postgrad education
competition law
Australasian legal business
AUSTRALASIAN
LEGAL BUSINESS
www.legalbusinessonline.com
MARCH 2013
And now, a word from in-house...
postgrad education competition law
in-house Counsel Roundtable 2013 ISSUE 11.02
SPECIAL REPORT: QUEENSLAND 2013
Brisbane mops up‌. again
ISSUE 11.02 MARCH 2013
CONTENTS
Australasian Legal Business ISSUE 11.02
22
1
“At the moment our competition is more from existing known competitors rather than anyone new on the block.” Chris Ward, Cooper Grace Ward
alb special report brisbane 2013
Are firms preparing for life after the resources boom?
22
regulars
cover story ALB IN-HOUSE COUNSEL ROUNDTABLE
14
Top GCs speak frankly about law firm mergers and their priorities for the coming year.
34
The latest trends in postgrad education for lawyers
Technology The changing face of dictation
06
SPONSORED UPDATE
09
Buddle Findlay
features POSTGRADUATE EDUCATION
Deals
42
Competition What the ACCC has planned for 2013
REGULATORY FATIGUE Is the government finally listening?
46
49
NEws
12
APPOINTMENTS
30
ACLA perspective
52
Australasian Legal Business ISSUE 11.02
2
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4
EDITORIAL postgrad education AUStRAlASIAn lEgAl bUSInESS MARCH 2013
AUSTRALASIAN
LEGAL BUSINESS
And now, a word from in-house...
in-house counsel roundtable 2013 ISSUE 11.02
Renu Prasad Australasia Editor, Australasian Legal Business, Thomson Reuters
www.legalbusinessonline.com
competition law
O
nce upon a time, smacking a child was considered an unremarkable aspect of maintaining discipline. The sound of the slap has resonated with Samuel Butler’s old adage “spare the rod and spoil the child” for generations. Much loved English author Enid Blyton even devised a character known as Dame Slap, a stern school mistress authority figure whose chief method of maintaining order in the classroom requires no explanation. As we know, social attitudes have moved on since then. Blyton’s Dame Slap was withdrawn from publication in the 1990s and reissued with a replacement character known as Dame Tickle. One suspects that even Dame Tickle’s teaching methods would run afoul of the educational authorities in modern Australia and New Zealand. The point is that what is considered unremarkable behaviour by one generation can often evolve to be considered abusive by the next. Practices which would not raise an eyebrow in one decade could get you sued in the next. I often think of this point when I read the increasing number of personal accounts from young lawyers who claim to have suffered depression as a result of the high pressure environment in corporate law firms. Is this a new form of abuse? Is this level of control and domination over young lives the new equivalent of the 19th century box on the ears? Over the years, western society has become kinder and more sensitive to the circumstances of the vulnerable. Some would say that we have become softer – too soft. But the trend is there and, given the way the wind is blowing, it is difficult to see how law firms can ignore the claims that long hours are having a detrimental effect on young employees. This may not be a legal liability issue. Not yet. But social attitudes are on the move again and wise employers will be taking note. Today’s mutterings could be tomorrow’s lawsuit.
LEGAL BUSINESS
postgrad education
DAME SLAP GOES ADVENTURING AGAIN
competition law
AUSTRALASIAN
SPECIAl REPORt: QUEEnSlAnD 2013
brisbane mops up…. again
ISSUE 11.02 MARCH 2013
6
deals
Australasian Legal Business ISSUE 11.02
your month at a glance C$1.1 billion M&A CGA mining’s merger with B2Gold corp
• This deal, previously announced in September 2012, completed in January 2013 with K&L Gates disclosing its involvement at that point. K&L Gates has acted on all the significant transactions and capital raisings events for CGA since the acquisition of the Masbate interests in 2006.
Tim Watkin, Minter Ellison
A$500 million DEBT Westpac
• Westpac is one of Allens’ oldest clients. The firm also advised Westpac on the convertible preference share offering last year, again under the leadership of Stuart McCulloch.
Your month at a glance Deal
Value
Advisor
Client
Lead Lawyer
CGA Mining merger with B2Gold Corp.
C$1.1 billion
K&L Gates
CGA Mining
Simon Salter
CGA Mining merger with B2Gold Corp
C$1.1 billion
Squire Sanders
B2Gold Corp
Neil Fearis, Robert Eastwood, Bennett Greenhalgh
Studio City senior secured project loan facility
US$1.4 billion
Ashurst
Studio City
Rob Ritchie
MCE Finance bond issue
US$1 billion
Ashurst
MCE Finance Limited
Rob Ritchie
NAB convertible preference shares
A$750 million
King & Wood Mallesons
NAB
Diana Nicholson, Ian Paterson
NAB convertible preference shares
A$750 million
Herbert Smith Freehills
Joint lead managers
Philippa Stone
Westpac capital notes
A$500 million
Herbert Smith Freehills
Joint lead managers
Philippa Stone, Patrick Lowden
Westpac capital notes
A$500 million
Allens Linklaters
Westpac
Stuart McCulloch, Julian Donnan
Bupa acquisition of Dental Corporation Holdings
A$374 million
Minter Ellison
Dental Corporation Holdings
Tim Watkin, Alberto Colla
deals
Australasian Legal Business ISSUE 11.02
7
DEALS REPORTED TO ALB, FEBRUARY 2013. Is your firm missing from this table? Please assist ALB in making this table as complete as possible by notifying us of your firm’s involvement in deals by emailing renu.prasad@thomsonreuters.com. ALB will publish all deals in value order and all submitted deals will be published, space allowing.
Your month at a glance Deal
Value
Advisor Herbert Smith Freehills
Client
Bupa acquisition of Dental Corporation Holdings
A$374 million
Bupa
Cubbie Station acquisition by consortium
A$240 million
Norton Rose
Acquisition consortium
Cubbie Station acquisition by consortium
A$240 million
Allens Linklaters
Deed administrator
Cubbie Station acquisition by consortium
A$240 million
Lander & Rogers
Lempriere
Cubbie Station acquisition by consortium
A$240 million
Ashurst
Jindal Steel & Power bid for Gujarat NRE Coking Coal
A$221 million
Hopgood Ganim
Lead Lawyer Bradley Russell, Andrew Rich
Anthony Latimer
M&A Cubbie Station acquisition by consortium
• Consortium consists of Australian wool trading company Lempriere and Chinese textile company Shandong RuYi Scientific & Technology Group.
A$221 million M&A Jindal Steel & Power bid for Gujarat NRE Coking Coal
ANZ
Jindal
A$240 million
Michael Hansel
“We have seen an increasing number of Australian banks offering hybrid securities to the retail market since the release of APRA’s new Basel III prudential standards in 2012. Westpac is now the second major Australian bank to come to market and we are very pleased to have acted on the transaction after having acted on the first two Basel III capital raisings by CBA and Bendigo and Adelaide Bank last year.” - Philippa Stone, Herbert Smith Freehills
• HopgoodGanim also advised Jindal on its on-market takeover offer for Rocklands Richfield Limited in April 2011.
Philippa Stone, Herbert Smith Freehills
8
deals
Australasian Legal Business ISSUE 11.02
your month at a glance A$90 million energy Guohua acquisition of Musselroe wind farm
• The transaction represents one of only a handful of financings in Australia to include long term ECA financing provided by Eksport Kredit Fonden, the Danish Export Credit Agency.
A$85 million CAPITAL RAISING Noble Mineral Resources capital raising
• Fully underwritten non-renounceable entitlement offer of convertible unsecured notes.
Your month at a glance Deal
Value
Advisor
Client
Lead Lawyer
Guohua acquisition of Musselroe wind farm
A$90 million
King & Wood Mallesons
Guohua Energy Investment
Claire Rogers, Jin Xiong
Guohua acquisition of Musselroe wind farm
A$90 million
King & Wood Mallesons
National Australia Bank
Jeff Clark
Guohua acquisition of Musselroe wind farm
A$90 million
Herbert Smith Freehills
Hydro Tasmania
Noble Mineral Resources capital raising
A$85 million
Ashurst
Noble
Roger Davies and Gaelan Cooney
Innopac Holdings bid for Merlin Diamonds
A$60 million
Herbert Smith Freehills
Merlin Diamonds
Michael Ziegelaar
LEgAL- PRoPERty & PRoCuREmEnt mAnAgER • Join Australia’s largest hearing provider and be part of an organisation that cares • Permanent Full Time role, Chatswood location with parking onsite and nearby Australian Hearing (AH) is a national organisation with over 1200 employees, an annual turnover of approximately $200 million per annum, is renowned internationally for excellence in the delivery of hearing services. Positively impacting our customers’ lives, we have a distinguished history of client and community services across more than 110 permanent hearing centres in every State and Territory in Australia.
Reporting to the Head of Legal and Procurement, this role provides the opportunity to join a small high performing legal and procurement team. The role includes: • responsibility for managing the renewal of the company’s retail shop leases • preparing tenders and contracts day to day management of selected corporate and clinical supply contracts • provision of legal advice to internal clients
You will have at least 3 years’ relevant experience. Procurement, commerce or business studies qualifications will be highly regarded.
The mix of legal and procurement aspects of the role will enable the right person to combine legal skills and commercial acumen in a hands on customer and client facing environment.
For more information, please contact Vijay Sekar, Recruitment Specialist on 02- 9412 6887
CAREER
If you are interested in this great opportunity please submit your application to careers@hearing.com.au quoting reference NHO/Legal
131 797 www.hearing.com.au
Firm Profile
NZ Commentary
Some are more equal than others – New Zealand’s resource management laws increasing lack of universality When it was introduced in 1991 the Resource Management Act 1991 (RMA) was hailed nationally and internationally as both ambitious and pioneering. A significant part of its innovation was that it provided a single and integrated process for making resource management decisions that replaced a multitude of different statutes, decision makers and processes. This integrated approach provided the platform for the RMA’s other innovation - its effect-focused, rather than activities-focused approach. While the RMA was first introduced by a Labour Government in 1989, it was advanced by the succeeding National Government and was at the time considered to represent cutting edge free market thinking. The all-embracing nature of the legislation was hailed as a great leap forward in unlocking our economic future. In more recent times, the Government interventions have created a number of resource management regimes to address particular imperatives. When considered as a whole, these interventions represent a substantial move away from a nationally uniform process for environmental decision-making to a far more diffuse, interventional and exceptionalist framework. This exceptionalism can be seen in a range of examples driven by an array of justifications. The most obvious and justified example can be seen in Christchurch. The Christchurch earthquakes clearly represented unique and exceptional events. As such they were always going to see the RMA’s widespread public participation and thoughtful, but timeconsuming reflection abandoned in favour of a more expedient and prescriptive approach to ensure that the rebuild could occur as quickly as possible. These events do mean though that Christchurch works - and will work for some time - under its own planning regime. While this approach has widespread support now, patience could well become more strained as the months of the rebuild stretch into years and the results of rapid decision-making bear fruit. While the Christchurch earthquakes were patently exceptional events justifying an exceptional response, other interventions have been justified by less dramatic concerns. In
2010 the Government intervened to remove the Canterbury Region’s elected members and replaced them with appointed Commissioners. The stated motivation for this was to try to better manage allocation of Canterbury’s fresh water resources, which were identified as being of unique importance. More controversially, this was justified, because the Government considered the Regional Council was so uniquely dysfunctional as to need fundamental and urgent reform. This intervention means that Cantabrians have been singled out to be served by a Regional Council which has less democratic connection with them than those of us living elsewhere in New Zealand. While Canterbury might have led the way in leaving the RMA’s inclusive fold, Auckland’s role as the country’s primary economic engine has meant it has also not been spared a custombuilt resource management regime. The reorganisation of local government in Auckland collapsed the local and regional functions into one ‘super council’ structure which is unique to the rest of the country, even among other so-called unitary authorities. Because of the significance of local government to the administration of the RMA, this results in Aucklanders having a different relationship and interface with the RMA than those outside Auckland. This difference has been emphasised by the approach that has been adopted to Auckland’s new planning scheme. Faced with having to consolidate its various legacy planning instruments into a single cohesive plan, the Government - at Auckland Council’s behest - has introduced a one-off and customized process which streamlines the RMA’s usual processes for advancing a new plan. Government and local government clearly see that exceptional times demand exceptional responses. Some potentially affected property owners have however loudly doubted both the justification and the response. There are more opaque examples, including the increasing use of Boards of Inquiry for specific large projects and the Waikato River Authority. The latter, under 2010 Waikato Treaty settlements regulatory control of the Waikato River, once exclusively held by the Waikato Regional Councils, is now shared with
the Waikato River Authority, a body with iwi and government appointees. This results in a structure of decision-making in respect of the Waikato River catchment which is unique to the Waikato. In addition to the innovations which have already occurred, Government led discussions about Auckland’s urban boundary suggest that in the future the pace of targeted reform will continue. At its introduction, the RMA represented a truly integrated system of resource management decision-making which applied throughout the country. In recent times a more exceptionalist approach, sometimes clearly justified, at other points less convincingly so, has eroded that coherence. The question of whether this is a good or bad thing is one which will eventually need addressing though because the appetite for targeted Government intervention does not yet appear to be satisfied.
