into the Hunter region and its opening of a small representative office in Sydney.

Despite the absence of widespread migration southwards, Brisbane firms have expressed enthusiasm about entering the Sydney and Melbourne markets. This enthusiasm, however, is tempered by two factors: the confidence that it is possible to service national clients well from Brisbane and the belief that Queensland itself will furnish ample growth opportunity.

“I’ve harboured a desire to go to Sydney – we’d be bloody good there. But we’re serving national clients well from Brisbane and there is the old saying

►► Key points: Cooper Grace Ward and Bain Gasteen merger • Law firms Cooper Grace Ward and Bain Gasteen merged in December 2009.

• The merger was brokered by a consultant, who did not introduce the two firms until he was satisfied that the parties had complementary Chris Ward, Cooper Grace goals.

Ward • The subsequent agreement saw Bain Gasteen’s four partners and 20 lawyers join CGW, forming a joint firm with 95 lawyers including 22 partners.

• Bain Gasteen had a mix of equity and salaried partners, who will retain their respective roles within the new firm.

• CGW did not charge for goodwill, with incoming equity partners making capital contributions which are returned upon retirement.

Australasian Legal Business ISSUE 8.1

NEWS | analysis >>

“‘if it ain’t broke ... don’t fix it’,” says HopgoodGanim’s managing partner Bruce Humphrys. “Queensland is a big state with a lot of big work and it pays to keep an eye on opportunities.”

The Queensland market is regarded as having more growth potential by virtue of being less mature than the markets of Sydney and Melbourne.

“There’s more opportunity to grow market share here,” says Freehills partner Michael Back.

Size

Mid-tiers are confident that they have the ability to win typical “top-tier” work. In this context, mergers become an important tool for delivering the one thing mid-tier firms need to compete with national firms: capacity.

The “critical mass” theory of growth has often been cited as a justification for firms joining together. This can perhaps be broken down into two discrete areas – the need to make a full-service offering and the need to offer depth across all areas.

“The smaller firms have excellent lawyers and can bring good skills to the table, but I just don’t know how they can provide the requisite range of services,” says Chris Ward, managing

partner of Cooper Grace Ward. “The partners that are joining us are doing so for that very reason – they need a bigger engine room. They need the ability to show the client that they have the grunt to do the work.”

Ward says that smaller firms are capable of flourishing in discrete boutique areas, but he says the general rule is that size does matter. “If you’re going to put your toe in the commercial world, I don’t see how you could do it without the normal range of services.

Any normal commercial transaction (take an A$15m transaction for example) will always have elements of IR, stamp duty, compliance and more. I don’t know how you can do that unless you have expertise in all these areas.”

And it is not simply a question of expertise – clients increasingly expect depth within those areas of expertise.

“They test you on depth, and you need to have capacity,” said CGW’s managing partner. “Clients really want to know how you will resource this – who are the people and what will they do? They do tend to spread their work around. If you can demonstrate your strength in various areas, you will have a much more attractive proposition,” he said. ALB

Recent law firm mergers July 2008

• Herbert Geer + Nicol Robinson Halletts, Brisbane • Thomson Playford + Cutler Hughes & Harris, Sydney

August 2008

• Cridlands + Morgan Buckley, Alice Springs, Darwin • Thynne & Macartney + Biggs & Biggs, Brisbane

December 2008 • Middletons + Franklyn Legal; Salter Power, Perth

January 2009

• Thomson Playford Cutlers + Dibbs Abbott Stillman (Melbourne), Melbourne

July 2009

• Wisewoulds + Mahonys, Melbourne

December 2009 • Cooper Grace Ward + Bain Gasteen, Brisbane

January 2010

• Barry & Nilsson + Stubbs Barbeler, Brisbane

Analysis >>

Keeping in step Does the push towards alternative billing mean the end of lockstep remuneration for associates?

T

he GFC has forced clients in all sectors to either reduce external legal spend or find sufficient justification to maintain it.

Consequently, law firms now have to look seriously at alternative billing arrangements that keep them competitive and in line with client demand.

Of course, if firms change the way they bill, they must also change the way they pay. Against the backdrop of large international firms such as Reed Smith abandoning associate lockstep altogether, most law firms are finding it increasingly important to link their remuneration structures to the quality of employee contributions, rather than www.legalbusinessonline.com

merely the quantity and cost of hours billed.

As the managing partner of Harmers Workplace Lawyers, Joydeep Hor, puts it: “The issue of billing has to tie in more closely with the issue of value for clients, and the issue of remuneration for staff has to tie in more closely with the issue of value to the employer.”

Sydney firm Marque Lawyers, founded and run by managing partner Michael Bradley, has made a name for itself by abandoning hourly billing.

Instead, they negotiate a variety of different arrangements with clients, usually on a retainer or fixed-fee basis.

“The thing to understand is if you’re trying to run a pricing model that is

“The issue of billing has to tie in more closely with value for clients, and the issue of remuneration for staff has to tie in more closely with value to the employer” Joydeep Hor, Harmers Workplace Lawyers detached from individual contribution then you have to structure your remuneration in a way that ties in with that,” Bradley said. “That’s the problem firms have with moving away from time costing – there’s a very direct link between associate charge-out rates and what they get paid. We’ve broken that nexus and we don’t remunerate by reference to personal billables or 11

NEWS | analysis >>

news in brief >> Maddocks appoints external board member Maddocks has appointed Barangaroo CEO John Tabart as an external board member for the company.

In this new role he has been charged with providing an outside perspective on the firm and encouraging a greater level of independence for the board’s decision-making.

Tabart will also work with Maddocks CEO David Rennick to develop and implement the firm’s strategies. Tabart is also a non-executive director of Infrastructure Partnerships Australia.

Sydney firm to take on British government Sydney law firm Stacks will represent the Australian Nuclear Veterans Association (ANVA) in England’s High Court, in a class action for Australian servicemen and UK veterans who were exposed to British nuclear testing between 1952 and 1958.

At the height of the Cold War, the UK tested 17 atomic bombs at Maralinga in South Australia and the Monte Bello Islands, off Western Australia’s Pilbara coast. About 2,000 of the 8,000 exservicemen who were ordered into radiation zones to clean planes and vehicles following the blasts are still alive. They have not yet received any compensation.

If the class action is successful, it is expected that the Australian government will have to pay the British government the amount it is sued to indemnify it.

Victoria appoints new Legal Services Commissioner Michael McGarvie has filled the vacancy left by Victoria Marles when she resigned from the position of Legal Services Commissioner and Legal Services Board CEO last October. McGarvie has 25 years’ experience in the legal industry, having previously been a partner at Holding Redlich. Most recently he spent the past three years as the CEO of the Supreme Court of Victoria.

In his new role, McGarvie will contribute to the move towards uniform laws for regulation of the legal industry in Australia. A taskforce is expected to present draft legislation to the Council of Australian Governments this year.

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personal fees – in fact, we don’t report those things at all.”

An associate’s remuneration at Marque is based not on what they charge-out to clients but their performance, measured by the quality of their work and the quality of their relationships. Bradley sees this option as having two major advantages for lawyers. First, the billing method is aligned with clients’ perceptions – something of value he says is conducive to maintaining strong long-term relationships. Second, the remuneration model allows lawyers in the firm to manage their time more freely to develop client relationships and find the best ways to meet clients’ objectives.

“As individuals it gives us enormous flexibility in how we manage our own time and what we’re able to invest in client relationships and in developing our business. That is incredibly liberating when you come from a timekeeping world,” the managing partner said. He added that the whole issue of remuneration modeling for lawyers needs to be focused on the quality of work that they are providing to clients.

“A number of ways to do it exist,” he says, but all involve moving away from the hourly billing model.

Hor agrees there is a fundamental problem with the time-based billing model, in that it links in to arbitrary notions of budget and work hours without proper focus on quality of work being done. “Too much focus is on hours and fees billed and that’s a very outdated way of running any business.

[It] doesn’t do wonders for the general public’s perception and impressions of

the legal profession,” Hor said, adding that the answer is to link remuneration to more important measures of performance.

Piper Alderman managing partner Gordon Grieve, however, says that his firm does not remunerate across the board on lock-step, despite the majority of its work being billed hourly.

“We have some portion of an increase in salary dependent on the number of years a person’s out, but generally salaries are negotiated on merit,” he says, “so it depends on that individual associate’s performance as to what their remuneration is. Those people are the ones that are in demand from clients – and the clients are prepared to pay for them.”

Meanwhile, FCB Lawyers is looking to integrate individual performance and the firm’s performance into its remuneration model, providing a bridge between the overall profitability of the firm and the value that associates provide to the client. “Our system is designed to give people a broader focus and form a collegiate kind of team and organisational focus,” managing partner Campbell Fisher said, “as well as making sure they individually perform so they are trying to support the culture we run as an organisation.”

A number of FCB’s clients have been asking for alternative billing arrangements, most commonly on a fixed-fee basis. As this situation becomes increasingly common, it will be up to law firms to find a way to remunerate their associates appropriately, to make sure they incentivise staff while maintaining profit margins. ALB Australasian Legal Business ISSUE 8.1

NEWS | analysis >>

►► Should associates be paid on a lockstep basis?

>> integrity

legal

SOA PBOX

Gordon Grieve, Piper Alderman “We have some portion of an increase in salary dependent on the number of years a person’s out but generally salaries are negotiated on merit so it depends on that individual associate’s performance as to what their remuneration is. Those people are the ones that are in demand from clients and the clients are prepared to pay for them”

Joe Ganim, HopgoodGanim

John Moore, Thynne & Macartney “Lock-step is a dinosaur and I can’t see how firms can afford to keep it.

Whether you’re 30 or 60, everyone deserves to be paid on the basis of their performance”

John Nerurker, Mills Oakley “Performance-based pay needs to be well thoughtout. There is no point in linking targets to huge bonuses if there is no prospect of meeting those targets – this creates incentives for lawyers to overcharge and inflate figures” Michael Bradley, Marque Lawyers “Normally, there’s a very direct link between associate charge-out rates and what they get paid.

We’ve broken that nexus and we don’t remunerate by reference to personal billable hours or personal fees – in fact, we don’t report those things at all” Paul Hopkins, Carter Newell “I can understand why firms would be abandoning the lock-step pay system for associates as it really is not in keeping with modern times. Carter Newell’s view is that meritocracy is the best driving principle here” www.legalbusinessonline.com

Retiring HopgoodGanim partner Joe Ganim reflects on the changes in the legal profession he’s witnessed over the years ’m retiring from the partnership I helped create over 35 years ago. As I start winding down in preparation, I’ve been able to pause and reflect on some of the changes in the legal sector since I first started out as a young lawyer. There is no doubt that our profession has changed dramatically, both for those who practice the law and for clients of legal services. What hasn’t changed, however, is the need for lawyers to get the basics right, and in my mind, the basics are client service and living by the highest of ethical standards.

Clients these days are more sophisticated and savvy than ever before. The globalisation of our profession and the litigious nature of our society mean lawyers are everywhere. It’s a buyer’s market and clients aren’t afraid to shop around until they find a lawyer who can not only offer sound legal advice, but also provide solutions that are commercially effective. We are no longer just lawyers – we’re business advisors, strategists and sometimes counsellors these days.

When Paul Hopgood and I first opened in the 1970s, law firms were prohibited from advertising their services. We relied on word of mouth and referrals from existing clients, which meant we were only as good as our last job. Our customer service standards were very high, as were the ethical standards we lived by.

But the more things change, the more they stay the same. Even though law firms now engage in detailed

I

What hasn’t changed is the need for lawyers to get the basics right, and in my mind, the basics are client service and living by the highest of ethical standards marketing programs, and can advertise through mass media and the internet, it’s more important today than ever before to sustain client relationships with good, old-fashioned service. Clients will not settle for anything less. Today, understanding our clients and providing exceptional client service have been rebadged with terms such as ‘customer relationship management’ and ‘key account management’. The techniques are certainly more advanced, but the fundamental principle of great service remains.

My reflection on the changing face of the legal profession wouldn’t be complete without a sentence or two on technology. Typing in triplicate, sending telegrams and posting letters are old news. Today we work with email, Blackberries, electronic briefs and online data rooms. I won’t spend time on the obvious benefits of 40 years of technological advances, but I will say this: a personal touch, often neglected in today’s busy digital world, can sometimes be the point of difference between a good lawyer and a great lawyer. Clients are still people, and even though technology may help you do things better and faster, clients may appreciate a handwritten note occasionally, or a phone call to see how they’re doing.

As I prepare to leave the partnership of HopgoodGanim, I’m encouraged by the exceptional young lawyers I see entering the profession today. The law and our clients may be more sophisticated than ever before, but I have no doubt these talented young guns can handle it.

While I’m stepping down from centre stage, I plan to keep watching from the wings. I can’t wait to see what will happen next.

13

NEWS | news >>

news in brief >> US hackers targeting law firms According to the FBI, US hackers are increasingly targeting law firms with an e-mail scam that breaks into the firms’ networks and steals sensitive data linked to large corporate clients doing business overseas. The bureau has issued a warning to law firms saying that it has witnessed “noticeable increases” in these hacking attempts.

The intrusions are mostly attacks that come through personal e-mail accounts that appear harmless, as they have appropriate subject lines and seem to come from a credible source. “Law firms have a tremendous concentration of really critical, private information,” said Bradford Bleier, unit chief with the FBI’s cyber division. Officials said that hackers often target companies negotiating a major international deal, looking for documents that lay out the company’s playbook for the deal or its negotiating positions.

Kiwi lawyer faces discipline A New Zealand lawyer is facing a professional misconduct investigation after launching a verbal attack on the country’s judiciary and police force.

Chris Comeskey, a former police detective, rated the police force as “sub-standard” and told a newspaper that Kiwi judges had become bureaucrats.

The attack came after a Wanganui District Court ruled that he would be forced to give evidence in the depositions of a man accused of stealing medals from the Waiouru Army Museum in 2007. Comeskey said that taking the stand would jeopardise the clientattorney privilege.

He went on to question the quality of judgments handed down by the New Zealand judiciary and said the country was stupid for abolishing its relationship with London’s Privy Council because “clearly we don’t have the intellectual horsepower” necessary to make sound judgments.

New chief for Clayton Utz Clayton Utz has chosen Darryl McDonough to succeed David Fagan as chief executive partner (CEP) when Fagan’s term ends on 30 June after nearly a decade at the helm. Fagan elected not to stand for reappointment but told ALB that he will stay at the firm following the conclusion of his term.

McDonough was selected by the board to serve a three-year term and will start working with Fagan soon to ensure a smooth transition. In his nine years as CEP, Fagan implemented a national partnership structure and built Clayton Utz into a practice with more than 215 partners and 1,900 other lawyers and staff. The firm’s revenue has doubled to A$490m during Fagan’s tenure.

