ISSUE 9.07
Melbourne report Is Melbourne the next Adelaide?
Partner promotions Full coverage of the mid-year round
Employment law Firms bulk up
National Broadband Network Firms hit the online superhighway Market-leading analysis Comprehensive deals coverage debt & Equity market intelligence
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ISSUE 9.07
Melbourne report Is Melbourne the next Adelaide?
Partner promotions Full coverage of the mid-year round
Employment law Firms bulk up
Damned if you do…
National Broadband Network Firms hit the online superhighway Market-leading analysis CoMprehensive deals Coverage debt & equity Market intelligenCe
www.legalbusinessonline.com
IN THE FIRST PERSON
I
f only Australian firms were so obliging. Law firms in the UK are now releasing their financial results, a wonderful source of information for journalists, competitors and the plain curious. All the information is there in black and white: revenues, growth, profitability, profits per partner. It’s enough to fill the pages of any legal industry journal for several issues. In Australia, law firms are becoming accustomed to the idea of publishing their revenues while, as a rule, profitability figures remain confidential. Confidentiality, of course, has proved no obstacle to profit figures being regularly leaked, published and commented upon in the press. Presumably this is part of the reason why some firms have felt that it is easier to simply release their figures rather than be subjected to often ill-informed speculation. If you can’t beat them, join them. Journalists must accept part of the responsibility for this minor cold war between the industry and the media. Firms know all too well that releasing their profit figures will lead to the inevitable headlines: “Crisis at firm x as profits plunge” and sensationalism of a similar ilk. The truth, of course, is that figures can only tell part of the story. Profits may be down because a firm has taken a stance against retrenchments. Declining revenues may be symptomatic of the particular industry segments to which a firm has exposure, rather than poor management. Financial figures do not shed light on a firm’s full story. They should be used as a compass, not a map. Will firms come to trust the media with their profitability figures? It has been encouraging to see Mallesons take a positive stance on this issue and, to use the colloquialism, open the kimono. On the other hand, it is discouraging to see that certain high profile Australian top tiers and virtually the entire New Zealand industry continue to refuse to engage with this issue. Trust is not gained overnight. One would hope, however, that the more this information becomes readily available, the more mature the coverage will become.
2
“Not all growth is profitable. In fact, poorly managed growth is often unprofitable. It is quite incorrect for partners to be measured primarily on increase in practice size.” Andrew Price, Wotton + Kearney (Q and A)
“I think expertise is important, but it can be learnt. If you are a good lawyer and smart enough to be specialised in another area of law, then you can learn insurance law,” Mathew Kaley, Allianz Australia (In-house profile)
“Overall, the business climate has been just a little bit kinder to people in Victoria.” Bill Fazio, Herbert Geer (Melbourne report)
Asian Legal Business ISSUE 10.6
EDITORial >>
www.legalbusinessonline.com
3
contents >>
contents
ALB issue 9.07 36
24
40
COVER STORY 28 National Broadband Network What changes will the NBN bring for workflow and legal practice?
ANALYSIS
PROFILES
10 Partner promotions ALB’s wrap of the mid-year round of promotions
24 Managing partner profile: Nick Nichola, Middletons Middletons national managing partner Nick Nichola speaks about Perth, partnership and the disappearing office tie.
13 Anti-bribery Are Australian oil and gas companies particularly vulnerable to the long arm of the new UK Bribery Act?
FEATURES 40 Melbourne report Melbourne may not be feeling the warm glow of the Magic Circle – but lawyers say there are still plenty of reasons for optimism. 48 Employment law There is no shortage of work for employment relations lawyers – but do top tier firms want to be part of the action?
36 In-house profile: Mathew Kaley, Allianz Australia Allianz Australia general counsel Mathew Kaley shares his thoughts about his role, the regulatory burden facing the industry and what he sees as the key challenges for law firms.
REGULARS 6 DEALS
• Perth: Jackson McDonald, McKenzie Moncrieff to merge • A&O sees increased revenue, stable partner profits • Kemp Strang opts for COO model 24 Appointments
COLUMNS 18 UK Report 21 US Report 23 In-house Q&A
COMMENTARY 9
New Zealand Buddle Findlay
18 NEWS • Breakaway Piper Alderman partners establish new workers’ comp firm • IPO market jitters hit new high amid uncertainty • Inbound M&A continues to surge ahead of outbound investment
4
Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as Australasian Legal Business can accept no responsibility for loss.
australasian legal business ISSUE 9.07
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NEWS | deals >>
deals in brief
| PPP | By Kalianna Dean
►► Gold Coast Rapid Transit project (GCRT) – A$1bn Firm: Allens Arthur Robinson Lead Lawyers: Emma Warren, James Darcy, Ren Niemann, Steve Clifford, Bill McCredie, Adrian Chek Client: Plenary Group and GoldlinQ consortium partners Firm: Corrs Chambers Westgarth Lead Lawyers: Peter Schenk, David Warren, John Walter, Henry Prokuda, Daryl Clifford and Simon Ashworth Client: Queensland government Firm: DLA Piper Lead Lawyers: Alex Guy, Kim Broadbent, Dan Brown, David East Client: KDR – Keolis/Downer EDI Firm: Maddocks Lead Lawyer: Mal Fielding Client: McConnell Dowell Firm: Mallesons Stephen Jaques Lead Lawyers: Mark Upfold, Peter Staciwa, Adam Wallwork Client: Financiers
| TMT | ►► Telstra NBN participation/ infrastructure agreement – A$11bn
Bruce Macdonald Blake Dawson
Firm: Blake Dawson Lead Lawyer: Bruce Macdonald, Tim Brookes, Carl Della-Bosca, Kevin Arkwright, Mel Harris Client: NBN Co
Firm: Clayton Utz Client: NBN Co Firm: Corrs Chambers Westgarth Lead Lawyers: Thomas Jones, Andrew Messenger, Byron Koster, James North Client: Federal Government Firm: Gilbert + Tobin Lead Lawyers: Peter Waters, Bill Spain, Moya Dodd, Cameron Whittfield Client: Telstra
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Firm: Mallesons Stephen Jaques Lead Lawyers: Cheng Lim, Neil Carabine, Renae Lattey, Cheng Lim, Trish Henry, Nicole Heller, Justin Cheng Lim Mallesons Cherrington, Scott Heezen, Alison Lansley, Tim Bednall, Andrew Norman Client: Telstra • Telstra signed definitive agreements with both NBN Co and the Commonwealth for participation in the roll out of the NBN • Mallesons Stephen Jaques advised Telstra on A$9bn worth of the agreements. Mallesons has been key legal advisor to Telstra since the NBN negotiations commenced in 2009. • Blake Dawson is the lead legal advisor to NBN Co • Agreement forms part of a suite of agreements between Telstra, NBN Co and the Commonwealth relating to structural separation and implementation of the NBN
Moya Dodd Gilbert + Tobin
Firm: Minter Ellison Lead Lawyer: Stewart Nankervis Client: Bombardier • Allens Arthur Robinson also advised its client, the Plenary Group, on its role as the leader of the winning consortium for the A$230m Biosciences Research Centre Project in Victoria in 2009. Emma Warren and John Darcy were also involved in that deal • Bombardier is a long-standing client of Minter Ellison • Maddocks has not represented McConnell Dowell in any significant capacity prior to this project
| dEBT | ►► Lend Lease syndicated loan facility – A$975m Firm: Allens Arthur Robinson Client: Underwriters Firm: Freehills Lead Lawyer: Justin Pelly Client: Lend Lease
• Lend Lease has finalised a A$975m unsecured syndicated loan facility. The initial target for the finance was A$750, but was increased following strong lender support • Freehills has a long client relationship with Lend Lease, most recently advising on the December 2010 purchase of Valemus for A$1bn and on the redevelopment of the RNA Showgrounds for A$2.5bn
| PPP | ►► Plenary Group/Defence Force accommodation PPP – A$900m Firm: Allens Arthur Robinson Lead Lawyers: Emma Warren, Leighton O’Brien, Anthony Arrow, James Darcy Client: Plenary Group Firm: Piper Alderman Lead Lawyers: Geoff Emmett, Sebastian Greene, Tim Coleman Client: Watpac Construction (Qld and Vic), Built Environs, Pindan Contracting, Richard Crooks Constructions and others • The two agreements for phase two of the Government’s Single LEAP project were successfully concluded on June 28. The deal was to design, construct, operate and maintain 3,015 accommodation units for the agreed 30-year term • Allens Arthur Robinson has once again advised the Plenary Group on this PPP. The firm also advised on the Gold Coast Rapid Transit PPP, also announced in June, and the A$230m Biosciences Research Centre Project in Victoria • Piper Alderman has acted for Watpac on various matters since partner Geoff Emmett joined the firm in 2009, and is currently also representing Built Environs on another matter
| TMT | ►►SingTel Optus HFC customer migration to NBN network – A$800m Firm: Baker & McKenzie Lead Lawyers: James Halliday, Patrick Fair Client: Singtel/Optus Firm: Clayton Utz Client: NBN Co Australasian Legal Business ISSUE 9.07
NEWS | deals >>
• NBN Co and Singtel/Optus have negotiated an A$800m deal to enable the migration of Optus’s Hybrid Fibre Coaxial Cable James Halliday Baker & (HFC) network McKenzie to the NBN. The deal was under negotiation for over a year • Baker & McKenzie and Optus have a longstanding client relationship, including Baker & McKenzie representing Optus in various litigation matters over the years • Clayton Utz has declined all comment related to the NBN Co deals, including disclosure of the partners involved
►► Your month at a glance Firm
Jurisdiction
Deal name
Value ($Am)
Practice
Allen & Overy
Australia/India
Adani acquisition of Abbot Point Coal Terminal
935
M&A
Allens Arthur Robinson
Australia
Gold Coast Rapid Transit Project (GCRT)
1,000
Projects
Australia
Lend Lease syndicated loan facility
975
Debt
Australia
Plenary Group/Defence Force accommodation PPP
900
Projects
Australia/US
JBS loan facility
791
Debt
Australia
Catalpa /Conquest acquisition from Newcrest Mining
Undisclosed
M&A
Australia
CGU Insurance acquisition of HBF Health Limited
Undisclosed
M&A
Australia
Woodlawn Wind Farm project
Undisclosed
Projects
Migration of SingTel Optus HFC customers to NBN network
800
Projects
Australia
Minor International Public Company takeover offer for Oaks Hotels & Resorts Limited
Undisclosed
M&A
Australia/Japan
NTT acquisition of 70% stake in Frontline Systems Australia
Undisclosed
M&A
Australia/Japan
TFS Corporation high yield bond offer
140
Debt
Australia
Growthpoint acquisition of Rabinov
Undisclosed
M&A
Australia
Telstra/NBN Co agreement
11,000
Projects
Australia/India
Adani acquisition of Abbot Point Coal Terminal
935
M&A
Australia/Solomon Islands
Asia Pacific Breweries Limited takeover bid for Solomon Breweries
Undisclosed
M&A
Blakiston & Crabb Australia
Focus Minerals bid for Crescent Gold
Undisclosed
M&A
Clayton Utz
Australia
Telstra/NBN Co agreement
11,000
Projects
Australia
Migration of SingTel Optus HFC customers to NBN network
800
Projects
Australia
Jonesville takeover bid for Territory Resources
133
M&A
Australia/India
Strides Arcolab acquisition of Ascent Pharmahealth
Undisclosed
M&A
Australia
Amcom sale and distribution of iiNet shares
Undisclosed
Equity
Australia
Telstra/NBN Co agreement
11,000
Projects
Australia
Gold Coast Rapid Transit Project (GCRT)
1,000
Projects
Australia/India
Adani acquisition of Abbot Point Coal Terminal
935
M&A
Australia
Stolt-Nielsen acquisition of Marstel Holdings
Undisclosed
M&A
Australia
Gold Coast Rapid Transit Project (GCRT)
1,000
Projects
Australia
CGU Insurance acquisition of HBF Health Limited
Undisclosed
M&A
Fox & Thomas
Australia/Solomon Islands
Asia Pacific Breweries Limited takeover bid for Solomon Breweries
Undisclosed
M&A
Freehills
Australia
Lend Lease syndicated loan facility
975
Debt
Australia
Archer Capital acquisition of Quick Service Restaurants from Quadrant
450
M&A
Australia
Stockland asset swap with Brookfield
401
Property
Australia/Canada
Mineral Deposits Limited equity capital raising
151
Equity
Australia
Jonesville takeover bid for Territory Resources
133
M&A
Australia
Catalpa /Conquest acquisition from Newcrest Mining
Undisclosed
M&A
Australia
Growthpoint acquisition of Rabinov
Undisclosed
M&A
Australia
Telstra/NBN Co agreement
11,000
Projects
Australia
Sphere Minerals rights issue
128.5
Equity
Baker & McKenzie Australia
Blake Dawson
| M&A | ►► Stockland asset swap with Brookfield A$401m Firm: Freehills Lead Lawyer: Frank Poeta Client: Brookfield Firm: Mallesons Stephen Jaques Lead Lawyers: Felicity Savage, Simone Menz Client: Brookfield
Corrs Chambers Westgarth
DLA Piper
Firm: Norton Rose Australia Lead Lawyers: Peter Trevaskis, Michael French Client: Stockland • Stockland’s 50% interest in Bank West Tower, Perth, was sold to Brookfield for A$130m. Stockland in turn acquired two residential estates, Whiteman Edge and Vale, in WA, for A$271m • Norton Rose recently advised Stockland on all planning and property aspects of the redevelopment of Totem shopping centre into Balgowlah Village, Sydney • Brookfield has been a client of Mallesons since at least 2009, when the firm advised on its A$57m bond issue.