This article was written by Patrick Mulligan, partner, and Olga Obushenkova, senior solicitor, both based in the Auckland office of Buddle Findlay, one of New Zealand’s leading law firms. Patrick heads Buddle Findlay’s resource management team and environmental law team and Olga works across both the resource management and local government teams. Patrick can be contacted on +64 9 357 9396 or patrick.mulligan@buddlefindlay.com and Olga on +64 9 363 0635 or olga.obushenkova@buddlefindlay.com
Patrick Mulligan
Buddle Findlay
Olga Obushenkova
Buddle Findlay
10
deals
Australasian Legal Business ISSUE 11.02
your month at a glance DEALS REPORTED TO ALB, FEBRUARY 2013. Is your firm missing from this table? Please assist ALB in making this table as complete as possible by notifying us of your firm’s involvement in deals by emailing renu.prasad@thomsonreuters.com. ALB will publish all deals in value order and all submitted deals will be published, space allowing.
A$60 million M&A Innopac Holdings bid for Merlin Diamonds
• Singaporean firm Robert Wang & Woo LLP is a member of LawExchange International and Holding Redlich is the Australian member firm of LawExchange International.
Daniel Blue, Holding Redlich
Undisclosed M&A Easton Investments
• Acquisition occurred via a subsidiary of Easton Investments.
Your month at a glance Deal
Value
Advisor
Client
Innopac Holdings bid for Merlin Diamonds
A$60 million
Holding Redlich
Innopac Holdings
Innopac Holdings bid for Merlin Diamonds
A$60 million
Robert Wang & Woo
Innopac Holdings
Clough acquisition of e2o Pty Ltd
A$14 million
Allion Legal
Clough Operations
Clough acquisition of e2o Pty Ltd
A$14 million
Fisher Jeffries
e2o Pty Ltd
Gunns sale of saw mills to New Forests
undisclosed
Ashurst
KordaMentha
Gunns sale of saw mills to New Forests
undisclosed
Clayton Utz
New Forests
Easton Investments stake acquisition in AAM Advisory
undisclosed
Herbert Smith Freehills
Easton Investments
Lead Lawyer Daniel Blue
Phil Lucas
Arthur Apos
Peter Dunne
Nominations now open!
10 year anniversary of the ALB Australasian Law Awards Thursday 30 May 2013, Sydney Town Hall The ALB Australasian Law Awards is the highlight of the legal industry calendar and provides a spectacular evening of celebration, networking and entertainment. The night is dedicated to recognising and rewarding the achievements and excellence of legal teams and individuals across Australiasia. Come and celebrate our landmark year at this prestigious event.
For all enquiries including sponsorship opportunities, please contact Paul Ferris on 02 8587 7114 or paul.ferris@thomsonreuters.com or Peter Ratcliff on 02 8587 7543 or peter.ratcliff@thomsonreuters.com
news
12
>>
Technology in practice
Q&A with
Australasian Legal Business ISSUE 11.02
In case you missed it….. The month’s top headlines from www.legalbusinessonline.com
Damian Huon Damian Huon is a Legal Technology Strategist and CEO of Huon IT. With over 24 years supporting Australian law firms, Huon IT deliver business-wide outcomes with ‘everything technology’.
Knowledge Redundancy: The Silent Threat
You already know the obvious risks to consider in your firm’s IT strategy – we’ve covered budget black holes, disaster recovery and security in previous editions. But what about those hidden threats that many don’t consider until it’s suddenly too late? Here seasoned strategist, Damian Huon, shares his tips on IT risk identification and mitigation.
Q1
What ‘hidden risk’ do you often see in a law firm’s IT strategy?
Even when your systems are operating perfectly, they are doing so because of your trusted IT people – whether in-house or outsourced – working tirelessly behind the scenes. But there lies a major vulnerability – your dependency upon that individual or team is absolute. IT is notorious for needing tweaks, complicated work-arounds and special little tricks that arise over the years to meet changing business demands. But what happens if the brain behind those unique customisations suddenly disappears? This is where ‘knowledge redundancy’ is so crucial. Every facet of your IT systems and knowledge base should have a substitute so your firm can function under any circumstance.
signs of poor knowledge redundancy should I look Q2 What out for?
Start by asking yourself one simple question. “If my key IT person announced they’re leaving immediately, would I be confident in our systems tomorrow?” If the answer is ‘no’ – or if you have any level of doubt – then you need to review your resourcing strategy as a priority. Getting an independent review of IT documentation is a great place to start. For most, it is the ‘boring’ side of IT and therefore the most neglected, so you should have it checked for both content and accuracy. As IT is ever-changing, this isn’t a ‘one off’ exercise to keep the auditor happy. It should be a living document that is practical in real situations.
Q3 What should my firm’s Plan B include?
Knowledge redundancy is wider business issue – not simply a job for IT. It goes far beyond documenting the technical details of your systems, but should also reflect how IT interacts with the rest of the business. All policies, incident management strategies, security procedures and more, must be considered. If you run IT from in-house, perhaps look at initiating a parallel relationship with an external company, or vice versa. Even if this is only on a low commitment basis, you have a separate pool of knowledge ready to assist in emergencies. Only when your firm’s systems can continue running independently of any single part or person, have you truly mitigated your firm’s IT risks. Email your questions to alb@huonit.com.au
ROYAL COMMISSION Gilbert + Tobin to advise Church in Royal Commission Gilbert + Tobin has been appointed to act for the Catholic Church’s Truth Justice and Healing Council in the Royal Commission into Institutional Responses to Child Sexual Abuse. The Truth Justice and Healing Council was established by the Catholic Church to address the Church’s participation in the Royal Commission. Managing partner Danny Gilbert said the firm welcomed “the opportunity to assist the Council and the Australian Catholic Church in this highly sensitive and difficult process.”
INDUSTRY Lateral hires key to growth, says UK managing partner Firms need to hold their nerve and invest in lateral hires even in challenging economic times, according to the managing partner of Silver Circle firm Berwin Leighton Paisner (BLP). BLP grew its business by 20 percent and eight percent in 2011 and 2012 respectively, a result which managing partner Neville Eisenberg attributed to “an uncompromising focus on quality coupled with a commitment to continue hiring top notch lawyers and partners despite the downturn.” “One of the key elements in a financial crisis is to continue investment in senior lawyers and partners from other firms,” he said. He added that while prior to the GFC it was “harder to dislodge clients” from their incumbent lawyers, in the current economic climate, clients of all sizes were far “more open to listening to creative ideas from lawyers.”
Cash flows again at Ashurst Ashurst will pay distributions to partners this quarter after holding back profits in the last quarter, UK publication The Lawyer has reported. The firm was said to have taken the decision in early February after it deferred profits last quarter after a six percent drop in revenue for the first half of the 2012/13 financial year.
news
Australasian Legal Business ISSUE 11.02
LITIGATION
>>
EUROPE Herbert Smith Freehills to return to Germany Herbert Smith Freehills has announced that it will open a Frankfurt office in the second quarter of 2013. The firm has recruited Ralf Thaeter, a senior corporate partner at Gleiss Lutz, as the office’s inaugural partner. Gleiss Lutz was previously HSF’s German alliance partner, with that alliance being terminated last year. Meanwhile in London, HSF has tapped Slater & Gordon to bolster its white collar crime team. Rod Fletcher, previously of a legacy firm now acquired by Slaters, will join HSF’s London office in April as co-head of the team, and will share the role with partner Graham More.
INDONESIA Indonesia tie-up for White & Case White & Case has entered into an association with MD & Partners, a newly established Jakarta-based law firm founded by former Hadiputranto, Hadinoto & Partners partner Mita Djajadiredja. Also part of the firm is Nadia Soraya, previously with Makarim & Taira S in Jakarta. While Djajadiredja is an M&A practitioner, Soraya has finance and corporate experience, particularly in the power and natural resources sectors. “White & Case was one of the first global law firms to focus on Indonesia,” said Barrye Wall, White & Case’s Asia regional section head, in a statement. “The association with MD & Partners will provide an enhanced level of service to our clients seeking legal advice on Indonesian transactions.” The statement added that White & Case had been doing Indonesia-related work for more than 35 years primarily through its office in Singapore.
In-house Q&A Aaron hockly
Piper Alderman files Commonwealth Bank class action Piper Alderman has filed a class action in the Federal Court relating to synthetic collateralised debt obligations, or SCDOs, purchased from the Commonwealth Bank of Australia (CBA). This action is being led by partner Amanda Banton, who late last year led two related successful class actions against Lehman Brothers and the Standard & Poor’s rating agency. The lead applicants in this action are Clurname Pty Ltd and Gloucester Shire Council who are looking to recover losses suffered by investors on the three SCDO investments sold by the CBA.
13
Company Secretary & General Counsel
Presented by
Growthpoint Properties Australia
1
In your opinion, why have in-house lawyers become an increasingly indispensable part of an organisation? Through being involved with all key business decisions and activities, good in-house lawyers should be able to: (1) avoid (often costly) escalation of issues; (2) avoid legislative breaches; (3) ensure transactions, documents and processes are structured appropriately and (4) ensure specialist advice (tax, legal, accounting etc) is obtained early (if required). Using their legal skills and experience, good in-house lawyers should be able to: (1) ensure legal spend is focussed on areas that require, from a business perspective, legal advice; (2) ensure legal costs are appropriate (it is very hard for non-lawyers to understand the work lawyers do, time-based billing is problematic for non-lawyers); and (3) demystify legal jargon and processes, people often just want matters explained in plain English without feeling stupid (something many private practice lawyers struggle with). As a focal point for legal, compliance, governance and risk, good in-house lawyers should be able to ensure directors and staff know where to go if they have queries or concerns and risk and compliance issues are given due attention. In my view, businesses are increasingly focussing on the above benefits due to: (1) business becoming more risk conscious/adverse (for good and bad reasons); (2) increased Australasian acceptance of in-house counsel as key business managers/advisers (bringing us closer to the USA); (3) increased focus on costs; (4) increased regulation; and (5) lawyers increasing their skill base beyond technical legal skills making them more useful within business.
2
In recent times, the role of the General Counsel has diversified into a multi-faceted role, (where the General Counsel can wear the ‘hat’ of Lawyer, Legal Manager, Compliance Manager, and Company Secretary). In your opinion, do you believe this has increased your risk profile? Without doubt, recent court decisions have increased the risk profile of roles like mine. In my view, the “business judgment rule” needs to be expanded to match the realities of trying to manage a business in 2013: keeping costs, and therefore headcount, low; increasing revenue; and complying with rapidly increasing regulation. It will not be possible in this environment for every decision and every public document to be perfect (without the benefit of hindsight). I hope all three branches of government can appreciate this. However, it is the multi-faceted nature of my role which makes it most appealing. Looking after a diverse range of areas such as investor relations and marketing keeps me involved with all areas of the business and, time constraints aside, allows me to fulfil my primary role as General Counsel more effectively.
3
In your opinion, what do you consider to be the main challenges you will face in 2013 ?
Although the GFC was painful, it flushed out a number of business activities which were probably more risky than the appetites of their investors. With equity markets coming back to life, I fear that some businesses may return to some of these activities. I hope investors (private and institutional) take a medium-long term view of risk and judge investments accordingly. JLegal is a global specialist legal recruitment consultancy focused solely on providing recruitment solutions to the legal profession. For a confidential discussion about your career, contact one of our senior consultants today.
www.jlegal.com Melbourne t | +61 3 8102 1900 Sydney t | +61 2 8249 4730
14
In-house
Australasian Legal Business ISSUE 11.02
In-house
And now, a word from the client... THEPANEL
Adrian Goss
Brian Salter
John Fitzgerald
General Counsel, Bauer Media LTD & National Vice President, ACLA
General Counsel, AMP
Head of Legal, AGL
In-house
Australasian Legal Business ISSUE 11.02
15
Last month, several leading senior in-house counsel gathered for the 2013 ALB In-house Counsel Roundtable. They were there to speak frankly about their views on practice in-house and their perception of the market. In this first instalment, our panel discusses the plethora of mergers which have been occurring in the private practice market and also sets out some of their priorities for the coming year.