14

Industry >>

Freehills unfreezes salaries despite ‘more

F

reehills managing partner Gavin Bell has informed all employees that the firm will conduct two salary reviews this year and make adjustments where necessary.

The first review will take place in March with a decision communicated to staff in April and any adjustments

backdated to 1 March. The second will take place in June and any additional salary adjustments will be effective from 1 July.

“We took the difficult but necessary decision to implement a salary freeze, to help us maintain a solid position and to protect jobs for our people during the economic downturn,” Bell said in a statement to employees. “We always intended to regularly review this position and lift the freeze as soon as it became sensible to do so.”

Freehills ended the last financial year in a solid position and expects to reach the midpoint of the current financial year in a reasonable state. “While we expect more challenges in 2010, we are also seeing some commercial recovery in the marketplace,” he said. “Against this backdrop, we have decided to conduct two salary reviews in the 2010 calendar year,

►► Firms salary freeze decisions Allens Arthur Robinson

Salary freeze still in place

Clayton Utz

Salary freeze still in place

Corrs Chambers Westgarth

Salary review in March with salary increases to take effect 1 July

Freehills

Salary reviews in March and June

Mallesons Stephen Jaques

Salary reviews in April and May

Litigation >>

Litigation work still to peak P iper Alderman managing partner Gordon Grieve believes that litigation work has a long way to go to reach its peak after the financial crisis eases. He points to the recession in the late 1980s as evidence that there will be strong demand in this practice area.

“I’ve got no doubt it will stay strong,” Grieve said, citing the many litigations that continued throughout the 1990s after the collapses seen in 1987 and 1989. “The big corporate collapses breed a significant amount of litigation as time goes by, and we still haven’t seen the peak of it at all yet. There’ll be a lot of litigation next year,” he said.

In anticipation of that work, Piper Alderman has announced 16 promotions in areas including corporate, property and employment relations. Ten of the promotions were to the dispute resolution team, including

Sasha Ivantsoff, who was made partner in the firm’s Sydney office.

Grieve said that about 50% of business comes through litigation but that the focus in this round of promotions is a direct result of the GFC. “We’ve always been a strong litigation firm but obviously over the last 12-18 months litigation has been booming, so we’ve channeled more graduates into litigation than to others,” he said.

Grieve is also expecting corporate

“I’ve got no doubt [litigation] will stay strong. We still haven’t seen the peak of it all. There’ll be a lot of litigation next year” gordon grieve, piper alderman Australasian Legal Business ISSUE 8.1

NEWS | news >>

challenges’ in 2010 for all Freehills staff.”

The March review will take into account a range of factors including any changes in market salaries, individual performance up to 1 March and, where Gavin Bell, applicable, any relevant Freehills increase in experience. Bell said the timing of the first review will achieve a fair balance between the original aims of the salary freeze and the improving market conditions the firm hopes to see in the new year.

The June review will take into account movement in market salaries between March and June and any relevant increase in experience. Bonuses will also be assessed in the June review for the whole of the 2009-10 year.

Earlier this year, Freehills predicted that the firm’s profit and therefore partners’ incomes would decrease in the 2009-10 year. The firm also made a decision to share any profit above that which was recorded in 2008-09 among staff. This arrangement remains in place, Bell said, but he does not expect the firm to exceed last year’s profit. ALB

and property work to pick up in the New Year. “We’re certainly getting that feedback from our clients,” he said.

“They’re preparing themselves to be ready to go in February when people get back from their holidays.”

Piper Alderman’s approach to promoting within is a legacy left over from the times when good experienced lawyers were hard to find. Grieve said that it forced the firm into implementing a sophisticated graduate recruitment program to try and get talent early – and keep it long term.

“It really came out of the difficult market for lawyers before the crash and it was difficult to laterally hire three- or four-year lawyers that were in demand and going overseas,” he said.

“So we have had a program of bringing these people on ourselves. This is really a culmination of a number of years’ work that we’ve been able to promote this number of people from within.” ALB www.legalbusinessonline.com

us report Ashurst redefines US strategy Ashurst has recently established a six-firm referral network that will operate independently of the firm’s own US offices. Where the firm previously worked with a much larger range of firms on US matters, it has now drawn up the six-strong list and made a small number of people responsible for relationships.

Akin Gump Strauss Hauer & Feld, Davis Polk & Wardwell, Paul Weiss Rifkind Wharton & Garrison, Ropes & Gray, Schulte Roth & Zabel and Quinn Emanuel Urquhart Oliver & Hedges have all been confirmed as Ashurst’s main US referral firms.

Although partners have been encouraged to forge relationships with others, Ashurst singled out these six for their expertise in various practice areas.

London partner Ed Sparrow and Madrid partner Jesus Almoguera have overall responsibility for the referral network, while all US-related deals must be recorded with Ashurst New York business development manager Hilary Becker.

Changes in store for first-year associates US-based first-year associates at Reed Smith recently had their pay slashed. Responding to feedback from clients and concerns about driving down the cost of legal services, the 20% reduction will see junior lawyers starting at the firm in January in major markets (New York, Chicago, California and

Washington DC) take home US$130,000 rather than US$160,000.

Orrick, Herrington & Sutcliffe also announced it would be implementing a new pay model for associates. Although it has confirmed that starting salaries for first-year associates in major markets (New York, Washington DC, San Francisco, Los Angeles, Silicon Valley and Orange County) will not be reduced, changes to the way it awards bonuses will occur.

First-year associates will not be eligible for year-end bonuses, only qualifying when they reach the next salary level, determined by their performance rather than the traditional lockstep model.

US firms cautious about partner promotions Promotion season has seen many US firms opting for a more conservative approach, despite confidence in a recovery remaining. Firms are still reluctant to go back to the partner numbers seen in pre-downturn days.

Weil Gotshal has been the most cautious, with partner promotions down by more than half on last year (seven down to three). Latham & Watkins cut promotions by seven this year from 30 to 23. Kirkland & Ellis added 51 staff to its partnership compared to 67 last year.

Milbank Tweed Hadley & McCloy however, has bucked the trend and upped its partner promotions, adding five compared to four seen in 2008.

ROUNDUP

• Jeffrey Hammes, a corporate specialist in PE deals, will soon take over the chairmanship of Kirkland & Ellis’ 15lawyer management committee. He replaces Thomas Yannucci, a Washington, DC-based litigator • Sidley Austin is set to launch a 12-lawyer office into Palo Alto, led by longtime Wilson Sonsini partner Thomas DeFilipps with three corporate attorneys from Howard and eight lawyers from Sidley’s San Francisco office • Cravath Swaine & Moore revealed cutbacks in bonuses for associates with a year’s experience, and no bonus at all for those starting less than a year ago. Second-year associates will receive a bonus of US$7,500, a drop of 57%, while senior associates will receive US$30,000, the same amount they were awarded a year ago • Davis Polk and Skadden recently secured lead roles in Exxon Mobil’s decision to acquire the Texas-based natural gas company XTO Energy for $31bn, the biggest energy deal seen since 2006 • Ropes & Gray IP associate Brien Santarlas has been identified as the second key player in the Galleon Group insider trading probe. The first – former Ropes associate Arthur Cutillo – was charged last month for providing traders with inside tips about three PE transactions on which Ropes was advising • Panasonic Corporation recently announced that it had successfully secured a majority stake in Sanyo Electric, creating one of the world’s largest electronics makers. Both companies used Japanese counsel for M&A advice, with Panasonic tapping into Nagashima Ohno & Tsunematsu, and Sanyo relying on Mori Hamada & Matsumoto

15

NEWS | news >>

news in brief >> HopgoodGanim founder retires Joe Ganim, one of the founders of Brisbane law firm HopgoodGanim, has announced his retirement from the partnership. Ganim spent his last day as a full-time partner with the firm in December before taking some time off to spend with family and serving HopgoodGanim as a consultant.

Ganim founded the firm in 1974 with Paul Hopgood, who currently heads up the family law practice. Together they were able to build the firm from just two partners to 24 partners and 200 staff.

Ganim has built a strong legacy of business ethics and mateship, and a steadfast commitment to service within the firm.

Ganim has been involved with the legal industry for almost four decades, conducting corporate and commercial litigation in the Supreme Court of Queensland, the Federal Court of Australia and the High Court of Australia [see Soapbox pg 13].

DLA Phillips Fox denies integration DLA Phillips Fox has been forced to deny further rumours that it was planning on full financial integration with DLA Piper this year. Industry sources believed that a vote on the move was imminent but a spokesperson for DLA Phillips Fox said recently “no it’s not true. Financial integration remains just one of a number of possibilities that the firm is considering. No date has been set to vote on any of these possibilities.” This is not the first time that the rumour mill has been proven wrong on this matter. It’s unlikely that the denial will stop the gossipmongers.

In the meantime, DLA Phillips Fox will get ready to welcome new CEO Tony Holland as he replaces outgoing CEO Tony Crawford in February.

Kemp Strang appoints Wannan to chairman’s role Rob Wannan has been appointed chairman of Kemp Strang Lawyers as the firm moves to finalise its governance structure and drive future growth. The firm has settled on a board model with both the new chairman and a managing Rob Wannan, partner (Stephen Godding) to drive Kemp Strang future growth.

Lawyers “As Kemp Strang has evolved the firm has given careful consideration to the most suitable governance structure and believes the board model, with a chairman and a managing partner, best fits our needs,” Wannan said. “We can make decisions quickly, access the skills and expertise of a range of partners when required, and ensure the firm continues to develop.”

Wannan joined Kemp Strang in 2001 as part of a merger plan with Greaves Wannan & Williams, and has worked as a consultant for the firm since then. He also has a number of external board positions and is chairman of two not-for-profit foundations.

16

Industry >>

Malaysia’s Zaid Ibrahim becomes first Asian law

M

alaysian firm Zaid Ibrahim has obtained approval to launch offices in Sydney and Melbourne this year, making it the first Asian law firm in Australia and the first time an Asian firm has practiced here.

Zaid Ibrahim is targeting the burgeoning US$1tr Islamic finance industry, although the firm will only advise on foreign laws, not Australian laws. “We decided to expand our presence to Australia in view of the tremendous interest in Islamic finance and Shariahcompliant advisory services,” the firm’s chairman, Dato’ Dr Nik Norzrul Thani, said Nik Norzrul Thani, Zaid Ibrahim recently.

The chairman said the Malaysian firm witnessed growing Australian interest in Islamic finance products firsthand when its lawyers visited Melbourne and Sydney early in December to promote Shariah finance.

The lawyers were part of a delegation

of officials – including some from Malaysia’s central bank, Bank Negara.

“We personally saw the tremendous interest from Australian businesses during the MIFC and Austrade road show,” said Thani.

Zaid Ibrahim’s launch comes as both the Malaysian and Australian governments expect cross-border investments between the countries to increase. The positive trading environment has been created by recent developments, such as the ASEAN-Australian-New Zealand Free Trade Agreement (AANZFTA) that came into effect this month; Malaysia’s simplification of foreign investment ownership laws for its financial services sector; and the Australian government’s intention to develop its local Islamic finance sector.

The firm’s Dubai office, launched in 2008, is presumed to be another key reason behind the dual launch in Australia, since the Malaysian firm is also tapping the market for Middle East investments into Australia. “As

Industry >>

New PPS legislation “as big as the Trade Practices Act” T he Personal Property Securities (PPS) legislation passed by Parliament in December looks to be the most momentous change of rules in the past four decades, but there is doubt it will result in more work for law firms.

In the 18 months left before the legislation takes effect, a surge of work for corporate and banking & finance teams is likely, as banks and finance companies prepare themselves for the changes coming from 18 pieces of legislation simplified into one. The PPS Act will cover all types of goods, shares, units, contractual rights, and IP – just about everything except land, fixtures and water rights. “We see it as potentially as big as the Trade Practices Act when that came in – everybody is going to have to redraw

their contracts,” Piper Alderman managing partner Gordon Grieve said.

“There’s a huge amount of work to be done in the finance industry. We see that as a big thing for next year.”

Gadens senior partner Jon Denovan agrees that the new legislation is a game changer and expects to receive increased work in the near-term.

He thinks the streamlined process will encourage lenders to conduct future transaction work inhouse.

“It is probably the biggest change to the law I’ve seen in my forty years,” Denovan Jon Denovan, Gadens said. “But if you’re going to have that Australasian Legal Business ISSUE 8.1

NEWS | news >>

firm in Australia the Australian government looks at attracting more investments from the Middle East for its major infrastructure projects, through our Dubai office and regional network in Asia, [we will] play a role as a bridge to facilitate these investments,” Thani added.

While office managing partners and an official launch date have yet to be announced, it is understood that the firm’s partner Lim Kar Han, who is admitted to practice in NSW and obtained his dual economics/law degree from the University of Sydney, will spearhead the two launches from Kuala Lumpur. He will build critical mass by initially transferring lawyers to the new offices. “We have 160 lawyers to cherry-pick from, but as we evolve and grow we will evaluate the market demands,” said Thani.

“Our physical presence on the ground provides us with the option to engage local talent when the need arises within the middle and long-term time frame.” ALB

uk report Allen & Overy adopt LPO Allen & Overy (A&O) recently became the first Magic Circle firm to outsource legal work, adoptig legal process outsourcing (LPO) in a bid to reduce their overheads. The firm has partnered with LPO provider Integreon to outsource basic litigation document review to teams in New York and Mumbai, to generate a 30-50% cost saving.

Although rivals Clifford Chance and Linklaters have both outsourced support functions, this is the first time that a Magic Circle firm has outsourced legal work. A&O have confirmed that they will only be working with Integreon on a case-by-case basis, rather than signing a deal for a dedicated team.

Magic Circle firms avoid over-specialisation Linklaters may soon introduce a number of schemes to counter over-specialisation, where junior lawyers will spend time in different practice areas in the first few years post-qualification. The new training program, currently under discussion with senior managers at Linklaters, will see associate

versatility become a core part of each lawyer’s career path. Time spent in other departments will also be an essential requirement for promotion/ moving from associate to managing associate.

Slaughter & May already operates a system where associates spend time in a given practice area and in a variety of groups.

Lovells/ Hogan & Hartson merger go-ahead Lovells and Hogan & Hartson will soon join forces, with reports that the two firms’ partnerships recently voted in favour of the union. The merger will see Lovells managing partner David Harris and Hogan’s chairman Warren Gorrell heading up the new firm as joint CEO’s.

Although regulatory approval is still required for the new firm, it is anticipated that it will comprise a US LLP, an international LLP, a Swiss Verein and the various businesses that are affiliated to these structures.

Lovells will become part of Hogan’s existing US LLP, which will be rebranded Hogan Lovells, while the reverse will happen in Europe and Asia. The merger will come into effect from May 2010.

