ISSUE 9.10
Blake Dawson’s Ashurst gamble First mover or Silver medal?
Special report: Asia 2011 Asia’s largest firms revealed
Energy & resources In-house lawyers speak out
40
Adam Levine Doug Jones Garry Besson John Tuck Bill Kritharas Martijn Wilder Tony Spar Paul Buetow Leigh Warnick Bridgette Styles Chew Seng Kok Anthony Latimer Kristy Calv Greg Gaunt John Greig Michael Bradley Martin Wiseman Mark Pistilli Joe DeRuvo Euge Fung Antony Dapiran Michael Blakiston Natalie Gullifer, Sasha Ivantsoff Phil Breden Micha Lishman Graham Goerke Chris Freeland Dominic Emmett Malcolm Stephens John Knox Stu Fuller Robert Milliner Jon Webster John Poulsen Danny Gilbert FirmSpy Barry Brown Che Lim John Weber Adam Levine Doug Jones Garry Besson John Tuck Bill Kritharas Mart Wilder Tony Sparks Paul Buetow Leigh Warnick Bridgette Styles Chew Seng Kok Antho Latimer Kristy Calvert Greg Gaunt John Greig Michael Bradley Martin Wiseman Mark Pis Joe DeRuvo Eugene Fung Antony Dapiran Michael Blakiston Natalie Gullifer, Sasha Ivants Phil Breden Michael Lishman Graham Goerke Chris Freeland Dominic Emmett Malco Stephens John Knox Stuart Fuller Robert Milliner Jon Webster John Poulsen Danny Gilb FirmSpy Barry Brown Cheng Lim John Weber Adam Levine Doug Jones Garry Besson Jo Tuck Bill Kritharas Martijn Wilder Tony Sparks Paul Buetow Leigh Warnick Bridgette Sty Chew Seng Kok Anthony Latimer Kristy Calvert Greg Gaunt John Greig Michael Brad Martin Wiseman Mark Pistilli Joe DeRuvo Eugene Fung Antony Dapiran Michael Blakist Natalie Gullifer, Sasha Ivantsoff Phil Breden Michael Lishman Graham Goerke Chris Freela Dominic Emmett Malcolm Stephens John Knox Stuart Fuller Robert Milliner Jon Webs John Poulsen Danny Gilbert FirmSpy Barry Brown Cheng Lim John Weber Adam Levi Doug Jones Garry Besson John Tuck Bill Kritharas Martijn Wilder Tony Sparks Paul Bueto Leigh Warnick Bridgette Styles Chew Seng Kok Anthony Latimer Kristy Calvert Greg Gau John Greig Michael Bradley Martin Wiseman Mark Pistilli Joe DeRuvo Eugene Fung Anto Dapiran Michael Blakiston Natalie Gullifer, Sasha Ivantsoff Phil Breden Michael Lishm
HOT
ALB’s hottest lawyers of 2011
Energy and Resources In-house Insights Market-leading analysis Comprehensive deals coverage debt & Equity market intelligence
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1
ISSUE 9.10
Blake Dawson’s Ashurst gamble First mover or Silver medal?