Moderator: Renu Prasad Australasia Editor, ALB Magazine
Jon Downes
Kim Sides
General Counsel, ACE Insurance
Gen. Counsel, Australia (Project MGMT & Construction) - Lend Lease
Mathew Kaley
Group General Counsel, Allianz Australia
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In-house
ALB: Clearly the hot topic in the private practice market lately has been the arrival of international firms and mergers involving the domestic firms. How closely have you been paying attention to these developments? Will they change the way you brief external counsel? Does all of this really matter? ADRIAN GOSS: We don’t maintain a formal panel, and I think it’s true for most General Counsel, it’s actually the practitioner you’re engaging, except on very big transactions where you need very big teams and you need to know there’s a lot of depth in that team. Really, it’s an individual that you trust, that you know has the expertise, so I just don’t think [the market changes are] relevant. I think most of us will still be pursuing the talented individuals who deliver well and the brand behind them is not such as issue. KIM SIDES: I think it’s been a huge distraction. I think it’s been an almighty distraction from every managing partner, and we hear about it a lot, and it makes no difference to me. In my previous role where I was doing a lot more cross-border stuff, financing and capital raising it was more important, but then, the top tier always had that very well covered and again I agree; we brief individuals, not firms. I think globalisation is almost ... some people think that’s going to be enough to lift their perception of quality in the market and I don’t think it has. We brief right across the tiers, and while legal surveys never want to hear it, the best value I have always got is from the top tier, because they can estimate a job and deliver it. They do it from a [position of] expertise, you’re not paying for someone to learn and [there are also] some very good boutique practices that do a good job. But in the mid-tier there are still some very old fashioned practices about not being able to estimate, not being able to staff appropriately and people learning on the job. JOHN FITZGERALD: The consolidation; I agree it’s been a distraction. I think that there’s a risk that it will continue to be a distraction for some time to come because not all of these mergers are firmly bedded down and for those of us who in corporate practice have been through mergers and consolidation, we know that the restructuring and the integration that comes post-merger is painful and time consuming so I’m curious to see how that plays out. There’s been no practical benefit that we’ve seen from it so far. We’ve just been through our panel process and refreshed our panel. It wasn’t a consideration for us at all. BRIAN SALTER: I agree with the other panel members. An enormous amount has been devoted by private law firms to their new international relationships and networks and I think a
...one of the advantages of the international law firms being present in Australia and having relationships with them is that you can access those emerging product sets and those new ways of being able to think... - brian salter
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disproportionate amount of effort has gone into the return that they’re going to get for it. Ninety-five percent of our expenditure is domestic and only a small amount is offshore and where we direct that offshore work would have occurred irrespective of the round of mergers that are occurring right now. Having said that, I just want to touch on a point that was raised by the others. We have panels, we have a domestic panel and we have an international panel. But we have a tendency to institutionalise our relationships. So we tend to follow firms rather than individuals and the reason for it is we have long-standing relationships and we value that corporate knowledge, but also we have the security of knowing that those firms that we’ve selected, they tend to operate to very high standards, they’re self educating and they have a very high quality of partner that comes through their ranks. And so for that reason we tend to try to institutionalise the relationship so that we can... and we don’t do this, but you could if we wanted to – set and forget. We tend to refresh every two years but we have the knowledge that, for the interim period, the qualities for why we selected that particular law firm will continue to apply and we can expect a standard of response and service from that law firm which is what we originally were expecting from the outset.
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We brief right across the tiers, and while legal surveys never want to hear it, the best value I have always got is from the top tier, because they can estimate a job and deliver it. - KIM SIDES
ALB: Well a lot of the prestigious old brands have disappeared or been absorbed into other brands but some of you seem to be saying that it’s the individual rather than the firm that counts. So here’s the question: does brand really count? MATHEW KALEY: It’s an easy answer. There’s no value in the brand so far as I’m concerned, as I do look to the individual lawyer concerned. Whether you’re Norton Rose or whatever their predecessor was, the same lawyers are there. And I look to the lawyers and if their lawyers start to change then that might well get them some work but a change of name won’t make any difference. KIM SIDES: I think to some extent it does... there’s a benchmark of quality embedded in the name. I always query whether it’s up to date or whether it’s trading on five or 10 years ago. But the quote that, when I was a partner at Mallesons, I was very proud of, was someone had said you could open the partner book of Mallesons and throw a dart at it and you were more likely to hit someone good than at some of the other firms because it’s so impossible to get there [to partnership]. It’s much more important – not so much at the partner level, because you’ve got truly excellent people right across the market and again, there’s lots of opportunity to go elsewhere than the top tier, but the mid tier and the junior tier, that’s where the training really comes in. The huge investment that those bigger firms and the mid tier put into training their staff means that if I’ve got a
three year lawyer working on something they’re more likely to be able to spell or put an email together, or have been trained in client communication … you get a useful email that you can immediately turn round in-house which is exactly the kind of communication style we’re looking for. The actual substance may be very similar, but the way in which it’s presented ... a three year lawyer over here with that brand is more likely to be able to produce that first off. JON DOWNES: I think it’s horses for courses to a certain degree. There are some international firms with a certain brand that are ... because our business is global we might utilise that particular firm in a number of jurisdictions and therefore we know from that international experience that they perform work to a certain standard and so, when that brand comes to Australia, there’s a certain amount of comfort in being able to rely on that brand because we know that there goes with it a certain quality of lawyer. But if it’s a brand we haven’t used before, because they have a global brand it doesn’t mean we will necessarily use them. Although, I think trying to brief what was traditionally a major Sydney firm now without it being part of a global network is becoming increasingly difficult. But I think as General Counsel you need to justify – if it’s a major piece of work – that you are briefing a firm that can deliver a service to a certain level, so that you can demonstrate that you are doing your job particularly well in protecting the company’s interests. You wouldn’t necessarily choose a firm that wouldn’t fit that category, that criteria. BRIAN SALTER: I think there are some advantages through the internationalisation process but they’re a bit more subtle than is otherwise apparent. I think that – certainly from our perspective – we see value in being able to have the international relationships, not only because of our international work, but also because it gives
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There’s no value in the brand so far as I’m concerned, as I do look to the individual lawyer concerned. - MATHEW KALEY
us access to law firms in relation to the latest products and the latest thinking internationally, which mightn’t have yet made their way to Australia, or if they have made their way to Australia there’s not a sufficient depth of expertise. And one of the advantages of the international law firms being present in Australia and having relationships with them is that you can access those emerging product sets and those new ways of being able to think about particular issues. And I think that’s an advantage and I think that’s one of the things they do bring to the table. My old area of expertise was structured finance and I think that the international firms have an enormous competitive advantage in that space, particularly the British Magic Circle firms around structured finance. And, a very good example recently was covered bonds where we used A&O in relation to our covered bond program – which we’re still working on – and they had an enormous amount of international experience that they could bring to the table, whereas the Australian law firms, the pure Australian law firms were quite short on it because it was still a very early and emerging market in Australia, a very immature market, so there wasn’t that depth of expertise in Australia, but from Sydney we were able to draw upon that expertise through their local offices. KIM SIDES: The major projects we do in PPPs tend to be in consortium, so we’ve recently won the Sunshine Coast University Hospital, we’re shortlisted for the Convention Centre. We can have as much comfort in a firm in Australia as you like, but if you’re trying to convince 16 banks all around the world, the value of the sign off, and the accessibility of those other firms does make a difference. And I’ve also ... I don’t ordinarily use them as a post box but, occasionally, if you’re stuck and you’ve got directors on the other side of the world, to be able to drop original documents, effectively deliver a deed in the same firm’s offices on the other side of the world, in order to get a deal done here, can be very powerful rather than doing it on scans and faxes and everything else. There is actually a physical presence element that we shouldn’t lose sight of on some of those sophisticated deals where you need the certainty the deal is actually done. Or if you’ve got consortium partners who take great value, they’ve always used DLA Piper or Norton Rose for their transactions, they’ve immediately got a level of comfort about them being in the consortium. JON DOWNES: That flows through to our company being an insurance company; a highly regulated environment. If we’re dealing a with a regulator, demonstrating to them that we’ve carefully considered an issue because it relates to something we
want to do and we can demonstrate that we’ve obtained advice from a firm that the regulator considers is reputable … that does have a [positive effect]... there’s a perception issue there that reflects on the company and what we’re trying to do. ALB: And now one of those classic questions – what kind of behaviours do you want to see from your external advisors? What don’t you want to see? JON DOWNES: No surprises... KIM SIDES: Yes. I think that’s a very good heading BRIAN SALTER: I think we – when we work on a major project – we tend, by the time we instruct an external law firm, we’ve been working on it for a long time. And so when we get to instructing an external law firm we are often at the sharp end of the project. And so, I think, particularly the major law firms are very good about this, about delivering twenty-four-seven service. We’re willing to work it and they’re very good at being able to deliver that service. So I think being able to respond to our needs, within our own time-frames, I think, is particularly important from our perspective. JON DOWNES: Following on from that, it’s about trusting your external firm, that
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they understand your business, that they give you the advice in a timely manner, which goes back to the ‘no surprises.’ You have to convey that advice to the business in a timely manner, in a way that is meaningful and if you have that relationship with an external provider, it assists in being able to deliver the service that’s expected from the in-house legal team. MATHEW KALEY: Just to build on that, we have our own relationships with our clients and it’s one thing to put to an external law firm that I need something done within two days and they say we can’t do it in two but we can do it three ... they have to deliver in those three days. So, that’s a real killer if they’re not reliable and don’t meet the timeframes that have been agreed. KIM SIDES: Budget is the other part of that for me. Because we wouldn’t brief more than 10 percent out, including PPPs, we do the vast majority in-house and so, it’s a big issue, too, for a project to be paying external legal costs. I tend to price a lot on “give us as much as you can for this amount”, rather than “how much is this task going to cost?”, because, often, that task then blows out to whatever budget is available. Whereas, particularly on early disputes, when you’re trying to work out ... because it’s going to end up in a negotiation – no one litigates, no one wishes to litigate, it’s not our preference – so you’re better to get a lie of the land with $15,000 or $20,000 of sensible spend, of someone going and looking at the documents, rather than getting a perfect advice on a point of law saying, “but, of course, it all depends on what the paperwork says”. For me, that’s a much more useful approach. And if you say it’s going to be 15, if it’s 16, I’m not paying it! ALB: A comment made by one of the managing partners in the last Round Table was that the in-house profession is far more sophisticated in sharing information amongst yourselves as to which firms you like, which firms you don’t like and the comment was that this level of knowledge has just shot up in recent years. Do you agree with that observation? ADRIAN GOSS: I don’t think there are any formal mechanisms [for sharing feedback] but I think, certainly one of the great functions
it’s about trusting your external firm, that they understand your business, that they give you the advice in a timely manner - Jon DOWNES
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...The first would be making sure that we’ve got the depth and strength of talent both internally and externally to be able to support the business’ growth objectives... - JOHN FITZGERALD JON DOWNES: If you have a bad experience with a firm, the chances are, if you’re with some colleagues from another company, you may mention that. And from that perspective, informally, word may get out. But I’m not sure that would necessarily influence people or change another legal team’s view on who to brief and why. that ACLA performs is increasing the collegiality among the inhouse profession. And I think anyone coming out of a law firm – it’s one of the first things they recognise – is that the in-house groups are less collegiate, you’re in a different environment. And also we’re quite isolated. We don’t work in large groups of lawyers, except in the relatively small number of companies that do employ big inhouse teams. And geographically we’re quite isolated. In-house teams are spread – especially in Sydney –everywhere and unlike the firms, which tend to be in the city. ACLA creates a lot of opportunities for the in-house community to talk to each other, share knowledge, share information. So, while we don’t have the law firm ‘Hot or Not’ yet, we certainly create the informal opportunities for that to occur. BRIAN SALTER: We have formal structures for giving feedback to our law firms, so, every quarter we survey our internal clients who have used those law firms and we gather that information and we actually feed it back to the law firms and we have a discussion with them about where we think they performed well, and where they haven’t performed well. And, where they haven’t performed well we set expectations around what the responses will be next time. So there is actually a formal structure about being able to provide that feedback loop to the law firm so that they, in turn, can improve their service levels to us. KIM SIDES: The relationships work best from a place of frankness and exchange of information, because it’s also important for me to hear back if there’s things in my team that can be doing better as well, because there’s a great responsibility on us to brief properly, and brief sensibly and to manage that process because it’s not as though you send it out and that’s it. You really are, you know ... it’s still your matter internally for you to deliver, you’re getting some man power and woman power behind you, but it’s still your responsibility. MATHEW KALEY: Yes, it’s very much a partnership with external law firms. I’ve always said, you won’t die wondering; if I’ve got a problem I’ll be sharing it with you. But you’ll probably only get one chance to fix it. The expectation is you’ll fix it quickly.
ALB: What are some of the key issues you’ll be prioritising this year? ADRIAN GOSS: It’s almost trite to say it, but cost and efficiency, and it’s not just the legal team – every department within our business is under pressure to do more with less and, being in legal, we are certainly not immune from that. KIM SIDES: For me the coming year is all about delivery. It’s lovely to win the big job but part of our job is seeing the matter all the way through and delivering on the promises that the organisation makes internally and externally, and us not always being there waving a finger, but encouraging people to see that as a positive way of delivering the job rather than being an add-on that gets in the way. MATHEW KALEY: My focus this year is to take my team from being good commercial legal advisors to strategically align with our business goals, so making sure we understand what our company, Allianz, is trying to achieve for the year and helping them get to that point – whether it’s putting the legal advice in the context of those goals, or it’s actually getting out there to the business and saying there’s a better way of achieving those goals than [what is occurring] at the moment. JON DOWNES: Following on from Matthew, our focus this year is raising the bar within the business and how does legal provide that value-add, not just to [assess] legal risk but to provide that add-on service that helps the business achieve its goals.