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Gilbert + Tobin
Australia
Catalpa /Conquest acquisition from Newcrest Mining
Undisclosed
M&A
Greenwoods & Freehills
Australia
Stolt-Nielsen acquisition of Marstel Holdings
Undisclosed
M&A
HopgoodGanim
Australia
Sucrogen acquisition of Proserpine Mill
115
M&A
Linklaters
Australia
Horizon Oil convertible bonds issue
80
Debt
Maddocks
Australia
Gold Coast Rapid Transit Project (GCRT)
1,000
Projects
7
NEWS | deals >>
Mallesons Stephen Australia Jaques Australia
Telstra/NBN Co agreement
11,000
Projects
Gold Coast Rapid Transit Project (GCRT)
1,000
Projects
Australia/US
JBS loan facility
791
Debt
Australia
Origin European notes issue
678
Equity
Australia
Stockland asset swap with Brookfield
401
Property
Australia
Horizon Oil convertible bonds issue
80
Debt
Australia
Focus Minerals bid for Crescent Gold
Undisclosed
M&A
Australia
Woodlawn Wind Farm project
Undisclosed
Projects
Middletons
Australia/India
Strides Arcolab acquisition of Ascent Pharmahealth
Undisclosed
M&A
Mills Oakley
Australia
Stolt-Nielsen acquisition of Marstel Holdings
Undisclosed
M&A
Minter Ellison
Australia
Gold Coast Rapid Transit Project (GCRT)
1,000
Projects
Australia
Archer Capital acquisition of Quick Service Restaurants from Quadrant
450
M&A
Australia/Canada
Mineral Deposits Limited equity capital raising
151
Equity
Australia
Sucrogen acquisition of Proserpine Mill
115
M&A
Australia
Stolt-Nielsen acquisition of Marstel Holdings
Undisclosed
M&A
Norton Rose
Australia
Stockland asset swap with Brookfield
401
Property
Piper Alderman
Australia
Plenary Group/Defence Force accommodation PPP
900
Projects
Stikeman Elliott
Australia/Canada
Mineral Deposits Limited equity capital raising
151
Equity
Thomsons Lawyers
Australia/Japan
NTT acquisition of 70% stake in Frontline Systems Australia
Undisclosed
M&A
Does your firm’s deal information appear in this table? Please contact
alb@thomsonreuters.com
| ENERGY | ►► Woodlawn Wind Farm project finance Undisclosed Firm: Allens Arthur Robinson Lead Lawyer: Richard Gordon Client: Westpac Firm: Mallesons Stephen Jaques Lead Lawyers: Scott Gardiner, Vishal Ahuja Client: Infigen Energy • Believed to be Australia’s first project financing of a merchant wind farm • Mallesons Stephen Jaques also advised Infigen Energy during its separation from former parent company Babcock & Brown in 2009. The advice related to internalisation of management and structural and transitional separation • Allens Arthur Robinson has a long history of advising Westpac. Recently it advised the bank on its merger with St George. Other notable transactions include advising on Westpac’s disposal of AGC
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61 2 8587 7484
| M&A | ►► Sucrogen acquisition of Proserpine Mill – A$115m Firm: HopgoodGanim Lead Lawyer: Nicole Radice Client: Proserpine Co-operative Sugar Milling Association Limited (PSMA) Firm: Minter Ellison Lead Lawyer: Leigh Brown Client: Wilmar International Limited • Sucrogen, the Australian subsidiary of Asian agribusiness group Wilmar, has entered into an agreement to acquire PSMA on a debt-free, cashfree basis • Minter Ellison also advised Wilmar on its 2010 acquisition of Sucrogen from CSR for A$1.75bn • This is the first time HopgoodGanim has advised PSMA
| m&A | ►► Archer Capital acquisition of Quick Service Restaurants from Quadrant – A$450m Firm: Freehills Lead Lawyer: Damien Hazard Client: Archer Capital (purchaser) Firm: Minter Ellison Lead Lawyer: Callen O’Brien Client: Vendors including Quadrant Private Equity • Quadrant Private Equity managed funds have sold QSR to Archer Capital. QSR operates more than 600 Red Rooster, Oportos and Chicken Treat restaurants Australiawide. Quadrant first acquired a majority in QSR in 2007, helping the group grow from 450 to 620 stores
• Minter Ellison has also advised QSR independently on various other transactions, including its acquisition of Red Rooster and Chicken Treat in 2007, followed by Oportos in the same year • Freehills also has a pre-existing client relationship with Archer Capital. Most recently the firm advised Archer on the acquisition of Brownes dairy and juice business, which completed in March
| m&A | ►► Stolt-Nielsen acquisition of Marstel Holdings Firm: Corrs Chambers Westgarth Lead Lawyers: Richard Lewis, Michael Cooper Client: Stolt-Nielsen Firm: Greenwoods & Freehills Lead Lawyer: Joshua Cardwell Client: Marstel Firm: Mills Oakley Lead Lawyers: Andrew Walker, Toby Norgate Client: Graham and Anne Catley (Marstel founders/ shareholders) Firm: Minter Ellison Lead Lawyers: Martin Bennett, Adrian Coras Client: Marstel • Trans-Tasman bulk liquid storage company Marstel will be acquired by global provider Stolt-Nielsen for an undisclosed sum • This is the first time Mills Oakley lawyers has advised Marstel or the Catleys • Minter Ellison has completed various other private equity funded transactions in recent weeks, including Quadrant’s secondary sale of Red Rooster to Archer. This is in addition to PE exits from Bledisloe Funeral Homes and Equity partners’ exit from National Credit Management company to Thorn
• Quadrant is a longstanding client of Minter Ellison. The firm has recently advised Quadrant on investments in Virtus Health, Independent Pub Group and Media Monitors, and on the raising of the A$750 million Quadrant Fund No. 6. Australasian Legal Business ISSUE 9.07
Firm Profile |
NEWS deals >>
NZ Commentary
Under pressure: fresh water management reform in New Zealand Despite a plentiful supply of fresh water, New Zealand is facing increasing pressure in terms of deteriorating water quality and competition for the allocation of rights to water. The Government has put in place a significant programme of policy and law reform seeking to address these issues, including the “Fresh Start for Fresh Water”. The Government is committed to enabling economic use of and benefit from New Zealand’s fresh water while balancing environmental and cultural interests. As an example, agricultural exports, reliant on plentiful supply of good quality fresh water, have driven New Zealand’s economic growth. Fresh water is sacred to Maori and has been the subject of significant Treaty of Waitangi settlements. The use of fresh water has to be balanced against environmental needs and intrinsic environmental and cultural values. The Resource Management Act 1991 (RMA) has not been able to address the significant fresh water management issues. For example, without a statutory allocation mechanism the “first in first served” approach has developed whereby allocation of fresh water resources occurs on a timing of application rather than allocation merit basis. The RMA devolved the management of New Zealand’s fresh water resources to regional councils. This has resulted in each regional council seeking to develop individual approaches, and the Courts are currently dealing with proposed regional water allocation regimes. In one case, the Government intervened with the Environment Canterbury (Temporary Commissioners and Improved Water Management) Act 2010. This legislation removed the elected councillors and provided for Government appointed commissioners with considerable powers “to address issues relevant to the efficient,
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effective, and sustainable management of fresh water in the Canterbury region.” Recognising the multitude of interests and parties affected by fresh water management, in 2009 the Government appointed the Land and Water Forum (which comprises a range of primary industry groups, environmental and recreational NGOs, iwi and other organisations) to advise on management options for fresh water. This collaborative process culminated in the release of a report in September 2010 with 53 high level recommendations, including that the Government promptly release a national policy statement on fresh water management (a process that started in 2008). National Policy Statement for Freshwater Management 2011 The National Policy Statement for Freshwater Management 2011 (NPS) was approved in May this year, and provides objectives and policies that direct management of fresh water. Under the RMA, regional councils must give effect to national policy statements in their planning documents and have regard to them in decision making processes. In particular, the NPS directs the preparation of water quality and quantity limits and efficient fresh water allocation and transfer regimes. However, the NPS does not provide details as to limits or allocation systems. While some commentators have criticised the lack of detail in the NPS, the Government has been clear that the NPS is the first step that signals the parameters of the new regime. The NPS will be followed in 2012 by a series of “complementary measures” which will include setting limits on water quality and quantity and the development of allocation mechanisms. There is considerable work to be done on these matters and also broader issues regarding the governance and management of fresh water.
The management of freshwater is one of New Zealand’s most pressing natural resources issues. There is a real need for further direction through continued policy and law reform.
This article was written by Paul Beverley from Buddle Findlay, one of New Zealand’s leading law firms. Paul leads the environment and resource management team and the Māori law team in the Wellington office and specialises in Resource Management Act consenting and processes, Treaty settlement negotiations and conservation law. He appears in a range of courts and tribunals including the Environment Court, High Court and Court of Appeal, and Boards of Inquiry and Special Tribunals on a range of RMA and environmental/conservation law matters.
Paul can be contacted on +64 4 462 0406 or email paul.beverley@buddlefindlay.com
Paul Beverley Buddle Findlay
9
NEWS | analysis >>
Analysis >> ►► Partnership promotions commencing July 1, 2011 Firm
Name
Practice area
Office
Allens Arthur Robinson
Nicholas Adkins
banking & finance
Sydney
Philip Blaxill
litigation/insolvency
Perth
Arnold Bloch Leibler
Baker & McKenzie
Blake Dawson
Corrs Chambers Westgarth
10
Hop Dang
infrastructure
Hanoi
Julian Donnan
corporate
Sydney
Karla Fraser
Banking & finance
Brisbane
Michael Graves
projects
Melbourne
Mark Malinas
corporate
Melbourne
Penny Nikoloudis
corporate
Sydney
Jodi Reinmuth
energy & resources
Perth
Gavin Smith
telecommunications, media & technology
Sydney
Caroline Goulden
litigation & dispute resolution
Melbourne
Matthew Lees
litigation & competition
Melbourne
Jeremy Leibler
corporate
Melbourne Melbourne
Genevieve Sexton
banking & finance
Eric Boone
corporate markets
Sydney
Paul Forbes
dispute resolution
Sydney
William Coulthard
construction
Perth
Tanya Denning
energy & resources
Adelaide
Jane Ellis
competition & consumer protection,
Brisbane/Sydney
Jeff Lynn
environment
Melbourne
David McManus
corporate
Sydney
Antonella Pacitti
corporate
Perth
Sean Prior
corporate
Jakarta
Damien Roberts
corporate
Tokyo
Timothy Sackar
restructuring & insolvency
Sydney Brisbane
Gavin Scott
resources & native title
Graeme Tucker
banking & finance
Sydney
Peter Ward
litigation & dispute resolution
Perth
Ross Zaurrini
competition & consumer protection
Sydney
Shaun Bailey
construction
Sydney
Paul Carrick
property & infrastructure
Sydney
Helen Clarke
intellectual property, trademarks & competition
Brisbane
Jennifer DeJong
litigation
Melbourne
Sam Delaney
litigation
Sydney
Steve Johns
corporate
Sydney
Sarah Leonard
construction
Perth
Anna Ross
litigation
Sydney
Frances Wheelahan
intellectual property & technology
Melbourne
Frances Williams
construction
Brisbane
Partnership: the next generation A new round of partner promotions has taken place in recent weeks. Olivia Collings reviews some of the highlights.
A
number of mid-size firms have increased their overall partnership size. Henry Davis York is an example, having experienced an increase of 10% in its partnership numbers. The new partners represent a cross section of divisions across the firm which have experienced significant growth over the past year. “The fact we have made appointments across five practices areas speaks volumes for the growth we are seeing across the firm and the need for partners,” said HDY managing partner Sharon Cook. Corrs Chambers Westgarth recently promoted 11 lawyers to partner. According to managing partner John Denton, the promotions are part of the firm’s strategy to grow by 30% between 2011 and 2015. “The firm needed to make some broad investments in key areas of growth as part of that strategy,” said Denton. “We are growing the firm and hence there is the ability to increase partner numbers.” Areas in which the firm is specifically looking to invest and grow include corporate, finance & banking, energy & resources, disputes and projects. For some firms, the appointments represent a desire to capitalise on improved market conditions and growth, but for others, partners have been appointed to cope with the growing number of retiring partners. “There is a generational shift going on which requires new talent entering the partnership,” said Allen’s chief executive partner, Michael Rose. Allens promoted four lawyers in both Sydney and Melbourne, which according to Rose, were investments in servicing existing important clients, while providing smooth succession in various practices. Freehills recently made six partner appointments, two of which were in the firm’s Perth office. According to chief executive officer and managing partner Gavin Bell, the office has experienced substantial growth in recent years. ►► Partnership trends at selected firms, 2010-2011 Allens Arthur Robinson Number of partners promoted: 12 Total number of partners July 1, 2011: 185 Total number of partners July 1, 2010: 185 Change: 0%
DLA Piper Number of partners promoted: 1 Total number of partners July 1, 2011: 114 Total number of partners July 1, 2010: 156
(2010 figure includes former New Zealand and Adelaide offices, which have since split from the firm)
Change: -27%
Australasian Legal Business ISSUE 9.07
NEWS | analysis >>
No miracle diet as top tiers look to slim down Conventional wisdom holds that the “big six” are reducing partnership size – but the figures can be somewhat equivocal, reports Renu Prasad
I
t is widely accepted that top tier firms are slimming down their partnership ranks. Various reasons have been proffered: a desire to enhance PEP, firms grooming themselves for an international merger; a desire to remove “dead wood” or perhaps all of the above. But is this theory actually supported by the figures? At first glance, not necessarily – many large firms in fact appear to have grown their partnership ranks in past six months. AAR, one of the firms most commonly mentioned as on a “slimming” regime, has had a net gain of eight partners to its ranks. This may explain some of the more bullish press coverage of recent law firm promotions: journalists (and indeed firms) are talking up growth and optimism. Twelve month comparisons are illuminating. AAR’s partner count, while on the rise for the first half of 2011, actually has not grown at all over the last 12 months. Figures collected by ALB indicate that the AAR partnership remained static at 185 partners between July 2010 and July 2011. Freehills dropped from 204 to 197 partners in the same period. Clayton Utz grew from 194 partners to 203 – but the firm had lost 14 partners to Allen & Overy in February 2010 and
Corrs Chambers Westgarth Number of partners promoted: 11 Total number of partners July 1, 2011: 127 Total number of partners July 1, 2010: 106 Change: +20%
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therefore had some ground to regain. The overall trend appears to be downwards – however generalisations gain in simplicity what they lose in accuracy. According to the Australian Financial Review, Minters gained an extra 7 partners over the past year (296 in total) while the real surprise mover was Blake Dawson, increasing from 173 partners to 186. Figures like these help put the rumours of a Blakes- Herbert Smith merger in context. Mallesons, one of the few firms to discuss its international ambitions on the record, remained static at 180 partners. So figures from the past 12 months provide only partial support for the thesis that the “big six” are slimming down. Expand the field of vision to a few years, however, and the picture becomes clearer: most of the “big six” have on average 15-20 fewer partners than they did in July 2008. For example, Clutz had 221 partners in July 2008, but 203 in July 2011. Freehills went from 218 partners to 197 in the same period; Mallesons went from 200 to 179. As Corrs’ John Denton once said, the big six ain’t so big anymore – nor do they necessarily want to be big. By contrast, Denton’s ambitions to grow his own partnership by a third by 2015 have been well publicised and the firm
Clayton Utz Number of partners promoted: 3 Total number of partners July 1, 2011: 203 Total number of partners July 1, 2010: 194 Change: + 5%
Freehills Number of partners promoted: 6 Total number of partners July 1, 2011: 197 Total number of partners July 1, 2010: 204 Change: -3%
appears to be well on its way, growing by 21 partners in the last 12 months. This fits the familiar industry narrative of the “big six” slimming down while an increasingly opportunistic chasing pack is in growth mode. However, there are always exceptions to the rule. Blake Dawson and Minter Ellison have achieved modest partnership growth in the past two years. Minter Ellison, however, has an unusual federation-style partnership which perhaps means that the firm is under less pressure to made wholesale changes. The overall trend is undoubtedly one of slimming down of partnership size – but with plenty of variation between firms. The media have an unfortunate habit of declaring, too early, the existence of a permanent and irreversible trend. History, however, is often cyclical and one should be cautious in inferring that shrinking partnerships are a long term or even conscious strategy. A Freehills spokesperson told ALB that the firm had no strategy of reducing partnership size and that the fluctuation in numbers was consistent with the normal ebb and flow of the practice. “If you go back further over the last decade, there are years when Freehills had many more and many fewer partners,” the spokesperson said.
Henry Davis York Number of partners promoted: 6 Total number of partners July 1, 2011: 57 Total number of partners July 1, 2010: 52 Change: +10%
Minter Ellison Total number of partners July 1, 2011: 296 Total number of partners July 1, 2010: 289 Change: +2.4%
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NEWS | analysis >>
Analysis >>
Clayton Utz
Shae McCartney
workplace relations
Brisbane
Mary Pringle
real estate
Perth
Fran Rush
banking & finance
Sydney
DibbsBarker
Gary Koning
Banking & finance
Sydney
Freehills
Patrick Gay
competition & market regulation
Sydney
Gilbert + Tobin Ricky Casali, Minter Ellison
HDY
David Hugo
projects
Perth
Liz Macknay
litigation
Perth
Nicholas Ogilvie
workplace relations
Melbourne
Joel Rennie
banking & finance
Sydney
Adam Strauss
corporate
Sydney
Rachael Bassil
corporate
Sydney
Andrew Crook
corporate
Sydney
Andrew Floro
litigation
Sydney
Tim O’Leary
litigation
Perth
Craig Ensor
banking, restructuring & insolvency
Sydney
Tom Hollo
commercial disputes
Sydney
Justin Madden
property environment & projects
Sydney
Peter Mulligan
corporate
Sydney
Scarlet Reid
workplace relations
Sydney
Claudine Salameh
banking, restructuring & insolvency
Sydney
HopgoodGanim
Michelle Eastwell
corporate
Brisbane
Sarah Persijn
planning, development and environment
Brisbane
Lander & Rogers
Michael Kavanagh
insurance law & litigation
Melbourne
Radhika Mendis
insurance law & litigation
Melbourne
Claudine Salameh, HDY
Maddocks
Minter Ellison
Antra Hood, Minter Ellison
Moray & Agnew
Watson Mangioni Lawyers
Adam Strauss, Freehills
12
Wotton + Kearney
Daniel Proietto
workplace relations & safety
Melbourne
Lillian Rizkalla
workcover
Melbourne
Jeff Goodall
corporate
Sydney
Marelda Hibberd
corporate
Melbourne
Andrew McNee
corporate
Sydney
Chong Ming Goh
corporate
Melbourne
Lindy Richardson
ESP
Melbourne
Jade Rowarth
corporate
Melbourne
Angela Wood
taxation
Melbourne
Rebecca Bedford
dispute resolution
Melbourne
Ricky Casali
corporate
Sydney
Kylie Diwell
corporate
Melbourne
Antra Hood
real estate
Brisbane
Kymberley Lawrence
dispute resolution
Adelaide
Jakob Paartalu
real estate
Sydney
Joseph Pace
corporate
Melbourne Melbourne
Lisa Ridd
dispute resolution
Graeme Slattery
dispute resolution
Perth
Andrew Cairns
workplace / insurance
Newcastle
Scott Cowell
insurance
Brisbane
Wendy Meredith
corporate
Newcastle
Chris Clarke
corporate
Sydney
Paul Spezza
public liability
Sydney
Charles Thornley
Public liability/property
Sydney Australasian Legal Business ISSUE 9.07
NEWS | analysis >>
No grease for oil and gas
Last month, ALB warned that the new UK Bribery Act will set a new benchmark for Australasian firms operating offshore. But are oil and gas companies particularly vulnerable?