Special report: Asia 2011 Asia’s largest firms revealed
Energy & resources In-house lawyers speak out
40
Adam Levine Doug Jones Garry Besson John Tuck Bill Kritharas Martijn Wilder Tony Sparks Paul Buetow Leigh Warnick Bridgette Styles Chew Seng Kok Anthony Latimer Kristy Calvert Greg Gaunt John Greig Michael Bradley Martin Wiseman Mark Pistilli Joe DeRuvo Eugene Fung Antony Dapiran Michael Blakiston Natalie Gullifer, Sasha Ivantsoff Phil Breden Michael Lishman Graham Goerke Chris Freeland Dominic Emmett Malcolm Stephens John Knox Stuart Fuller Robert Milliner Jon Webster John Poulsen Danny Gilbert FirmSpy Barry Brown Cheng Lim John Weber Adam Levine Doug Jones Garry Besson John Tuck Bill Kritharas Martijn Wilder Tony Sparks Paul Buetow Leigh Warnick Bridgette Styles Chew Seng Kok Anthony Latimer Kristy Calvert Greg Gaunt John Greig Michael Bradley Martin Wiseman Mark Pistilli Joe DeRuvo Eugene Fung Antony Dapiran Michael Blakiston Natalie Gullifer, Sasha Ivantsoff Phil Breden Michael Lishman Graham Goerke Chris Freeland Dominic Emmett Malcolm Stephens John Knox Stuart Fuller Robert Milliner Jon Webster John Poulsen Danny Gilbert FirmSpy Barry Brown Cheng Lim John Weber Adam Levine Doug Jones Garry Besson John Tuck Bill Kritharas Martijn Wilder Tony Sparks Paul Buetow Leigh Warnick Bridgette Styles Chew Seng Kok Anthony Latimer Kristy Calvert Greg Gaunt John Greig Michael Bradley Martin Wiseman Mark Pistilli Joe DeRuvo Eugene Fung Antony Dapiran Michael Blakiston Natalie Gullifer, Sasha Ivantsoff Phil Breden Michael Lishman Graham Goerke Chris Freeland Dominic Emmett Malcolm Stephens John Knox Stuart Fuller Robert Milliner Jon Webster John Poulsen Danny Gilbert FirmSpy Barry Brown Cheng Lim John Weber Adam Levine Doug Jones Garry Besson John Tuck Bill Kritharas Martijn Wilder Tony Sparks Paul Buetow Leigh Warnick Bridgette Styles Chew Seng Kok Anthony Latimer Kristy Calvert Greg Gaunt John Greig Michael Bradley Martin Wiseman Mark Pistilli Joe DeRuvo Eugene Fung Antony Dapiran Michael Blakiston Natalie Gullifer, Sasha Ivantsoff Phil Breden Michael Lishman
HOT
ALB’s hottest lawyers of 2011
More supercilious pomposity
Energy and Resources In-house Insights Market-leading analysis CoMprehensive deals Coverage debt & equity Market intelligenCe
www.legalbusinessonline.com
IN THE FIRST PERSON
P
ompous git. Supercilious Stuart. Evening diatribe. Some readers will recall that these were the terms of endearment applied to Stuart Littlemore QC as the opening credits rolled each week on the ABC’s Media Watch in the 1990s. Littlemore was the founding host of the show, which provided a frequently caustic commentary on the performance of the Australia media. Journalists guilty of intellectual laziness, poor grammar and plain old fashioned stupidity were the frequent victims of Littlemore’s wrath. Predictably, the show was criticised for often not allowing those scrutinised a right of reply. Even at a distance of ten years after leaving the show, Littlemore remained unrepentant. As far as he was concerned, critics had misunderstood the purpose of the show. Media Watch was intended to be a commentary on the media; it was not a forum for the media. Whether or not there was a multiplicity or diversity of views was immaterial. Which brings us to a debate of more modest proportions: the annual ALB Hot 40, ALB’s showcase of (ostensibly) the hottest lawyers of the year. Law firms accustomed to the format of listings such as Chambers or other ALB market surveys such as the Fast 10 have found the Hot 40 somewhat enigmatic. Can one nominate oneself for the 40? Is there a submission form? Indeed, is there a submissions process? If not, why not? The answer to all of this must be couched in Littlemore-esque terms: like Media Watch, the Hot 40 does not have any delusions of speaking on behalf of the industry or presenting itself as an objective measure of merit. It exists as part of the media narrative; it is a commentary on the legal profession with the objective of entertainment. We hope those lawyers and firms who find themselves on these hallowed pages might derive some small measure of satisfaction. But fear not if otherwise: there exist many worthier forums for the objective evaluation of talent in the profession – indeed, the independently judged ALB Law Awards are a prime example. Like Littlemore, the Hot 40 will attract its fair share of bouquets and brickbats. We would expect nothing less.