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JOHN FITZGERALD: I’m going to nominate two goals. The first would be making sure that we’ve got the depth and strength of talent both internally and externally to be able to support the business’ growth objectives. And the second would be just to continue to manage the scale and intensity of regulatory change. BRIAN SALTER: From my perspective, it’s about delivering and continuing to deliver value to the business and for it to be recognised as such. And so this year, for example, AMP – along with others in the wealth management industry – is experiencing regulatory change and so the challenge I put to my team is to focus on innovation and whether they can – through regulatory change – deliver competitive opportunities for AMP that would otherwise not be there. And secondly, AMP’s goal this year – amongst others – is to be able to put the customer at the centre of everything we do, and I’ve thrown the challenge to my team about how our team can improve the experience of AMP customers and so I think they’re really two tangible ways in which we can help deliver on the goals of our business and also be seen to be delivering value back to the business as well. ALB thanks the panel for taking part in this discussion. Next month, the panel returns to talk about building a career in-house, in independence of the in-house profession and the optimum structure for an in-house team.
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... every department within our business is under pressure to do more with less and, being in legal, we are certainly not immune from that - Adrian Goss
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dÉjÀ vu, anyone? Last year Brisbane firms had a flood of work; this year they’ve had just the flood. Still, Queenslanders have been through this all this before and there’s no reason why the Sunshine State can’t shine through once again. REPORT: RENU PRASAD
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A
s the Channel Nine helicopters anxiously hovered over the turgid Brisbane River in January, no doubt many television viewers were wondering whether this was 2013 or 2011. The relative brevity of the interval between the two floods will mean that, for some victims, the two events must seem to have merged into one. Many businesses had not had time to fully recover from the effects of 2011 before being inundated again. Maurice Blackburn had barely had time to announce a class action before being interrupted by the second flood.
The flood waters have now receded and Brisbane law firms appear to have had a more felicitous run than two years ago, when widespread evacuations were necessary. Firms contacted by ALB after the river peaked reported that it was business as usual in their part of the CBD. Some firms conducted risk assessments and, in some cases, organised for staff to work from home immediately following the Australia Day weekend, but ultimately no major 2011 style emergency eventuated. Attention has now turned to how the floods will affect what was already
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a somewhat fragile state economy. Queensland’s Treasurer Tim Nicholls recently predicted that recovery costs and economic disruption would exceed the original estimate of A$2.4 billion. There is a familiar line of reasoning that the inflow of funds from insurers, reinsurers and government relief funds will have a long term net positive impact, but this will be some way down the track. The immediate impact is more likely to be a further slowing in economic growth; the government’s December forecast for FY 2013 has already been revised downwards from 4 percent to 3.75 percent. Not long ago, the only flood around Brisbane was the flood of law firms washing into town to capitalise on the resources boom. It’s a different story in 2013: while no one is writing off the resources boom just yet, many firms are quietly adjusting their business strategy in anticipation of a workflow less weighted towards resources projects. Public infrastructure work may figure in this mix, which initially seems at odds with the Queensland government’s reputation for fiscal conservatism. However, lawyers have noted a subtle change in the air: the government appears to be sending a message that last year’s funding cutbacks have run their course and 2013 will be a year of positive action. The Costello Commission of Audit, due to deliver its findings in February, is widely expected to include recommendations as to the sale of publicly owned assets. The government’s response on this issue will be of great interest not only to firms interested in gaining a role in the privatisation process, but also firms awaiting the next round of large infrastructure projects which are likely to be pursued with the cash from asset sales. Overall, this is a transitional period for the Queensland market. There is no reason why this market will not continue to scale great heights with infrastructure investment, continuing strong resources activity and a gradually recovering state economy. However, it may be some time before we see these elements come together and crystallise for law firms.
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Not long ago, the only flood around Brisbane was the flood of law firms washing into town to capitalise on the resources boom. Firm growth Brisbane firms have had solid revenue growth in recent years, with firms such as McCullough Robertson and Carter Newell leading the way with 16 percent and 15 percent growth respectively in FY 2012. However, the market has been slowly running out of puff. While all firms interviewed by ALB for this report were expecting some measure of revenue growth for financial year 2013, counter-cyclical practices featured strongly in this equation and many lawyers frankly conceded that they would not be surprised if they did not make their FY 2013 targets. “We would anticipate single digit growth this year, but we have traditionally enjoyed double digit growth – I don’t think we will see that this year,” says McCullough Robertson managing partner Guy Humble. “If we see growth at all, it will be minimal.” Cooper Grace Ward managing partner Chris Ward is similarly measured in his predictions: “We believe we will grow
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revenues by about 3 to 5 percent, but it’s line ball at the moment,” he says. “So yes, we are predicting there will be growth, but nothing to write home about.” One of the key reasons for this is a slowdown in the resources sector, a phenomenon explored in more depth later in this feature. This has resulted in firms adjusting to what Humble describes as a “realignment of revenue away from the resources sector” and towards what is hoped will be a compensatory upswing in the infrastructure and construction space, particularly in anticipation of the Commonwealth Games on the Gold Coast in 2018. Some firms are not expecting substantial recovery for at least another few months. “We have the looming Federal Election - business needs certainty to make major investment decisions and I don’t think that will eventuate till later in 2013 - one flow on effect is that legal spend is likely to be subdued for first half of 2013,” says Humble. Market wrap With each passing year, the Brisbane market has become more crowded with the arrival of new entrants. Some of the more recent arrivals have included Johnson Winter & Slattery, Gadens and M+K Lawyers (all 2010), Henry Davis York and Thomsons Lawyers (2011) and several local firms have also been involved in mergers in that time. This activity has continued over the past 18 months. Middletons – now known as K&L Gates – merged with local firm Flower and Hart in March 2012. In October, TressCox absorbed Macrossans Lawyers, bringing the combined Brisbane operation to a total of eight partners and what managing partner Peter Smith called
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a point of “critical mass” in terms of the firm’s capacity to serve clients. In October, former Walsh Halligan Douglas managing partner Matt McCormick announced that he would be opening his own firm, focussing on niche areas including the insurance and entertainment industries. In 2013, the activity has continued with Gadens announcing a merger with MacGillivrays, a firm known for its large specialist retail mortgage documentation practice and also for dispute resolution, property and commercial. Gadens Brisbane Chairman Paul Spiro commented that the move reflected “continued confidence in the Queensland market.” That confidence is also reflected in the top tier. Herbert Smith Freehills has signed a new agreement to take up the top three floors of a new office tower to be constructed at 480 Queen Street in Brisbane. The agreement will see Freehills shift to the new premises in 2015 after 18 years based at Brisbane’s Central Plaza One. The number of staff in the Freehills Brisbane office has increased by more than 30 percent to 225 people between 2011 and 2012.
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In the past, Queensland firms had so much local work on tap that some were giving serious consideration to opening a second Queensland office in one of the Sunshine State’s many significant regional centres. Several important lateral hires have also taken place, with highlights including HopgoodGanim luring ex Grocon GC Charles Sullivan and Johnson Winter & Slattery recruiting M&A specialists Cameron Jorss and Jonathan Cheyne from Carter Newell. This plethora of activity demonstrates that firms continue to see potential in the Queensland market. However, many of these movements took place in or were conceived last year, off the back of strong 2012 results. It will be interesting to see whether firms continue to pursue growth strategies into FY 2014. Impact The Brisbane market is certainly more crowded, but is it more competitive as a result? Local lawyers are not so sure. “It’s fair to say that there are new firms in town, but our competition still comes from McCullough Robertson, HopgoodGanim, Allens, Clayton Utz and those firms,” says Chris Ward. “Firms such as Johnson Winter & Slattery and Henry Davis York are very good firms, but we haven’t come across them up here. I would never dismiss them – clearly they are very good firms and they might start to ramp up, but at the moment our competition is more from existing known competitors rather than anyone new on the block.” Other lawyers told ALB that they had heard stories of partners at the established Brisbane practices being headhunted by the new arrivals, which suggests that some measure of “ramping up” may already be taking place. Baker & McKenzie is also rumoured to be pondering a Brisbane office, although the firm declined to comment on this when approached by ALB.
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Looking further afield In the past, Queensland firms had so much local work on tap that some were giving serious consideration to opening a second Queensland office in one of the Sunshine State’s many significant regional centres. “We toyed with the idea, but at the end of the day we think we can still [service the clients] without needing to be physically on ground day by day,” comments Ward. Most large Brisbane firms take the same view, although there are exceptions to this rule such as McInnes Wilson and MacDonnells Law, firms which are noted for their multicity Queensland presence. But Queensland firms are also pursuing growth strategies that will take them well beyond their home state. Last year, HopgoodGanim signed cooperation agreements with two Chinese firms, Dacheng Law Offices LLP and Zhejiang T&C law firm. The announcement followed HopgoodGanim’s recent move into the Western Australian market through its merger with Perth-based Q Legal. “It made sense for us to be exporting our expertise in the resources industry from Queensland into Western Australia, as well as developing relationships in China,” says HopgoodGanim partner Michael Hansel. “However, this may not be the case for other Brisbane-based firms who aren’t operating in the sectors in the greatest demand by these locations.” Over the past year, we have seen national firms split into two broad groups: the first group has embraced mergers and alliances and enthusiastically promoted these arrangements; meanwhile, the second group has taken a more cautious approach and proceeded on the assumption that remaining independent will prove the more beneficial path. It is interesting to see that the growth strategies at state-based firms are also beginning to crystallize along similar lines, although the situation is still very much in flux. Carter Newell senior partner Paul Hopkins, for example, told ALB that his firm had “no immediate plans to merge with any local or international firms” and that the firm’s membership of the TAGLaw alliance was providing a valuable international scope. “Using these relationships recently, we linked with a Chinese firm to secure a multi-million tonne materials supply contract from China for an Australia based client in the construction industry,” he says. Cooper Grace Ward has adopted a similar
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approach: “The one firm model for us works really well,” says Ward. “We are part of an international firm alliance which gives us access to very strong firms in Asia, particularly China. Cooper Grace Ward’s alliance is known as Advoc and comprises of a network of over 50 firms globally. McCullough Robertson has a dedicated China practice and relationships with selected Chinese firms. Managing partner Humble told ALB that the firm was keeping an open mind as to growth options, but had a preference for maintaining an independent model. “If we were going to move into Perth we would do it as McCullough Robertson – we wouldn’t acquire someone else,” he explained. “Any new region we go into, we maintain the McCullough Robertson culture by having a start up rather than an acquisition.” It is clear from this commentary that Brisbane firms are weighing up two important considerations: first, there is a recognition of the need to build relationships off-shore and interstate in order to service international trade. Secondly, however, these firms have a long history of independence and are less likely to pursue outright mergers or exclusive alliances than larger national law
“It made sense for us to be exporting our expertise in the resources industry from Queensland into Western Australia, as well as developing relationships in China” Michael Hansel, Partner, HopgoodGanim
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firms. What we are likely to see in both Brisbane and other markets is a series of loose alliances as state-based firms build their international capacity while seeking to maintain their market position as the more nimble, independent alternative to the global heavyweights. Resources Queensland firms are uniquely placed to comment on the status of the resources boom, being intimately involved in the full sweep of matters ranging from the megaprojects down to the junior miners who are perhaps the first to feel the winds of a changing economic climate. There have been mixed reports from lawyers. Carter Newell’s Hopkins says that his firm’s clients with involvement in the major mining and infrastructure projects remain for the most part “at full capacity.” However, it is also noteworthy that many projects are reaching a more mature stage: “It is certainly the case that many of the major projects underway in 2012 have progressed to more advanced phases,
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“What we are seeing is that the miners are very much looking at existing services contracts and revisiting them and using market power to put pressure on costs and in some cases taking services back in-house. It creates fair bit of [renegotiation] work,” explains managing partner Ward.
“If we were going to move into Perth we would do it as McCullough Robertson – we wouldn’t acquire someone else.” Guy Humble, Managing Partner, McCullough Robertson some into construction whilst others are nearing their operating modes,” he says. This is a significant observation for law firms, because projects at the operational stage perhaps do not generate the same amount of legal work as at the investment stage. McCullough Robertson’s Humble says that many coal projects may have reached this point: “It’s very clear that the investment phase of the cycle is ending and certainly major capital expenditure to construct new mines will complete sometime this year and will certainly be finished by 2014. So those assets will move into full operation and they won’t generate the same amount of legal work,” he says. However, he adds that he has not seen the same pattern for oil and gas projects. HopgoodGanim’s Hansel describes a pattern of a “tangible slowing down” in a number of significant production and infrastructure projects. “However, there is still a lot of consolidation and activity, generally at a mid to junior explorer level,” he adds. “The focus of the sector has shifted. For example, we’re still seeing some secondary capital raising, but for smaller amounts, which shows a level of caution as companies avoid overcapitalising and diluting the equity interest of existing shareholders before having a return to show.” Hansel says that mid-level and junior explorers in the resources sector are continuing to consolidate. “There appears to be a significant rationalising of operating and construction costs, which is a clear benefit to our clients entering the feasibility and preproduction cycle,” he says. “The recent downturn in some sectors has certainly created some great buying opportunities for cashed up clients who are taking a long-term view on bulk commodities.” For firms who advise mining services companies, there has been plenty of activity – but not necessarily the kind of activity associated with a robust sector. Cooper Grace Ward, for example, has been busy assisting mining service providers with the renegotiation of contracts.