►► securities subject to pps:

• Fixed and floating charges • Bills of sale, hire purchase agreements, leases • Charges over contracts (eg construction contracts • Charges over shares and units • Charges over deposits

degree of simplification, there’s even the potential for lawyers to lose work out of it because banks will be more comfortable to do this work internally as the process will be so much simpler.”

Before the legislation comes into effect, expected in May 2011, there is much legal work required to formulate new procedures and create new documents for financial clients. “I’m hopeful of getting a fair bit of work to do new procedures for lenders and new documents. Once they’re done I think lenders will have a simpler rules game – like changing from chess to checkers or downgrading from bridge to 500,” Denovan said. ALB www.legalbusinessonline.com

ROUNDUP

• Watson Farley & Williams (WFW) recently launched an office in Spain following the recruitment of a fivelawyer team from Lovells, as part of what the firm refers to as a pan-European focus on renewables energy • Pinsent Masons has seen its half-year revenues drop by 7% during the first six months of 2009-10 compared with revenues last year, with £98m brough in this year compared to £105m for the first six months of 2008-09.

• Freshfields Bruckhaus Deringer will implement its revamped associate career development model in London from spring 2010 with the system to be rolled out globally from 2011. This will make Freshfields the latest firm to move away from using post-qualification experience (PQE) to assess lawyers’ development • Linklaters has suffered a 9.5% reduction in turnover at the half-year stage, attracting £591m in revenue compared with £653m during the same period last year • Clyde & Co may be in preliminary talks to tie up with construction firm Shadbolt, enabling the firms to compete on a level playing field with larger firms operating in the construction, projects and infrastructure spaces • Allen & Overy, Herbert Smith, Simmons & Simmons and Slaughter and May have won roles on a new government panel to handle the sale of its stake in banks bailed out during the financial crisis. Slaughters had been sole adviser to United Kingdom Financial Investments (UKFI) since September 2007 • Routledge Modise – Eversheds’ alliance partner in South Africa since 2008 – was recently embroiled in a legal row with the local law society over rebranding associated offices. The firm changed its name to Eversheds in July 2009 but the Law Society says dropping reference to the local partners contravenes both the Attorneys Act and its own rules and has ordered a name reversal • Legal Sector Alliance (LSA) revealed that many of the UK’s major law firms have reduced their carbon footprints over the last financial year, in a report launched to coincide with the Copenhagen negotiations for the next stage of the Kyoto protocol

17

NEWS | news >>

news in brief >> WA legal market heats up The Western Australian legal market is heating up as existing firms beef up their presence and others look to expand into the jurisdiction, lured by the emergence of a revitalised commodities market.

Cochrane Lishman, a local commercial law firm, has appointed new partners and two senior associates. This adds energy & resources and commercial litigation to its current offerings of M&A and corporate governance practices. Jon Carson will lead the energy & resources team from January, along with Ben Luscombe who will head up the commercial litigation team. The move by Cochrane Lishman follows on the heels of an expansion into WA by Sydney IP firm Hodgkinson McInnes. The firm has taken office space in Bentley’s Innovation Centre and recruited local IP practitioners to establish a presence. The team will be led by patent & trade marks attorney Stephen Krouzecky who was one of three senior partners at leading Perth IP firm Wrays before joining Hodgkinson McInnes.

Allens signs up for Indigenous business program Allens Arthur Robinson has signed an agreement with indigenous business Message Stick for the provision of audio- and web-conferencing services, as part of a pilot project linking indigenous businesses with some of Australia’s biggest organisations.

Allens CEP Michael Rose signed the agreement at a ceremony in Sydney attended by Message Stick Group CEO Michael McLeod and Federal Minister for Employment Participation Senator Mark Arbib.

Allens and construction giant Leighton Holdings, which also signed an agreement with Message Stick, are taking part in the Australian Indigenous Minority Supplier Council (AIMSC), a pilot project that links indigenous businesses with some of Australia’s biggest organisations.

The agreements between Message Stick, Allens and Leighton Holdings are for two years and together are worth about A$2m in revenue for Message Stick.

Advisers lack confidence in ASIC Almost half of financial advisers have no confidence at all in ASIC’s ability to monitor and prevent malpractice and financial product collapses, new research by CoreData on the Ripoll Inquiry has revealed.

Four out of five respondents (79.4%) feel that financial advisers are being unfairly targeted, and more than half (57.5%) expect their professional indemnity insurance premiums to increase if the recommendations are adopted.

The research was conducted in November 2009 by Sydney-based independent research group CoreData and included 236 advisers, predominantly financial planners and practice principals.

18

Industry >>

New chairman says DLA Phillips Fox set for transformation

U

nder the guidance of a new chairman and CEO, DLA Phillips Fox will transform from an insurance and government work-centred firm into a full-service business law firm with a focus on corporate and banking & finance sectors. David East’s appointment to chairman of the board comes after the announcement that Tony Holland will be heading up the firm as managing partner from February 2010.

In an exclusive interview with ALB, East sets out an ambitious strategy for the law firm. “We’re on a changed program here,” he said.

“The firm has had a long history in some key industries in insurance and government but the changed focus is [towards] more of a business law firm in terms of the corporate and finance practices in particular.”

“We will be looking to attract quality lateral recruitments in the banking & finance and corporate space ” david east, dla phillips fox

The appointment of Holland, who brings with him a wealth of project finance experience, is the first step, followed by the firm’s hiring of PPP specialist Alex Guy from DLA Piper’s London office.

DLA Phillips Fox’s credentials as a business law firm were reinforced with the appointment to the Westpac panel late last year and the subsequent confirmation of that position in June when Westpac re-tendered its panel and dropped Clayton Utz and Corrs

Banking & Finance >>

Kangaroo bonds bounce back in M

allesons Stephen Jaques has capitalised on the return of the kangaroo bond market, acting on 41 deals in 2009. Clayton Utz was the only other Australian law firm to work on a deal. There were A$18.2bn worth of foreign bonds issued by non-Australian companies in the domestic market last year– a remarkable turnaround from the start of 2009, when the market had disappeared completely.

Last April there still had not been a single issue of a kangaroo bond. Yet the bottoming-out of the GFC lured foreign development banks and sovereign funds back to the market and resulted in nine issues in October alone.

“People got less worried about the GFC basically,” said Mallesons partner Greg Hammond, who has worked on most of the deals since the first bond market deal eventuated in 1991. “The Australian market has also recovered more quickly than other markets ... therefore investors in Australia have Australasian Legal Business ISSUE 8.1

NEWS | news >>

Legal Traveller >> ►► Key points:

• DLA Phillips Fox to move into corporate and banking & finance sectors • Firm will maintain insurance and government presence • New CEO Tony Holland will spearhead recruitment campaign

Chambers Westgarth.

“We are looking at the market and will be looking to attract quality lateral recruitments in the banking & finance and corporate space.”

The relationship with DLA Piper, which was cemented in November 2006, provides DLA Phillips Fox with the opportunity to access key staff in the corporate areas. “We are continuing to see a crossover of their people joining us or our people joining them so there’s ongoing secondment between the firms,” East said.

The prospect of a full merger between the two firms is “certainly an option” but there is nothing conclusive, the chairman

said. “We’re looking at working together in all sorts of ways, collaborating on pitches, sharing clients and referring clients. Certainly, the merger prospect is an option but there is nothing concluded around that.”

The chairman believes that the firm’s history of working in the government space, coupled with its newly acquired finance expertise, will allow it to compete with other firms like Clayton Utz for infrastructure work from the government.

“We’ve got good government connections and we’ve got expertise in that project work so we David East, think our value proposition DLA Phillips Fox is very attractive and we’re pretty excited about the opportunity,” East said. “It’s an area where we have additional capability with the recruitment of Alex Guy so we would see ourselves absolutely playing in that space.” ALB

second half of 2009 ►► Top 10 kangaroo bonds of 2009 Issuer

Managers

Value (A$m)

European Investment Bank

ANZ, CBA, DB

International Bank for Reconstruction and Development

CBA, RBC, TDS, WIB

800

European Investment Bank

ANZ, JPM

750

Inter American Development Bank

CBA, RBC, WIB

750

Kreditanstalt fur Wiederaufbau

ANZ, RBC, WIB

750

European Investment Bank

TDS, UBS

750

International Finance Corporation

CBA, TDS, RBC

750

CADES

CBA, TDS, WIB

700

European Investment Bank

RBC

600

Inter American Development Bank

CBA, TDS

575

1,500

been more prepared to invest in foreign bonds than other people.”

In 1991 when the first foreign bond was issued, Mallesons made a strategic decision to set up a dedicated team to www.legalbusinessonline.com

look after the debt capital markets, Hammond said. “As a result of that, over the last 18 years we’ve been involved with most of these issuers on a consistent basis.”

“The Australian market has also recovered more quickly than other markets ... investors have been more prepared to invest” greg hammond, mallesons He expects the strong run to continue this year, meaning that the trough hit in 2008, when just A$10.2bn of kangaroo bonds were issued. However, the market was already slowing in 2007 when A$19.5bn of bonds were issued – a significant drop from 2006’s peak of A$32.4bn worth of bonds. If the last eight months of 2009 were pro-rated over the full year, it would suggest a market of A$27.3bn.ALB

Natalie Fisher, Curwoods Lawyers partner, insurance, Sydney

Favourite city to visit on business: Melbourne Best restaurant for business lunch: Currently it’s Pendolino in the Strand Arcade Sydney. The food is excellent – especially my favourite dish, the pappardelle con ragu di vitella e maggiorana (organic pasta with veal sauce and marjoram) Favourite travel experience: Vang Vieng, Laos. For US$5 the locals drive you five kilometres out of town, give you an inner tube from a tractor tyre and drop you at the river.

You then float back into town. Bars have been built along the banks of the river if you feel like stopping for food or drinks – magic!

Current favourite destination: This year I went to Arusha, Tanzania, to volunteer at the St Jude’s school for a short period, which was an amazing experience. The school was founded by an Australian, Gemma Sisia, and the children were so enthusiastic and grateful to have the opportunity to attend such a fantastic school.

Their joy in everything was humbling.

Most exotic leisure destination ever visited: Tarangire National Park in Tanzania Most dangerous travel experience: Catching a small plane from Siem Reap in Cambodia to Luang Prabang in Laos: as you walk out onto the tarmac to get on the plane there was a sign asking you to ‘please check your handguns with the hostess’ – and people did!

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NEWS | news >>

Industry >>

Australian law firms strengthen ties to China with placement program “At the Law Council we recognise that one of the key growth areas for Australian lawyers is work with a particular focus on Asia” John Corcoran, Russell Kennedy

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A

ustralian law firms are taking part in the 2010 Australia-China Legal Profession Development program (ACLPDP), a program that will see 10 lawyers from China gain firsthand experience of the Australian legal arena through a three-month placement. The program is a joint initiative between the Law Council and the International Legal Services Advisory Council (ILSAC) and aims to further strengthen ties between Australia and China, at a time when increasing amounts of legal work crosses borders.

“At the Law Council we recognise that one of the key growth areas for Australian lawyers is international work with a particular focus on Asia,” said Law Council president

►► Key points:

• Program introduces Chinese lawyers to Australian legal community • Law Society president says close to a billion dollars of legal services is exported annually • Chinese participants are placed with law firm for three months

John Corcoran. “The most recent survey, taken in 2006-07, showed that Australia exported something like A$700m of legal services. I suspect at the moment that it’s probably closer to a billion dollars – and continuing to grow exponentially.”

To capitalise on these opportunities, Australian lawyers need to understand the culture and environment that they will be working in. The ACLPDP helps

Australasian Legal Business ISSUE 8.1

NEWS | news >>

facilitate that understanding. Under the program, lawyers from Chinese government agencies and private law firms travel to Australia to gain firsthand knowledge of the country’s legal industry. They are able to request areas that they want to work in and are introduced to Australian courts and bodies such as ASIC and the Trade Practices Commission. Lawyers then go on a placement for three months either with a government agency or a private practice.

“The feedback has been terrific,” said Corcoran, who is also a principal at Russell Kennedy. “My firm, for example, unrelated to my position as president of the Law Council, had a lawyer work in our office a couple of years ago and I think it was a really good experience, not only for her but also for our young lawyers.”

The Australian Leadership Awards Fellowships conducted by AusAID currently funds the program and all lawyers are provided with

accommodation and a living allowance.

Participants are selected on the basis of experience in nominated areas ranging from the regulation of the legal profession and practice management to energy & resources and dispute resolution. Participants will arrive in Australia from February to commence the initial study and training component of the program, prior to the 12–14-week placement, which is scheduled to run from 29 March 2010 until mid-late June.

There is a long history of co-operation between the Law Council and the All China Lawyers Association, dating back to the early 1980s when the China body was still in its infancy. The two legal bodies signed a memorandum of understanding, which led to joint co-operation and eventually to this program, now in its fourth year. “This is a highly regarded program, not only by the Law Council in Australia but also by the All China Lawyers Association,” Corcoran said. ALB

Company Profile

e.law Asia Pacific Pty Ltd

T

he scope of litigation can change at a moment’s notice often leaving solicitors and legal support crews with unanticipated needs and impending deadlines. The recent acquisition of CCH Workflow Solutions by e.law Asia Pacific Pty Ltd positions this market leading litigation support group as a unique cradle to grave solution provider. From the provision of computer forensic services, e.discovery and legal photocopying through to hosted case management software e.law is now able to assist their clients in every stage of the matter lifecycle.

“By combining the talent, passion and technology of two leading-edge companies e.law will continue to drive innovation that helps our clients manage their matters in the most efficient and cost effective manner” commented e.law Director and CEO Allison Stanfield. “Our focus will be 100% on client service and delivery and we now have the www.legalbusinessonline.com

opportunity to harvest best practice and technology to provide exceptional service” Allison concluded.

The new year will no doubt see interesting activity in the litigation support market and e.law has moved ahead of the pack in making an unexpected entry into the competitive bureau arena. So why would the dominating force in e.courts and e.discovery extend itself to include services such as legal copying, scanning and printing? “It’s about the ability to say ‘yes’ to our clients, we want to meet the broader range of clients needs , we are incredibly excited to be able to offer such flexibility of services” responded e.law Director Bruce Grant.

CCH Workflow Solutions had been operating in the Asia market for 8 years and had great success in assisting Australian, US and UK clients with litigation support needs throughout Asia.

The acquisition of CCH Workflow Solutions by e.law will see support to the Asia region

not only continue but expand. e.law will now hold offices in Sydney, Brisbane, Melbourne, Perth and Hong Kong with service centres in Beijing, Shanghai, Guangzhou and Singapore, ensuring it has the widest reach of any Asia Pacific litigation support provider.

The new e.law will continue to operate under the existing corporate brand of e.law Asia Pacific Pty Ltd. Clients of both e.law and CCH Workflow Solutions should notice no change in service delivery, with a seamless transition already complete.