2
“Anyone who’s over the age of 40 and chasing money in this profession really hasn’t worked it out yet.” Shane Barber, Truman Hoyle (44)
“A number of the international firms are populated by local lawyers we have dealt with before so we don’t rule out engaging with those firms as they form alliances and put their beach heads down here in Australia. “ David Lambert - general counsel and company secretary, TRUenergy (56)
“Class actions are still incredibly rare events within corporate Australia. Leighton shows that they are not going away though.” Greg Golding, Mallesons (22)
Asian Legal Business ISSUE 10.6
SYDNEY MELBOURNE P E RT H
News | deals contents >> >>
contents
40 HOT
2011
ALB issue 9.10 54
38
34
COVER STORY 24 ALB HOT 40 ALB’s tribute to the lawyers who dominated the headlines in 2011
ANALYSIS 15 Blake Dawson’s Ashurst gamble Is this a genuine game changer for the Australian market? 20 Commercial property Cashed up foreign investors up the stakes in the CBD
52 Admission in Australia What it takes for foreign lawyers to practise in Australia 56 Energy & resources: in-house insights GCs and senior corporate lawyers reveal the pressing issues for energy & resources companies
22 Class actions Class actions are on the increase – and it’s shareholders who are at the forefront of the trend
PROFILES
FEATURES
54 Managing partner series: Shane Barber, Truman Hoyle Boutique and proud of it
38 Insurance Law Keeping abreast of the latest trends in insurance 48 Asia’s largest firms Wrap of the movers and shakers in the Asian regional market
38 In-house profile: Emma Zipper, Bupa Australia An award winning in-house leader
14 NEWS • Blake Dawson, Ashurst to merge • Perth IP firm expands in the east • Foster’s bid provides cheer for M&A lawyers • Australian M&A levels recover: report
COLUMNS 19 In-house Q&A 66 UK Report
COMMENTARY 13 New Zealand Buddle Findlay
REGULARS 6 Appointments 8 DEALS
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.
4
australasian legal business ISSUE 9.10
E xp er ti se rs o f Leg a l a ye ty en tw Ove r
NEWS | deals >>
deals in brief
| JV | By Kalianna Dean
►► Meridian Energy project financing of Macarthur Wind Farm – A$386 million Firm: Allens Arthur Robinson Lead Lawyers: Anna Collyer, Simon Lynch, Stuart Weir, Paul Quinn, Michael Graves Client: Meridian Energy Ltd Firm: Freehills Client: ANZ , Eksport Kredit Fonden Firm: Norton Rose Lead Lawyers: Vincent Dwyer, Dan Marjanovic, Justin Lucas Client: AGL • N ew Zealand electricity provider, Meridian Energy, has formed a joint venture with AGL to share the development and construction costs of the A$1 billion Macarthur Wind Farm
| M&A | ►► SAB Miller takeover bid for Foster’s Group – A$12.3 billion Firm: Allen & Overy Lead Lawyers: Aaron Kenavan, Michael Parshall, David Poddar, Adam Stapledon Client: SABMiller Firm: Allens Arthur Robinson Lead Lawyers: Ewen Crouch, Robert Pick, Kim Reid Client: Foster’s Group Limited Firm: Hogan Lovells Client: SABMiller – global transaction advice • South African brewer SABMiller first expressed interest in Foster’s in June this year and originally offered 13 percent less for Foster’s, a bid which was rejected • Corrs Chambers Westgarth advised Foster’s on the demerger of its wine business, Treasury Estates, prior to the takeover, for fees totalling A$10 million • Allens Arthur Robinson was also the advisor to Foster’s, along with Goldman Sachs and Gresham, when the original bid was proposed and rejected
6