Infrastructure and government All eyes are on the Campbell Newman’s LNP government and particularly what solid commitments it will make in relation to infrastructure delivery. “Following the change of government in Queensland last year, there has been a lot of discussion about infrastructure delivery, which the government has backed up with some concrete steps,” says Hansel. “Now that the government has had some time to familiarise itself with the state’s financial position, we would expect the next 12-18 months to generate a lot more action by the government in the infrastructure/ PPP sector. However, given the problems experienced with the Clem 7 Tunnel and the Airport Link, we would expect that any future PPPs will require a review of the risk profile appropriate to the actual project.” Readers will be familiar with the patchy track record of PPPs not only in Queensland, but in other states too. It’s a state of affairs which has led some lawyers to suggest that other models need to be employed. Humble suggests one viable path could be a model known as “capital recycling”, whereby the government commits to delivering infrastructure with a view to selling it to the private sector once the project is complete and revenues are known. “That’s something we think should be looked at closely,” he says. The Queensland government has also attracted attention with its drastic approach to the slimming down of the public service. While this phase appears to now be complete, concerns about the impact on business confidence remain. “We’re based in George St and we have the government sector here – in our building alone 400 people went,” says Ward. “You just speak to the local coffee shop operators or the newsagent and you see that those downstream effects all have an impact that could shake confidence. I don’t think anyone would disagree that the government had to make some tough calls but the way it was done was perhaps seen to be a little aggressive. But Newman has been putting a strong positive message out there [that there will be no more redundancies] and we will get things moving again.”
Mills Oakley Lawyers: Clients want more than just strong legal skills As commercial law firms compete ever more fiercely for market share in Australia, those faring best are tapping effectively into what clients value in addition to strong legal skills. So-called “value-add” services are now an important factor in the mix when firms are striving to achieve an edge over competitors. These include a range of free offerings, from client seminars and professional development training through to sophisticated technology applications that create more convenience for clients. Indeed, technology can be an important market differentiator.
“Any service that makes doing business easier will be attractive to clients.” At Mills Oakley Lawyers, the firm is using a sophisticated interactive portal for many of its corporate clients, enabling efficient management of high-volume projects and 24-7 document access. “Our experience is that any service that makes doing business easier will be attractive to clients,” says Mills Oakley Chief Executive, John Nerurker. “We regularly review how we can provide ‘out-of-the-box’ services and are prepared to make the capital investments required.” The firm’s so-called Interactive Client Portal (ICP) gives clients a real-time window into the firm’s electronic filing systems to access their own documents and obtain progressive summaries of their legal costs. In the case of commercial property law, for example, the ICP provides clients with instant summaries of lease terms, an early warning system for lease expiries or option deadlines and a search tool that can be tailored for specific criteria, for example by asset, state or tenant. “We develop training tailored to the requirements of client organisations and are always happy to be guided on topics of interest,” Nerurker says. “In fact, our Continuing Professional
Development Program received national recognition from ALB magazine and we will keep refining its core elements so what we offer endeavours to be market best practice,” he says. The firm is further striking a chord with clients in its delivery of cross-sector networking initiatives.
clients, including some of Australia’s leading companies, such as Telstra, Leighton Properties, Lend Lease, Grocon, Suncorp, Vero, Allianz and the Commonwealth Government, as well as Queensland-owned construction companies such as Matrix and the BMD Group.
Mills Oakley hosts a Corporate Counsel Breakfast Series which enables in-house counsel to connect with peers from a wide range of corporate and government sector organisations. “Always front and centre in our thinking is how we can create greater value for the clients we work with,” explains Nerurker. “Even small value-add services can really assist clients to progress their business objectives. For instance, a number of our clients appreciate access to our meeting rooms when their executives are travelling interstate and need somewhere to work,” he says. “We see this offering as evidence of our desire to create a genuine partnership with our clients that goes beyond just being a legal services provider.”
“Always at front and centre in our thinking is how we can create greater value for the clients we work with.” The firm’s growth is testament to the success of its client relationship model. Mills Oakley is now 40 partners strong and has around 250 staff across offices in Melbourne, Sydney and Brisbane. The Brisbane practice has enjoyed particularly strong growth, recently moving to expanded premises at King George Central, the city’s newest and most prestigious office building, developed by Leighton Properties. Mills Oakley acts for a wide range of corporate, government and not for profit
John Nerurker
“It’s about making business easier for clients.” The firm recently secured leading building, construction and infrastructure partner Greg Richards from Minter Ellison and Bill Crane, Special Counsel from Gadens for its Brisbane team. Richards joins existing Brisbane partners such as Andrew Johnson, John Matthews, Stephen Dickens, Darren Ho and Michael Nixon with a brief to aggressively grow the practice as the firm seeks to position itself as a leading player in the Queensland legal market. Bill brings with him experience within the Planning and Environment and Energy and Resources Sectors adding these capabilities to the firm. Nerurker, said the firm was very excited to have the new Planning and Environment, and Energy and Resources capability to offer clients. “Greg and Bill are both strong additions to the Mills Oakley team,” Nerurker says. “Within a few years, I am confident we can further expand the footprint with clients in the Brisbane market in the same way that we have in Melbourne and Sydney. These are exciting times for us.”
aPPOINTMENTS Lateral partner appointments Name
Practice area
Coming from
Going to
Andrew Christopher
Competition
Baker & McKenzie
Webb Henderson
Andrew Galvin
Financial services
Corrs Chambers Westgarth
HWL Ebsworth
Andrew Orford
Resources
BHP Mitsubishi (BMA)
Minter Ellison
Carolyn Vigar
Local government
Minter Ellison
Wallmans Lawyers
Gareth Rogers
Construction
Thiess
Holding Redlich
Hal Lloyd
M&A
Baker & McKenzie
Sparke Helmore
Jim FitzSimons
Technology
Clayton Utz
Truman Hoyle
Joanne Crew
Banking & finance
Herbert Smith Freehills
Norton Rose
John Cooper
Projects
Allens
Jones Day
Julian Olley
Property
Norton Rose
Lander & Rogers
Matthew Rowe
Commercial
Coleman Greig
HWL Ebsworth
Michael Anastas
Financial services
Corrs Chambers Westgarth
HWL Ebsworth
Michael Barrett
Banking & finance
Finlaysons
Thomsons
Nada Raphael
Planning/ Environment
Fortescue Metals
Minter Ellison
Phil McKeiver
Infrastructure
Oakajee Port & Rail
Gilbert + Tobin
Shannon Platt
IP
DLA Piper
Sparke Helmore
Simon Lynch
Restructuring/ finance
Allens
Gilbert + Tobin
NZ: Carruthers takes top spot at Kensington Swan
G+T snares Allens’ Lynch
Kensington Swan has appointed Alastair Carruthers as Chief Executive. Carruthers has more than 20 years’ experience leading and advising major New Zealand commercial organisations including 13 years as Chief Executive at Chapman Tripp. “We are delighted to have Alastair join us,” said Kensington Swan Chairman, Gerald Fitzgerald. “His impressive business background and exceptional leadership skills will further develop our strong position in the domestic and international marketplace.”
Alastair Carruthers
Jones Day recruits senior Allens projects partner Jones Day has announced the appointment of John Cooper as a partner in its global disputes practice. Cooper, who spent 26 years at Allens, has a national reputation in the fields of infrastructure, construction, and procurement, including in major transactions and disputes. Jones Day now has 12 partners in Sydney.
Minns takes chairmanship at King & Wood Mallesons King & Wood Mallesons has appointed Stephen Minns as chairman of the Australian board. Minns replaces Tim Bednall who, having completed a three year term, returns to his M&A and corporate advisory practice. Minns has been at KWM and its predecessor firms since 1986 and plans to continue in practice in addition to his new management responsibilities.
Gilbert + Tobin has announced the appointment of leading finance and restructuring expert Simon Lynch from Allens Linklaters. As a partner of Allens Linklaters, Lynch had worked on some of the most significant recent deals in the market including the $2.3 billion financing of the Sydney Desalinisation Plant, Dulux’s $293 million acquisition of Alesco and the workout and refinancings of Centro, Elders and Nufarm. Managing partner Danny Gilbert said that his firm’s finance and restructuring practice had grown 49 percent over the past year and worked on many high-profile transactions including the Nine restructuring and the Top Ryde whole of debt sale.
Resourceful Minters recruits from BHP/ Mitsubishi, Fortescue
Stephen Minns
Minter Ellison has made two hires from the mining sector at special counsel level. Andrew Orford joins Minters in Brisbane after five years with BHP Billiton Mitsubishi Alliance (BMA), where he was the contracts and commercial manager and most recently the senior manager
aPPOINTMENTS responsible for the procurement function. Planning and environmental law specialist Nada Raphael started her legal career with Minter Ellison some 10 years ago. Most recently, she was senior legal counsel with Fortescue Metals Group Ltd advising on statutory approval processes and compliance across Fortescue’s port, rail and mining projects. She will be joining the firm’s Perth office.
Norton Rose boosts banking & finance practice
Nada Raphael
Sparke taps Bakers, DLA for IP and M&A talent Sparke Helmore has added two new corporate partners. Shannon Platt joins as a partner and head of the Intellectual Property team. She was previously the head of the Intellectual Property and Technology Group at DLA Piper in Sydney and is a registered trade marks attorney with experience in IP litigation and the commercialisation of IP. M&A specialist Hal Lloyd has also joined Sparke Helmore, following seven years as a partner at Baker & McKenzie. The firm said in a statement that its corporate team executed more than 30 deals in 2012, which were worth collectively more than A$1 billion.
Norton Rose property partner moves to Landers Lander & Rogers has announced that it has appointed property lawyer Julian Olley as a partner in its Sydney office. Olley has advised on all forms of commercial and government real estate transactions, including the sale, acquisition, development and leasing of substantial commercial, industrial and retail buildings for both landowners and corporate tenants. Olley cited cultural reasons and the “respectful and appreciative working environment” as reasons for his move to Landers.
Webb Henderson recruits ex Bakers competition expert Competition and disputes specialist Andrew Christopher has joined Webb Henderson as a partner based in Sydney. Christopher has acted for a wide range of clients in diverse industries including telecommunications and media, transport, energy and resources and, prior to joining Webb Henderson, was Baker & McKenzie’s national practice manager of competition law and disputes and led the firm’s Asian competition practice.
HWL Ebsworth recruits Corrs financial services duo HWL Ebsworth Lawyers has announced the appointment of regulatory specialists Andrew Galvin and Michael Anastas as partners. Both lawyers make the move from Corrs Chambers Westgarth. Galvin will be located in Sydney and Anastas will be based in Brisbane.
Clutz tech specialist moves to Truman Hoyle Clayton Utz technology specialist Jim FitzSimons has joined Truman Hoyle as a consultant. In addition to his practice, FitzSimons will also be working on a series of technology ventures. FitzSimons said that Truman Hoyle was “widely recognised for its understanding of the emerging digital economy and the associated legal issues.”
Adelaide: Thomsons adds Finlaysons banking & finance specialist Thomsons has recruited banking and finance partner Michael Barrett from Finlaysons. Barrett’s principal focus is high-end insolvency work and he has experience in major dispute resolution, particularly in the area of auditor liability. “I regularly act for clients in Melbourne and Adelaide and I think moving to a national firm will enable me to offer my clients some great advantages,” he said.
Norton Rose is continuing the expansion of its banking & finance capability with two new faces: Joanne Crew joins Norton Rose as partner from Herbert Smith Freehills while Jake Howard has relocated to Norton Rose Australia from London. Crew is based in Melbourne and Howard is based in Perth. There have been seven key hires in the Norton Rose banking & finance team over the last year.
Gilbert + Tobin recruits infrastructure experts from Oakajee Gilbert + Tobin has recruited two new lawyers from Oakajee Port and Rail. Phil McKeiver will join as partner and Fionn Bowd joins as senior associate. Perth managing partner Michael Blakiston said that the appointments will add to the ongoing growth and development of the firm’s energy and resources practice, particularly in the area of infrastructure and projects. Bowd will share her time between the Melbourne and Perth offices, while McKeiver will be based in Perth.
Clifford Chance adds finance partner in Australia Clifford Chance has announced that lending and leveraged finance partner Caroline Jury has relocated from the firm’s London office to Sydney. A CC partner of 15 years, Jury’s experience includes building the firm’s finance practice in Germany and leading the Clifford Chance team that led the drafting of the Loan Market Association’s Intercreditor Agreement.
Thiess lawyer moves to Holding Redlich Holding Redlich has appointed former Thiess Australia lawyer Gareth Rogers to the firm’s Brisbane office. Rogers was previously the senior contracts administrator on the Brisbane Airport Link, Northern Busway and Airport Roundabout projects. The Holding Redlich construction team in Brisbane now has over 20 lawyers.
Sparke adds partner to Perth insurance team Sparke Helmore has announced the promotion of Joel Sheldrick from special counsel to partner in the insurance group in the firm’s Perth office. Sheldrick has represented insurers and employers in the areas of statutory classes and liability for more than 10 years. He has substantial claims experience and has successfully defended liability and statutory class actions across a range of industries, including medical, retail, manufacturing, mining and construction.