J
ust like its US counterpart, the Foreign Corrupt Practices Act (FCPA), the UK Bribery Act has exterritorial effect. But extraterritoriality is where the similarities between the Bribery Act and the FCPA end. The Bribery Act introduces a new strict liability offence for commercial organizations: the failure to prevent bribery and corruption by an ‘associated person’ - anyone providing services for that company including employees, subsidiaries and agents - which is committed for or on behalf of the company A recent Ernst & Young study found that of all the sectors that will come under scrutiny by the UK Serious Fraud Office (SFO), the oil & gas industry would be the hardest
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hit. The study, which was based on a review of 118 FCPA cases involving 242 companies and 167 prosecutions since it came into effect in 1977, notes that 18% of all prosecutions during this period concerned oil and gas companies. The study’s findings are far from conclusive as there is still very little information on what the enforcement strategy of the SFO is likely to look like in practice. However, the FCPA data does provide a useful template for how the enforcement of the Bribery Act may play out in the UK and worldwide. Chris Greiveson, a Singapore-based partner with Wikborg Rein, agrees that the oil and gas sector is one of the most at risk under the Bribery
Continued on page 15 13
NEWS | analysis >>
Salary to equity: Holding Redlich partners upgraded
H
olding Redlich has implemented a plan to upgrade salaried partners to equity partnership, managing partner Chris Lovell has revealed to ALB. “When we looked at all the real high performance firms, it was pretty clear that a lot of those firms – not all, but virtually all – were fully equitised,” said Lovell. “We thought that if everybody was in the same position and their fortunes rose and fell with the firm, then it would encourage people to be more proprietorial – realise the importance of quality work, of debtors and collections and so on.” Previously, the Holding Redlich partnership was only 50% equitised but the firm now boasts an 80% equity partnership. The remaining 20% of the partnership is comprised of partners who have not opted to take equity and new internally promoted partners, who will need to complete two years as partners to qualify for equity. The partnership agreed in principle to this move 18 months ago and had been waiting for an appropriate time since then for implementation. “It costs money and we had to wait for a time at which we thought the firm could bear the cost,” said Lovell. “We’re pretty convinced this year will allow us to do that. We’ve had a very good last six
months.” Holding Redlich recorded 10% revenue growth for FY2011. Interestingly, the plan was approved unanimously by the existing partnership. “We all agreed this was a desirable to do,” said Lovell. “It was unanimous. No one’s bailed, no one has left because they didn’t like the idea.” The firm calculates that 2012 profit per equity partner will be higher than that in 2011 because of revenue growth, although the current equity partners will have to bear some of the cost of the equitisation. “The existing equity partners will contribute a bit to the cost of bringing in the new partners – just to get the [new equity partners] to the same level of take home income required us to actually pay them more money and of course we wanted them to do better than that,” said Lovell. These costs include tax costs and underwriting bank loans so that new partners could make their capital contribution upon entering the partnership. The other side of the equation is that the firm has also successfully reduced its operating costs. “It is amazing when you grow, you get costs creeping in that you don’t really need,” said Lovell. “About two years we looked at cost and got our costs down quite significantly without making any real visible difference.”
“It was unanimous. No one’s bailed, no one has left because they didn’t like the idea.” Chris Lovel, Holding Redlich Chris Lovell
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Australasian Legal Business ISSUE 9.07
NEWS | analysis >>
Continued … Act given that ‘grease’ payments are necessary to oil the wheels of business in many developing countries. “Oil and gas companies invest heavily in ensuring that they are not party to any bribery… [however] in developing countries where much of the growth in oil and gas production is occurring, small grease payments paid by agents are a way of life to get things done by public officials which, although they are bound to do, would effectively never be done but for these payments,” he said. And even though an absolute defence to the offence of failure to prevent persons associated with a company from committing bribery on their behalf lies with ensuring adequate procedures to prevent bribery are in place, Greiveson believes that that the overall cost to the oil and gas industry could be huge. “Oil and gas companies may take on the risk of prosecution by the authorities under bribery laws and price this risk into contracts, ultimately increasing the cost of production of oil and gas,” he said. “Alternatively, companies may cease activity and leave the country entirely, leaving other companies bound by less stringent regulatory requirements to move in and replace them.” As so often has been the case in the past, UK legislation will have ramifications for Australian corporates. One does not need to look too far to find examples of Australian resources companies with a UK presence, but as Minter Ellison partner Sam MacGibbon www.legalbusinessonline.com
points out, the implications go beyond the obvious targets such as dual listed Rio Tinto and BHP. “My broad understanding is that certain of the new offences that will be created under the Act can apply to companies incorporated or headquartered in Australia - or other jurisdictions outside the UK - in relation to operations that have no connection with the UK,” says MacGibbon. “In particular, any company with a presence in the UK – for example, an Australian company with a branch office in London - [is capable of being liable for] an offence under the Act.” Australian miners are particularly well known for their activities in developing countries such as Indonesia and West Africa. Allens Arthur Robinson partner Matthew Skinner says that the Act will be particularly relevant to companies operating in jurisdictions where the perceived level of corruption is high. “In particular, the new offence of 'failing to prevent bribery' will catch bribes paid by local agents anywhere in the world, even if the company did not know or agree to the payment,” he said. “The only defence to this is for companies to have 'adequate procedures' in place to prevent this happening and accordingly, Australian oil and gas companies should ensure that their anti-bribery procedures meet the guidelines issued by the UK Ministry of Justice.” ALB 15
Q A FEATURE | Q&A >>
&
In this new segment, ALB asks leading legal professionals to provide a short commentary on a selected topic each month.
This month’s question: Which of the following three factors are more relevant in achieving profit growth and why? A. Increased revenue B. Cost cutting C. Efficiency improvements 16
Andrew Price Chief operating officer, Wotton + Kearney Increasing revenue is a more sustainable means by which to grow profits compared to cost cutting and improving efficiencies. But it must be properly managed, and it requires a focus on fee levels and leverage. Not all growth is profitable. In fact, poorly managed growth is often unprofitable. It is quite incorrect for partners to be measured primarily on increase in practice size. Without an understanding of the profitability of the practice, the growth is of little consequence. When revenue increases, if the blended billing rate is not increased, or if leverage is not improved, the growth in revenue will normally not equate to a growth in profit per equity principal. The work undertaken will require a proportionate amount of expenditure to undertake it. There will be more pie – but more to share it. Increasing fee levels is a major consideration. Why? Fee levels can increase without any increase in expenses. Therefore, the extra revenue obtained through the increased fees is passed directly into firm profits. Managing leverage correctly means ensuring the right level of skill is matched to the complexity of the work is critical. Firms must avoid, for example, highly paid specialist lawyers undertaking less complex procedural work that could be undertaken by less qualified and therefore less expensive lawyers. Growing profits can more easily be achieved through increasing revenue where there is a focus on fee levels and leverage. The extent to which increasing revenue, cost cutting or improving efficiencies can deliver profit growth is largely dependent on the individual firm characteristics. Andrew Price is responsible for the management of Wotton + Kearney’s practice which includes the functions of business development, IT, finance and HR. He has experience as a lawyer and business manager within the legal industry and HR sectors of Sydney and Melbourne.
Australasian Legal Business ISSUE 9.07
FEATURE | Q&A >>
Scott Kennedy
Chris Ward
Managing partner, Curwoods Lawyers
Managing partner, Cooper Grace Ward Lawyers
Profit is the real cost of staying in business. Increasing revenue, cost cutting and improving efficiency are all means to improve profitability. These are “management” functions. To achieve profit growth requires a strategic plan and leadership. Without a strategic plan, pulling the levers of cost cutting and improved efficiency may increase profitability in the short term, but damage the sustainability of the firm. As a partnership cannot be valued and sold like a business, sustainability is vital for the transfer of equity and therefore the focus must be on ensuring the profit exceeds the capital cost. Under the firm’s leadership the partnership develops a strategic plan considering the “what ifs”, external and internal factors, new and different opportunities and the acceptable level of risk. This includes looking at ways to improve efficiency, managing (as opposed to cutting) costs. Increased revenue will be a product of the strategic plan, but not its sole objective. An objective only to increase revenue is unlikely to grow profit and more likely to reduce both profit and profitability. Lawyers sell knowledge. The value clients put on that knowledge is dependent on the people in the firm and the service they provide. A strategic plan cannot be achieved without engaging the firm’s people as a team. If the team isn’t happy the clients won’t be happy and there will certainly be no profit growth. Scott Kennedy is the managing partner of Curwoods Lawyers. During his 18 year legal career he has developed expertise in a range of complementary dispute related areas including public and products liability, ISR, construction and professional indemnity. His primary focus in recent years has been in the construction sector with an emphasis on contracting, dispute resolution and risk management. He also leads the firm’s construction and dispute resolution teams.
All three factors are relevant, however increased revenue and efficiency improvements are the most relevant. At the end of the day you can only save your way to success for so long. Increased revenue is a key factor and, if achieved, reflects in my view a firm’s strategic efforts in the whole business development and marketing sector. We know that the legal marketplace is relatively mature which means the ability to increase revenue will arise from a firm’s business development and marketing focus in combination with their ability to differentiate themselves in the marketplace. Cooper Grace Ward has a strategy around business development, marketing and differentiating ourselves in the market place, and we believe this will continue to drive our increase in revenue. In line with this however it is essential to continue to focus on efficiencies, particularly through the area of technology. It may be stating the obvious, but the ability to embrace technological change in a way that brings about efficiency improvements will allow further differentiation in the mature Australian legal marketplace. Clients see a direct benefit from efficient workflow practices, particularly when they can adopt the streamlined processes of their service providers to improve their own workflow processes. Chris Ward has practised as a litigator for nearly all of his 34 years of practice, focusing principally on the areas of insurance law, commercial litigation, family law and de facto law. Chris took over the role as managing partner in October 2005 as the firm celebrated the 25th anniversary of its formation. He has led the firm since that time through to its 30th anniversary at the end of 2010.
Dragon in the den. We’re delighted to welcome aboard new Partner Brendan Connell. Expert in Chinese business. Capital raising and IPO specialist. Near 30 years experience. [And no lack of fire.]
L 14, 100 King William St Adelaide SA 5000 p: +61 8 8124 1811 www.foxtucker.com.au
COMMERCIAL | TAXATION | INSURANCE www.legalbusinessonline.com
17
NEWS >>
news in brief >> uk report BLG and Clyde to break into the top 10 with merger talks According to The Lawyer Barlow Lyde & Gilbert (BLG) and Clyde & Co have begun merger talks. Both believe that their combined fire power could be enough to secure a spot as one of the UK’s top 10 law firms. Clyde & Co senior partner Michael Payton and chief executive Peter Hesson and BLG chief executive David Jabbari are reportedly in favour of a merger. Hesson said that a tie-up deserves ‘serious consideration’ given the impact it would have on the insurance market in an interview. Jabbari added the the idea obviously has ‘serious potential’. Uni of Westminster, College of Law to lose teaching staff 12 out of 60 academic staff with the University of Westminster law faculty will lose their jobs following a round of redundancy talks announced
on June 24. The redundancies will be part of a university-wide programme, involving around 120-130 staff in total. Consultations are expected to conclude during July. The cuts will impact the university’s Legal Practice Course (LPC) in particular, which is said to be running at 50% capacity in 2011 as only 60 out of 120 places have been filled. Trainee vacancies at top UK law firms fall 10% The number of vacancies for trainee solicitors at the UK’s top law firms has dropped by 10% compared to the start of the global financial crisis, according to the latest research conducted by Lawyer2B. SNR Denton confirmed it has been the most brutal, announcing on June 20 that it is to halve the number of training places on offer over a four year period. Allen & Overy has cut 12% from its program, the lowest performed of the magic circle firms.
ROUNDUP • Clifford Chance has threatened to sue the four-partner funds team which left the firm for Weil Gotshal & Manges. Ed Gander, Nick Benson, Nigel Clark and tax partner Jonathan Kandel all resigned on June 7, leaving Clifford Chance’s London office with one funds partner, Nigel Hatfield • Wragge & Co has confirmed that it is looking for a suitable merger partner in London, preferably with a top 50 UK law firm. The tie-up would bolster Wragge & Co’s City offering, and specific areas of interest are listed as financial services, corporate, pensions, projects, employment and technology • Law firms across the UK are receiving work from Ireland’s National Asset management Agency. The Irish Independent reported that close to 50 law firms have been engaged either over enforcement of developers or borrower’s business plans. The NAMA has two legal panels, listing 106 firms in total • Jones Day has added to its London base after poaching a three partner US securities team from Ashurst. Daniel Bushner, Eric Stuart and Marie Elena Angulo. Bushner and Angulo commenced work at Jones Day during the last week of May, Stuart waited until the final week of June to conclude several client matters • Freshfields Bruckhaus Deringer has lost two of its German real estate partners to domestic firm Noerr, effectively depriving the magic circle firm of all of its German property partners. Alexander Goepfert and Christoph Brenzinger are expected to depart for Noerr this month, where Goepfert will lead Noerr’s real estate investment group • Clifford Chance, Eversheds, Freshfields Bruckhaus Deringer and Hogan Lovells have all won roles advising the UK’s largest care home group, Southern Cross Healthcare on a rescue package to prevent the group from going into administration. Freshfields is advising Capita Asset Services • Linklaters’ global head of antitrust, Gerwin Van Gerven, is stepping down after eight years in the role. Van Gerven will be replaced by Michael Cutting, head of the firm’s London competition practice from 2004-2007, will split his time between London and Brussels. Van Gerven will return to client-facing work with the firm • Berwin Leighton Paisner (BLP) has hired former Linklaters lawyer Oleg Khokhlov as partner in its Moscow office. Khokhlov will join the banking & finance team at Goltsblat BLP. He is the third English-qualified partner to be based in BLP’s Russian office
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Linklaters raids Australia, NZ for talent Linklaters has hired 21 associates from Australia and New Zealand, The Lawyer has reported. The Magic Circle firm was said to have picked up 16 Australians and five New Zealanders following a recruitment drive here in March. Most recruits were in the banking & finance and corporate area. Source firms included Allens Arthur Robinson, Blake Dawson, Freehills , Mallesons Stephen Jaques and Russell McVeagh in NZ. Ogier launches in Shanghai; hires Rio Tinto in-house lawyer Ogier has become the first offshore law firm with an office in Mainland China after launching in Shanghai earlier this month. The firm’s group chief executive officer, Nick Kershaw, described the establishment of the office in Shanghai as “critically important” and will allow the firm to offer advice on the laws of BVI, Cayman, Guernsey and Jersey directly to clients based in the mainland. Kershaw says that the firm’s newest office will work closely with existing resources in Hong Kong-- an office that Kershaw says will double in size over the next three years. The firm’s Shanghai office will be led by Kristy Calvert who was formerly a legal director (China/ Asia) for Anglo-Australian mining giant Rio Tinto. Law Council launches new Australian Solicitors’ Conduct Rules The Law Council of Australia has released the Australian Solicitors’ Conduct Rules after two years of development. The new rules provide lawyers across the country with a set of single, uniform rules. The adoption of the rules by each state and territory will ensure all solicitors will be bound by a common set of professional obligations and ethical principles when dealing with their clients, the courts, their fellow legal practitioners, regulators and other persons. The rules were first released for consultation in early 2010 and have since been through a series of review and consultation processes. Law Societies will now be working to have the rules adopted in each state and territory according to the processes and approvals set out in their respective local legal profession regulatory arrangements.