| M&A | ►► Banpu off-market takeover offer for Hunnu Coal Limited – A$477 million Firm: Allen & Overy Lead Lawyer: Tony Sparks, Aaron Kenavan, Barry Irwin, Arkrapol Pichedvanichok Client: Banpu Minerals Firm: Steinepreis Paganin Client: Hunnu Coal Limited • B anpu Minerals has submitted an all cash off-market takeover offer for Hunnu Coal Limited. Hunnu’s board of directors has unanimously recommended that shareholders accept the proposal, valuing Hunnu’s fully diluted equity at A$477 million • T hrough this transaction, Banpu gains access to Hunnu’s coking thermal coal deposits and exploration program in Mongolia • A llen & Overy also advised its client Banpu Minerals when it acquired a 12 percent placement in Hunnu earlier in the year
• T his deal represents A$386 million in syndicated debt facilities arranged by ANZ, including a tranche from Eksport Kredit Fonden • F reehills originally assisted AGL to obtain all of the A$1 billion unsecured loan facility and A$200 million export credit facility, which was originally announced in July
| M&A | ►► WPG sale of iron-ore assets to One Steel – A$364 million Firm: Allens Arthur Robinson Lead Lawyers: Andrew Finch, Nicholas Adkins Client: OneSteel Firm: Maddocks Lead Lawyer: Jeff Goss, Peter Shaw, Andrew McNee, Sean Rush Client: WPG Resources Limited\ • WPG has sold its iron-ore assets to OneSteel for A$364. Signing took place on August 23 • Allens Arthur Robinson has advised OneSteel on its 2010 $1 billion acquisition of the Moly-Cop businesses in North and South America; its 2009 underwritten $559 million accelerated non-
renounceable institutional rights issue and placement and $319 million retail entitlement offer; and its 2007 $2.2 billion acquisition of Smorgon Group Ltd by way of scheme of arrangement • Maddocks has also advised OneSteel on the capital raising for the Peculiar Knob project in South Australia and joint venture arrangements with Evergreen in relation to WPG’s coal assets
| equity | ►► GI Dynamics INC IPO – A$80million
Firm: DLA Piper Lead Lawyers: David Morris, Catherine Merity, Alec Christie, Jock McCormack Client: GI Dynamics Firm: Minter Ellison Lead Lawyer: Leigh Brown Client: Lead Manager Inteq • The team from DLA Piper advised GI Dynamics on all corporate, tax and IP law matters related to the transaction with assistance from affiliate offices in Hong Kong, Singapore, London and Wellington • Minter Ellison has advised client Inteq on various other Australian IPOs. Prior to this IPO for GI Dynamics Inteq acted as lead manager to REVA Medical on its A$85 million capital raising and IPO with market capitalisation of A$360 million
| debt | ►► NAB Residential Mortgage Backed Securities Issue - A$196m Firm: Mallesons Stephen Jaques Lead Lawyer: Ian Edmonds-Wilson Client: National Australia Bank (NAB) Firm: Minter Ellison Lead Lawyer: John Elias Client: Perpetual Trustee Company Limited as issuer and P.T. Limited as security trustee Firm: Sidley Austin Client: U.S Counsel for NAB
Australasian Legal Business ISSUE 9.10
NEWS | deals >>
• As part of NAB’s A$750 million National RMBS Trust 2011-12 this issue includes Class A-1 tranche with the bonds offered in the form of a two year soft bullet. The offer is backed by 2,597 housing loans originated and maintained by NAB • Mallesons Stephen Jaques has a long client relationship with NAB, and is the bank’s principal law firm • In 2009 Mallesons also advised on NAB’s strategic alliance with Goldman Sachs, which saw it acquire 80 percent of Goldman Sachs JB Were’s private wealth management business
| debt | ►► ANZ, UOB, SMBC syndicated loan to Sinochem – A$190 million Firm: Allens Arthur Robinson Lead Lawyer: Rod Howell Client: ANZ, United Overseas Bank, Sumimoto Mitsui Banking Corporation
►► Your month at a glance Firm
Jurisdiction
Deal name
Value ($Am) Practice
Allen & Gledhill
Australia
SEA6/Headland Capital acquisition of 26.5pct stake in Miclyn
144
Allen & Overy
Allens Arthur Robinson
• Allens Arthur Robinson also advised ANZ recently on its acquisition of a 19.9 per cent stake in Shanghai Rural Commercial Bank, formerly Shanghai Rural Credit Co-operative Union, the largest financial services cooperative in the People’s Republic of China