Wallmans welcomes new local government practice head Adelaide-based Wallmans Lawyers has announced that Carolyn Vigar will be the firm’s new local government head. Originally from Adelaide, Vigar joins the firm from her most recent role at Minter Ellison Melbourne, where she specialised for over 10 years on all aspects of public and regulatory law for all levels of government.
Carolyn Vigar
HWL Ebsworth makes hire from Coleman Grieg HWL Ebsworth has announced that Matthew Rowe has joined the firm as a partner in the commercial practice group at the Norwest office, in suburban Sydney. Rowe joins HWL Ebsworth from Coleman Grieg where he was the head of the commercial advice team. He joins partners Ashley Holland and Denis Hall in the Norwest office.
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Don’t procrastinate on postgraduate Postgraduate studies are increasingly essential for legal practitioners looking to get ahead in their career or their understanding of an area of law, reports Olivia Collings
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Australasian Legal Business ISSUE 11.02
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L
aw is a constantly changing and evolving beast, so little surprise legal education is also continually evolving. Now more than ever lawyers are expected and required to remain up-to-date with new laws, court cases, regulation, best practice and issues surrounding the law. The result is a two-way stream of information between students and the universities, who are in a continual process of seeking feedback and ideas on what new courses should be developed. “We listen to what our students tell us about the sort of course they are looking for,” says Professor Stephen Bottomley, Dean of the ANU College of Law. “We have practitioners contacting us to talk about what is going on [in the market] – we try to be as responsive as we can and also get on the front foot.” While continuous education is part of the job on a day-to-day basis, formal study such as a master degree or even a doctorate are increasingly common in the legal profession. “Ultimately it makes you a better practitioner,” says Norton Rose associate Katie Hegarty. “It allows you to hone your specific set of skills in the area that you practice in. I work in the M&A regulator space and postgraduate study gave me the ability to choose specific courses designed to upskill and hone my skill set.” For Hegarty, the decision to undertake a Master of Laws at The University of Sydney after several years of practice was an easy decision. “I think a masters is part of a broader need to undertake continual learning and development as a practitioner,” she says. K&L Gates senior associate Tamara Cardan also saw significant benefit in undertaking a Master of Laws at The University of Melbourne, specialising in taxation: “Especially in the tax field, because it is constantly changing, it is quite important to have postgraduate experience and qualifications. It is such a competitive environment – I thought it would be useful.” Perhaps unsurprisingly, according to Laureate Professor Cheryl Saunders AO, associate dean at The University of Melbourne Law School, taxation and construction are two of the most popular streams for a Master of Laws. “Construction and tax are very popular specialisations,” she states. “Tax speaks for itself, there are a lot of people who specialise in tax and need construction is a reflection of the Australian economy.” For Cardan, the additional studies have provided her with a greater ability to analyse tax concepts and more confidence. “It gives you a broader understanding, if I have studied a particular area of tax law in the course, I am much more confident in dealing with that particular area in practice,” she adds. Swaab Attorneys senior associate Marc Baddams had a similar experience following his Master of Laws at The University of NSW. “It definitely has given me a lot more confidence in dealing with matters that come through the door,” says Baddams. “Every subject I did had relevance to my practice… It was about expanding my knowledge base and helping me take my career to the next step.” As an added bonus, many practitioners that undertake post graduate studies find that they not only learn a great deal, but that they improve their marketability and employment options as well as their professional network by participating in further study. “It will
Katie Hegarty, Norton Rose
“It allows you to hone your specific set of skills in the area that you practice in. I work in the M&A regulator space and postgraduate study gave me the ability to choose specific courses designed to upskill and hone my skill set.” - Katie Hegarty, Norton Rose increase your marketability substantially,” says Carden. Hegarty adds: “There are networking opportunities as well, as the other students in your course are mainly practitioners in the same field. It has been very enjoyable and beneficial to widen my network throughout the course.” Word of mouth Having decided to undertake further studies, the next difficult task for practitioners is deciding where to undertake the further study. With so many universities now offering high quality courses and a growing range of subjects, the options are vast. All practitioners ALB spoke to recommended talking to colleagues when deciding on where to study. “You should definitely ask around you team or firm, as inevitably some of them would have undertaken postgraduate studies already and they can give you first hand advice,” says Hegarty. In Cardan’s case the choice was simple. “Everyone in my team has done their
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masters at Melbourne University, so I thought I should go there as well,” she says. “The University offers a wide range of tax-related subjects that are industry specific.” Which brings us is the next important factor a practitioner needs to consider when deciding where to study, the subjects on offer and the delivery of those subjects. At The University of Melbourne Law School there are no less than 170 post graduate law subjects on offer in 2013; while at The University of Queensland there are 75 post graduate subjects this year. “For the past few years we have run between 160 and 170 subjects, but we are constantly tweaking what subjects are on offer, adding new ones, discontinuing others,” says Saunders. Some subjects fill up extremely quickly and may be run twice in a year as a result, to meet the needs of students according to Saunders. For example, some of the construction law subjects are already full for the year and the school is now looking at repeating them, space and tutors permitting. She says the time of year or semester when a subject is run can also have a significant impact on popularity and feasibility. “For example, tax subjects during the winter period is not a particularly good idea,” she says. According to Baddams, studying subjects that are directly relevant to your practice area is an important aspect to making postgraduate studies worthwhile. “The subjects that the University of NSW had on offer were spot on, and relevant to my field of law,” he says. “every
Marc Baddams, Swaab
“The subjects that the University of NSW had on offer were spot on, and relevant to my field of law.” - Marc Baddams, Swaab
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subject I did had relevance to my practice, and the fact that it was relevant made it even better.” Cardan adds: “the subject range available at an institution is quite important, because you don’t want to be having to undertake subjects at another institution.” The availability of subjects that were directly relevant to her field of practice were also essential to Hegarty. “I chose all of my subjects around skills I was looking to hone,” she says. Another interesting offering has been a suite of courses developed at the Australian National University under the banner of Law, Governance and Development. With a particular focus on South East Asia and especially the Pacific region, courses cover a wide range of topics from the operation of treaties, strengthening the rule of law, law enforcement, policing and human rights. These are topics which have proven to be popular with Australian students, but the ANU’s Professor Bottomley told ALB that the courses were also gaining good traction with students from developing nations, where participation was often facilitated via AusAID. “We’ve tried to set up a programme where people from developing countries can get some upskilling in the latest thinking on governance issues and issues to do with land and development – the whole suite,” says Bottomley.
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“We listen to what our students tell us about the sort of course they are looking for” - Professor Stephen Bottomley, ANU College of Law
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Along with having the right subjects on offer at the right time, it’s also essential for institutions to have the right people teaching those subjects. “If we have judges and QCs presenting courses or ex QCs and ex judges, those courses are extremely popular,” says Dr Alan Davidson, director of postgraduate course programs at the TC Beirne School of Law, The University of Queensland. “For example, we had a retired judge presenting a course last year on civil litigation that was extremely popular and during the course they invited two current judges to come and speak to the students; which was obviously very well received. If you had a regular academic or legal practitioner coming along, you would not receive the same level of interest in that course.” The tutor, lecturers, guest speakers and program directors are also increasingly important factors when considering where to study according to students such as Baddams, Hegarty and Cardan. “All of the lecturers and tutors at UNSW were fabulous,” he says. “Dennis Harley, who teaches contract law at the university has a youthful enthusiasm for everything that he is teaching, which came through at his lectures and made what he was teaching that much more enjoyable.” Similarly, Hegarty thought very highly of her own tutors at The University of Sydney: “We had lecturers from the best firms who had worked on the best deals in the M&A space,” she says. For Cardan, it was about having lecturers and tutors who were passionate about the subjects they were teaching that made a difference. “Tax is generally considered quite dry, but some of the lecturers are very passionate about the field and they made the learning experience far more enjoyable,” she states.
Change is happening As with other areas of education, postgraduate legal education is evolving. At The University of Queensland there are moves afoot to introduce specialist masters, while at Melbourne University Law School there are two new master degrees this year, one in energy and resources and one in environment. Energy and resources, environment and mining law are all growing areas of interest for postgraduate students says Saunders. “What we are seeing is a great deal of interest in energy and resources master degrees,” she says. “From both domestic students and international students.” At Melbourne University some of the construction law subjects are cross credited to the energy specialisation and vice versa, as students in the field better hone their education to the needs of the mining sector. Dr Davidson has also seen this trend: “Mining law was one of our most popular subjects last year, which is obviously very important to the Queensland and West Australian markets at present,” he says.
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“We have found from our surveys that our domestic students, who make up about 60 percent of our students, prefer intensive courses, while international students prefer subjects that are run over a number of weeks.” -Dr Alan Davidson, TC Beirne School of Law, University of Queensland “Native Title has also seen a greater amount of interest, and sits within our mining suite of subjects.” Mediation and arbitration have also been in high demand at both universities in recent years, although at Queensland University, this year they are dropping it back to one semester having run it in both in the past. In the past year the universities have also seen a shift in the number of domestic students verses international students, which ultimately impacts how subjects are taught. The high Australian dollar, weaker economies overseas and general business uncertainty has seen a drop in international postgraduate students across the board says Dr Davidson. For program directors, this impacts how subjects are taught because the two student groups have very different study preferences. “We have found from our surveys that our domestic
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“we have to be careful of not interrupting traditional holiday times too” -Cheryl Saunders, The University of Melbourne Law School
students, who make up about 60 percent of our students, prefer intensive courses, while international students prefer subjects that are run over a number of weeks,” he says. “We have to please what the various students want.” Saunders also has to deal with this predicament. “Most of the domestic students are practicing lawyers, and therefore they are time poor; they can often find work related-tasks come up suddenly and that impacts on their study. We often have students who are forced to withdraw last minute because of commitments… we try to be accommodating but it is disruptive from a planning point of view,” she says. This is an issue Cardan dealt with while undertaking her masters and starting a family. “Up until this semester I had done semester long courses, one evening a week, but now that I have a young child that is logistically tricky, so I try and do intensive courses over a week,” she says. “It has been hard finding time to sit down and do the study, but you do become more organised as a result.” To assist time poor students, such as Cardan, Melbourne Law School is looking into offering courses in late January, when some practitioners might have more free time on their hands. “But, we have to be careful of not interrupting traditional holiday times too,” says Saunders. Queensland University has already taken a step in this direction and will be offering subjects in the summer 2013/2014 says Dr Davidson. “I think there are some students who like that quieter time of year to catch up, get ahead or even repeat a subject,” he says.
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Australasian Legal Business ISSUE 11.02
the changing face of dictation Find out how three innovative Australian legal practices are using mobile dictation, dictation in the cloud and speech recognition technology to improve their client service, increase their profitability and create an enjoyable and productive work environment for their fee earners.
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Computer,” “- Yes Captain”. “Give me the co-ordinates for the last known location of the Romulan Spaceship”. “- Not a problem, sir.” Star Trek, the popular science fiction franchise that continues to fascinate millions of, let’s face it – geeks – has been fantastically adept at predicting future technological breakthroughs: conversing with computers, check. Powerful handheld devices that let us communicate and carry out a number of applications, check. Printing 3D objects, check. Intergalactic space travel at warp speed, well maybe not quite. Let’s concentrate on the first item in this list, human-computer interaction. Over the last decade or so, astonishing developments have taken place in the legal workplace. Previously technophobe senior partners have become early adopters of technology with the emergence of the iPad and the general tablet/smartphone revolution. They now ask demanding questions of IT professionals, and drive the need for “enterprise” solutions – no pun intended – that are integrated, secure and scalable, but deliver the same kind of ease of use as the consumer applications that they can so easily access. The need for these solutions is pressing, as devices are increasingly being brought into the workplace at an astonishing rate. According to a recent LexisNexis study1, over 90 percent of fee earners currently own a smartphone and over 15 percent a tablet device. The latter number is expected to grow rapidly. At the same time, affordability and computing power have developed with opposing trajectories. The cloud provides a limitless supply of affordable computing power that continues to be both exciting and scary. While security issues need to be assessed and addressed, it affords legal firms the option to consume legal IT services “on demand”– also sometimes called software-as-aservice (SAAS) – with a promise to deliver drastically reduced hardware acquisition, operating and maintenance cost, alongside instant effortless upgrades and a host of other benefits. Speech recognition technology, being talked about now for almost twenty years, has also finally arrived on the ‘Plateau of Productivity’ according to the Gartner Hype Cycle2. More and more, we can expect to talk to our machines and expect them to understand what we say. While the dream of your own Starship Enterprise ‘Bridge’ in your corner office may still be a while off, professional speech recognition solutions have improved dramatically over the last few years and in combination with legal process outsourcing are leading to faster document turnaround times, while improving efficiencies and reducing costs. So where does an ‘old technology’ like dictation fit in? In fact, it fits in rather well. But let’s hear about that from some Australian legal firms instead.
While the dream of your own Starship Enterprise ‘Bridge’ in your corner office may still be a while off, professional speech recognition solutions have improved dramatically over the last few years and in combination with legal process outsourcing are leading to faster document turnaround times, while improving efficiencies and reducing costs.