Australasian Legal Business ISSUE 9.07
NEWS >>
INDUSTRY >>
Breakaway Piper Alderman partners establish new workers’ comp firm
F
our partners from Piper Alderman will leave the firm to open a boutique South Australian law firm specialising in advice for the workers’ compensation sector. Departing partners Tracey Kerrigan, John Hiatt, Mark Keam and Neville John will operate the as yet unnamed firm and will maintain a ‘best friends’ relationship with Piper Alderman for the purpose of referrals. Piper Alderman managing partner Tony Phelps said that the move reflects the firm’s overall strategy of focusing on the core strengths of the national practice. Referring to the loss of the four partners, Phelps called the change ‘bitter sweet’ but said Australian clients are looking for specialised legal services, which the new firm will provide. “By focusing on a unique area of law, the new firm can offer efficient, cost-effective advice and representation,” he said. The new firm will benefit from technical support, research and similar services out of Piper Alderman while it establishes itself in the South Australian legal market. ALB
EQUITY >>
IPO market jitters hit new high amid uncertainty T
he IPO market continues to lag across the Australasia region, hitting an all-time high in the value of IPO withdrawals. According to a recent Thomson Reuters report, the value of IPOs withdrawn or postponed by companies in the Australasia region (excluding Japan) since the start of the year is US$57.8bn, representing a 19% increase on last year’s amount. “I think the combination of long lead times and the volatility across the markets means companies are taking more certain roads,” said Blake Dawson M&A partner
Murray Wheater. “An IPO generally involves a lot of preparation, and a lot of money. The shape of the market when you begin the process can be very different to when the process is complete 18 months on,” he added. With the A$500m cancelled float of underground mining contractor Barminco still fresh in the collective market memory, Wheater says trade sales may prove the way to go. “With an IPO you turn up at the end of the process and buyers either say yes or no. With a trade sale it’s an ongoing process and you can guage the level of interest,” he said. ALB
►► Top 5 IPOs withdrawn (by value) in the region since 2000 Issuer
origin
Exchange
Date announced
Date postponed/ cancelled
Proceeds (US$m)
Resource Development Int
Australia
Australia/Hong Kong
03/07/08
02/04/09
4,445
Swire Properties
Hong Kong
Hong Kong
11/02/10
06/05/10
2,562.7
Resourcehouse
Australia
Australia
28/02/11
04/06/11
2,353.2
DLF
India
-
08/04/06
02/09/06
2,000
PetroChina Co
China
Shanghai
07/04/01
03/12/03
1,993.2
Another rung bites the dust. Congratulations to our three newest Senior Associates, Despina, John and Tim. All bright talents. All hardworkers. All promoted from within. [The climb continues.]
L 14, 100 King William St Adelaide SA 5000 p: +61 8 8124 1811 www.foxtucker.com.au
| TAXATION | INSURANCE www.legalbusinessonline.com COMMERCIAL
Despina Adamopoulos Commercial Disputes & Insolvency
John Chouris Insurance
Tim Graham Corporate & Commercial
19
NEWS >>
INDUSTRY >>
Graham Goerke, Jackson McDonald
Perth: Jackson McDonald, McKenzie Moncrieff to merge
W
est Australian law firms Jackson McDonald and McKenzie Moncrieff are set to merge later this year. In a joint statement, Jackson McDonald’s chairman of partners Graham Goerke and McKenzie Moncrieff executive director Rob McKenzie have announced that the two firms will merge and operate under the Jackson McDonald banner from 1 September 2011. The firms had reportedly been in discussions for six months and on completion of the merger will boast a
32-partner firm with more than 120 professional staff. McKenzie said his firm had been approached by several international and national firms before deciding to proceed with Jackson McDonald. “We have experienced spectacular growth in construction, property, tax and in dispute resolution, with solid gains in other key areas,” said Goerke. “They [McKenzie Moncrieff ] will bring valuable additional capacity to Jackson McDonald through and beyond the current mining and energy boom.”
“For us, the next 10 years is about growing with our clients, responding to their growth challenges across every legal dimension and then celebrating our centenary in 2022 as the stand out legal firm in this state,” added Goerke. For McKenzie Moncrieff, the merger provides the capabilities to operate in a full-service environment. “In particular, joining Jackson McDonald will expand our capacity to deliver in areas such as workplace relations, IP and taxation. This also applies to litigation where we are experiencing strong growth,” said McKenzie. ALB
M&A >>
Inbound M&A continues to surge ahead of outbound investment M
&A activity involving Australian companies has hit US$86.1bn in the first half of 2011, according to the latest Thomson Reuters M&A review. The equivalent level of activity in 2007 was US$93.8bn, which suggests that M&A activity is approaching preGFC levels. However, lawyers report that the number of deals and sentiment in the market are a far cry from 2007. “Even though the overall value is closer, I don’t think there is the same feeling in the market,” said Clayton Utz M&A partner Karen Evans-Cullen. “In 2007 deals happened faster and more frequently.” Of the overall M&A cross border activity in the first half of 2011, outbound deals accounted for only 25%, while inbound accounted for 75%. 20
“We have been surprised by the strong inbound investment activity, given that the Australian dollar has appreciated in recent years,” said Evans-Cullen. “But, we think this [activity] has continued because of the strong and
robust economy, which gives confidence to overseas investors.” A majority of inbound deals focused on the materials sector, which accounted for 262 of the 801 transactions in the first half of the year. ALB
►► Significant M&A deals first half 2011 Type
Target
Acquirer
Firms
Value US$bn
Inbound
Equinox Minerals
Barrick Canada
Clayton Utz, Osler Hoskin & Harcourt
7,169.5
Inbound
Abbot Point Coal Terminal
Mundra Port & Special Economic Zone
Allen & Overy, Allens Arthur Robinson, Blake Dawson
1,950.8
Inbound
Australia Pacific LNG
China Petrochemical Corp
Blake Dawson, Clayton Utz, Herbert Smith
1,500
Outbound
Chesapeake Energy Corp
BHP Billiton
Wachtell, Lipton, Rosen & Katz, Wilmer Cutler Pickering Hale & Dorr, Morgan, Lewis & Bockius
4,750
Outbound
Treasury Wine Estates
Shareholders
Corrs Chambers Westgarth
2,505.7
Australasian Legal Business ISSUE 9.07
NEWS >>
INDUSTRY >>
Kemp Strang opts for COO model S
ydney-based Kemp Strang has become the latest firm to adopt a COO model. The firm will continue to have a managing partner, but will recruit a COO to manage internal functions such as HR, finance, IT and marketing. Partner Steven Godding told ALB that the firm believed the COO model was the most efficient way to manage resources. “The benefits that we see are that it will not require one of the fee producing partners to be devoted in whole to management,” he said. “In the past it’s taken a significant amount of time for the managing partner to manage the [internal functions] of the firm. We thought it was a better use of resources to essentially delegate that to a professional manager.” Godding, who was previously the firm’s managing partner, will vacate the role on 1 July and be replaced by litigator Michael Joseph. Godding, who will be returning to full time practice, previously had a reduced budget during his tenure as managing partner. By contrast, Joseph will be practicing full time. “Michael doesn’t have the day to day management obligations, so it’s not as great a burden as it was previously,” Godding said. The firm’s CFO Paul Best will take on the role of acting COO during the search for a permanent appointment. Kemp Strang chairman Rob Wannan continues in that role. ALB
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us report Non-partner career track making a comeback There is a distinctive trend emerging among US law firms. A number of their lawyers are choosing positions which don’t necessarily put them on the fast track to partnership, but do allow them to achieve work-life balance and specialise further. The role of ‘staff attorney’ has become a topic for discussion and law firms appear to be divided on the overall impact the trend will have on the profession. Staff attorney positions typically involve an associate-level attorney focusing on one specific form of work for the time they are employed by the firm. Class action discrimination claims more difficult following Wal Mart ruling The US Supreme Court has blocked a law suit by five female employees against retail giant Wal Mart, delivering a blow to future class action claims against large US corporates. The justices of the Supreme Court all agreed that the case could not proceed as a class action in its current form, overturning a decision of the 9th U.S. Circuit Court of Appeals in San Francisco. The justices were split 5-4 along ideological
grounds. Had it gone ahead, the case could have involved over one and a half million female Wal Mart employees, amounting to billions of dollars in damages. Start dates for law grads still being put on hold Despite reports that the worst of the recession may be coming to an end for large US law firms, there are still firms deferring their incoming grads. The bizarre situation has meant that a number of those graduating with the class of 2011 will commence before those from the class of 2010, depending on where they end up. Proskauer Rose is one firm where the class of 2011 will be commence as normal, in November, while the class of 2010 graduates have been informed they are still being deferred until either January or April 2012. One spokesperson for the firm explained the decision would only affect a small number of 2010 graduates, and that “the 2010 associates who start later than November will continue to receive the monthly stipend and most will continue to work at the secondments we previously arranged for them.” Other firms have still chosen to defer the class of 2011, including Foley & Lardner.
ROUNDUP • Canadian insurance firm Nicholl Paskell-Mede (NPM) completed a merger with UK firm Clyde & Co on June 27. The pair were rumoured to be in merger talks in March and Clyde & Co is also considering merging with one of the UK’s top 50 firms to capitalise on its insurance strength • The pay gap between top UK and US firms has widened recently as US firms maintain far broader salary bands than their UK counterparts. US firms pay first year associates between £92,000 and £109,000, second-years £102,000-£112,000 and third-years £114,000-£123,000 while the magic circle firms pay £67,000 and £70,000, £72,000 and £76,000 for two years’ PQE and £82,000-£86,000 for third-years • Kirkland Ellis has doubled the number of trainees in its London office, as the first intake of graduates received Newly Qualified (NQ) positions with the firm. The Chicago firm will see six trainees qualify in September 2011, and hopes to increase its intake to 10-12 graduates • To coincide with the increase in the number of trainees accepted at Kirkland, fellow US firms Ropes & Gray and Sullivan & Cromwell have also launched new schemes out of their London offices • Baker & McKenzie is continuing its Canadian hiring spree following the hire of former Cassels Brock & Blackwell partner Howard Burshtein in the firm’s Toronto office. Burshtein was previously legal counsel with the British Columbia Securities Commission • Current external legal advisors Dewey & LeBoeuf, SNR Denton and Vinson & Elkins will be watching with interest as Norweigan firm Statoil has announced a revamp of its in-house legal team. Statoil appointed SEB Enskilda CEO Hans Henrik Klouman as head of legal, effective August 1 • Weil Gotshal & Manges co-chair of litigation, Matthew Powers is to leave the firm after 18 years to start a new plaintiff litigation firm. While reports state that the split was friendly, two other patent litigators, including a co-chair of patent litigation, have also left Weil to join Paul Weiss
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NEWS >>
appointments
IR and employment law, having previously worked for the Queensland Mining Council in a senior IR related role. HWL Ebsworth
►► lateral partner hires Name
Practice area
Coming from
Going to
Jay Andrews
commercial property
Freehills
Corrs Chambers Westgarth
Natalie Breen
real estate
Challenger
Norton Rose Australia
Joanna Glynn
workplace relations
Freehills
Corrs Chambers Westgarth
John Homburg
medical/ insurance
Fountain+Bönig
Gilchrist Connell
Michael Linehan
corporate
Holding Redlich
Clayton Utz
Robert Lilburne
disputes and resolution
Mallesons Stephen Jaques
Blake Dawson
Susan O’Rourke
Energy and resources
DibbsBarker
McCullough Robertson
Lachlan Paterson
property
HWL Ebsworth
Mills Oakley
Ron Smooker
commercial
Clayton Utz
Maddocks
Leigh Warnick
corporate
Blake Dawson
Lavan Legal
Freehills
Corrs
Corrs lures Freehills property partner In addition to announcing a record number of partner promotions, Corrs Chambers Westgarth has also made a new lateral partner appointment. The latest recruit is Jay Andrews, who Jay Andrews joins Corrs from Freehills, where he was a commercial property partner for 18 years. Andrews advises on all aspects of commercial property law including property development,
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Freehills
Mills Oakley secures HWL Ebsworth talent Mills Oakley has bolstered its national property practice with former HWL Ebsworth property partner Lachlan Paterson. Sydney-based Paterson has been involved in numerous major property transactions in recent years and represents clients in joint ventures, acquisitions, disposals, leasing and development. This appointment takes the total number of lateral partner hires at Mills Oakley to three so far this year. Holding Redlich
major transactions in the hotel and leisure sector, management agreements, complex title issues and the negotiation of hotel development documentation. Andrews will be located in the Sydney office. Corrs
Freehills workplace expert moves to Corrs Freehills workplace relations expert Joanna Glynn is moving to Corrs as partner in the firm’s Brisbane practice. This is not the first significant workplace relations appointment for Corrs this year – the firm also recruited John Tuck from DLA Piper in February. Glynn brings with her 17 years experience in both
Mills Oakley
Clayton Utz
Holding Redlich corporate partner returns to Clayton Utz Clayton Utz has recruited former Holding Redlich partner Michael Linehan in Melbourne. Having started his legal career as a graduate in the Melbourne office of Clayton Utz in 1995, Linehan reached senior associate level at the firm before leaving in 2004 for Holding Redlich, where he took up a partner position. Linehan will be joined at Clayton Utz by lawyers Quentin Reidy and Angela Manolakos, also from Holding Redlich. Melbourne managing partner Glen Bartlett said the addition of Linehan and his team would enhance the ability of Clayton Utz’s Melbourne corporate practice to work on the major national transactions. “Bringing Michael and his team on board is also consistent with our plans to significantly expand the capability of our Melbourne office,” said Bartlett.
Australasian Legal Business ISSUE 9.07
NEWS >>
Blake Dawson
Leigh Warnick
Lavan Legal
Ex-Blake Dawson corporate partner bolsters Lavan Legal’s growing team Former Blake Dawson corporate lawyer Leigh Warnick has commenced as a partner at growing West Australian firm Lavan Legal. Warnick acted as lead external legal adviser to BHP Billiton on its planned merger and iron ore joint venture with Rio Tinto and will focus on the expansion of the firm’s corporate and resources practices.
Mallesons
Blake Dawson
Mallesons Perth partner joins Blakes Perth-based disputes resolution lawyer Robert Lilburne has left the Mallesons Stephen Jaques partnership to join Blake Dawson. Lilburne specialises in labour law, advising on industrial and employment law strategies. He also acted for BHP Billiton Iron Ore in relation to the introduction of individual agreements .
>>
Clayton Utz
Maddocks
Maddocks secures Clutz partner Mid-tier law firm Maddocks has added another lateral partner. Former Clayton Utz commercial partner Ron Smooker has joined the firm, becoming the third top tier partner to move across this year to Maddocks. Blake Dawson property partners Lisa Chung and Bronwyn Badcock announced in March that they would be joining Maddocks. Victorian Government Solicitor
Maurice Blackburn
Maurice Blackburn welcomes back former managing partner Maurice Blackburn has welcomed back former Victorian Government Solicitor, John Cain, to the firm nine years after he departed to join the Law Institute of Victoria. Cain was previously managing partner of Maurice Blackburn from 1991 until 2002. Maurice Blackburn CEO Greg Tucker said Cain was joining the firm to take on the new role of national special projects manager. Fountain+bönig
Gilchrist Connell
Gilchrist Connell ads new partner in Adelaide Insurance law firm Gilchrist Connell has appointed John Homburg as a principal. Homburg rejoins his former firm from Fountain+Bönig, a boutique corporate firm, co-founded by South Australian Law Society president Ralph Bönig. Homburg’s expertise lies in medical insurance law. He has extensive experience in defending complex medical malpractice claims, as well as specialising in insurance and administrative law. Homberg is also a current national board member of the Australian Insurance Law Association. Clayton Utz
Maddocks
Norton Rose goes in-house for real estate expert Norton Rose Australia has appointed in-house real estate expert Natalie Breen to the role of partner. Breen will commence her role on secondment to the firm’s Singapore office. She joins Norton Rose from Challenger, and has held various legal roles for Stockland , Mallesons Stephen Jaques and Minter Ellison. Breen is the thirteenth lateral hire for Norton Rose Australia since its merger announcement. www.legalbusinessonline.com
Amelia Jalleh Legal Manager – Australia/PNG
Talisman Australasia Pty Ltd
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In your opinion, why have in-house lawyers become an increasingly indispensable part of an organisation?