Established in 1999 by Allison Stanfield and Bruce Grant, who both still lead the organisation, e.law is a privately owned company providing specialised e.forensics, e.discovery, e.courts and bureau services to the legal profession, corporate and government organisations.

Contact Allison Stanfield, Director & CEO for more information.

1300 136 993 or visit us online: elaw.com.au

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www.legalbusinessonline.com

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Firm Profile NEWS | news >>

Buddle Findlay

NZ COMMENTARY

Limitation and the Fair Trading Act 1986: the view from the Supreme Court

T

he recent decision of the New Zealand Supreme Court in Commerce Commission v Carter Holt Harvey (CHH) [2009] NZSC 120, sets a high threshold for parties seeking to defend claims under the Fair Trading Act 1986 (the Act) on limitation grounds. This decision will also have important implications for statutory limitation provisions in other legislation, such as sec 82 of the Commerce Act 1986.

Background In 2006, CHH entered a guilty plea to criminal charges under the Act of misleading and deceptive conduct in relation to the grading of timber.

Subsequently, the Commerce Commission (the Commission) made an application for compensation on behalf of those who had suffered loss as a result of CHH’s conduct. CHH applied to strike out the application on the basis that the claim was time-barred. It relied on sec 43(5) of the Act, which provides: An application under sub-section (1) may be made at any time within 3 years after the date on which the loss or damage, or the likelihood of loss or damage, was discovered or ought reasonably to have been discovered.

CHH relied on an affidavit provided by the Commission in support of an application for a search warrant against CHH, which pre-dated the Commission’s application for compensation by more than three years. The Commission argued that it is the knowledge not of the applicant but of each person who suffered loss or damage which is relevant for the purposes of the Act.

Issues In the majority judgment, Tipping J identified three key points arising on the interpretation of sec 43(5): • If the person who suffered loss and the applicant for compensation are not the same, whose knowledge is relevant?

• Is the relevant knowledge of “likelihood of loss or damage”, knowledge that losses are likely to arise in the future or knowledge that it is likely that loss or damage has already occurred?

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• What degree of awareness must an applicant have before being found to have discovered loss or damage and how likely must the suffering of loss or damage be before it can be said to have been discovered?

Knowledge – the relevant person The majority held that the natural implication from the language of sec 43(5) is that it is the knowledge of the person making the application (in this case, the Commission) that is relevant, rather that of the person who actually suffered the loss.

The court noted that this interpretation would enable a person who was timebarred to nominate another to make the application. However, the court held that this could not have been the intended effect of the provision and that compensation could not be ordered in such circumstances.

Elias CJ disagreed with the majority and favoured a composite approach to knowledge. On her construction, if either the applicant or person on whose behalf the application is brought ought to have discovered the loss, then the limitation period will begin to run from that point.

Likelihood – past or future loss?

CHH submitted that loss or damage is discovered when the applicant knows or ought to know it is likely that loss or damage has already been suffered or will be suffered in the future. The majority rejected this interpretation and held that the word “likelihood” is only forward looking. Accordingly, time starts running from the discovery that loss or damage has already occurred or that it is likely to occur in the future.

Standard of knowledge and likelihood However, the majority observed that a similar concept of probability is an appropriate standard against which the occurrence of past loss should be measured. What the applicant must know to set time running for past loss is that it is more probable than not that loss has occurred. The majority commented

that a qualitative description of the knowledge inherent in the concept of discovery is neither necessary nor desirable. An applicant discovers the loss or damage when she or he acquires knowledge of it and if there is any doubt about actual awareness, the relevant inquiry is whether he or she ought reasonably to have been aware of it.

Adopting a “balance of probabilities” approach, the applicant must be aware that it is more probable than not that loss has occurred (in the case of past losses) or that it is more probable than not that future losses are likely (in the case of future losses).

Elias CJ disagreed with the majority on this issue. She held that likelihood was not a standard for discovery and that discovery of the threshold fact (loss or likely loss) is a question of fact – turning on what is known or ought to have been known.

Result On the basis of the majority view, the issue was whether the Commission knew or ought reasonably to have known, on or before 26 October 2003, that some person or persons were likely (more probably than not) to have suffered loss or damage as a result of a probable contravention by CHH. The court held unanimously that at the relevant date, the information available to the Commission was insufficient to warrant the conclusion that it knew or ought to have known of those matters.

This article was written by Anita Birkinshaw, a senior associate in the Auckland office of Buddle Findlay, one of New Zealand’s leading law firms.

Angela is a member of Buddle Findlay’s litigation team and has extensive experience in commercial litigation, arbitration Anita Birkinshaw, Buddle Findlay and alternative dispute resolution procedures both in New Zealand and internationally.

Anita can be contacted by phone: +64 9 358 7017 or email: anita.birkinshaw@buddlefindlay.com

Australasian Legal Business ISSUE 8.1

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Arbitration >>

Bill sets up potential new practice area

W

hile most of the legal industry’s focus on events in Canberra have centred around the shenanigans of the Liberal Party and the Senate’s voting down of the CPRS legislation, a less publicised legislative push is likely to have a bigger impact on the Australian legal environment – to the point of establishing another onshore practice area for law firms. At least lawyers who are working in the international arbitration space hope, after amendments to the International Arbitration Act 1974 were introduced into Parliament last month.

The amendments will seek to incorporate changes which the UN commission on International Trade Law has made to a model law that Australia adopted soon after it was created. Other amendments would bring Australia into line with other jurisdictions seen as favourable to host

neutral dispute resolution processes.

If the amendments pass, Australia will have a favourable legislative regime supportive of international arbitration, and adding this to its attributes will attract business for law firms. Other attributes include a judiciary which is sophisticated and supportive of international arbitration, a legal profession expert in the practice of dispute resolution and arbitration, and world-class facilities which make the running of international arbitrations effective and hospitable.

According to Doug Jones, partner of Clayton Utz and president of the Australian Centre for International Commercial Arbitration (ACICA), Australia has the potential to join London, Paris, Geneva, Stockholm, New York, Hong Kong and Singapore as a major centre for international arbitration. “We have all of the

►► Key points:

• Amendments to International Arbitration Act would bring Australia in line with UN • Would open Australia up to be a hub for international arbitration • Law firms could establish onshore international arbitration practices

ingredients that go to make a neutral venue desirable to parties seeking to run international arbitration,” he said.

“We tick all of the boxes, which not a lot of other countries in the world manage to do.”

The rise of Australia as a place to settle international disputes would be worth billions to the overall economy and would provide a windfall for the legal industry. Jones said that for lawyers it represents a whole new practice area that can be developed onshore; if Australian lawyers want to practice international arbitration at the moment they generally have to leave the country. ALB

M&A>>

Financial services to offer M&A opportunities T

he focus of M&A practices at most law firms has been on the booming energy & resources sector but 2010 will also see increased consolidation in both the financial services and the industrials sectors, according to Allens Arthur Robinson head of M&A Ewen Crouch.

“I think there are good prospects for M&A activity across the financial services spectrum as well as in the industrials area Ewen Crouch, and, of course, energy & Allens Arthur Robinson resources which I think will be the mainstay,” Crouch said.

Uncertain economic conditions at the start of 2009 made recapitalisation and debt management priorities and put any acquisition aspirations on the backburner for most www.legalbusinessonline.com

companies. However, clients are now acknowledging that the economy seems to have bottomed out and are once again turning their attention to inorganic growth.

“I think the outlook now is reasonably promising,” Crouch said. “It’s still uncertain but as the year progresses, I would expect that we would see activity increase.”

One aspect that has hampered M&A activity since the global credit crunch has been the lack of debt funding available. This has had a significant impact on private equity clients, who had previously been very active in the market conducting highly-leveraged buyouts. “Some of the private equity acquisitions rely very heavily on debt,” Crouch said. “Now private equity clients are looking at making acquisitions with much more significant equity contributions.”

►► Top Australian and New Zealand legal advisers by value Rank

Firm

Value (US$m)

Deal count

1

Allens Arthur Robinson

25,404

48

2

Mallesons Stephen Jaques

30,143

55

3

Freehills

25,404

74

4

Blake Dawson

16,160

47

5

Freshfields Bruckhaus Deringer

15,955

8

6

Linklaters

10,333

7

7

Baker & McKenzie

10,034

29

8

Clifford Chance

6,440

5

9

Minter Ellison

6,340

56

10

Clayton Utz

6,217

61 Source: Bloomberg

According to figures released by Bloomberg, Australian M&A activity decreased by 15% to US$66bn in 2009 while New Zealand M&A activity fell by more than 60% to just US$1.3bn (down from US$3.3bn in 2008). ALB 25

NEWS | appointments >>

news in brief >> young lawyer recognised for outstanding achievement HopgoodGanim Lawyers senior associate Michelle Eastwell has been recognised for her legal achievements in Queensland Law Society President’s Awards, held in Brisbane recently. Eastwell won the category of recognising outstanding achievement by a young lawyer with less than seven years postadmission experience.

As a member of HopgoodGanim’s corporate advisory and governance team Michelle advises public and private clients on mergers and acquisitions, IPOs, capital raisings, stock exchange listings and joint ventures. She has led a number of high-value capital raisings including Eastern Corporation, key advisor on Bow Energy’s A$77m raising, FSA Group, D’Aguilar Gold and Techniche, and also recently advised Stanmore Coal on its IPO and listing on the ASX.

Bible versus Booze in the capital The ACT Law Society has two events coming up in February to mark the commencement of the legal year – but who would want to hazard a guess as to which will be better attended?

1 February 2010 Commencement of the Legal Year Church Service

4 February 2010 Commencement of the Legal Year Drinks

hopgoodganim appoints two new litigation partners HopgoodGanim Lawyers has promoted two senior legal practitioners to partnership. Paul Betros and Liam Prescott both work within the firm’s litigation and dispute resolution practice. The new partnerships came into effect on 1 January and take the firm’s partnership numbers to 25.

Betros, who was promoted from his position as special counsel, is a Queensland Law Society accredited specialist in commercial litigation.

Liam Prescott His practice focuses primarily on insolvency law. Liam Prescott was promoted from senior associate and specialises in complex commercial disputes in the financial services, banking, mining and energy sectors.

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Banking Finance >> Industry&>>

Government to copy private sector in legal procurement A review into the procurement of Commonwealth legal services seeks to align how government agencies outsource legal work with how private sector does, in a bid to minimise the Federal Government’s legal spend, which last year hit a high of A$555m.

“The report finds that the current system of agencies individually tendering for legal services is very costly – both to the Commonwealth and to external service providers,” said the federal Attorney-General, Robert McClelland. “The review puts forward a number of recommendations which the Government will consider carefully as part of our commitment to closely monitor legal services expenditure and achieve greater value for taxpayers’ money.”

“Key to best practice in privatesector organisations is a clear definition and understanding of the role of in-house lawyers ” anthony blunn, sibylle krieger Of the A$555m spent on legal services by government agencies, almost A$308m was spent on purchasing services from external legal service providers. The balance of 247m was largely attributed to the cost of in-house practices.

While government legal spend in the past decade has increased 285% – from A$144m in 1999 to A$555m in 2009 – the report notes that most of the expense is a result of significant changes in government policy including the development and implementation of national competition policy, whereby former monopolies are either exposed to competition or regulated in a manner designed to emulate what would occur in a competitive market.

Increased transparency and accountability of government agencies has also increased the demand for legal

►► commonwealth legal spend breakdown FY

Internal (A$M)

External (A$M)

1999

29

114

Total 143

2000

133

175

308

2001

138

164

302

2002

178

185

363

2003

204

205

409

2004

230

216

446

2005

n/a

n/a

n/a

2006

106

207

313

2007

126

280

406

2008

182

311

493

2009

247

308

555

services with the development of “wellinformed and well-funded community and commercial bodies able and willing to challenge government actions.”

Authors of the report, Anthony Blunn and Sibylle Krieger, interviewed private-sector organisations and determined that a more structured way of deciding what work would be conducted in-house and what work should be farmed out to a panel would be effective for use in government agencies. When work is outsourced, the report said that government agencies should more rigorously seek to negotiate the best price for legal work.

“Key to best practice in private-sector organisations is a clear definition and understanding of the role of in-house lawyers, a sound knowledge of the market from which external services are purchased, and the ability and willingness to cost work rigorously and negotiate strongly on the basis of that costing with both external providers and internal clients as appropriate,” the report said. “Finally, that ability to rigorously cost work and knowledge of the market has enabled a number of private sector organisations to experiment with different models of service delivery, including alliance-like models in which risks and rewards are shared more openly than is the norm in Commonwealth legal services procurement.”

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NEWS | appointments >>

appointments

Bar

►► Lateral hires Name

Practice areas

Organisation coming from

Organisation going to

Kate Bint

Family law

Legal Aid Queensland

HopgoodGanim

Justin Castaldi

Commercial

Bar

Moray & Agnew

Simon Ellis

Insurance & litigation

Lyde & Gilbert

Lander & Rogers

Mark Forman

Corporate

CMS Cameron McKenna

Minter Ellison Rudd Watts

David Gillard

Family Law

Rennick & Gaynor

Lander & Rogers

Karl Luke

Workplace relations

Donaldson Walsh

Thomson Playford Cutlers

Peter Nugent

Property

Stuffs Barbeler

Carter Newell

Tim Sherman

Tax

Mallesons Stephen Jaques

Baker & McKenzie

Geoffrey Wood

Infrastructure

Mallesons Stephen Jaques

Baker & McKenzie

►► Promotions Name

Practice areas

Organisation

Paul Betros

Litigation

HopgoodGanim

Amy Cowper

Competition

Truman Hoyle

Chris Gianatti

IR

FCB

Ernest Graf

Physical sciences

Fisher Adams Kelly

Sasha Ivantsoff

Dispute resolution

Piper Alderman

Liam Prescott

Litigation

HopgoodGanim

Steve Smith

Employee relations

Freehills

Michael Stojanovic

Communications & technology

Truman Hoyle

Damien Timms

Corporate

Truman Hoyle

Mallesons Stephen Jaques

Baker & Mckenzie

Bakers’ hires tax specialist Taxation specialist Tim Sherman has joined Baker & McKenzie from Mallesons Stephen Jaques, making him the fifth new partner to join Bakers’ Australian offices.

Sherman’s focus is on corporate Tim Sherman and private equity taxation issues and he said that his talents complemented the other 11 tax professionals within the firm’s Australian offices.

“It was a good opportunity to come across to Bakers because my skill set is predominantly in the corporate and private equity area,” Sherman said. Work in his niche area is already picking up as improving economic conditions encourage increased activity in the M&A and corporate arena. “Tax is always at the forefront of any of those transactions so, the way I see it, it’s all pretty positive for the next 12 months,” he said.