Australasian Legal Business ISSUE 11.02
“I can dictate in front of clients, at the airport, wherever I happen to be. I can get the job done, and without [these apps], I can’t do that.” -Edward Genocchio, Principal, Spruson & ferguson
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But before we jump let us address a common observation. Younger lawyers are nowadays less likely to dictate than maybe 10 or 20 years ago. They are content to self-type. Yet this practice can be a significant disadvantage to a firm. Most humans speak at an average of 120 to 200 words per minute, an experienced self-typist will average 45, take formatting into account and you’re in the low 10s to 20s. Why use your highly skilled fee earners to carry out this work when you can have someone far better equipped do the job more effectively? The demonstrated benefits of the division of labour are one of the fundamental reasons for the economic success of the industrialised nations. So why go back into the dark ages? MOBILE DICTATION Intellectual Property firm Spruson & Ferguson, headquartered in Sydney, deals with innovative technology on a day to day basis. To be taken seriously in this competitive sector, Spruson leverages its own use of technology to create the best outcomes for its clients. That means having a dictation solution that is stable and secure, which allows its fee earners to handle client affairs wherever they happen to be. After using digital dictation for a number of years, Spruson & Ferguson introduced Winscribe’s mobile dictation solutions for iPhone, iPad and Android devices last year. As Principal Edward Genocchio puts it: “Everything we do revolves around deadlines. These deadlines are critical and must be met. I personally love the use of the iPhone and iPad, and having mobile dictation on both of them enables me to be more productive.” “I can dictate in front of clients, at the airport, wherever I happen to be. I can get the job done, and without [these apps], I can’t do that.” He noted that while on a cross-country flight in the United States, he “was amazed to find out that I could use Wi-Fi in flight. So where I would normally sit idle, I managed to dictate instructions to my P.A. back in the Sydney office, which made it very productive for me”. The move from analogue tapes to digital dictation was a logical one for the firm. Similarly, the transition from digital dictation to mobile dictation was a natural progression. IT Manager Simon Saunders comments: “Deployment was easy. It literally took minutes, downloading the apps from the respective online stores of Apple and Android. That’s well and good from my perspective, but from the fee earners perspective, it has given them flexibility, it has really opened the door to productivity.” Saunders adds, “What’s important is to make sure that you work with your partners and fee earners and provide guidance to those that may need more help. Mobile dictation can provide significant cost savings to a firm, and make fee earners’ work life more enjoyable and productive.” DICTATION IN THE CLOUD Alongside the mobile revolution, cloud technology is currently changing the way many legal firms consume legal IT solutions, such as dictation. The central notion of SAAS is simple. You get access to an IT solution when you need it, and let others worry about server hardware, maintenance and upgrades. In effect you are consuming a service, rather than purchasing a product. It is increasingly an appealing choice for many legal firms. At the cutting edge of this development is Victoria Legal Aid (VLA), which recently signed an agreement with Winscribe for the supply of a cloud based digital dictation solution to its frontline lawyers
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dictation working across the State of Victoria. Chief Information Officer for VLA, Hans Wolf commented: “The reason why VLA has decided to go for a software as a service approach is because we believe the vendor, as the subject matter expert on their own product, will be able to secure and maintain the system better, thus freeing up VLA’s ICT resources to concentrate on bringing more innovation to VLA.” “Furthermore, by hosting the solution in the cloud, cost savings are achieved as the need to have an internal server and all its associated costs are negated.”
“...by hosting the solution in the cloud, cost savings are achieved...” - hans wolf, CIO, VLA Making sure that tax payer’s funds are used to provide legal services, rather than for ICT upkeep and maintenance makes perfect sense for VLA. Added to this, is Winscribe’s ability to run as a secure integrated cloud based installation that connects the separate offices and links each lawyer with a virtual typing pool of transcriptionists that can work from any location across the State of Victoria, or indeed anywhere with access to the internet. The networked dictation approach means that work can be distributed more effectively, smoothing out peaks and troughs in demand and supply for transcription services within the organisation, another source of cost savings for VLA. Its cloud based dictation solution also allows lawyers to be flexible in their work practices. “Winscribe’s iPad dictation application allows us to utilise existing iPads provided to all lawyers, which minimises hardware purchases. The ultimate goal is to increase the efficiency of our staff and promote cost savings through the use of technology,” says Ken Chee, VLA’s Project Lead. “By giving our lawyers the ability to create, send and review dictations on their iPads, we will see an improvement in document turnaround times. I’m confident that our lawyers will appreciate the flexibility and convenience of being more mobile. They can do so while resting assured that their dictation is being sent securely, without the need for a VPN, or a change in our Firewall.”
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SPEECH RECOGNITION Another forward looking firm, PK Simpson Compensation Lawyers, based in Sydney, processes their dictation through Speech Recognition (SR) technology in combination with legal process outsourcing (LPO) in order to save costs and at the same time improve its customer service by dramatically reducing document turnaround times. PK Simpson’s Chief Operating Officer Bruce Bravo explains, “We started using SR about three and a half years ago. We wanted to move all our transcription to our sister legal process outsourcing company LPO Ezy (formerly PK Simpson Law Philippines), based in the Philippines. The idea was for highly competent Filipino staff to do the typing, not just plain typists (to ensure the highest quality output possible). The problem was most of the highly competent staff we could hire couldn’t touch-type or speed-type.” The solution was to use Winscribe’s integrated speech recognition capabilities to automatically ‘pre-type’ the document, ready for the LPO team in the Philippines to proofread and quality check. The results have been quite staggering, “When we had a team of Sydney based transcriptionists, we had a turnaround time of two to three weeks, after we implemented SR and our Manila based LPO, our turnaround time is now, on average, 20-30 minutes after dictation. That’s an unbelievable hundred-fold improvement.” Not only did client responsiveness improve dramatically, the combination of SR and LPO has also led to significant cost savings for PK Simpson, “We have the production capacity of about 100 staff, but an actual labour cost equivalent of only 67 Sydney staff. By combining speech recognition technology and legal process outsourcing, we have gained a significant cost and service advantage, and we believe it goes a long way towards future-proofing our legal business.” PK Simpson’s fee earners use Winscribe’s iPhone dictation application to send dictations for transcription on the go, however PK Simpson’s COO believes traditional dictation hardware is better suited to speech recognition: “We find the accuracy of specialist dictation hardware is superior to smartphones or tablets. In our experience the quality of the microphone of the device is key in SR accuracy,” says Bravo. This is supported by recent accuracy tests by Nuance, the makers of Dragon Naturally Speaking. It found that specialist dictation hardware from certain device manufacturers such as Philips performed better in speech recognition accuracy tests than smartphones, tablets, and some of the other manufacturer’s dictation hardware.3 The reason for this can be found in the design philosophy behind these devices. Professional dictation hardware is designed to minimise handling and background noise, an important factor in obtaining clear audio for automated recognition. Bravo identifies one key success factor for firms that are looking to use technology to improve operational efficiency: “Any dictation, SR or LPO initiative should involve process re-engineering (for the better). For some principals and partners that sounds too daunting and traumatic, but in our experience it is not if you deal with experienced firms that have process improvement in their DNA.” IN A NUTSHELL In the end, every legal firm is looking to improve the service it provides to its clients, maximise the profits from its operations and provide an enjoyable, productive work environment for its fee earners and support staff. The answer to all three is not science-fiction. It is already here and has been for a long time. It’s called dictation.
Footnotes: 1
http://www.lexisnexis.com.au/lexisnexisred/downloads/the%20mobile%20lawyer.pdf http://www.wired.com/beyond_the_beyond/2012/10/gartner-hype-cycle-2012/ https://www.dictation.philips.com/au/how-we-make-a-difference/news/philips_achieves_highest_nuance_dragon_score/
2 3
Seriously accurate results Achieve reliable results time after time, with Winscribe’s secure dictation workflow software and Philips professional dictation devices. Experience the difference a fully integrated dictation solution can make to your firm’s document turnaround times.
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competition
Australasian Legal Business ISSUE 11.02
BIG YEAR AHEAD for competition regulator Corporate Australia can expect another high level year of activity from the ACCC, writes Helen Jones.
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he Australian Competition and Consumer Commission’s sights will be set firmly on big business this year, but not at the expense of consumer protection, according to chairman Rod Sims. In a wide-ranging interview with Thomson Reuters, Sims admitted that the ACCC had not escaped Federal Government belt tightening. Sims said he remained optimistic about ACCC’s ability to continue working effectively with the resources allocated. The ACCC wants to “get more bang for our buck” and so would focus on larger companies’ breaches for 2013’s investigations and operations. Sims also said enforcement and working to bring more competition cases to court was a high priority. But he emphasised that this would not be at the expense of consumer law concerns. The ACCC had 40 to 45 investigations in progress under three sections of the Competition and Consumer Act 2010 in the areas of cartels, business contracts and misuse of market power. He warned that not all investigations would reach the courts this year. Some would suffer problems like lack of evidence; others would simply take substantial investigation time before legal proceedings could start. Last year ACCC took three competition cases to court: a pricefixing case against Flight Centre; a case against two NSW gas companies accused of an anti-competitive cartel arrangement; and, in mid-December, a case against Japanese company Yazaki Corporation and its Australian subsidiary Australian Arrow Pty Ltd for the supply of wire harnesses to Toyota. Sims told Thomson Reuters the ACCC hoped to increase the number of cases reaching court this year. “If we can double it, that would be good,” he said. “There’s a lot of investigation under way.” Sims was reluctant to predict how successful those cases would be, saying the investigations were “complex” and “hotly contested” in court.
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Consumer protection still a priority Sims said the ACCC had focused on, and taken full advantage of, Australian consumer law last year. Successful actions included $2.25 million in fines dealt to Apple for misleading advertising, and $3.6 million against Optus over its Think Bigger internet plans. The ACCC would target businesses with unfair contract terms, online group buying sites and fake online reviews this year, Sims said. The ACCC was aware of several online group buying companies, which offer discounts on products and services if a specified number of people sign up, creating problems for consumers and other businesses. There was growing concern from consumers unable to redeem vouchers while some businesses claimed they were not seeing the benefits promised. Sims also warned big business: “We’re trying to make sure our consumer work is aimed at larger companies.” He acknowledged the likelihood of bringing investigations to court always “depends on circumstances” and the ACCC considered whether a breach was “inadvertent” or if a business was a long-term offender. “Where there looks to be intent, no corrective behaviour [and] consumer harm” the ACCC was more likely to take court action.
The ACCC wants to “get more bang for our buck” and so would focus on larger companies’ breaches for 2013’s investigations and operations. Resourcing restricted Sims acknowledged that the extent of the ACCC’s investigations was restricted by resources. “We’re always under resource constraints.” He confirmed federal financial cutbacks had led to a staff reduction at ACCC. “The biggest issue we have is do we have sufficient resources? Just like the police, they can’t chase everything, they don’t have the resources. Nor can we. We have to make tough choices about what we chase and what we don’t.” The ACCC was committed to maintaining solid relationships with the Australian business community. However, the regulator was “not going to step back in our activity because of the global financial crisis.” He said Australian businesses understood that, with many now more cognisant of their consumer law obligations. However, with cartel activity, the ACCC was “still seeing more activity than we’re comfortable with.”
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Cartel generates $98.5 million in fines A record $98.5 million in penalties has now been generated from a single ACCC investigation into cartel conduct, according to Sims. His statement followed the Federal Court in Sydney ordering Thai Airways International Public Company to pay $7.5 million for breaching the Trade Practices Act (TPA) and the Competition and Consumer Act. Thai Airways is the 13th international airline to admit cartel conduct in Australia and have penalties ordered against it. The judgement, and other proceedings in progress alleging cartel conduct against Renegade Gas Pty Ltd and Speed-E-Gas (NSW) Ltd in August and the Yazaki Corporation in December, were strong signals to the business community that cartel conduct would not be tolerated, Sims said. Federal Court Justice Anna Katzmann said: “This was deliberate, systematic conduct involving senior staff at the Thai station in Indonesia. For the understandings to be effective they required the participation of all players in the market, including Thai.” The ACCC started proceedings against Thai Airlines in 2009, alleging it engaged in cartel conduct for fuel and other surcharges. As part of the settlement, Thai Airways admitted reaching and giving effect to price-fixing understandings for fuel and security surcharges and customs fees for freight carriage from Indonesia to Australia. The court also ordered Thai Airways to pay $500,000 in costs, bringing the total penalties ordered in the entire cartel proceedings to $98.5 million. The ACCC’s trial against Air NZ and Garuda Indonesia continues before Justice Nye Perram in the Federal Court in Sydney. Singapore, Cathay slugged $23 million As part of the ACCC’s cartel conduct investigation, the Federal Court has ordered Singapore Airlines Cargo Pte Ltd and Cathay Pacific Airways Ltd to pay a total of $23 million in penalties for breaching the TPA and the Competition and Consumer Act. An ACCC statement said Cathay Pacific and Singapore Airlines Cargo were the 11th and 12th airlines to settle and their respective penalties of $11.25 million and $11.75 million, plus costs, were among the biggest ordered in the cartel conduct proceedings. The court also ordered injunctions restraining the airlines from engaging in similar conduct for five years. The ACCC began proceedings against the two airlines in 2008 and 2009 respectively, alleging cartel conduct for fuel and other surcharges applied to airfreight. Singapore Airlines admitted breaching s45 of the TPA by agreeing and giving effect to price understandings relating to fuel and security surcharges and customs fees for airfreight from Indonesia to Australia; airfreight rates between Jakarta and various destinations, including Australia; and attempting a price fixing arrangement with Malaysia Airlines on airfreight rates for meat from Australia to the Middle East. Singapore Airlines anticipated a build-up of U.S. troops would lead to increased demand for airfreight of Australian meat to the Middle East. Cathay admitted to arriving at and giving effect to price understandings on fuel and security surcharges for airfreight between Singapore and Australia and attempting a price-fixing arrangement with Qantas on airfreight rates between Hong Kong and Australia after Qantas started a new Sydney-Hong Kong service, making a significant competitive impact. Cathay proposed Qantas increase its price by 25 percent to Cathay’s charge level. The ACCC said, had that attempt succeeded, Qantas’s price
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competition increase on a fully laden freighter would have been more than $80,000 a week. ACCC steps up action against cartels Sims said the ACCC had stepped up its focus on cartels, starting with its short film The Marker, which he sent to CEOs of Australia’s top 300 companies. It has started civil proceedings in the Federal Court in Adelaide against Japanese company Yazaki Corporation and its Australian subsidiary, Australian Arrow Pty Ltd, alleging they engaged in cartel conduct, market sharing and price fixing.