In-house legal teams are definitely at the coal-face – long gone are the days where in-house lawyers could act as “post boxes”. An important part of my role – and that of any senior in-house counsel – is to understand and be familiar with every material aspect of our business. Management and boards look to their in-house legal team for advice on, and management of, the multitude of operational, HSE, HR, business development and company secretarial issues that companies face every day. It is not practical, efficient or cost-effective for much of that work to be out-sourced to external firms – particularly since the Global Financial Crisis.
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?
The many roles of a senior in-house lawyer nowadays definitely pose risks under Australian law. One critical issue is that of establishing and maintaining legal professional privilege. While in Australia it remains the case that an in-house lawyer is entitled to claim privilege on behalf of their employer as client, this has the potential to be eroded as the role potentially involves legal, commercial and managerial responsibilities, and raises questions as to the lawyer’s independence. A number of recent decisions – including that of the Federal Court in Telstra Corporation Limited v Minister for Communications, Information Technology and the Arts (No 2) – confirm the considerable onus being placed on parties seeking to claim legal professional privilege in respect of documents or communications involving in-house lawyers. Another fundamental issue is that of conflicts of interests. The most extreme example would be where an employer asks its in-house lawyer to do something which the company may view as commercially advantageous, but which violates the law. The crux of the matter is that a lawyer’s professional responsibilities as an employee will not excuse a breach of legal professional standards.
3 John Homburg
In-house Q&A
In your opinion, what do you consider to be the main challenges you and your team will face in 201?
Although Talisman’s PNG/Australia business unit was officially established only a year ago, it is part of a multi-national oil and gas explorer and producer with an enterprise value of more than $25 billion and operations in Canada, the United States of America, Indonesia, Malaysia, Vietnam, Australia, Papua New Guinea, Algeria, Colombia, Peru, and the Kurdistan region of northern Iraq. Accordingly, the PNG/Australia legal team has had to put in structures, policies and procedures that in other organisations may take years to develop, while at the same time ensuring that we work in accordance with the structures, policies and procedures that apply to Talisman globally. And, of course, at the same time as establishing this, we are supporting the operations and business development initiatives of a rapidly expanding and developing business in PNG and Australia. Prioritising and executing these multiple roles and responsibilities provides a considerable challenge for our team – but it is never boring!
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Photography by Thilo Pulch
profile | managing partner >>
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Australasian Legal Business ISSUE 9.07
profile | managing partner >>
ALB 2011 MANAGING PARTNER SERIES
Nick Nichola, Middletons
Cherished ties Middletons national managing partner Nick Nichola speaks with ALB’s Renu Prasad about Perth, partnership and the disappearing office tie.
A
t the Middletons Sydney office, the ties are on standby - just in case Nick Nichola decides to drop by for a surprise visit. “In Melbourne most men would be wearing their ties – in Sydney, I think they put their ties on when I come around!” says Nichola. “These are all generalisations of course, but I noticed that ties are less common in Sydney – Perth’s a bit like that too.” Melbourne, Sydney and Perth represent the three points of the Middletons compass. Like many others, this firm’s expansion journey is still a work in progress. In December 2008, Middletons entered the Perth market via a three-way merger with local firms Salter Power and Franklyn Legal. The arrangement was to prove short-lived for the three Franklyn Legal partners, who defected to Corrs a little over a year later because they felt the scale of the Corrs operation was more suitable for them. “I think the decision they came to was that what they planned for themselves and their clients was better suited to an entity that was considerably larger than what we were and still are,” says Nichola. “It was a question of critical mass.” Still, Middletons appears to have recovered well from the setback 2010 calendar year revenues from the Perth office were 235% ahead of the
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2009 figures. Middletons has seven partners in Perth at present and would like to expand to 15-20. The use of a merger to enter the Perth market has since become a well-trodden path for firms such as Gilbert + Tobin, Allen & Overy and Clifford Chance. The conventional wisdom is that the Perth market is fiercely parochial and would not accept a newcomer without any local roots or affiliations. Nichola is cautious about this stereotype, but admits that there is an element of truth to it. “Our experience has been that Perth corporates are much more likely to want to know whether you are from the local office or from one of the interstate offices,” he says. “Anecdotally you hear lots of stories about someone being instructed and that is one of the first questions a client will ask. And what they’re really asking is not which office are you situated in, but are you a Perth person or are you a fly-in? I don’t get a sense that that occurs in Melbourne or Sydney. It doesn’t seem to be as relevant.” In addition to a desire to support the local economy, Nichola says that there are also practical reasons for this preference for Perth lawyers. “If I am a junior miner in West Perth, I want to know that my lawyer is actually on the ground here and will be available when I
“Our experience has been that Perth corporates are much more likely to want to know whether you are from the local office or from one of the interstate offices,”
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profile | managing partner >>
“My view is that the GFC, for the legal industry worldwide, has been a game changer and a permanent game changer,”
want them to be available,” he says. “You don’t want your lawyer telling you they’re about to book a flight and will be there tomorrow or in a couple of days time.” The traditional Melbourne method of expansion is what is jovially known as the Mexican method – advancing north across the border into Sydney and Brisbane. Middletons boasts a rather different geographical spread: Melbourne, Sydney and Perth. Brisbane perhaps would have been a more logical choice for the firm’s third office, a point which is conceded by Nichola. However, he explains that client demand drove the firm west. “The impetus for Perth was client driven,” he says. “Prior to Perth, if you had to pick where to expand it would logically have been Brisbane so we’d be up and down the east coast but it was because of a client need we went into Perth.” However, the firm is anxious to establish a presence in Brisbane. “Brisbane for us is very much on the agenda,” declares Nichola. However, he preferred not to comment on whether the firm was currently in any negotiations.
History
When the Perth-based partners of Franklyn Legal defected from Middletons, they may have been upholding one of the firm’s less hallowed traditions - broken partnerships and a flirtation with Corrs figure prominently in the history of the firm. In the late 80s, it was known as Westgarth Middletons, the result of a merger with a partnership which subsequently departed to join Corrs. Middletons then entered a federation with Sydney-based Moore and Bevan, an arrangement which lasted until 2001. “The Sydney part was rebadged as Acuity Legal and Melbourne went back to being just Middletons,” says Nichola. “We had to rebuild Sydney because we were suddenly left with only a couple of partners there. It took us a few years to get back to having some critical mass in Sydney.” All of this is now history, but it explains why Nichola prefers the firm not to be described simply as a Melbourne firm. “It’s not quite accurate to say we’re a Melbourne firm which grew into Sydney - we were a Melbourne-Sydney federation that split,” he says. 26
The dynamics surrounding the evolution of the modern Middletons may have seemed remarkable at the time, but Nichola says that they pale in comparison to the tectonic shifts which are occurring at the moment. “The whole market is in a state of flux,” he says. “Everyone is thinking about their position in the market and their strategy. I have never seen so much thought or discussion or activity at that level across the entire industry – I can’t ever recall it.” Nichola describes the changes wrought by the GFC as “significant, irreversible and permanent.” “My view is that the GFC, for the legal industry worldwide, has been a game changer and a permanent game changer,” he says. “This is not like the past where there is a recession that the law firms ride along with the business community and things go back to normal. There is no normal anymore.”
Partnership
As firms re-evaluate their long term strategy, it is only natural that partners should do the same on a personal level. In many cases partners are voting with their feet and moving to firms which they believe are a better fit for their career aspirations. Nichola says this is a phenomenon which would have seemed remarkable 15 or 20 years ago. “Historically, people became partners and remained at one firm, but the world has changed,” he says. “What has changed is people’s willingness and propensity to move. I would say in last two to three years this certainly seems to have accelerated.” The Middletons partnership contains a mix of salaried and equity partners and Nichola says that there are no plans to change this system. He preferred not to discuss the firm’s policies in detail, but made some general comments about the approach taken: “For us it is simply a business case scenario,” he says. “You become a partner if you meet all the criteria for partner and, like most firms, we have a detailed matrix of capabilities which should be demonstrated over a period of time. The difference between being a fixed draw partner and an equity partner is purely a business case decision - it’s not a question of attributes. Sometimes there will not be a business case for another equity partner in that particular practice group.” ALB Australasian Legal Business ISSUE 9.07
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Feature | TMT >>
NBN:
THE lAW FIRM pERSPECTIVE
►► NBN – key points
• Agreements were reached between the government, NBN Co and various telecommunications companies which will define the participation of each company in the NBN; • The largest of these was Telstra’s A$11bn deal which inter alia facilitates NBN access to Telstra infrastructure; • Lawyers says there is still plenty of work to come: getting the agreements approved by shareholders and regulators and then moving to roll-out phase.
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Australasian Legal Business ISSUE 9.07
Feature | TMT >>
6 ways the NBN will impact law firms post roll-out Both Australia and New Zealand are implementing ambitious new national broadband networks. For legal advisors, the agenda to date has been dominated by telco negotiations and roll-out issues – but how will the NBN affect law firm workflow in the longer term? Renu Prasad investigates.
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Disputes and uncertainty
When the big projects go wrong, things can get very messy – and even the most fervent optimist would concede that there is plenty that could go wrong with the mammoth NBN project. The confusion begins with Canberra - the next federal election is not until late 2013, but Opposition leader Tony Abbott has already made threats to “demolish” (his own words) the NBN. Negotiations with Telstra have already taken this uncertainty into account – the telco will be entitled to an A$500m break fee in the event of a future government attempting to change the terms of its contract. But it is impossible to anticipate every eventuality and the NBN could well develop into a moving feast for disputes lawyers on any number of fronts. Meanwhile, business will continue to need advice on their NBN-related investment. “I think at the moment the biggest issue and change in the business environment caused by the NBN is not so much what will happen when we get it, as the uncertainty it brings until we [address] unknowns such as what might happen if the Federal Opposition wins the next election,” says Truman Hoyle partner Hamish Fraser. “As a result, right now, a lot of people are adopting a bit of a “wait and see” approach on NBN.” Hamish Fraser, Truman Hoyle
www.legalbusinessonline.com
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Feature | TMT >>
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Taking Australasian lawyers – and clients - to the world
In theory, we live in a modern, interconnected world – but as anyone who has ever struggled with blurry video-conferencing or echoing international phone lines would attest, reality can be far removed from the ideal. Perhaps this is the reason why Australian firms, with some notable exceptions such as Corrs Chambers Westgarth, have insisted that overseas offices are a critical part of global expansion. Could the NBN change that mindset? “We will see new ways of interacting with clients - for example videoconferencing will finally take off; there may also be an increase in remote and offshore delivery of legal services,” observes Minter Ellison partner Anthony Lloyd. The other half of the equation is that Australian and New Zealand clients will need legal advice to take their businesses overseas. “We have seen a rise in the number of Australian companies seeking crossjurisdictional legal advice as the internet allows them to sell to customers outside Australia,” says Norton Rose partner Nick Abrahams. “The NBN will fuel this movement and allow Australian companies to conquer, to a degree, the tyranny of distance that has made it
difficult for Australians to do business overseas unless they actually open offices there. I expect to receive more requests from clients for advice from our offices located outside Australia.” DLA Piper Australia partner Alec Christie says that the NBN Anthony Lloyd, Minter Ellison will play the role of an equaliser – removing some of the traditional barriers between small and large businesses and local and international businesses. “It will enable SMEs to participate actively in the digital economy. In addition to allowing client companies to provide a better online experience to their customers within Australia, it should also have a significant impact on delivery of online services internationally from Australia,” he predicts.
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12:32:30 PM9.07 Australasian Legal7/7/2011 Business ISSUE
Feature | TMT >>
3
NBN as a catalyst for investment
This is the most commonly discussed aspect of the NBN: its capacity to provide a new platform for online investment. Lawyers say that this new wave of investment has already begun. “We are seeing that the NBN is having an impact on commercial and investment decision making,” says Piper Alderman partner Tim Clark. “Companies are making investments now in technologies and businesses, the success of which are premised on ubiquitous broadband connectivity throughout Australia in the future. As advisers, this involves us being more forward-looking in our advice, anticipating the likely legal issues that will arise for these companies in the future.” Buddle Findlay partner Philip Wood says that commercialising the new opportunities will be a complex process. “The challenge will be to create or build sustainable revenue streams based on this new opportunity. Clients will also need legal
advice to help understand the legal framework, and potential risks, around the NBN and how to respond – this will create a new and challenging aspect to our work,” he Tim Clark, Piper Alderman says. Chapman Tripp partner Bruce McClintock identifies two stages of the business response to high speed broadband. The first priority will be to take stock as clients focus on implications for their position in the market. “In the longer term, we can expect increasing focus on new products and services to leverage improved infrastructure,” he says.
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Feature | TMT >>
4
NBN accelerates legal problems relating to online delivery
The NBN will also spawn legal work in areas which are not necessarily new, but will take on a new significance in light of the increased online focus. Even companies which do not choose to actively invest in new technology will find a heightened need for advice in areas which are already familiar: traditional IP matters, online privacy, crime and identity theft to name a few. “I expect that the NBN and growth in online presence and commerce will increase the demand for lawyers with expertise in a range of online issues including both traditional IP matters and the growing areas of social media use, both as a marketing tool and defensively when one is being
attacked through social media,” says Alec Christie. Nick Abrahams says that there are a number of unique issues which arise in the online world. “These include how to create effective online contracts, Alec Christie, DLA Piper how to comply with record retention obligations as well as considerations of data privacy and security obligations,” he observes.
Understanding NBN in the social context It is easy to see the NBN as primarily a commercial tool, but Gilbert + Tobin partner Peter Leonard believes that the key “game changers” will be new interactive medical, educational, e-government, integrated Peter Leonard, Gilbert + Tobin information, logistics and e-business applications. “These applications will transform lives, particularly the lives of those with limited mobility or living in
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Convergence and regulatory issues
Traditionally telecommunications and media have had their own discrete legislation in Australia: a telecommunications act, a broadcasting act and separate acts for radio and government broadcasters such as ABC and SBS. The line between broadcasting and telecommunications has clearly become more blurred in recent years as television and radio broadcasters move online and online entities in turn eye the
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rural or remote communities,” he says. How will this affect legal work? ” The legal focus will move to the conditions on which these services are made available, to which ones are so essential that they should be priced for universal availability, and protection of personal privacy as yet richer information about individuals accumulates and becomes commercially valuable,” says Leonard. T he nexus between technology law and broader policy objectives such as social equity and competitiveness can only become stronger as the interaction between the internet and one’s personal life and well-being becomes more intimate.
possibilities of online transmission. With this in mind, the Australian government has commissioned a review into the existing policy framework. A final report is expected by March 2012. “I anticipate that the legal questions around convergency issues will grow even larger, as everyone can become a content creator and broadcaster. This will, of course, make the Government’s Convergence Review of even greater relevance,” says Truman Hoyle’s Hamish Fraser.
Australasian Legal Business ISSUE 9.07
Feature | TMT >>
Merry band of advisors Progress on Australia’s National Broadband Network took a giant leap forward with the signing of definitive agreements with a number of key industry players – but there’s plenty more legal work to come.