“I think the fact that, in the second half of [2009] we’ve seen a number of IPOs come to market is indicative of much more confidence.” As with his peers, Sherman is eagerly awaiting the Australia’s Future Tax System Review Panel report, more commonly known as the Henry Report. “The time is ripe for tax reform in Australia,” he said. “It can be easy to make things

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simple by taking away some of the incentives that are in the tax regime but it’s important that those incentives remain because they’re important in making sure we’ve got the right competitive investment environment in Australia.”

Donaldson Walsh

Thomson Playford Cutlers

Thomson Playford Cutlers adds workplace relations partner Thomson Playford Cutlers is significantly expanding its workplace relations capability with the lateral hire of an additional Adelaide-based team headed by partner Karl Luke. Luke has more than 15 years experience as both a barrister and solicitor dealing with workplace relations. Chief executive partner Adrian Tembel said the appointment would further strengthen the firm’s expertise and resources in its growing practice.

“This is an important step forward for the firm and broadens the level of expertise and support for our clients,” he said. “This appointment highlights a real growth market for the firm, with demand for workplace relations assistance increasing following the Karl Luke introduction of the Fair Work Act.

Moray & Agnew

Moray & Agnew hires former barrister to commercial practice Moray & Agnew has hired Julien Castaldi as special counsel in its Newcastle office, in a move that is set to strengthen its commercial practice.

Castaldi joins the firm after an 11-year career as a barrister. At the bar he appeared in a number of landmark cases including the Bell litigation in Western Australia; more recently in the Lehman Brothers litigation in the Full Julien Castaldi Federal Court in Sydney. Over the years, he has acted in commercial disputes involving trade practices, contract law, trade marks, copyright, banking and finance, professional negligence, insurance law, insolvency and defamation. Castaldi also advised on “front-end” commercial matters, which is an area of practice he will drive in his new role. “From a litigation perspective, I think that having had the benefit of literally running the cases will be invaluable in advising and preparing in the stages leading up to the hearing.”

Mallesons Stephen Jaques

Baker & Mckenzie

Infrastructure specialist joins Bakers Infrastructure specialist Geoffrey Wood has joined Baker & McKenzie’s construction team from Mallesons Stephen Jaques. Wood has worked on some landmark infrastructure and defence projects, including the A$8bn SEA 4000 Air Warfare Destroyer program, the Royal North Shore Hospital Redevelopment PPP, the Adelaide and Sydney desalination plants.

Baker & McKenzie has identified major projects, infrastructure and construction practices as key growth priorities, both in the local and Asia-Pacific markets.

To that end, the firm has made four lateral hires so far, also bringing in Nicholas Grambas, Alex Hartmann, and John Mollard. Hartmann and Wood both worked on the Sydney desalination project.

Freehills

Freehills promotes employee relations lawyer Freehills has promoted Steve Smith to new partner in the employee relations team in Brisbane in a bid to boost its service offering in this area. Smith has advised clients on a broad range of industrial and employment law issues and took up his new position in January.

Smith has worked with major corporate and government clients on industrial relations strategic planning, enterprise bargaining, industrial dispute resolution, industrial and employment risk management, workplace investigations, termination of employment and general employment matters. “Both the Queensland market and the employee relations practice area have great potential over the next few years,” Freehills managing partner Gavin Bell said.

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profile | managing partner >>

ALB 2010 MANAGING PARTNER SERIES

Paul Hopkins, Carter Newell

Two feet on the ground Carter Newell’s Paul Hopkins speaks to ALB about mergers, aviation law, the corporate firm model and how to build a nurturing firm culture for staff and clients

P

aul Hopkins is one of those Australian managing partners who has the gift of being able to run a team of top-flight lawyers, while keeping a fundamental “blokenext-door” quality intact. He isn’t completely immune from corporate speak, but the business clichés disappear when it counts. “Our people are nice people – we keep our feet on the ground,” the father of four says.

While its feet may be on the ground, Carter Newell was one of Queensland’s high-flying firms in 2009. Even in a year when keeping revenues at par would be considered a good result, the firm managed to get close to double-digit growth. Hopkins puts the result down to a targeted approach on specialisation and having the right people.

Life, liberty, and the pursuit of happiness

Hopkins isn’t too keen to talk about revenues and steers the conversation towards one of his favourite topics – building a happy law firm. He is concerned about the high incidence of depression in the legal profession and links this pattern with issues concerning work/life balance and engagement with work.

“We do recognise that not everyone 30

has an outstanding day every day.

People are not machines,” he says.

“Someone might have something come up at home, so we try and create the environment where [staff] trust us to the point where they’re comfortable to go and do what they need to do. When they come back they’re focussed and feel a valued part of the team.”

This approach is also reflected in staff policy – nearly 30% of the staff has some kind of flexible arrangement

engagement which makes them happy,” he says.

“We have people here who have come from firms where they’ve been back-room lawyers, so to speak. There are still a lot of firms doing that these days. It’s beneficial for clients too because they like to get to know other outstanding lawyers – although obviously you have to make sure that there is not a case of overexposure.”

“Many airports are now reviewing their master plans and seeking advice in relation to construction and reviewing contracts with users of the airports such as airlines and tenants” facilitating an improved work/ life balance. Yet Hopkins also says that lawyer morale is a product of the extent to which lawyers are allowed to understand the work in its full context. “We don’t put people in the background – if our lawyers are working on complicated work for a client, they will meet that client and get the level of exposure and

Thanks, but no thanks

Over the past five years, Carter Newell has been a target for merger proposals from Sydney and Melbourne-based firms. Hopkins says that approaches from these firms have always been courteously received, although ironically none have come from Brisbane firms. ”We’re always respectful and keen to meet – but at Australasian Legal Business ISSUE 8.1

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profile | managing partner >>

the end of the day we have preferred to maintain what we are doing as we believe in what we are doing.”

Despite would-be suitors offering major concessions for a merger to take place (including retention of the Carter Newell brand) the firm believed there would be no net benefit for clients in merging. The committee structures proposed for the merged entity would be too cumbersome and would compromise the law firm’s ability to “focus on service in a way that we control.”

Hopkins also points out that a number of Carter Newell lawyers joined the firm because they wanted to avoid the “large national-firm” culture.

However, the firm is not completely opposed to the idea of a merger “if the right opportunity came along and it was a good fit,” but there would need to be compatibility both in the sense of culture and having complementary practice areas.

“What we found with a couple of the proposals was that you might get a strong practice area or two, but then they’d want to bring along family law too,” says the managing partner.

Needless to say, this is not an area that Carter Newell’s carefully targeted practice areas include.

Corporate models

The firm operates under a corporate model with two external directors sitting on the firm’s board alongside CEO Peter Ellender. The external directors provide a fresh perspective on strategic direction and fiscal management, but Carter Newell is not incorporated.

It has experienced the same tax issues which received publicity last year, in connection with Deacons’ attempt to incorporate as a precursor to its merger with Norton Rose in January this year. Under Queensland law, Carter Newell would be liable to pay stamp duty on the transaction, and there would be also be additional costs borne with payroll and capital gains taxes issues.

The latter have been welldocumented in relation to the Deacons merger. “And that’s where the Deacons-Norton Rose matter is a tough thing. They’re trying to do the right thing – you can certainly 32

►► Carter Newell: key practice areas • Insurance • Construction & engineering • Resources • Corporate • Commercial property • Litigation & dispute resolution • Aviation

understand what they’re trying to achieve,” Hopkins says.

In the meantime, Carter Newell’s aim is to run the firm as close to a corporate model as possible – without actually being incorporated. “It just means that you have very experienced people, so if you’re looking at leasing issues or IT upgrades or what’s happening in an industry, you can really get another perspective.”

Taking flight

One of the firm’s more distinct niche areas is aviation law, starting out as a subset of the insurance practice.

It eventually took on a life of its own and now covers matters such as compliance with airport legislation and the multitude of commercial issues associated with operating an airport.

Brisbane Airport is a long-standing client and a milestone achievement was the production of a national airports liability and compliance guide last year. “It’s a good example of how we worked with one client for a long time, as well as doing work for other airports around Australia,” says Hopkins. “We saw the need for [the guide] and the product was very well received. Value-add is very important these days.”

The aviation team has seen an increase in liability, property damage and business interruption claims lately, and Hopkins believes this is connected with the Federal Government’s recent ratification of the international 1999 Montreal Convention. Inter alia, this convention provides for an increase to carriers’ maximum liability for delay or loss or damage to cargo, as well as increased scope for carrier liability on other fronts.

“Many airports are now reviewing their master plans and seeking advice in relation to construction, [as well as] reviewing contracts with users of the airports such as airlines and tenants, and considering the terms of use for an airport facility and pricing structures,” he says. ALB Australasian Legal Business ISSUE 8.1

ALB special report | Brisbane 2010 >>

Brisbane 2010:

Back in business After a lean 2009, Brisbane law firms are sensing that the tide has once again turned. ALB’s Renu Prasad talks to the key players about 2010’s prospects

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rime Minister Kevin Rudd has always been an exponent of immigration and a “big Australia” and now, as Brisbane’s urban sprawl advances inexorably along the eastern seaboard, Queenslanders have an exclusive preview of Rudd’s expansionist vision. In recent years, housing developments have broken out like a rash along hitherto undeveloped land in the south-east, accommodating a rise in international and interstate immigration.

The result is that, in a period of economic conservatism, Queensland has continued to lead the way in infrastructure development. The A$1.7bn Gold Coast Rapid Transit, A$1.6bn Sunshine Coast University Hospital and A$1.7bn Northern Link Tunnel linking Toowong to Bowen Hills in Brisbane are just some of the many projects – either mooted or already underway – to service Queensland’s burgeoning population.

Mind you, the state could do with the boost – FY09 was the weakest year for Australasian Legal Business ISSUE 8.1

ALB special report | Brisbane 2010 >>

the Queensland economy since 1991.

In line with the comparative resilience of the Australian economy during the economic downturn, Queensland did however manage to record a modest 1% growth. While household consumption slumped, business investment actually increased 10%, largely as a result of momentum from projects already under construction. Public investment was also an important stimulant.

Queensland law firms saw the warning signs in late 2008 and braced themselves accordingly, so while 2009 was in many respects a lean patch, it was not the disaster that many had predicted. “It’s mostly business as usual – the whole firm stayed busy,” says Thynne & Macartney partner John Moore. “We battened down the hatches, but we haven’t had to survive any storm.”

Some firms recorded revenue growth last year. Cooper Grace Ward grew by 5%, while Carter Newell is understood to have recorded “near double-digit” growth. These results are likely to be – at least in part – a reflection of the strengths these firms have in countercyclical areas such as insurance.

HopgoodGanim, which achieved 34% revenue growth in 2008, managed to retain revenues slightly above 2008 levels last year – a result which has pleased managing partner Bruce Humphrys.

“We made the decision to protect jobs for the greater good. We worked to hold onto staff and also to be flexible on the debtor side of things, where clients were under pressure. To keep revenues at 2008 levels in those circumstances is a good result,” he says.

McCullough Robertson’s revenues were down on 2008, but chairman of partners Brett Heading is a relieved ►► Brisbane firms: lawyer and partner numbers* Name

No. of lawyers

No. of partners

Carter Newell

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11

Cooper Grace Ward

95

22

Herbert Geer

25

9

HopgoodGanim

62

24

135

42

McCullough Robertson Mills Oakley

13

3

Thynne & Macartney

34

13

* Note: this list covers firms interviewed for this feature and does not purport to be exhaustive. Figures were provided by the firms themselves

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man. He describes himself as having been “scarred” by his experience of previous recessions and describes 2009 in comparison as a “picnic”. “We were becoming pretty worried in March, April, May, June [2009] but then the lights came back on in July,” he says. Mind you, he’s not necessarily discounting the possibility of a “w” recession, frankly professing that economic prognostications are not his area.

Despite the lukewarm performance of the Queensland economy, there has been some suggestion that the state has been a beacon of light for beleaguered national firms during the downturn. This theory is certainly borne out by revenue figures from Freehills. Despite a decline in national revenues in 2009, the firm’s Brisbane office actually grew by 13%.

Partner Michael Back says that largescale infrastructure projects, plans by the state government to privatise public assets and activity in the resources sector have all generated work for the firm.

Clayton Utz was one of the few top-tier firms to record national revenue growth in 2009 (about 4%). The firm’s Brisbane office grew its revenues approximately in line with this national figure.

“We were becoming pretty worried in March, April, May and June [2009] but then the lights came back on in July” Brett Heading, McCullough Robertson

Rent and salary

On the lighter side, the financial crisis brought firms some relief from the pressures of leasing and fitting out premises. Cooper Grace Ward is one firm to have benefited, having relocated its offices from Eagle St to new and larger premises in Brisbane’s North Quarter precinct last October. Managing partner Chris Ward says he was pleasantly surprised at the cost.

“Rental prices in Brisbane were astronomical in 2007, but common sense has returned to the market,” he says. “We wanted a new space and we were able to get a really good deal. We took three floors with an integrated fit-out and the quotes for the work were very sensible.

We would have been massacred if we’d done the same thing three years ago.”

Having made the move from Eagle St to Adelaide St several years ago to control costs, Carter Newell is another firm which has seen an opportunity to canvass its options, although at the time of writing no decision had been made about expanding its current premises or moving to a new address altogether.

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ALB special report | Brisbane 2010 >>

“We wanted a new space and we were able to get a really good deal. We took three floors with an integrated fitout and the quotes for the work were very sensible” Chris Ward, Cooper Grace Ward

“Right now, vacancy rates are reported to be around 12 to 15%, and they were around 2% at one point,” says CEO Peter Ellender. “We’ve now got options, whereas 18 months ago we would have been scrambling. It’s certainly been an improvement.” Other firms are already committed: HopgoodGanim entered its current lease in 2003. However, Humphrys says that he is satisfied with the current arrangement, particularly as the terms were agreed on before the height of the boom.

Salary pressures have also diminished for the moment. Recruitment firm Hughes-Castell’s director Karen Waldock reports that despite increased confidence seen in the past six months, there has been little salary movement. “However, it is important to note that not all firms froze salaries in 2009,” she says.

Waldock says that after a tough year, lawyers may begin to review their options for 2010. “With lawyers now drawing breath, they are now questioning whether all firms froze salaries and made redundancies and that, just maybe, they might be best suited elsewhere.”

Insolvency and optimism

Solid revenue results for firms such as Carter Newell suggest that the countercycle is having its predictable impact on firm workflows. But while countercyclical practices have inevitably picked up, some lawyers have noted that this has not occurred to the extent as might have been expected.

“There has been an increase in insolvency work. Not an alarming increase, but certainly an increase – but it hasn’t been absolutely hectic as it was in the late 1980s and early 1990s,” says Mills Oakley partner Stephen Dickens.

He is optimistic about the New Year, and is already in recruitment mode.

“We have plans to expand our Brisbane offering. We’re looking for good candidates in the property and commercial space and the workplace health and safety area, in the expectation that things will improve further,” he says.