As part of the ACCC’s cartel conduct investigation, the Federal Court has ordered Singapore Airlines Cargo Pte Ltd and Cathay Pacific Airways Ltd to pay a total of $23 million in penalties for breaching the TPA and the Competition and Consumer Act. The alleged cartel conduct is for supplying wire harnesses to Toyota Motor Corporation and its Australian affiliates. Wire harnesses are electrical systems that distribute power and send electrical signals to various car components. The ACCC alleges there was an overarching cartel arrangement between Yazaki and a competitor until at least late 2009. ACCC is seeking pecuniary penalties, declarations, injunctions and costs. Its action follows similar enforcement cases
FRH0043_TheAge_T21_R1.indd 1
Australasian Legal Business ISSUE 11.02
against Yazaki and other cartel participants by Japanese and U.S. competition regulators for supplying wire harnesses and other automotive components to several car manufacturers. ACCC aims to fight TPG further The ACCC is also seeking special leave in the High Court to appeal against a Federal Full Court decision that partially overturned a $2 million misleading conduct ruling against internet provider TPG Internet. ACCC initially succeeded in its action against TPG for allegedly misleading advertising on TV, radio, internet and on public transport. On November 4, 2011, Federal Court Justice Bernard Murphy found TPG’s initial and amended Unlimited ADSL2+ ads were misleading because they conveyed the impression TPG’s Unlimited ADSL2+ broadband could only be acquired with a “bundled” home telephone line for an additional $30 a month. In a second set of reasons handed down on June 15, 2012, Justice Murphy ordered several forms of relief, including declarations, injunctions, corrective advertising and pecuniary penalties totalling $2 million, comprising $600,000 for the initial advertisements and $1.4 million for the revised advertisement. On December 20, TPG partially won its appeal to the Federal Full Court. Justices Michael Jacobsen, Annabelle Bennett and John Gilmour, who partially allowed the appeal, said Justice Murphy had failed to consider the target audience’s knowledge. The ads conveyed ADSL2+ cost $29.99 a month and the judges said “a degree of robustness is required. The legislation does not operate for the benefit of those who fail to take care of their own interests … Once the attributes of the hypothetical ordinary or reasonable viewer are taken into account; we doubt such a person would be misled. As we have said, that person is taken to know the service may be offered as bundled with another and that some form of connection is required to receive the service. He or she is also taken to know that set-up charges are often made”. Justices Jacobsen, Bennett and Gilmour held only TPG’s TV ads were misleading because of the ‘fleeting’ nature of the medium. They said the ads breached s53(c) of the TPA because the minimum correct price was not prominently displayed.
3/08/12 3:34 PM
regulation
Australasian Legal Business ISSUE 11.02
REGULATORY
FATIGUE
Australian business might finally be able to look forward to some respite from the recent surge in regulatory change, writes Nathan Lynch.
Market participants in Australia are optimistic the government’s decision to stall competition in cash equities clearing and settlement is reflective of a broader understanding of the challenges facing the industry. Federal treasurer Wayne Swan recently accepted a recommendation from the Council of Financial Regulators that competition should be delayed for at least two years. The Council’s advice was based on wide-ranging consultations following a discussion paper issued in June 2012. Swan said that while competition would be likely to reduce the cost of clearing and settlement services, now was “not the appropriate time for changes that will have further cost implications for the industry”. His decision was influenced by the market conditions and the magnitude of regulatory change already under way. Within stockbroking the decision has triggered a mixed response, with some
participants saying competition would be beneficial for local markets but most agreeing it was the right decision to delay any potential changes. Doug Clark, policy executive at the Stockbrokers’ Association of Australia, said the government appeared to be heeding broad concerns about the extent of regulatory change in recent years. He said with changes in supervision and law reform such as the Future of Financial Advice (FoFA), market participants were looking forward to a period of consolidation and compliance cost management. He said all of these issues were relevant to the decision, rather than focusing solely on the potential headline savings that may be associated with competition in the clearing space. “We are all for competition. If there’s a 30 percent saving in clearing fees as apparently occurred in Europe, for argument’s sake, then that would be fantastic for stockbrokers and their clients. But we want to know the costs that are associated with it as well,” Clark said. “The industry has been saying for some time that the government needs to stand back and let the last wave of regulatory change settle in before we push ahead with anything new.” Clark also said that while the arrival of Chi-X in 2011 did lead to lower trading fees, the overall benefits of competition had been less
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regulation pronounced than expected, when viewed in the context of the associated costs of compliance, including best execution and systems changes. “Thankfully, ASIC seems to now appreciate that it’s not just about the best price you can achieve but the underlying costs as well,” he said. Groundswell of support David Jacobson, compliance specialist at law firm Langes, said there was a groundswell of support for a period of regulatory stability and consolidation. He said this was particularly strong in areas of the market that will be affected by the FoFA reforms, which includes stockbrokers and other securities market participants.
“I suspect it’s really just a matter of time before they introduce competition in the clearing space. So the two-year break is really a reflection of market realities and resources and priorities, not a rejection of competition per se.” - David Jacobson, compliance specialist, Langes “I think everybody’s had enough. This is also an election year so I don’t think they’re going to start biting off more than they can chew in that respect or implement any major changes before September,” Jacobson said. “They’ve got enough on their plate without buying into other issues. FoFA isn’t even in yet so between FoFA and all the regulatory and supervision changes that are being introducing in the area of stockbroking, I think everybody would be happy to see a period of consolidation,” he said. In the bigger picture, however, he said the latest announcement with regard to clearing and settlement competition was likely to represent a temporary reprieve. “I suspect it’s really just a matter of time before they introduce competition in the clearing space. So the two-year break is really a reflection of market realities and
Australasian Legal Business ISSUE 11.02
resources and priorities, not a rejection of competition per se,” Jacobson said. Pricing pressures David Lynch, executive director of the Australian Financial Markets Association, said that while it was hopeful that competition would lead to better pricing for clearing of cash equities, there were other factors to consider. These included the overall compliance costs for members and the question of whether the savings demonstrated in Europe would be achieved in a market the size of Australia’s. “We do know that competition in Europe has led to reduced clearing charges. The application of that to the market here will depend on the types of services being offered and needs to be viewed in the context of the local market,” Lynch said. He said that the regulators and the government had reached a “pragmatic” solution that simply delayed rather than thwarted a potential move to competition for clearing. He was less convinced about the benefits of competition in relation to settlement, however, which is in reality uncontested. “It was a pragmatic solution because what they’ve done is address the concerns raised by the people in the market about the regulatory and operational cost issues that might arise in the near term from change, while leaving open the potential for these issues to be looked at again in a couple of years,” Lynch said. “So it takes into account the conceptual policy framework and the practical reality of the market as it has been for the last couple of years.” AFMA has also welcomed the fact that the government has made provision for an ASX code of practice that will give industry participants a voice going forward in the governance of clearing and settlements arrangements. The big picture A source told Thomson Reuters that there had been some disillusionment in relation to competition for market services following the introduction of Chi-X. This had a positive impact on pricing but brokers have struggled with some of the other costs that limit the savings, such as best execution. The source said these feelings had flowed through in the regulator’s consultation in the second half of 2012, with many market participants being less than enthusiastic in their responses. “Market competition was discussed at a different time when the markets were a lot more buoyant and revenues were a lot more buoyant. I think what’s happening is that the cost pressures are now quite significant so there is a change in the balance of risks attaching to change, like the structure of competition for clearing and settlement,” he said. The source also said the associated costs with a move to competition in clearing were unclear. “If you have another clearer you’re going to have connection costs and operational costs, so it is unclear what would happen to the costs of regulation. They are the kinds of things that are affecting people in their decisions. So I think what’s happening is that the government saying let’s have a two-year period where we consolidate the positions of the industry and the ASX. That buys us a couple of years and by then the market conditions surrounding the industry might have improved,” he said.
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in-house observations
Australasian Legal Business ISSUE 11.02
THE NEW ANTI-DISCRIMINATION LAWS – a (goose) step too far? By Tony de Govrik, Legal Affairs & Communications Director, Australian Corporate Lawyers Association, the professional body for in-house lawyers.
W Tony de Govrik
ho could ever forget that hilarious scene in possibly the funniest of the Fawlty Towers episodes in which John Cleese (alias Basil Fawlty) in exaggerated manner goose-steps in front of a German couple in the hotel dining room while shouting “sieg heil” and using his finger to simulate the moustache of Adolf Hitler? His final insult to the elderly German guests was “Who won the bloody war anyway?” Offensive then or offensive now – that is the $6 million dollar question! Now the BBC which produced the series has, in effect, rewritten television history by sanitising a scene, in which it claims racist language has been used, for fear of offending modern-day viewers. This action by the BBC has been described as “cultural vandalism” and many of the millions of fans of Fawlty Towers will lament this as yet another extreme case of political correctness gone mad – or, to put it in the British vernacular, “bonkers”. The question now being asked is whether an Australian broadcaster of the uncut version of this episode will fall foul of the Federal government’s draft Human Rights and Anti-Discrimination Bill 2012. What other far-reaching and unforeseen consequences might the proposed legislation have for Australian business? The Bill is designed to consolidate five different Commonwealth antidiscrimination laws into one new national law. The new legislation as currently proposed includes protections against discrimination based on 18 different “attributes” including race, age and disability. The list includes breastfeeding, potential pregnancy, immigrant status, gender identity, sexual orientation and industrial history. For some categories discrimination is only unlawful in the workplace. These include medical history, political opinion and religion. An exposure draft of the Bill was released on 20 November last year and has since generated intense public debate with over 240 submissions being received. The Bill was intended to introduce a simple, all encompassing definition of “discrimination”. If passed in its current form, the legislation will redefine discrimination to include “unfavourable treatment” and “disadvantage by imposition of policy” – a form of indirect discrimination likely to apply to companies and government. Illegal “unfavourable treatment” by a person includes conduct that “offends, insults or intimidates the other person.” It is the offence of “offending” that has sparked much of the public debate evident today. Presently, only the Racial Discrimination Act has a prohibition against causing offence. It includes actions “reasonably likely to offend.” There have been a number of high profile critics in relation to this and other aspects of the Bill. Former NSW Chief Justice, Jim Spigelman, has been critical of some of the changes proposed in the new legislation and warned that they risked breaching international treaties that protected freedom of speech. Speaking at an Australian Human Rights Commission conference last
December, Mr Spigelman expressed the view that a proposed law protecting people from offence infringed the right to free speech and suggested that hurting another person’s feelings should not be outlawed. “There is no right not to be offended” he said. “The freedom to offend is an integral component of freedom of speech. I am not aware of any international human rights instrument or national anti-discrimination statute in another liberal democracy that extends to conduct that is merely offensive.” The former Federal Attorney-General, Nicola Roxon, has vigorously defended the new Bill. She has stated that despite what some reports may have said, it is not the case that any conduct that a person finds offensive will be unlawful. According to Ms Roxon “Telling someone their football team is hopeless or their artwork is ugly might offend them – but it’s not illegal, nor does the government propose it should be. On the other hand, telling a team they are hopeless “like all Asians” or telling a female staff member “shorter skirts would be better for all girls in the office” might well breach discrimination laws.” Ms Roxon made it clear that it is also not the case that the specific prohibition against racial vilification would be extended to other types of vilification. She said that the government is not seeking to regulate the type of language used privately between friends. Despite the assurances given by the former Attorney-General, the potential for impact on business still needs to be assessed in the fullness of time. In-house counsel need to watch this space and be prepared to advise their employer organisations of the changes and possible far-reaching ramifications when the new consolidating statute finally passes into law. In the meantime, we can only hope that television treasures such as Fawlty Towers and iconic Australian movies such as They’re a Weird Mob do not succumb to the censors’ scissors as a result of this new legislation.
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