T
en Mallesons partners and nearly 100 lawyers worked around the clock on Telstra’s historic A$11bn NBN deal with the government – but the firm is keeping quiet on the most intriguing question of all: how much of the work was done on a fixed fee basis? “We have a fee arrangement with Telstra and we did the work under the terms of that normal fee arrangement – I’m sorry but the details are confidential,” partner Cheng Lim told ALB. Mallesons is one of a host of firms who have been kept busy with the latest round of NBN deals. Mallesons and Gilbert + Tobin were the key advisors for Telstra; Blake Dawson, AAR, Clutz and boutique firm Webb Henderson have been advising NBN Co and Corrs and Minter Ellison are the advisors for the federal government. The TelstraNBN deals have been the most widely reported, but there have also been a series of similar deals as other telcos
negotiate the terms upon which they will participate in the NBN. Baker & McKenzie, for example, advised SingTel Optus on its NBN negotiations. As with any major deal, the extent of each firm’s involvement varies and firms were anxious that credit for their own particular contributions not be lost in the deluge of NBN-related publicity.“If you look at the relative value of the deals and the A$11bn worth of value Telstra received, the agreements we worked on were worth about A$9bn,” said Lim. “If you look at the value, in some ways that’s an important metric.” Similarly, Blake Dawson describes itself as the lead advisor for NBN Co and Corrs is reported to be the federal government’s main advisor for the purpose of these negotiations. Agreements may have been reached with the major players, but Lim says the pipeline of NBN legal work will continue to flow. “In terms of the
►► Telstra’s A$11bn NBN deal – key legal advisors Firm
Client
Partners
Mallesons
Telstra
Alison Lansley, Andrew Norman, Cheng Lim, Justin Cherrington, Neil Carabine, Nicole Heller, Renae Lattey, Scott Heezen, Trish Henry, Tim Bednall
Corrs Chambers Westgarth
Federal government
Thomas Jones, Andrew Messenger, Byron Koster, and James North
Blake Dawson
NBN Co
Bruce Macdonald, Carl Della-Bosca, Kevin Arkwright, Mel Harris, Tim Brookes
Gilbert + Tobin
Telstra
Peter Waters, Bill Spain, Moya Dodd, Cameron Whittfield
Minter Ellison
Federal government
Richard Dammery, Michael Brennan, Geoff Shelley
Clayton Utz
NBN Co
undisclosed
www.legalbusinessonline.com
Cheng Lim, Mallesons
overall legal work for NBN, this is the first step in a journey of a thousand miles,” says Lim. He views the NBN project in two stages: first, getting the telco participation deals signed and in force and secondly implementing those deals. At present, the first stage is only half complete – regulatory and shareholder approvals now need to occur before the implementation can begin in earnest. Implementation will involve a roll-out period of ten years and a transition of customers onto the NBN, something which Lim anticipates will give rise to yet more legal work as Telstra’s eight million plus customers migrate to the NBN and the fibre is laid. “There will be a lot of legal work around the rollout and around the migration – people signing new contracts, terminating old products,” says Lim. “Then you’ve got the construction [legal work], powers of immunity under the Telecommunications Act, how they actually get access to homes, straight contract work in terms of people finishing up old services and signing new services – that will be across the industry because everyone will be migrating customers.” Lim is not sure that the legal work will continue for the full period of the roll-out. “It will bed down before then,” he predicted. “There’s the hump as people get into the whole disconnection process before it moves a into a business as usual environment. Telstra has done product migrations in the past – but never before on this scale. The NBN will keep everyone occupied for a long time - not just us.” 33
Feature | TMT >>
TMT sees an explosion of work There’s more to technology, media and telecommunications (TMT) than broadband. Kalianna Dean reviews some of the other key developments in this space.
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ustralia’s TMT lawyers are riding the wave of the sector’s major projects and ever-faster technological change. Lawyers are busy working on a number of fronts: business spawned from those projects, new technology such as cloudcomputing and green technology plus regulatory and compliance issues as the law finds it hard to match the pace of change.
“I don’t know a TMT lawyer that doesn’t have enough to do,’ says Peter Leonard, corporate, communications and technology partner at Gilbert + Tobin. “Clients’ business models change very fast and in unpredictable ways. Every new business model requires a new form of contract and brings to the surface a new way of contracting.” That’s not to forget clients’ bread and butter TMT issues, where they look to
technology to save on costs, according to lawyers ALB spoke to. “The demand for CEOs and boards to find efficiencies and improvements inside business is as relentless as ever. They are relying on technology to make that happen,” says Anthony Foley, partner in IT, communications and IP at Baker & McKenzie. People are getting on with business too, according to specialist firms. “We
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Australasian Legal Business ISSUE 9.07
Feature | TMT >>
continue to see clients install and implement new systems. Parts of the economy are thriving,” says Hamish Fraser, a partner with Truman Hoyle.
Not just traditional TMT
The focus is increasingly expanding away from the traditional applications of a tech law firm. “We’re seeing a lot of work around smart applications of technology across a broad range of industries and I think we’ve moved beyond the traditional TMT focus on audiovisual, telecommunications and ‘big banking’ or big systems to a broad range of technology applications and therefore a much broader range of clients,” says Leonard. Lawyers should expect to be kept on their toes by small and medium sized outfits, which want firms to forge new territory on their behalf. “We are seeing new technology explode,” adds Alec Christie, DLA Piper’s IP and technology partner. That explosion is coming off the back of the technology platforms becoming now readily available much more quickly to SMEs, whereas previously it was reserved for the ‘big end of town’. “I’m getting SME clients who are now really in the electronic space, in social media, or rolling out sales on-line and they wouldn’t have been two years ago,” says Christie. “It’s nice to get some small and medium sized firms who are cutting edge to push the envelope. It’s a very exciting time.”
Technology M&A
Many interesting and complex crossborder investment situations have come about, such as the recently announced partnership between www.legalbusinessonline.com
Malaysian owned Australian pay-tv provider Fetch TV and Optus. “There is interesting cross-border investment within the Asia-Pacific region,” adds Leonard. Minter Ellison has also recently signed a contract with a client based in Canada to do a project for them in over ten Asian countries. “Probably over the last twelve months half of our work has been from overseas clients,” says Anthony Lloyd, lead partner in the firm’s TMT group. Lloyd’s team was also chosen to help implement a change of IT provider contract for the Bank of Ireland during late 2010. The new wave of cross-border transactions and rapidly changing services brings with it related issues which need a particular skill set. Lloyd highlights the fact that it is difficult to get people that have the experience and quality this type of work now demands. “We are very careful about the hires we make. Recently we hired someone from one of the boutique IT firms in London and someone with fantastic IT expertise in Sweden,” he adds. For both Australia and New Zealand, the need is also greater now for TMT lawyers to identify and deal with regulatory and compliance issues, especially those operating within foreign jurisdictions. “The law is clear in some jurisdictions and unclear in others; in some regulatory opinion forms during the project. It is difficult to manage,” notes Nick Abrahams, partner and head of the Australia TMT group at Norton Rose. Some described the situation as a once in a generation ‘catch up’ in terms of regulation and compliance. ALB 35
Feature | interview >>
In-house perspective
Mathew Kaley, Allianz Australia:
One step ahead Allianz Australia general counsel Mathew Kaley shares his thoughts about his role, the regulatory burden facing the industry and what he sees as the key challenges for law firms. Olivia Collings reports.
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laims might be the first thing that comes to mind when you hear the word “insurance”, but Allianz Australia general counsel Mathew Kaley is quick to point out there is more to the legal side of insurance than just claims. Indeed, Kaley deals with none of the claims work at Allianz Australia and is instead focused on providing proactive strategic advice to the board and senior management on a raft of legal issues that arise when working for one of the largest insurance groups in Australia – Allianz is number four, boasting a combined premium income of more than A$3bn a year. Kaley joined Allianz Australia in 2001 after a successful private practice career predominantly with Clayton Utz, although he also completed a stint in London at Clifford Chance. “I weighed up the pros and cons of becoming a partner versus going inhouse and decided in-house was more in
line with my interests and strengths,” he says. “External lawyers, I saw for myself, are limited in providing advice on the questions that are put to them. In-house lawyers have more scope.” Kaley joined Allianz Australia after a period of change at the Australian offshoot of the global organisation. In the early 1990s Allianz Australia was known as MMI and was only partly owned by the German-based Allianz SE (parent company). In 1999 Allianz SE took full ownership of MMI, renamed the entity and appointed a new CEO, Terry Towell, who is still in that role today. “There was a significant transformation process going on when I started and legal needed to be established and built up,” recalls Kaley. “The legal function was pretty small – apart from me there was one full-time and one part-time lawyer.” Today the legal team is made up of eight lawyers, including Kaley, most of whom have more than 10 years of legal
“One of the key triggers for sending work to an external lawyer is a need for specialist knowledge,” 36
experience. “I had a look at the legal work that was coming to us and should be coming to us, and matched that against the expertise and capacity in the team,” he says. “Once we had a base we could then move onto providing real business solutions, and understand our clients’ needs and goals.” When looking for in-house lawyers Kaley says he doesn’t only consider lawyers with experience in insurance. “I think expertise is important, but it can be learnt. If you are a good lawyer and smart enough to be specialised in another area of law, then you can learn insurance law,” he states. “What you can’t change sometimes is the way people apply the law or the way they reason through the law to find solutions.” Kaley says the goal is to have a team which can complete most of the work in-house. This means he is not overly concerned about building expertise in niche areas of the law. “One of the key triggers for sending work to an external lawyer is a need for specialist knowledge,” he adds.
The role of external counsel
Kaley’s next priority was to establish a legal panel. In 2002 he ran a general Australasian Legal Business ISSUE 9.07
Photography by Thilo Pulch
Feature | interview >>
www.legalbusinessonline.com
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Feature | interview >>
“An increasingly high proportion of the work I outsource is really only able to be done by partners.”
tender to establish a panel. Since then, however, he has preferred to hold mini-tenders and internal reviews as opposed to full-blown tenders. The initial panel had three firms, and two of those firms, Allens Arthur Robinson and Minter Ellison, are still on the panel today. The three firms on the panel originally covered about 90% of the external work; today, however, that same amount of work is covered by six firms. When deciding on a firm Kaley has three main criteria for choosing a firm, starting with expertise. “If they don’t have the expertise for the work we are doing, then it doesn’t go any further,” he says. Secondly, the lawyers must be commercial and solution orientated and lastly, the firm must provide good service. “The best solution-based lawyer who does not deliver on time frames and lets us down will be a problem,” he adds. A number of lawyers who were part of the original panel still work with Kaley today, providing a significant advantage to both parties. “A couple of lawyers we use reasonably regularly have a lot of history in their heads… it makes it easier to give instructions, but the big part of it is that these are lawyers who have proven that they have the expertise, and a practical approach to advice,” says Kaley. When instructing external counsel for any matter, Kaley always requests an estimate and regular updates on how the firm is tracking in terms of cost. “In some cases, where appropriate, I will ask for a fixed price, which can work to ours or their benefit,” he says. While Kaley agrees there are effective alternatives to hourly billing for particular matters, he also says that the hourly billing model remains a good default, which can work well where estimates have been obtained and costs are tracked. 38
Kaley’s main concern with regards to law firms is the role of junior or associate lawyers when providing advice to external clients such as himself. “As internal legal teams become stronger and more capable, the demand for advisory work from private practice has become focused on the top end,” he says. “An increasingly high proportion of the work I outsource is really only able to be done by partners.” Once the work has been passed down to an associate or lawyer, Kaley doubts the firm’s ability to do it any better than his in-house team, “and that is not what I’m looking for,” he says. However, Kaley does not pretend to have the solution: “I think that is the challenge for private practice because they obviously need the work flow for associates and junior lawyers to make their model work, and also to let those lawyers cut their teeth, but if the demand for that work is reducing, then that is a challenge,” he says. One solution, touted in a number of publications, is for firms to cover the cost of paying junior lawyers, instead of billing clients for their work. However, as partners are reliant on the income derived from the associates working with them, it is unlikely firms will be eager to change that aspect of their model, which has been profitable for so long. “The challenge is there for private practice, as I don’t see any change in the trend of increasingly strong internal legal departments,” notes Kaley. In recent times Kaley’s team has started undertaking a greater amount of work which would have previously been sent to external legal advisors. “I would like to think it will be done better internally, because the lawyers understand what we are doing and how it will fit within the strategic goals of the company,” he adds.
What’s on the horizon?
When Dorothea Mackellar wrote of Australia being a land of “droughts and flooding rains,” little did the Australian insurance industry know how right she would be. In the past two years the sector has been faced with a deluge of natural disasters, inquiries, reforms and much more.
The regulatory burden now faced by the insurance industry has developed substantially since 2001, says Kaley. What began with a spate of financial services reforms has grown into an ever changing environment for the industry, he says. “Even now I’m involved with numerous regulatory matters, which are not yet resolved,” he adds. In recent times the reforms have been accelerated by the natural disasters across Australia and the response from the government and the media, he explains. Product disclosure statements are one such aspect under the spotlight, with the Treasury department looking at documents across all financial services industries and whether they can be made simpler for consumers. “This process has accelerated in the last few months, and the current proposal for insurance is a one page disclosure summary,” says Kaley. There has also been a call for a common flood policy wording from the government, however, when the industry previously tried to establish a single definition for floods, the ACCC turned it down. The issue then fell away but is now on the agenda again following the Queensland floods, according to Kaley, who adds that the industry is quite comfortable with the idea of a single definition. Lastly, the unfair contract provisions included in the new Competition and Consumer Act (2010) are likely to have ramifications for the insurance industry. “The provisions do not apply to insurance contracts yet because they are covered by the Insurance Contracts Act, but the Federal Government has indicated that that is going to change. We are assessing the [potential] impact of that change,” explains Kaley. These ongoing challenges, along with international events means there is no shortage of work for Kaley and his team to deal with. And while a lot of the work is reactionary, Kaley says his ultimate goal is to move beyond this with his team, and better anticipate the needs of the business. “More recently the team has been focused on taking a proactive, strategic approach to our legal advice,” he says. Preparing for the unexpected – it’s what insurers do best. ALB Australasian Legal Business ISSUE 9.07
ALB special report | Melbourne 2011 >>
No magic for Melbourne After the Magic Circle by-passed Melbourne, pessimists suggested that the market was destined for obscurity – but local lawyers tell ALB’s Renu Prasad that they intend to remain optimistic.
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elbourne lawyers are damned with faint praise. While Magic Circle newcomers Allen & Overy and Clifford Chance have been courteously deferential to Melbournians and the strategic importance of this market, they have not established offices there. It is a mixed blessing for local lawyers. “International firms are clearly targeting Sydney and Perth and Melbournians must be thinking about what that means,” says Hall & Wilcox managing partner Tony Macvean. “On
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the one hand you wonder if Melbourne is decreasing in relevance, on the other hand it’s an opportunity – top tier firms have to direct their attention to those international firms, so potentially they’re going to take their eye off the game down here which means the market is opening up for us.” It may be just parochialism in action, but some Sydney lawyers are already predicting the demise of Melbourne as a major centre. “Melbourne is the next Adelaide,” declared one top tier partner. “Sure, they’ve got some blue chips and the banks down there, but I’ll bet that
a lot of their legal work is done in Sydney. Then you’ve got BHP which is officially headquartered in Melbourne – well how much of their legal work is being done down there, John Nerurker and how much of it is Mills Oakley being done in London by Slaughter and May?” The assumption is that Magic Circle firms have made a conscious decision to absent themselves from Melbourne, an inference which Mills Oakley CEO John Nerurker challenges. He believes Australasian Legal Business ISSUE 9.07
ALB special report | Melbourne 2011 >>
►► Victorian economy – quick facts Average annual productivity growth rate Five years to 2009-2010: 0.7% Annual employment growth Year ending March 2011: 3.5% Unemployment 2009-2010: 5.5% 2010-2011: 5.25% (forecast) 2011-2012: 5% (forecast) 2012-2013: 5% (forecast) 2013-2014: 4.75% (forecast) Increase in gross state product (GSP) on previous year 2009-2010: 2% 2010-2011: 2.5% (forecast) 2011-2012: 3% (forecast) Source: 2011-2012 Victorian Budget Overview, Department of Treasury and Finance
that the choice of Sydney was tied to the fact that the parties involved in both Magic Circle mergers happened to be Sydney-based. In other words it was relationships, not geography, which was the determinative factor. “I don’t think it says anything about the Melbourne market place whatsoever,” he comments. It is also true that some top tier firms are continuing to invest in Melbourne in a highly visible way – for example, Clayton Utz recently absorbed local workplace relations firm Trindade, Farr & Pill. The firm is also www.legalbusinessonline.com
looking to expand its corporate practice and has already made lateral hires such as ex-Holding Redlich partner Michael Linehan. Melbourne lawyers concede that their market may not have the excitement of the resources boom or enjoy the cutting edge transactions to the same extent as Sydney, but they believe that there is still plenty of work to go around. “There is still plenty of business down here - lots of corporate work, panels, mid-market work and high net worth families are Melbourne based,” says Macvean. Most of these firms have enjoyed steady revenue growth – Mills Oakley, for example, has had double digit growth for the past seven years and is on track for 22% growth in FY2011, while Hall & Wilcox is expecting 18% growth and Maddocks is expecting between 15 to 20% growth. Firms were still finalising their revenue figures at time of writing.