Property and construction

Like their counterparts nationwide, Brisbane lawyers have seen the familiar pattern of disputes work overtaking front-end business in the construction 36

space. Some lawyers have also observed a recovery in front-end work in the final months of 2009. However, it is mainly the large developers who are benefiting and it remains to be seen whether the fortunes of smaller developers will be similarly revived.

“The big companies are still busy – you only have to drive around town to see all the Leighton signs round the place,” says John Moore. A good pipeline of work and solid clout with the banks has put the big developers in a relative position of strength, but smaller companies have not fared so well.

A recent example of this is the Brisbane-based civil engineering and construction company Civdec, which entered voluntary administration in November. “I’ve seen a good number of property developers collapse, mainly at the lower end of the substratum,” says Dickens.

“The smaller companies have struggled because the banks perhaps haven’t been so willing to provide working capital.”

Stephen Dickens, Thynne & Macartney’s Mills Oakley Moore agrees and says that that while projects under $20m commonly receive the green light, there is less enthusiasm for projects over this level. Amid cautious optimism, this lack of liquidity is causing concern. “I’ve got clients that are pulling their hair out because they can’t get funding,” says HopgoodGanim’s Humphrys. “The construction sector is a big employer of people – the smaller companies aren’t that small – and it concerns me that we have continual stories of people not being able to find capital.”

Meanwhile, back-end work continues.

Lawyers report a steady stream of claims under Queensland’s 2004 Building and Construction Industry Payments Act. And Carter Newell’s senior partner Paul Hopkins says that he has also observed resurgence in issuing subcontractors’ charges under the 1974 Subcontractors’ Charges Act.

Infrastructure

Queensland’s ambitious infrastructure program is showing no signs of slowing down. While tunnel and road projects have received a good deal of publicity, there is a full range of projects from dams Australasian Legal Business ISSUE 8.1

ALB special report | India 09 >>

www.legalbusinessonline.com

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ALB special report | Brisbane 2010 >>

to hospitals to pipelines underway. Some of these projects have been accompanied by uncertainty (the federal government’s veto of the Traveston Dam project is one high-profile example), but for law firms the workflow can start well before the first sod is turned or financing is in place.

“The state government has not rolled back its infrastructure delivery program.

They’ve made a commitment to keep infrastructure programs intact and go into deficit – that’s driving a lot of planning and delivery,” says Herbert Geer partner Ian Wright. “Most local councils brought forward large capital works programs, particularly in water and sewerage, to start trying to plan for growth. There’s a lot of civil contracting work going on.”

Herbert Geer is one firm which has long understood that there is more to infrastructure than construction alone, and has put some energy into developing

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its planning and government capabilities, recruiting partner Ian Wright from Corrs Chambers Westgarth last February. “We’re doing an enormous amount of Ian Wright, work for government in Herbert Geer terms of planning of new towns, cities and infrastructure networks – before you even start thinking of building, you have to plan for it,” says Wright.

“That work started years ago – it won’t stop today and it will continue forever. It’s important work which needs to be done.

You never stop planning.” It’s been a key part of the 2009 story for the firm – the practice has been so successful that two extra lawyers have been added. And Wright says that while infrastructure work has eased a little, this was off an “enormous” base.

Mining and resources

Coal-seam-gas continues to be the resource du jour in Queensland, but law firms agree that activity across the whole resources sector picked up in the latter half of 2009. Exploration activity and capital raisings to fund opportunistic M&A took place. “The resources area was the strongest area for us [in 2009] but other than the coal-seam-gas it had gone fairly quiet,” says McCullough Robertson’s Heading. “Now it is reviving itself and companies that weren’t exploring are now, and companies that put development projects on hold are now starting to do that work again.”

Heading nominates indigenous land access agreements as a particularly busy area, but says that the entire mining project cycle – from exploration, to approvals, to construction and sales and transport – is generating more work.

“We’ve got lawyers travelling around

Australasian Legal Business ISSUE 8.1

ALB special report | India 09 >>

www.legalbusinessonline.com

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ALB special report | Brisbane 2010 >>

“In top-end work, you tend to come across [national firms] more than the others” Michael Back, Freehills

NSW and QLD and we’ve seen a lot of mine infrastructure work.”

There is also a shift in trends on the M&A front. While deals such as the BG Group’s acquisition of Queensland Gas and Gloucester Coal’s flirtation with Whitehaven and Noble Group have been dominant in the headlines, a good deal of activity has centred on companies in the small-and mid-cap space.

“A lot of smaller mining companies sprang up during the boom – mainly in Western Australia, but also in Queensland. Some of them were [going into mergers] because there were synergies, some of them were cashed up, and some were struggling to raise capital,” says Heading. “It’s a bit of the old story of the lion eating the antelope.”

As always, there is the challenge of securing funding for the deal – and it’s not an easy task for everyone. “A lot of good Brett Heading, McCullough deals went begging,” says Robertson HopgoodGanim partner

Michele Muscillo. Carter Newell’s Hopkins notes there is also a trend towards some mid-sized players looking to overseas parties, particularly from China, as investment partners to develop their tenement.

Taking on the top tier

Stories of mid-size firms taking market share at the expense of the top tier are not unique to Queensland, but according to HopgoodGanim’s Humphrys, Queensland firms are particularly well positioned to take on the challenge.

“Some of the local firms are probably a lot larger than some top-tier firms in Brisbane,” he says. “Nationally, they’ve got the scale, but in this patch we’re quite large and there’s a greater opportunity for clients to consider their options.” He points to Bow Energy’s A$77m capital raising and Norton Gold Fields’ A$40.5m share placement as recent examples of big clients giving HopgoodGanim a greater share of work.

However, Humphrys also says that the trend should not be simplified into

Firm Profile

Cooper Grace Ward

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ooper Grace Ward is an independent law firm offering a range of commercial, insurance, property and dispute resolution services to clients throughout Australia.

In 2009, clients voted Cooper Grace Ward as Best Australian Law Firm (revenue up to $50m) in the BRW Client Choice Awards. The firm was also one of only 11 law firms in Australia to be recognised as an EOWA Employer of Choice for Women by the Federal Government. Its success was further recognised in a survey conducted by The Australian newspaper which ranked Cooper Grace Ward as Australia’s fastest growing law firm for 2009.

Cooper Grace Ward has been highlighted as a leading and recommended law firm in many of the ALB Practice Guides during 2008 and 2009, including the ALB Guides to: • Employment Law • Insurance Law • Banking and Finance Law

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• Environmental Law • Intellectual Property Law. These achievements reflect the value Cooper Grace Ward places on relationships with clients and team members.

On 1 December 2009, Cooper Grace Ward joined with Bain Gasteen Lawyers to create a merged firm of more than 210 people. The merger brings together two highly experienced teams and significantly increases the firm’s footprint in the Queensland legal marketplace, while at the same time boosting its portfolio of services and support for clients. Bain Gasteen has more than 20 years of experience servicing the corporate and business community, including some of Australia’s largest financial and insurance institutions. The merged firm will be known as Cooper Grace Ward (now incorporating Bain Gasteen Lawyers) until March 2010 when it will be known as Cooper Grace Ward.

The Australian’s end-of-year survey of 33 leading firms...shows that Cooper Grace Ward, a 21-partner Brisbane practice, shrugged off the economic malaise to emerge as the nation’s fastest-growing law firm. On partnership and employment growth, this firm topped the rankings.

The Australian, December 2009

The point that good client service starts internally is key for Cooper Grace Ward and is singled out as a reason why it is among the elite of professional services firms.

BRW Magazine, March 2009

T 61 7 3231 2444 • www.cgw.com.au Australasian Legal Business ISSUE 8.1

ALB special report | Brisbane 2010 >>

a GFC-induced pricing issue. “The work has only shifted to the extent that we can demonstrate that we’re able to do it,” he says.

“Clients aren’t racing out to give the mid-tier more work for the sake of it – you Bruce Humphrys, have to show you’ve got the HopgoodGanim wares.”

Carter Newell’s Ellender agrees that pricing is not a factor. In his view, larger clients are mainly using national firms for the scale they offer. “Quality is no longer a differentiator,” he says.

A spokesperson for Clayton Utz, which has 36 partners in Brisbane, said the suggestion that local firms had more scale in Brisbane was “gilding the lily” somewhat, but cited McCullough Robertson as a possible exception.

And national firms are still winning important work. Allens, Clayton Utz, Freehills and Minter Ellison have all been successful in bids to advise the state government on the proposed sale of assets, with previous experience in

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similar work in NSW and Victoria likely to have been a competitive advantage.

The outcome has disappointed local firms like McCullough Robertson, which also bid for the work. “That’s how it goes,” says McCullough Robertson’s Heading.

“That’s life – no doubt the experience in the divestments down south might have been useful to them. But we have a lot of ASX200 and international clients who aren’t concerned that we’re not a national firm.”

Freehills partner Michael Back says that it is difficult to assess whether the top tier is losing ground to local firms.

However, he points to his firm’s own strong revenue growth (13%) and recent success in the tender for the proposed sale of Forestry Plantations Queensland as examples which would suggest otherwise. “In top end work, you tend to come across [national firms] Michael Back, more than the others,” he Freehills observes. ALB

“The big companies are still busy – you only have to drive around town to see all the Leighton signs round the place” John Moore, Thynne & Macartney

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FEATURE | watchlist >>

As the industry enters the New Year with a renewed sense of optimism, ALB singles out ten firms that are set to have a big 2010. Reasons for including some firms (such as the newly merged Norton Rose) are obvious, while the inclusion of other names on the list might be more surprising. Yet all these firms are equally capable of distinguishing themselves through their own unique brand, philosophy and plans for growth

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2010

Australasian Legal Business ISSUE 8.1

FEATURE | watchlist >>

What’s Danny Gilbert plotting for 2010?

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y his own admission, Gilbert + Tobin’s managing partner always has something on the boil. Latest plans are a new Melbourne office – the firm’s first outside of Sydney - and the snaring of prize M&A partner Peter Cook from Mallesons. G+T will no doubt be looking to grow its revenues by more than the modest 2% it achieved in 2009. It will also be interesting to see if the firm manages to lure across more high-profile partners to join the likes of Cook and banking & finance high-flyer John Schembri. As all firms undergo wholesale renewal from time to time, could this be the start of a new chapter for G+T as it enters its 22nd year?

Gilbert + Tobin

Managing partner: Danny Gilbert Offices: Melbourne, Sydney

This small Melbourne-based IP firm has a fresh approach, accepting new clients only if they have been referred by an existing client or acquaintance

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Choy Lawyers Principal: Trevor Choy Offices: Melbourne

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hoy Lawyers’ referral-only model is only one half of a radical new client strategy. In line with Pareto’s Principle, also known as the “80-20 rule”, the firm has also trimmed its client base in order to focus more closely on its valued clients. Principal Trevor Choy is adamant that the firm is better off without clients who are difficult to work with, do not give adequate instructions or set unnecessary deadlines. He notes that most clients with these behaviours were non-referral clients – a fact which suggests that the referral rule will lead to a better-quality client base. This bold new approach has taken over twelve months to implement with the final elements expected to come together early in 2010. Clients the firm doesn’t want to retain have been informed and offered assistance with finding an alternative legal adviser – and rival firms have apparently been rolling out the welcome mat. It’s a strategy which will see Choy Lawyers grow through its existing core relationships, but growth for the sake of growth is not the firm’s priority. Choy prefers not to formulate his goals in terms of revenue-growth targets. The quality and strength of the firm’s client base is ultimately how its success will be measured in 2010.

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FEATURE | watchlist >>

This listed firm made some key acquisitions in 2009 – and it’s on the lookout for more partner firms in 2010

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LH was named the fastest-growing firm in Australia in December’s ALB Fast 10 list, with 59% revenue growth. This listed company has the unconventional strategy of acquiring law firms and continuing to operate them under their existing branding, which will continue in 2010. Managing director Graeme Fowler plans to recruit 15 to 20 medium-sized firms to the group over the next few years and there is no reason why ILH cannot continue to grow at 2009 levels if favourable economic conditions continue. Along with its fellow listedfirm Slater & Gordon, ILH is fundamentally reshaping the Australian legal industry in the small-to-medium size sector. Love them or loathe them, you can’t ignore them.

Integrated Legal Holdings Managing director: Graeme Fowler Offices: Melbourne, Perth, Sydney (separately branded)

Chairman Tony Ward is on a mission to transform his firm into the premier name in the IP space, with 2010 shaping up as a pivotal year

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lready a well-established name in the patent and trademarks space, Griffith Hack has ambitions to build a national integrated IP legal practice and has been making solid progress. Griffith Hack’s law practice grew by 30% last year and is tracking towards a similar result in 2010. The firm is expecting to establish a law practice in Perth this year, with Brisbane to follow in the medium term. Chairman Tony Ward says that IP is increasingly being recognised as a boutique space and that Griffith Hack has found it easier to attract top talent in recent years. He notes that the firm’s unique advantage is the capacity to provide patents and trademark attorneys in addition to legal advice, which is a complementary offering not covered off by most other firms.

Griffith Hack

Chairman: Tony Ward Offices: Melbourne, Sydney, Perth, Brisbane

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FEATURE | watchlist >>

Will the M+K juggernaut continue in 2010?

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LB Fast 10 firm M+K recorded 25% revenue growth in 2007, 20% growth in 2008 and 21% growth in 2009. Subject to economic vicissitudes, the firm is likely to record up to 30% growth in 2010. That’s organic growth – and M+K also has a couple of mergers in the pipeline which could see its final growth figures exceed 40% this year. Managing director Damian Paul attributes the firm’s success to the strength of M+K’s 2, 000-strong client base and its capacity to refer work with confidence within the firm. While he isn’t divulging details of the mergers just yet, Paul expects M+K to enter two new Australian states this year.

There have been rumours of plans to float the firm, yet while Paul says that M+K is structured to take into account this contingency, the firm does not need to raise funds and definitely has no plans to do so in the medium term.

M+K Lawyers

Managing director: Damian Paul Offices: Melbourne, Dandenong, Sydney

Kensington Swan is is breaking new ground in Abu Dhabi, and observers in New Zealand and Australia alike will be watching closely

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Kensington Swan

Managing partner: Quentin Lowcay (Abu Dhabi) Offices: Auckland, Wellington, Abu Dhabi

www.legalbusinessonline.com

ensington Swan has been building relationships in the Gulf for over five years, but in December they took the plunge and opened an office in Abu Dhabi, catering for locally-based, New Zealand and Australian companies looking to set up business in the Gulf region. Companies looking to attract direct foreign investment out of the Gulf region and the government sector are also being targeted, as this last sector has long been a Kensington Swan specialty. It’s an intriguing move, particularly coming from a New Zealand firm. It is the Australian firms which are usually in geographical expansion mode, yet Australians have generally eschewed the Gulf for proximity reasons. Colin Biggers & Paisley is believed to be the only other Australian/NZ firm to have a partner permanently on the ground in the region – and that firm also has a joint venture operation in Dubai with local firm Lutfi & Co. The Kensington Swan model, based on the competitive advantage of a NZ-dollar cost base and the capacity to provide quality advice in areas traditionally neglected by global firms, is one to watch.

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FEATURE | watchlist >>

Look out – Jones Day is one of several international firms seeing 2010 as the year to crack the Australian market

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Jones Day

he four-partner Sydney office of global firm Jones Day is expected to triple in size over the next three years as it expands to a fullservice offering. However, partner-in-charge Chris Ahern says that size is not the objective and that the firm will bide its time if necessary in its search for top-quality talent. Smaller size and lack of depth are frequently cited as obstacles to taking on the Australian top-tier, but Ahern points out that this has not stopped global firms from winning clients from local firms in other key markets. Indeed, relative lack of scale hasn’t been an obstacle for Australian firms in Asia. Jones Day’s Australian offering is expected to replicate its key global strengths, including IP, M&A and competition law. Ex-Freehills partner Philip Hoser joined the firm in 2009 to enhance another key practice area, insolvency & restructuring. Meanwhile, other international firms have also been active in Australia. Shipping specialist Holman Fenwick opened a Sydney office last year and US-based Dorsey & Whitney also established itself ‘down under’.

Partner-in-charge: Chris Ahern Offices: Global partnership

Balance Legal’s secondment-only model is proving popular – after 18 months in business the firm has already opened a second office

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Balance Legal

Managing director: Ken Jagger Offices: Perth, Melbourne

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alance Legal didn’t make the 2009 ALB Fast 10 because it had not been in operation long enough to supply the revenue figures for the requisite periods. Yet the figures which Balance Legal could furnish clearly mark it as a firm on the rise. The firm has grown from three to 20 lawyers over the past 18 months, and was tracking at over 200% revenue growth for the first quarter of 2010, albeit from a modest base. At the heart of this growth is Balance’s unique secondment-only model, where lawyers are placed with clients for a fixed period. Managing director Ken Jagger says that the model is not intended to displace traditional in-house lawyers or law firms, but rather to provide a cost-effective augmentation in situations where there is a spike in work or an unexpected shortfall in resources. By his own admission, Jagger is surprised at how quickly clients have warmed to the idea. Balance Legal was able to open its second office in Melbourne in September 2009, nearly two years ahead of the managing director’s most optimistic plans. And while he doesn’t have confirmed plans for any new offices, Jagger says that a Sydney or Brisbane office isn’t out of the question.

Australasian Legal Business ISSUE 8.1

FEATURE | watchlist >>

Marque Lawyers has become the standard bearer for those advocating a fresh approach to billing. Will this fledgling firm be able to continue the momentum in 2010?

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Marque Lawyers Managing director: Michael Bradley Offices: Sydney

ichael Bradley is still a bit miffed that he wasn’t named as one of Australia’s hottest lawyers in last year’s ALB Hot 40 feature, but luckily he agreed to speak with us for this article. Marque Lawyers opened its doors in August 2008 and has experienced remarkable growth in its short lifespan, growing from four to seven partners and adding 12 lawyers to its original five lawyer base. All of this occurred at the height of the GFC and Bradley describes it as “exceeding wildest expectations.” Much of the growth has come from direct referrals from existing clients and industry contacts. Bradley believes that this support has been a response to Marque’s innovative billing concepts and a “longstanding, deep-seated frustration” in the market at traditional hourly-based legal billing. Alternative billing arrangements are not unique to Marque, but Bradley says even firms which would like to pursue alternative systems face fundamental constraints. “In those firms, each individual in the firm is accountable for every hour of their day. The billable hour is culturally embedded and a fundamental part of the business model.” Bradley is looking to consolidate in 2010 and says that he’s keen for Marque Lawyers to “continue to be as annoying as we have been in the past.”

A big year lies ahead for the firm formerly known as Deacons. However, the first step in coming to terms with the new world order will be to become accustomed to the new name

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Norton Rose

Managing partner (Australia): Don Boyd Offices: global presence

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010 will see Norton Rose Australia pursue what it calls a “headlight strategy” which involves focussing on five areas: financial institutions, energy, infrastructure, transport and technology.

Managing partner Don Boyd says that the firm will be looking to recruit and consolidate its talent in those areas. It is unclear what will happen to specialisations outside the “headlights”, with Boyd saying that resources will be directed as a priority to the headlight areas. Boyd says that full financial integration of Deacons and Norton Rose is about “18 to 24 months away” and that the complexity of the transition to limited liability status was proving to be challenging.

However, a unified board is already in place and three of the twelve members are Australians. The managing partner is a firm believer that the global legal services market is consolidating, and compares the situation to Australia in the 1980s, when client demand led to formation of large national firms. “As time goes on, there will fewer opportunities left [for mergers],” he says. Should we expect to see more international mergers this year? “It may not play out in the short term, but it’s the right thing for all large Australian firms,” says Boyd.

“However, it’s not an easy thing to achieve – it took us three years from making a strategic decision to actually making it happen.”

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Feature | employment law >>

Employment law:

Happy New Year

Workplace lawyers around the country have good reason to toast the start of the New Year: 2010 looks set to be a bumper year for IR work. ALB investigates

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ull implementation of the Fair Work Act 2009, an improving economy and an election which will inevitably bring further changes to employment laws, are going to make 2010 a mammoth year for IR lawyers. Many in the industry say that businesses have no idea what is about to hit them.

The Fair Work Act has brought large clients calling on law firms as they 48

try to understand how changes to the regulations will impact their business.

The first changes occurred in July last year with initial amendments coming into play. However, introduction of the National Employment Standards (NES) and changes that occurred in January will provide an avalanche of work for employment lawyers.

“I think it’s going to be a huge year for a number of reasons,” says Harmers

Workplace Lawyers managing partner, Joydeep Hor. “Those businesses that have not come close to coming to grips with the ramifications of the new laws will need a lot of help. Individuals will have a lot more rights in the context of termination of employment. All of those things point to a very, very big year.”

Minter Ellison IR partner Gareth Jolly agrees, saying that a number of developments in 2010 will result in an Australasian Legal Business ISSUE 8.1

Feature | employment law >>

increased workload for employment lawyers. “I think that you’ll see the development of different types of employee actions such as adverse action proceedings this year,” he says.

“This is where an employee asserts that an employer has taken adverse action against them for a prohibited reason.”

Jolly says that “those types of actions have been around for a while but the Fair Work Act has consolidated those provisions and to some degree extended them.

As a consequence you’re likely to see increasing use of them.”

Campbell Fisher Gareth Jolly, of FCB Lawyers is Minter Ellison IR currently recruiting four lawyers to deal with an anticipated surge in demand for employment work. He says the new Act brought into operation a range of new modern awards, quite a significant change. “I think many people in business will not yet appreciate the degree of change that will come through that modern awards system,” Fisher says.

“The majority of private industry will have to adjust to those new sets of minimum conditions. Employment lawyers will be very busy helping business understand what that means, realise opportunities and ensure they move to comply.”

Just award

The changes to workplace law include modernisation of awards, which will have a greater impact on some businesses.

Tim Capelin of Australian Business Lawyers says the expansion of award coverage is going to take clients working in the financial services sector by surprise. “A lot of participants in the finance sector are probably only used to engaging with the clerical award which covers a small percentage of their workforce,” Capelin says. “They’ll suddenly find a much larger percentage of their workforce will be covered, which will create some compliance issues for them. But it will also give unfair dismissal rights to people who previously didn’t have them.” www.legalbusinessonline.com

This change will lead to a substantial increase in legal work explaining new award coverage across industries. The only thing that is certain for people is their current award won’t be their new award – and will vary from employer to employer.

Work flowing from the Act really started to ramp up in the last quarter of 2009. Lawyers working in the field say they expect increasing interest throughout the first half of 2010, with most of the pay elements for most industrial awards not coming into effect until July.

Into the bargain

Enterprise bargaining has also caused headaches. Capelin says that the financial crisis led many businesses to suspend enterprise bargaining, or enter into one-year agreements on wage increases which are set to expire this year. Those who refrained from negotiating in the height of the economic downturn will have returned to the negotiating table at the end of last year.

Capelin expects work in this area to continue to increase throughout this year. “The difficulty that employers are facing is that there’s a perception amongst some in the union movement that the GFC is over and that businesses are doing as well as the share market suggests they’re doing,” he says. “You’ve got this massive growth in share prices over 2009 and unions are very nervous that employers are doing much better than they actually are.”

Capelin says that disconnection between unions and employee expectations and what employers can provide will lead to problems in enterprise bargaining, resulting in both sides seeking legal advice and representation. And lawyers are seeing an increase in work related to disputes around enterprise bargaining. A short negotiation lasts about three months but these complications mean that some bargaining talks will last much longer than that, providing on-going work for law firms.

“I think many people in business will not yet appreciate the degree of change that will come through” Campbell Fisher, FCB Lawyers

Economic rebound

Harmers Workplace Lawyers won the award for ALB ‘Employment Law Firm 49

Feature | employment law >>

“A lot of participants in the finance sector are probably only used to engaging with the clerical award which covers a small percentage of their workforce” Tim Capelin, Australian Business Lawyers

of the Year’ in 2009, and Harmers’ Hor expects the recovering economy to play a role. “With the general economy picking up we’ll see more activity in the M&A space which will also be positive for work levels,” she says.

There’s always issues of dealing with employee entitlements when they’re transferring from one business to another as well as a whole range of other things – contracts, redundancies where necessary, selection criteria.”

M&A is not the only field where employment lawyers will be kept busy by improving economic conditions.

FCB’s Fisher says that in the last six months his firm has had as much work as it could handle – he has had to increase staffing levels to be able to cope with the increased volume of work. “I think we’re starting to see the economy strengthen and there’ll be a range of opportunities from people looking to build back in the capability that business has shed through the financial crisis.”

“That will lead to a range of labour hire and outsourcing opportunities as people start to build organisational competency,” Fisher says, adding that business is likely to start building that organisational competency in outsource models before moving to direct hire models. Employment lawyers are in the enviable position of being able to find a decent amount of work at any point in the economic cycle – it’s just the nature of the work that changes.

During the recent downturn employment lawyers found themselves working on restructuring and redundancy issues as businesses sought to reduce their labour costs, as well as numerous litigation cases associated with staff losing ►► IR changes that became operational on 1 January: Maximum weekly hours Community service leave Parental leave Annual leave Requests for flexible working arrangements Personal, carer’s and compassionate leave Long service leave Public holidays Notice of termination Redundancy pay

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employment. When more buoyant economic times arrive the workload changes towards helping businesses realise growth opportunities.

“You tend to look at innovative ways to employ and engage people and maximise the contribution they make to business success,” Fisher says.

“Large businesses in particular tend to spend a great deal of time and effort to ensure they do things properly, so you do a lot of work just making sure large business understands the law.”

Election promise

Prime Minister Kevin Rudd has said he will not use the failed carbon pollution reduction scheme legislation as a trigger to call for a double dissolution. Even if he does stays true to his word, there will be a federal election before the end of 2010. And the promise of an election means that IR laws will again feature prominently on the political agenda, with further changes inevitable.

“I think that many people in the business will not appreciate the degree of change that will come through” Campbell Fisher, FCB Lawyers “Regardless of what happens in the next election I think we will see further changes to this legislation, with [Opposition Leader] Tony Abbott indicating a move away from this current legislation in a fairly significant way,” Hor says. “That would mean the whole issue of IR will continue to be visible in the lead-up to the next election.”

If the Coalition won, the new Prime Minister would seek to pare back some of the union-friendly provisions that the Rudd Government has put in place. Some of the employer-friendly provisions, such as the ability to have individual work contracts, could well come back.

However, if Labor wins there is the opportunity to push IR legislation Australasian Legal Business ISSUE 8.1

Feature | employment law >>

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“We’ll see more activity in the M&A space which will also be positive for work levels” Joydeep Hor, Harmers Workplace Lawyers 52

further left. “If the Labor Government is re-elected, I think we could well see this legislation moving in the direction that it’s already heading – perhaps some greater rights and powers for the union movement would be the area of most change,” Hor says. “It’s just always a changing area, it’s never static, and even if governments are reelected IR legislation never stays still.”

Already anticipating an increase in demand, many law firms spent the end of 2009 boosting their employment teams. Top partners were snared to continue to pay dividends for their new firms from their experience and

client relationships. Deacons, Hall & Wilcox, Lander & Rogers and Thomson Playford Cutlers have all recently announced partner hires to their employment law teams.

It is hoped that the legal experts’ knowledge of the practice will help clients navigate the powerful rapids of new legislation while taking advantage of new opportunities, and come to grips with a potential new party in government. All the ingredients are in place for 2010 to be a busy one for IR practices. Any way you look at it, there is a lot of work coming their way this year. ALB Australasian Legal Business ISSUE 8.1

Feature | employment law >>

www.legalbusinessonline.com

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Feature | interview >>

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Feature | interview >>

In-house perspective

Star City: Michael Anderson

Not your average punter Star City’s general counsel speaks with ALB’s Renu Prasad about the unique challenges of being counsel to a casino business

A

t Sydney’s Star City casino, construction work is in full swing. Tall cranes have appeared in vacant land behind the complex. The original curved façade, along with its faux waterfall and dubious palm trees, have disappeared behind a purposeful hoarding. It’s all part of a $575m redevelopment which will see the construction of a new five-star hotel – Sydney’s first such development since the Olympics – and what is being described as a ‘reorientation’ of the complex to take better advantage of the views afforded of Sydney’s sparkling harbour and shimmering cityscape.

One man who’s been part of the project from the beginning is general counsel Michael Anderson. With the help of external advisor Freehills and a small in-house team of two lawyers and a paralegal, he has spent the past year drafting and negotiating the contracts and legal vicissitudes for this substantial project. Very much a “hands-on” general counsel, Anderson spends a good part of his day providing advice rather than delegating it.

Now, as the cranes manoeuvre outside Anderson’s fourth floor office, he’s stepped up his involvement in the commercial side of things. As the redeveloped complex will incorporate a new retail section, Anderson has found himself involved with leasing

www.legalbusinessonline.com

“Get out of the office, go to the site – and write that time off! You’ll never find out what you don’t know about a business unless you go and talk to the people on the ground'” strategy and fit-outs, working with food consultants to establish an appropriate mix of tenants and food and beverage outlets. In an era where GCs strive for closer business involvement, it must be seen as something of a compliment that Anderson has been entrusted with these additional duties.

While Anderson has some experience with retail (he was previously legal counsel with David Jones) he says that general counsel should not be afraid of stepping into new areas of business. “It will be hard initially, and you have to be willing to learn and accept that you don’t know everything, but there’s no reason why you shouldn’t do it,” he says.