Referral work
If Magic Circle firms are absent from Melbourne, it is likely that they are referring work to Melbourne firms – but to whom? None of the local firms interviewed by ALB was prepared to be quoted on the subject and indeed Grant Fuzi the question appears Allen & Overy to be a sensitive one. Allen & Overy’s Grant Fuzi said that his firm had cultivated relationships with local firms where necessary, but preferred not to disclose those firms. It is therefore perhaps understandable that local firms felt that it was inappropriate to discuss their Magic Circle relationships, if that was the wish of their de facto client. This reticence extended not only to Allen & Overy and Clifford Chance, but also other international firms with whom Melbourne lawyers have built relationships. “These agreements are gentlemen’s agreements - it’s about being
respectful and courteous,” said one partner. “Also, I would not want my firm’s arrangements publicised because that might preclude us from being approached to do work for other overseas firms – they might assume that the relationship is exclusive.” It would be misleading to suggest that there is a hidden trail of lucrative work running from Melbourne to Sydney – both Allen & Overy and Clifford Chance are still in their infancy in Mark Pistilli Australia and perhaps Clifford Chance these relationships have not had time to evolve. Clifford Chance managing partner Mark Pistilli points out that his firm has barely had six months to organise its affairs. In the longer term, Pistilli says that Clifford Chance will have a preferred list of firms, but that list will not be exclusive. “We won’t align with anyone – we want the best expert that’s available and if you make that kind of undertaking, you may not always get the best,” he says. Pistilli says that no formal talks have taken place with Melbourne firms as to who will be a “preferred” provider and says this is more likely to evolve naturally. In the meantime, Clifford Chance has adopted a mixed approach to Melbourne: it has undertaken some of the work in Sydney and Perth and has also referred one matter to Gadens and another to Hall & Wilcox. “They’ve handled it well, and no doubt it’s an opportunity for them to develop those relationships too,” Pistilli observed. He has also had approaches from around Australasia from local firms interested in representing the Clifford Chance brand in markets such as Melbourne and Adelaide and Auckland. However, the firm will not be pursuing these options at this point.
Stability
Lawyers report a sense of stability in Victoria which has been lacking in 41
ALB special report | Melbourne 2011 >>
David Rennick – Maddocks
other jurisdictions. Brisbane has had flood waters lapping at its CBD; Sydney has struggled with a turbulent political environment but in Melbourne the story has been “business as usual”. It is true that there has been a change of government , but the platform of the new Coalition government was not regarded as being significantly different from that of the previous ALP regime. Some changes in policy direction in areas such as PPPs have been mooted, but lawyers say that the political environment has not had the same distracting effect that it has had north of the border. “I’ve spoken to property developers in Sydney towards the end of the last regime – not only did they have the business Bill Fazio Herbert Geer problems of access to 42
credit, but they had the political overlay to deal with too,” recalls Herbert Geer managing partner Bill Fazio. “They were asking what was happening with planning and infrastructure and all that stuff and expecting a change in government. So there was a bit of a hold back effect.” This situation is unlikely to be quickly resolved post election as the new NSW government has a clear mandate to make sweeping reforms. Fazio contrasts this to the situation in Victoria: “Even though we had a government change here I don’t think we’ve changed enormously in terms of what the government is hoping to achieve,” he says. “Overall, the business climate has been just a little bit kinder to people in Victoria.” Lawyers report that mid-market M&A is starting to pick up. “The succession of large family owned businesses has been contemplated for some time, but now we’re starting to see Tony Macvean that happen,” says Hall & Wilcox Tony Macvean. “Large family businesses are either transferring control to the next generation or they’re selling out by way of trade sale or to private equity.” At Mills Oakley, the Melbourne M&A team has seen fee growth “in the mid 20s”, according to Nerurker. “That is symptomatic of a higher degree of activity,” he says. “Businesses have to do deals. A whole generation of baby boomers are getting set to retire over the next ten years, they’re divesting themselves of their businesses. People can’t put their lives and plans on ice forever – you can wait a year or two for the economy to warm up, but after that if people want to sell, they want to sell. And likewise for buyers.” The activity is not confined to family businesses. Macvean nominates superannuation funds and financial planning as two other particularly active areas for M&A, while Maddocks CEO David Rennick says that some of the activity has a distressed feel to it. “However, there is far more positive activity,” he observes.
PPPs – the great Victorian tradition Victoria has long been one of the leaders in the Australian PPP space
and the state has continued its tradition of innovation. Last year, when conspicuous PPP motorway failures such as Brisbane’s CLEM7 and Sydney’s Lane Cove and CrossCity Tunnels had soured private sector enthusiasm for such projects, lawyers devised a new availability model PPP concept which redistributed patronage risk. Victoria’s Peninsula Link motorway, facilitated by Clayton Utz (government advisors), Freehills (advising the lenders) and Mallesons (advising Southern Way Consortium), is regarded as an important step in the evolution of the PPP concept, particularly in relation to motorway projects. The motorway is now under construction. Peninsula Link was an example of the enthusiasm with which the previous Victorian state government embraced the PPP concept. Another notable PPP was the Victorian desalination plant, facilitated by Clayton Utz (AquaSure consortium), AAR (Thiess), Corrs (Victorian government) and Mallesons (senior financiers). But times are changing. A new Liberal government took office in November last year and there is a new culture of scepticism surrounding the mega-projects which were heralded with so much fanfare during the GFC. This is a political narrative which mirrors that of Canberra: while the ►► Victorian Gross State Product and Australian Gross Domestic Product Victoria’s gross state product (GSP) in 20092010: AU $293.313 billion Australia’s gross domestic product (GDP) in 2009-2010: AU$1.283799 trillion Victoria’s GSP as a percentage of Australia’s GDP in 2009-2010: 22.85% Increase in Victorian gross state product (GSP) in 2009-2010: 2% Australia’s GDP growth in 2009-2010: 2.3% Victoria’s average annual compound growth rate (1998-1999 to 2009-2010): 2.8% Victoria’s GSP per capita in 2009-2010: $53,316 (-0.2% on previous year) Australia’s GDP per capita in 2009-2010: $57,925 (+0.3% on previous year) Source: Australian National Accounts: State Accounts 2009-10(Australian Bureau of Statistics)
Australasian Legal Business ISSUE 9.07
ALB special report | Melbourne 2011 >>
ALB special report | Melbourne 2011 >>
Josh Sgro – Freehills
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previous Victorian government was anxious to boost the economy with a series of “shovel ready” projects during the GFC, the debate has now moved to fiscal responsibility. Like its Commonwealth counterpart, the Victorian Coalition has been critical of alleged wasteful conduct by the ALP. “They are very focused on strong fiscal management - all Liberals want to own that ground,” says Fazio. “That will be an inhibitor to the really big projects in the short term that aren’t 100% demanded by the population.” The situation is aggravated by the fact that some of the flagship Victorian PPPs have run into trouble. The desalination plant has been beset with delays and industrial disputes and contractor Leighton Holdings has revised its budgeted profit for the project downwards by nearly A$300m. Meanwhile, the Peninsula Link project has been criticised in a recent report by state AuditorGeneral Des Pearson, who questioned the appropriateness of the PPP model in this particular instance, finding that the tender process may have been skewed towards the PPP process to the detriment of the public sector alternative. The new government, which has been particularly critical of the previous government’s handling of
PPPs, has asked the Public Accounts and Estimates Committee to conduct an enquiry into how the process can be improved. It is difficult to say how much of this debate represents a genuine challenge to the viability of the PPP model and how much is a criticism of the execution in these particular instances or this particular political context. While a complete departure from the PPP concept is unlikely, lawyers are watching the political landscape with great interest “There is a sense of nervousness as to which way the state will go,” says Mallesons partner Jeff Clark. “Everyone is looking for a clear statement of policy and understanding of what their focus is going to be and the priorities for the next couple of years.” Lawyers are generally confident that there will be no wholesale departure from the PPP model. “I don’t believe it’s dead,” says Freehills partner Josh Sgro. “They might be looking at different ways these assets might work, for example slightly different models where you have government setting up its own project company. There might be variations on a theme, but there will still be a lot of scope for private sector finance and involvement, otherwise the projects just won’t be delivered.” David Rennick is of the same view: “They are always looking at
Australasian Legal Business ISSUE 9.07
ALB special report | Melbourne 2011 >>
revising the model and trying to get it right,” he says. “The bottom line is that government at all three levels does not have the money to fund the infrastructure that is planned and required. The private sector has to get involved - call it PPPs, whatever you like - the reality is that infrastructure is going to have to be delivered using the private sector.” Despite the cautious approach, some projects are proceeding. Examples are the A$1bn Victorian Comprehensive Cancer Centre in Parkville, which at the time of writing was awaiting an announcement as to the winning consortium. Many firms including Clayton Utz, Gilbert + Tobin, AAR and Freehills have assisted in the bidding process while Minter Ellison is the government advisor. Contracts have also been let on the A$390m Ararat Prison project, the first Victorian social infrastructure project to be procured in accordance with the National PPP Guidelines approved by COAG in 2008. Minter Ellison is again
the government advisor. The A$528m New Bendigo Hospital is also in the development stage. These projects are now regarded as a certainty to proceed, although there have been notable delays by the government which had prompted speculation to the contrary earlier this year. The general feeling is that the pipeline of projects is not as strong as it was 18 months ago and lawyers are eyeing the possibility of a new generation of projects such as a new container terminal at the Port of Hastings and expansion of the underground railway network. Again, firm announcements have not been forthcoming to the extent that lawyers perhaps might have hoped. “They’ve got a range of options,” observes Josh Sgro. “We know they’re looking at them - it’s just a question of when they come to market.” The government has introduced legislation to establish an independent Port of Hastings Development Authority in anticipation of future development of the port.
“There might be variations on a theme, but there will still be a lot of scope for private t finance and involvement.” Josh Sgro
Freehills
promoted to senior associate
www.legalbusinessonline.com
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ALB special report | Melbourne 2011 >>
Energy
Victoria, with its vast reserves of brown coal, will be particularly affected by the introduction of a carbon price. While coal-fired power stations are commonly found across Australia, Victoria is noteworthy for its heavy use of brown coal, which emits more carbon than other types of coal. The state’s energy producers therefore have a particular interest in the outcome of the carbon price policy debate. “This is something that is hanging over the heads of the existing electricity generators and their current financings and their prospects of investing in future generation capacity,” says Jeff Clark. Brown coal has become a highly contested issue. Energy company HRL recently won an approval to construct a new brown coal plant in the Latrobe Valley, but only at half of the capacity it had sought and not without significant community opposition and the prospect of legal action by environment groups. The viability of the project now hangs in the balance, a situation aggravated by the uncertainty over carbon pricing. It’s a problem replicated across the
state as energy generators ponder their investment decisions. “There are a number of power stations which have debt which is coming up for renewal in the next 12 months and that’s proving very problematic,” says Clark. “Lenders aren’t going to be comfortable allowing an energy generator to operate as per normal in circumstances where there is significant uncertainty which may impact on the feasibility Jeff Clark Mallesons of the whole company. Generally what they’re requiring is that any surplus cash flow is either locked up or applied to debt retirement and they are not allowing it to be paid to the shareholders in the generating company. Any debt extensions are going to be relatively short term because people aren’t prepared to commit for any length of time. No one is going to invest in any new technology or any new power stations while there is uncertainty as to what the final scheme will be.”
►► CARBON TAX ANNOUNCEMENT The interviews for this feature were conducted prior to the Federal Government’s announcement of the details of the forthcoming carbon pricing and emissions trading schemes. Updated commentary on the impact of this policy on the mining sector will follow in the next edition of ALB.
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But there is more to the Victorian energy story than brown coal. The state is regarded as a leader in wind farm technology and is set to be home to the largest wind farm in the southern hemisphere, the AGL Energy/ Meridian Energy project at Macarthur which was facilitated by AAR (Meridian), Freehills (AGL) and Norton Rose (AGL). The Macarthur wind farm received approval in 2006 and since then there has been a steady flow of new wind farm approvals by Victorian authorities. These have ranged in size from as few as 14 turbines through to Origin’s 157 turbine project at Stockyard Hill, west of Ballarat. Five Victorian wind farm projects received approval last year. The fact that a project has been approved does not necessarily mean that construction will commence immediately. The legal work stemming from a wind farm ranges from environmental approvals, financing, construction contracts and off-take agreements and much of the work to date has been at the earlier stages of this process. “It is fair to say in Victoria that, because of the nature of the market, we’ve been doing more of the permitting process to date,” says Freehills partner Tim Power. “What I expect to happen once the market improves for building wind farms is that things will be
Australasian Legal Business ISSUE 9.07
ALB special report | Melbourne 2011 >>
reversed - we will probably end up doing more work in terms of commercialising projects when clients get ready to actually go out and build.” The reason why many projects have paused at the approval stage is that the market for wind energy is regarded as sub-optimal at present. “The business case for building a wind farm depends on electricity prices of course, but it also depends on whether you got an off-taker for the electricity, which some wind farm operators are finding challenging at the moment,” says Power. “It also depends on price for Renewable Energy Certificates (RECs). At the moment the REC price is quite depressed. So until there is better alignment with some of those things, which isn’t expected to happen for a year or so, we won’t see too many more wind farms being built. Hopefully over the next 12 to 18 months these projects will start to come into the bankable stage and will be ready to go.”
Some commentators believe the REC price may not recover to economic levels until 2014 – still some time in the future, but not so far ahead that operators Tim Power have the luxury of Freehills an extended period of inactivity. “You got to make investment decisions well beforehand so you can hit the market when those REC prices are good,” observes Power. As with other large projects, midsize firms will expect to play a part once development begins in earnest. Herbert Geer, for example, has already been involved in the Macarthur project, advising electricity regulator AEMO on the negotiation of off-take arrangements. “These project usually have a few layers,” says Fazio. “So you’ll have someone acting for the equity side of things – and we were on the off-take agreement side to interconnect with the network for the electricity regulator.” ALB
“Hopefully over the next 12 to 18 months these projects will start to come into the bankable stage and will be ready to go.” Tim Power.
Freehills
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Feature | employment law >>
Eminently employable There is no shortage of work for employment relations lawyers – but do top tier firms want to be part of the action? Renu Prasad reports.
“We want to continue to have a strong employment relations (ER) capability and the pre-eminent ER brand in Australia” Graeme Smith
Freehills
48
A
ccording to a recent study by Macquarie Relationship Banking, employment law is the practice area of choice for law firms intending to expand their offering over the next three years. Lawyers clearly believe that the demand for employment law advice is on an upward trajectory, a view based on the fact that the employment environment is still evolving. The Commonwealth government’s Fair Work Act has now been in force for two years, but some of the patterns of behaviour stemming from that Act are only now beginning to manifest themselves: the manner in which disgruntled ex-employees bring claims; the manner in which the courts and tribunals interpret the Act and, of course, the manner in which unions operate. This story is still unfolding and there is plenty of action to come. Law firms have been busy shoring up their talent in the employment law space. Clayton Utz has absorbed specialist Melbourne boutique firm Trindade Farr & Pill; Middletons has recruited five new partners from HWL Ebsworth, Hall & Wilcox and Hebert Geer; Corrs has picked up DLA Piper workplace head John Tuck and Joanna Glynn from Freehills. Another firm which has been very active in this area is Mills Oakley, which has recruited senior partner Adam Lunn from Allens Arthur Robinson and Heinz Lepahe from Cooper Grace Ward. This list of movements, which does not purport to be exhaustive, demonstrates the remarkable degree of market movement over the past 18 months. Firms are also evolving. Prominent ex-Harmers partner Joydeep Hor has departed the firm to form his own practice, People & Culture Strategies, another addition to the crowded
boutique space. An interesting trend in recent years is that boutique firms have expanded beyond the provision of legal advice and can be multidisciplinary in nature: for example, specialist firm FCB Workplace Law provides legal advice, HR products and technology solutions. Boutique firms are notable for their penetration of the ASX 200 market and their success has helped drive speculation that the employment law space may in the longer term be vacated by the top tiers. Lawyers at Freehills would argue otherwise. Earlier this year, Freehills investigated the possibility of deintegrating its employment law practice from its partnership as part of a firm-wide review. This proposal was not adopted and the firm plans to keep its employment law practice as an integrated sector of the partnership “We want to continue to have a strong employment relations (ER) capability and the pre-eminent ER brand in Australia, and this means we must and will continue to provide quality ER service to our clients,” says practice group head Graeme Smith. Smith said he was not convinced that the boutique model was the future for employment law advice: “Freehills has resources that outweigh a standalone ER firm which means clients not only have access to Australia’s top ER partners, but also Australia’s leading litigators, corporate and projects lawyers,” he says. It is well known that top tier firms are slimming down their partnership numbers and there is a view that premium firms are likely to pursue high level transactional work at the expense of other practice areas. Some lawyers believe that the current movement of lawyers in the market is caused by top tier firms reassessing their priorities. According to this Australasian Legal Business ISSUE 9.07
Feature | employment law >>
Employment relations lawyers on the move As firms reassess their strategies, lawyers are also voting with their feet on which firms they believe will best enhance their careers. The list below, which does not purport to be exhaustive, covers some of the highlights of the previous 18 months. theory, work is moving to the mid-tier and boutique firms, who are in turn scrambling to secure talent to perform this work. “Let’s say a firm decides employment is not a core area - it’s more of a service type area,” says one mid-tier partner. “Well employment lawyers in that firm are going to start asking whether that’s what they want for their future. Do they really want to be at a firm where they’re no longer part of the core service, and they’re just reduced to providing an [incidental] service?” Employment law is just one part of a profession which coming to terms with the post GFC new world order. As the full service model comes under review, employment lawyers will be among the first to feel the heat of scrutiny. The employment law partners at Freehills have won the first battle - but it remains to be seen how other top tier firms approach this issue. One top tier firm which may be requiring the services of its employment law experts for the foreseeable future is Clayton Utz, which has become the subject of a well-publicised sexual harassment claim from a former senior associate. The case, which has earned the firm notable publicity in the mainstream media, was still in progress at the time of writing.