“Take me for example – I’d never worked in gaming before Star City.” Even so, Anderson knows his limits – he won’t buy into detailed discussions of the décor, for example. “I always tell them, don’t ask me about the carpet!” he says.

Regulatory

The regulatory side of Anderson’s

role is somewhat unique. While other in-house lawyers may find themselves frequently entangled with widereaching legislation, such as the federal Trade Practices Act 1974 or NSW's Fair Trading Act 1987, Star City’s regulatory compliance burden goes one step further. The Casino Control Act 1992 ostensibly regulates all NSW casinos, but as Star City is the only casino in NSW, the result is that Star City has its very own legislation – an Act of parliament solely dedicated to regulating the Star City business.

Also, the casino has a dedicated regulator in the form of the state government’s Casino Liquor and Gaming Control Authority.

Add all this to the usual compliance requirements for Australian businesses and the result is a tremendous amount of legislation for Anderson and his team to navigate. The general counsel keeps copies of all the relevant Acts stacked in a cabinet in his office, where a tottering pile of legislation threatens 55

Feature | interview >>

to collapse at any moment. “We do a lot of regulatory work,” says Anderson with a deadpan expression.

The people in his regulatory team are not necessarily lawyers, which Anderson says is common sense. “You don’t need the experience of a lawyer just to be able to read the legislation and ensure we’re complying. That’s normal business practice – there are a lot of contracts in business that are done by procurement people who aren’t lawyers, for example.”

Anderson expects this to become more commonplace as companies look to control costs. “It make sense to only use lawyers for work that really needs a lawyer, and to use other resources within business for other work,” Anderson says. “That’s also the reason why there is such scope for paralegals within in-house teams.”

External advisers

“It's important to get a good track record in general commercial work – try and avoid specialisation. You need a number of years under your belt before you can be really effective inhouse” 56

Star City is owned by entertainment and gambling group Tabcorp, so Anderson uses law firms from Tabcorp’s panel to assist with matters such as major projects and litigation.

The current casino redevelopment is a case in point, with Freehills getting the nod ahead of a field of rivals which included Allens Arthur Robinson and Mallesons (which had an existing relationship with the casino).

Anderson says that the selection process came down to price, business pragmatism and market reputation, but firms could not rely on reputation alone. The general counsel had no previous acquaintance with any of the firm’s partners; prospective bidders were invited to Star City to make their pitch and each was allocated equal time to meet Anderson and his team.

The law firms had been asked to make a presentation along prescribed lines and Anderson was impressed with the quality of Freehills’ presentation. He notes that these kinds of presentations, which may seem like a formality, are capable of creating a good impression with prospective clients and can demonstrate a firm’s attentiveness to client needs. Anderson has three pointers for firms on client service: meet agreed deadlines, meet cost estimates (or warn the client in advance if you aren’t going to be able

to) and know the client’s business.

Law firms, of course, regularly profess their deep and intimate knowledge of their clients’ businesses, but Anderson challenges the notion of what really constitutes deep and intimate knowledge.

He says that doing legal work for a client over an extended period is not the same thing as constructive, prolonged exposure to the business itself. “Get out of the office, go to the site – and write that time off!” he says.

“You’ll never find out what you don’t know about a business unless you go and talk to the people on the ground.”

Anderson practices what he preaches.

Every second month he can be found circulating on the casino floor on Friday or Saturday night, spending time with duty managers and gaining a better insight into the Star City business. “Our business runs 24/7, so I don’t have to take time off normal work to do it,” he says. “The downside is that I get home and it’s already Sunday morning!”

Advice for aspiring counsel

Star City's general counsel says that spending four to six years in private practice is good grounding for any young lawyer aspiring to become a general counsel. “It’s important to get a good track record in general commercial work – try and avoid specialisation. You need a number of years under your belt before you can be really effective in-house.

“Otherwise you just don’t have the experience and the breadth of knowledge to know what you don’t know. And you need to be happy with operating with minimal support around you – you do everything yourself,” he says.

Star City’s GC may prove to be an inspiration in more ways than one, having recently collected the ACLA award for Australian Corporate Lawyer of the Year. Anderson edged out fellow nominees Saul Cannon of Asciano and Christopher Lee of Schneider Electric.

“It was a great honour to win the award. I’ve been a member of ACLA for many years and I think they do a great job,” he says. “There are a lot of great in-house lawyers out there and it’s very humbling to have won it.” ALB Australasian Legal Business ISSUE 8.1

Feature | marketing >>

Marketing strikes back Marketing teams are being rebuilt after suffering somewhat in the wake of the financial crisis. Managers of law firms are looking to take advantage of new technologies to ensure they offer maximum client benefits

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T

he issue of brand recognition and reputation for lawyers and law firms has never been more important. Firms in Australia and New Zealand are rebuilding their marketing teams and evaluating their marketing campaigns, in order to embark on a mission to make sure that their brand is foremost in their clients’ collective mind.

In 2010, while marketing budgets are not necessarily larger than they were in 2009, teams are expected to grow and will be looking at ways of taking advantage of new technologies. This is expected to reinforce their firm’s reputation in the mind of existing and potential clients. “The numberone priority in our plan is to remain absolutely focused on our key client program and our key referrers, both in New Zealand and internationally,” says Bell Gully’s acting BDM director, Trish Carroll.

Carroll says that the firm will rely on effective marketing techniques that have served it in the past. These include remaining “obsessively clientfocused” by taking ideas to clients, investing in initiatives that assist them and “most importantly devising solutions that help them meet their objectives.” She says the most effective marketing happens through lawyers “being great at client service and getting the job done with minimum fuss, maximum results and at a price the client expected to pay”.

As Bell Gully’s marketing programs are very client-centric, value for money is mainly determined by their clients’ response. “We measure this in various ways throughout the year,” says the business development manager.

New beginnings

Kensington Swan’s marketing team faces a different challenge this year, with the opening of its first offshore office in Abu Dhabi.

Market development director Angela Johansson says that, on top of continuing its program from last year, the firm will focus on business development opportunities for new www.legalbusinessonline.com

clients using its new Middle East office.

This includes working with clients in the United Arab Emirates and assisting New Zealand clients who are looking to do business in the region. “[Our marketing plan is] similar to last year with a focus on ensuring client service meets client expectations – hence client retention,” she says.

“We are also working to help our existing clients with all aspects of their business.”

Kensington Swan’s timing for its Arabian adventure could not be better for marketing, as 2010 marks the end of Kensington Swan’s five-year strategic plan. “We have already started shaping the new five-year plan which will span 2011-2015,” Johansson says. “This process will incorporate reviewing our existing culture and internal behaviours, and identifying what needs to change to take our firm to the next level.”

►► Top priorities for law firm marketing directors • Resourcing • Improvements in client relationship management systems and processes • Pricing

Evaluation

Marketing teams have long struggled to determine return on investment of their programs. It is hard to determine exactly what value they get out of their expenditures, with most of the marketing budget going towards client development and sponsorships.

“ROI is a hard one. However, we are working to develop guidelines for marketing expenditure as a percentage of the gross profit we derive from a client,” Kensington Swan’s Johansson says. “This is a technique commonly used in the commercial world.” She says there is some anticipation of push-back in the first instance, but

“The need to focus on how people are interacting with your brand online [is an emerging trend]” Angela Johansson, Kensington Swan One review will be identifying how clients relate to Kensington Swan online. “The need to focus on how people are interacting with your brand online [is an emerging trend],” she says. The market development director adds that this is not necessarily about ‘Twitter’ and other social networking sites but how clients – and potential clients – search for information about the firm.

Bell Gully is also looking online to cement its position in the New Zealand legal market. “The use of the electronic medium in general, including the growing importance of websites and micro-sites, for marketing and increasingly sophisticated client relationship management [is an emerging trend],” Carroll says.

insists that guidelines help to achieve parity and make people accountable for expenditure.

At Bell Gully, the marketing team is continuously evaluating its activities through a range of metrics “but it’s all about the client experience and how well we perform,” Carroll says. “That is our number-one focus.” The firm spends a large part of its marketing budget on its key client program and its 10-year long sponsorship of the Corporate Lawyers Association of New Zealand.

“We also spend a substantial sum on training in ‘soft skills’ for lawyers and all our staff,” Carroll says. “Otherwise it’s on the usual activities associated with promoting the brand and communicating with the market.”

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“We spend a substantial sum on training in ‘soft skills’ for lawyers and all our staff” Trish Carroll, Bell Gully

Staffing

Seldon Gill is a professional service and marketing recruitment company and saw strong activity to end 2009.

Director of business development Michael Sugg says that this indicates a move by law firms to rebuild their marketing teams, which had shrunk during the downturn through redundancies or natural attrition.

“Last year ended with a flurry of activity – it was a very positive, upbeat vibe in regards to recruitment in the legal sector particularly,” he says. “We had more new jobs created in the last six months than in the previous financial year.” The roles only included those that were completely new positions, not ones that offered a change in job title or slight change in job description. “What we’ve seen is an increase in senior and director appointments, as well as an increase in the number of BDMs [business development managers] recruited,” he says. “What has also happened is that there has been a lot of innovative restructuring of marketing teams.”

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Sugg says that some law firms are moving towards having their marketing personnel match up with the firm’s clients, rather than aligning them with specific practice areas.

“When people are researching the market and seeking to understand clients’ needs, they need to be more in tune with the client than the firm’s practice areas,” he says.

This will be a “big year” for marketing recruitment, particularly in light of restructuring plans that law firms are taking on. “There’s going to be great opportunity to get involved in various projects, which will prove quite advantageous for firms but also for those working in marketing within firms,” he says. “We’re going to see a real opportunity for marketing people to get stuck into projects and make a name for themselves.”

Rise of the mid-tiers

One group that has already boosted ranks is the mid-tier. As top-tier firms were hardest hit – with clients examining all expenditure including

legal spend – this led to a number of cost-saving measures, including redundancies among marketing teams and not replacing staff. Accordingly, Sugg says mid-tier firms took the opportunity to boost their marketing teams with high-quality talent and go after top-tier firms’ clients as well.

“The mid-tier firms have done very well out of the GFC, [as] they tend to have taken this opportunity to grow their teams,” he says, adding that there is still a bit further to go. “Our mid-tier clients are saying they could do with growing their marketing teams a little bit more, with all the extra work they have been getting.”

Nevertheless, marketing is starting to be recognised for the value it adds to law firms’ business. Sugg says this is leading to more active partner involvement in developing marketing teams. He believes this is going to be a big year for marketing investment, and that budgets will be spent on a number of different channels to ensure firms are able to have complete control over their message. ALB Australasian Legal Business ISSUE 8.1

Feature | marketing >>

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market data | capital markets >>

Equity Capital Markets TRANSACTIONS List Australia, New Zealand Dec 27-Jan 23 NB: Does not include transactions valued at less than than USD10m, best efforts transactions and private placements Issuer

Proceeds (USDm)

Issue date

Currency

Bookrunner(s)

Sector

Australia CGA Mining Ltd

72.6

19/01/2010

CAD

BMO Capital Markets, Haywood Securities Ltd

Materials

Northern Iron Ltd

36.9

21/01/2010

AUD

Macquarie Equity Capital Mkts, Euroz Securities Ltd

Materials

Asian Masters Fund Ltd

21.4

15/01/2010

AUD

Dixon Advisory

Financials

Source: Thomson Reuters

DEBT CAPITAL MARKETS TRANSACTIONS LIST Australia, New Zealand Dec 27-Jan 23 Issuer

Proceeds (USDm)

Issue date

Currency

Bookrunner(s)

Sector

Australia ANZ Banking Group Ltd

2995.4

6/01/2010

USD

Goldman Sachs & Co, JP Morgan

Financials

National Australia Bank Ltd

1750.0

4/01/2010

USD

Banc of America Securities LLC, HSBC Holdings PLC

Financials

Macquarie Group Ltd

999.1

7/01/2010

USD

Barclays Bank PLC, HSBC Holdings PLC, JP Morgan, Macquarie Group

Financials

Westpac Banking Corp

915.8

15/01/2010

JPY

Citigroup Global Markets Japan, Daiwa Sec Capital Markets, Mizuho Securities Co Ltd

Financials

National Australia Bank Ltd

750.0

20/01/2010

USD

Morgan Stanley

Financials

Commonwealth Bank of Australia

243.1

5/01/2010

CHF

BNP Paribas SA, Credit Suisse

Financials

ANZ Banking Group Ltd

242.0

13/01/2010

CAD

RBC Capital Markets, TD Securities Inc

Financials

Bank of Queensland Govt Gtd

226.1

22/01/2010

AUD

UBS Investment Bank

Government and Agencies

BNZIF-London Br

196.9

13/01/2010

CHF

BNP Paribas SA, UBS Investment Bank

Financials

Westpac Banking Corp

195.4

19/01/2010

CHF

Credit Suisse, UBS Investment Bank

Financials

Westpac Banking Corp

186.2

15/01/2010

JPY

Citigroup Global Markets Japan, Daiwa Sec Capital Markets, Mizuho Securities Co Ltd

Financials

Westpac Banking Corp

185.3

19/01/2010

EUR

Goldman Sachs International

Financials

Westpac Banking Corp

161.8

15/01/2010

SGD

Standard Chartered Bank PLC

Financials

ASB Finance Limited

147.7

11/01/2010

CHF

UBS Investment Bank, RBS

Financials

Westpac Banking Corp

124.5

15/01/2010

JPY

Citigroup Global Markets Japan, Daiwa Sec Capital Markets, Mizuho Securities Co Ltd

Financials

Westpac Banking Corp

92.1

21/01/2010

AUD

TD Securities Inc

Financials

ANZ Banking Group Ltd

91.9

20/01/2010

AUD

RBC Capital Markets

Financials

Westpac Banking Corp

51.6

7/01/2010

HKD

BNP Paribas SA

Financials

Westpac Banking Corp-Sydney

51.5

15/01/2010

HKD

HSBC Holdings PLC

Financials

Commonwealth Bank of Australia

38.7

4/01/2010

HKD

HSBC Holdings PLC

Financials

Commonwealth Bank of Australia

38.7

5/01/2010

HKD

Standard Chartered Bank (HK)

Financials

Commonwealth Bank of Australia

36.0

15/01/2010

SGD

Hongkong and Shanghai Bkg (SG)

Financials

Commonwealth Bank of Australia

12.9

5/01/2010

HKD

HSBC Holdings PLC

Financials

Westpac Banking Corp

12.9

8/01/2010

HKD

ANZ Banking Group

Financials

Westpac Securities NZ Ltd

499.6

20/01/2010

USD

Goldman Sachs & Co

Financials

Westpac Securities NZ Ltd

169.2

7/01/2010

CHF

BNP Paribas SA

Financials

NEW ZEALAND

Source: Thomson Reuters

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