Adam Lunn, Allens Arthur Robinson
Mills Oakley
Alice DeBoos, HWL Ebsworth
Middletons
Bryan Belling, HWL Ebsworth
Middletons
Dan Trindade, Trindade Farr & Pill
Clayton Utz
Duncan Fletcher, Mallesons
Middletons
Heinz Lepahe, Cooper Grace Ward
Mills Oakley
Joanna Glynn, Freehills
Corrs Chambers Westgarth
John Tuck, DLA Piper
Corrs Chambers Westgarth
Kathy Dalton, Herbert Geer
Middletons
Adverse actions
Employment lawyers are unanimously of the view that the volume of adverse action claims has substantially increased in recent months and the area now represents a major minefield for employers. But what is an adverse action? The Fair Work Act prohibits employers from taking “adverse action” against an employee “because the other person “has a workplace right, has exercised a www.legalbusinessonline.com
49
Feature | employment law >>
“Applications and threats of adverse action are being made by employees at all levels” Andrew Farr
Lander & Rogers
workplace right, or proposes to exercise such a right.” This is a fairly broad ambit and according to lawyers, it is precisely this broadness which is making adverse action claims so attractive. Blake Dawson partner Stephen Woodbury describes them as the new default claim of choice. “It has provided another avenue for employees and moves outside the realm of unfair dismissal and straight breach of contract,” he says. Tony Vernier , managing director at Australian Business Lawyers has observed applicants electing to pursue adverse action claims rather than unfair dismissal claims. He says there are two practical reasons for this. “An
Penny Stevens, Hall & Wilcox
Middletons
Seamus Burke, HWL Ebsworth
Middletons
Stuart Pill, Trindade Farr & Pill
Clayton Utz
adverse action claim has no limit on the amount of damages that may be awarded and could also expose the employer to substantial fines,” he says. “Secondly, individuals involved in the contravention could be joined as parties to the litigation, putting pressure on employers to settle.” Lander & Rogers partner Andrew Farr makes another crucial point on the lure of adverse action claims: “Applications and threats of adverse action are being made by employees at all levels,” he says. “Adverse action has armed senior employees outside the unfair dismissal jurisdiction with a powerful weapon which delivers real protection.” The legislative provisions relating to
adverse actions were first introduced in 2009 and it has taken time for the concept to take hold. However, lawyers are all in agreement that the point of critical mass has now been reached. A recent decision by the Full Federal Court of Australia adds fuel the fire, expanding the ambit of these claims. “A decision maker may now [be found to] take adverse action against an employee without even consciously considering the employee's workplace right,” explains Lander & Rogers partner Derek Humphery-Smith. The decision is currently on appeal to the High Court. “There is no doubt that there will be a continued rise of adverse action claims, regardless of the outcome
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Feature | employment law >>
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Feature | employment law >>
in the High Court,” warns HumpherySmith. Cooper Grace Ward partner Belinda Winter says that her firm has received numerous queries about adverse action claims. “Many ground level managers aren’t aware of even the existence of adverse action claims and if they are aware of them, they don’t understand the complexities of it,” she says. “That’s a bit of a concern for employers and we’re doing training on that point constantly for managers who are making those decisions so they’re armed with the knowledge of what they can and can’t do and when the alarm bells should ring for them.”
OH&S Harmonisation
Uniform OH&S laws are set to come into effect in every Australian jurisdiction in January 2012. Nationally consistent regulations and codes of practice are also being developed. This is a major change to the legislative landscape and lawyers suspect that many employers are yet to fully turn their minds to the issue. In some cases, the queries from employers concerned about the changes are only just beginning to reach firms. “There’s a last minute rush to make sure people are compliant and understand their obligations,” says Belinda Winter. “Even when it’s already [commenced], there will be people trying to get on top of things.” Stephen Woodbury is another who believes that there is an element of haste developing as the countdown to 2012 continues. However, he is optimistic. “If employers devote the time and energy [now], they will probably be able to get to a reasonable position in time,” he says. “This is an issue we anticipate will carry through into next year.” Lawyers are recommending that employers undertake audits to ensure that they are in a position to be compliant by the new year. Some of
the key points include an expanded definition of who constitutes a “worker” and an expansion of the class of people responsible for workplace safety. This may represent a significant departure from the legislative situation in some states. Belinda Winter gives Queensland as an example. “There will be people who haven’t had duties before that may now have duties,” she says. “There is a broader category of managers who can potentially be held accountable.” Awareness of the new obligations is only the first step, observes DLA Piper partner Andrew Ball. “Companies will need to be advising their directors and significant decision makers as to not only their obligations under the new OH&S laws, but how they can meet those obligations,” he says. “This will mean for many that they will need to create new systems to acquire relevant information and to provide that information to their directors and decision makers. Not only will there be a need to demonstrate that there is an awareness at the top levels of companies of the relevant OHS issues, but also companies will need to be able to demonstrate how their directors and decision makers act upon that information.” A national system should, in theory, simplify OH&S for all concerned but Winter warns that state-bystate complications could still arise. “We’ve got each state enacting its own legislation to comply with the harmonisation and each state has their own background and that isn’t necessarily the same in other states,” she says. “There’s still some concern about how are these laws going to be applied. Organisations need to be mindful of how the states are managing the new laws. I don’t think it’s going to be as simple as head office taking responsibility.”
“Companies will need to be advising their directors and significant decision makers as to not only their obligations under the new OH&S laws, but how they can meet those obligations” Andrew Ball
DLA Piper 52
Bullying, harassment – and enterprise bargaining
Harassment claims against employers have certainly received increased media attention in recent times - think Kristy Fraser-Kirk v David Jones, or more recently Bridgette Styles v Clayton Utz – and lawyers report an increased level of claims in this area. Sparke Helmore partner David Davies is one such lawyer and he describes bullying and harassment as the most significant employment law issue “by a country mile.” “It’s certainly a larger part of our practice now than it has been historically,” he says. “I think that trend is only going to continue. It can strike any workplace at any time and the scope of is just huge.” Andrew Ball agrees: “Not only does there appear to be an increase in the number of claims, but the way those claims are being framed is changing to make maximum impact,” he observes. Meanwhile, lawyers are reporting an increase in enterprise bargaining work. This is an area which has undergone significant upheaval and a recent decision by the full bench of Fair Work Australia has demonstrated the primacy of collective bargaining agreements under current legislation. The Richards decision ([2011] FWAFB 3377) upheld the union right to strike before bargaining and without majority support, a position which lawyers say will place employers in a vulnerable position early in a dispute. “The tribunal is taking an approach of encouraging bargaining and interpreting the Act in a way that protects industrial action,” says Woodbury. “That’s becoming an issue for employers - they need to plan well in advance.” Tony Vernier agrees that employers will be under pressure early: “All that is required is an ability to show that the union and the employees were genuinely trying to seek an agreement, which is probably not difficult to do,” he says. Job security is also becoming a significant issue in bargaining. “A lot of businesses are going through a flat economic period and unions are very keen to try and enhance the security of employees,” says Woodbury.
New Zealand update
There have been several noteworthy legal developments for employers in Australasian Legal Business ISSUE 9.07
Feature | employment law >>
FCB Workplace Law is equivalent to, or larger than, most workplace relations groups in top-tier firms. Unlike a generalist law firm, all of FCB’s professional staff members specialise in employment and workplace relations. Winner of ACQ magazine’s Australia Employment Law Firm of the Year Award for 2010 Winner of Corporate INTL magazine’s Boutique Employment Law Firm of the Year in Australia for 2010 Asia Pacific Legal 500 has recommended FCB Workplace Law for Employment Law every year from 2005 to 2010 Appointed sole Australian representative in the Work law Global Alliance of specialist workplace relations law firms.
Campbell Fisher Managing Partner
Benjamin Gee Partner
Sue Barnes Partner
Chris Gianatti Partner
Jessica Fisher Partner
Matthew Robinson Partner
SYDNEY +61 2 9922 5188 MELBOURNE +61 3 9098 9400 EMAIL INFO@FCBGROUP.COM.AU WEB WWW.FCBGROUP.COM.AU
Feature | employment law >>
“it is possible that we may see a return to “harsh but fair” dismissals, which is good news for employers.” Jennifer Mills
Minter Ellison Rudd Watts
New Zealand. The best publicised of these has been an introduction of a 90 day trial period for new employees, within which period an employee may be dismissed without recourse to the usual protective provisions. This trial period was previously available to companies with less than 20 employees and has now been extended to all employers. Unfair dismissal provisions have also been subject to what appears to be a minor revision in wording which has nonetheless been welcomed by employer groups. “Quite what effect these changes will have in practice is not yet clear,” says Minter Ellison Rudd Watts partner Jennifer Mills. “Whilst, at first blush, the wording change might seem like mere semantics, it is possible that we may see a return to “harsh but fair” dismissals, which is good news for employers.” The Employment Court has issued a decision (Vice Chancellor of Massey University v Wrigley and Kelly) which
Legal support for your workplace matters Cooper Grace Ward Lawyers’ Employment and Workplace Relations team is a specialist group of highly experienced lawyers who have worked with major corporations providing strategic advice and representation in a myriad of industrial relations matters. The team specialises in: ■ All aspects of enterprise bargaining ■ Strategic business restructuring advice including outsourcing, transfer of business and redundancy ■ Advising and representing clients in all aspects of occupational health and safety ■ All aspects of employee discipline, including termination of employment ■ Advising on and appearing in industrial disputes ■ Management of ill and injured employees ■ Anti-discrimination, sexual harassment and adverse action ■ Workplace bullying and harassment, including workplace investigations ■ Employment contracts, including executive agreements and bonus schemes ■ Workplace training in all areas of expertise.
considered the obligation on employers to provide information to employees during consultation processes. “Whilst the case concerned a selection process in the context of redundancy, the court’s decision is applicable to any other consultation processes which might impact an employee’s continued employment,” says Mills. “Of particular note is that as a result of this case the privacy rights of other employees may not constitute “good reason” to withhold information, and the court even noted that information that is not recorded in writing may also need to be provided.” Mills says that the case has caused widespread concerns amongst a number of employers, especially in relation to potentially onerous obligations on employers and the possibility for disclosure of information about employees to their colleagues to have negative impact on workplace morale. “This is definitely a hot topic of the moment to be aware of,” she says. ALB
Belinda Winter Partner T 61 7 3231 2498 E belinda.winter@cgw.com.au
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Australasian Legal Business ISSUE 9.07
market data | M&A >>
MARKET DATA | M&A >>
In association with
M&A TRANSACTIONS AND STATISTICAL ANALYSIS Top 10 Announced Deals - Australasia (01 June, 2011 - 30 June, 2011) Announcement Date
Target Company
Target/Seller Legal Advisor
Bidder Company
Bidder Legal Advisor
17-June-11
Graham Packaging Company Inc
Abrams & Bayliss; Simpson Thacher & Bartlett
Reynolds Group Holdings Limited
Debevoise & Plimpton; Freshfields Bruckhaus Deringer
Advising financial advisor (JPMorgan): Davis Polk & Wardwell
01-June-11
Meridian Energy Limited (Tekapo A and B Power Stations)
13-June-11
Quick Service Restaurant Holdings
15-June-11
Seller Company
Deal Value (AUDm)
Blackstone Group LP
4,078
Advising financial advisor (Credit Suisse): Cravath Swaine & Moore
Genesis Energy
Harmos Horton Lusk
Meridian Energy Limited
633
Advising seller: Minter Ellison
Archer Capital Pty Ltd
Freehills
Quadrant Private Equity Pty Limited; and Mr Frank Romano (Private Investor)
450
Cracow Mining (70% Stake); and Mt Rawdon gold mine
Advising seller: Allens Arthur Robinson
Catalpa Resources Limited; and Conquest Mining Limited
Freehills; Gilbert + Tobin
Newcrest Mining Limited
418
07-June-11
Healthe Care Australia Pty Ltd
Advising seller: Baker & McKenzie
Archer Capital Pty Ltd
Allens Arthur Robinson
CHAMP Ventures Pty Limited
368
15-June-11
Conquest Mining Limited
Gilbert + Tobin
Catalpa Resources Limited
Freehills
30-June-11
Stewart Group Limited
Pinsent Masons
Australian Laboratory Services Pty Ltd
Minter Ellison
06-June-11
ERG Resources LLC (14 Oil fields)
27-June-11
FerrAus Limited
Hardy Bowen
Atlas Iron Limited
Blake Dawson
198
03-June-11
Proserpine Co-operative Sugar Milling Association Limited
HopgoodGanim Lawyers
Sucrogen Limited
Minter Ellison
174
Notes:
269
Linc Energy Ltd
Close Brothers Private Equity
220
ERG Resources LLC
220
Based on announced deals, including lapsed and withdrawn bids, from 01 June 2011 to 30 June 2011•Based on geography of either target, bidder or seller company being Australasia•Includes all deals valued over USD 5m. Where deal value not disclosed, deal has been entered based on turnover of target exceeding USD 10m•Activities excluded from table include property transactions and restructurings where the ultimate shareholders' interests are not changed•League tables are ranked by value•Q2 11 * = 1 April 2011 to 30 June 2011
League Table of Legal Advisors to Australasian M&A (June 01, 2011 - June 30, 2011)
League Table of Financial Advisors to Australasian M&A (June 01, 2011 - June 30, 2011) Value (AUDm)
Deal Count
1=
Abrams & Bayliss
4,078
1
1
Credit Suisse
4,496
2
1=
Cravath Swaine & Moore
4,078
1
2
JPMorgan
4,078
1
1=
Davis Polk & Wardwell
4,078
1
3
Macquarie Group
1,197
4
1=
Debevoise & Plimpton
4,078
1
4
PwC
633
1
1=
Freshfields Bruckhaus Deringer
4,078
1
5
Goldman Sachs
478
2
1=
Simpson Thacher & Bartlett
4,078
1
6
Ernst & Young
450
2
7
Freehills
1,377
8
7=
Barclays Capital
368
1
8
Minter Ellison
899
5
7=
Morgan Stanley
368
1
9
Allens Arthur Robinson
872
3
9=
Gryphon Partners
258
2
10
Harmos Horton Lusk
633
1
9=
Hartleys
258
2
Rank
House
Value (AUDm)
Deal Count
Rank
House
Australasian M&A Activity - Quarterly Trends 200
70,000
180 160
Value (AUDm) Volume
50,000
140 120
40,000
100 30,000
80
20,000
60 40
10,000 0
Number of deals
Value (AUDm)
60,000
20 0
Q1 03
Q2 03
Q3 03
Q4 03
www.legalbusinessonline.com
Q1 04
Q2 04
Q3 04
Q4 04
Q1 05
Q2 05
Q3 05
Q4 05
Q1 06
Q2 06
Q3 06
Q4 06
Q1 07
Q2 07
Q3 07
Q4 07
Q1 08
Q2 08
Q3 08
Q4 08
Q1 09
Q2 09
Q3 09
Q4 09
Q1 10
Q2 10
Q3 10
Q4 10
Q1 11
Q2 11*
Australasian Legal Business ISSUE 9.755
Feature | employment law >>
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Feature | employment law >>
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