www.legalbusinessonline.com
M&A Debt Capital Markets
Australia
SAB Miller takeover bid for Foster’s Group
12 300
M&A
Australia
Meridian Energy project financing of Macarthur Wind Farm
386
Project Finance
Australia
WPG sale of iron-ore assets to One Steel
364
Mining & Resources
Australia
ANZ, UOB, SMBC syndicated loan to Sinochem
190
Debt Capital Markets
Australia
Fusion Retail Brands establishment; related transactions
125
Insolvency/Restructuring
Whitehaven Block Trade
Undisclosed
Equity Capital Markets
Investec financing for Gold One
185
Mining & Resources
Australia
Fusion Retail Brands establishment; related transactions
125
Insolvency/Restructuring
Clayton Utz
Australia
SEA6/Headland Capital acquisition of 26.5pct stake in Miclyn
144
M&A
Australia
Curtis Island water infrastructure agreement
Undisclosed
Infrastructure/Major Projects
Corrs Chambers Westgarth
Australia
Straits Resources sale of Hillgrove Antimony-Gold Project to Court Resources WA
40
Mining & Resources
Freehills
Australia
Goodman Fielder PAITREO capital raising
259
Equity Capital Markets
Gilbert + Tobin
Australia/Canada Ivanhoe institutional placement and capital raising
180
Equity Capital Markets
Australia
Bendigo and Adelaide bank head office lease
Undisclosed
Real Estate
Australia
Focus Minerals takeover bid for Crescent Gold
60
M&A/Mining & Resources
Australia
Lemur Resources IPO
25
Energy & Resources/ Equity Capital Markets
Henry Davis York
Australia
GPT Group sale of 224-250 La Trobe St Melbourne
29
Property/Real Estate
Hogan Lovells
Australia
SAB Miller takeover bid for Foster’s Group
12 300
M&A
Holding Redlich
Australia
Kentix recapitalization of AJ Lucas Group
110
Debt Capital Markets
HopgoodGanim
Australia
MetroCoal placement of shares to DADI Engineering Development
24
Equity Capital Markets
Jun He
Australia
ANZ, UOB, SMBC syndicated loan to Sinochem
190
Debt Capital Markets
Maddocks
Mallesons Stephen Jaques
– A$185 million
• Norton Rose is capitalising on its South African presence with this financing deal. Funds will be used by Gold One to purchase Rand Uranium
12 300 110
Australia
►► Investec financing for Gold One
Firm: Norton Rose Lead Lawyer: Shaun Clyne Client: Financier Investec Bank Limited
SAB Miller takeover bid for Foster’s Group Kentix recapitalization of AJ Lucas Group
Australia/South Africa
| debt |
Firm: Blake Dawson Lead Lawyer: Roger Davies Client: Gold One
Australia Australia
Blake Dawson
Firm: Jun He Client: Sinochem • The syndicated loan, signed on 16 September, will be guaranteed by Sinochem International Limited
M&A
Australia
WPG sale of iron-ore assets to One Steel
364
Mining & Resources
Australia
GPT Group sale of 224-250 La Trobe St Melbourne
29
Property/Real Estate
Australia
Goodman Fielder PAITREO capital raising
259
Equity Capital Markets
Australia
NAB Residential Mortgage Backed Securities Issue
196
Equity Capital Markets
Australia
Kentix recapitalization of AJ Lucas Group
110
Debt Capital Markets
Australia
Focus Minerals takeover bid for Crescent Gold
60
M&A/Mining & Resources
Australia
Dow AgroSciences equity investment in HRZ Wheats
Undisclosed
Equity Capital Markets
Australia
Bendigo and Adelaide bank head office lease
Undisclosed
Real Estate
Australia
Whitehaven Block Trade
Undisclosed
Equity Capital Markets
Australia
MetroCoal placement of shares to DADI Engineering Development
24
Equity Capital Markets
McCullough Robertson
Australia
Whitehaven Block Trade
Undisclosed
Equity Capital Markets
Minter Ellison
Australia
NAB Residential Mortgage Backed Securities Issue
196
Equity Capital Markets
Norton Rose
Sidley Austin
Australia/Canada Ivanhoe institutional placement and capital raising
180
Equity Capital Markets
Australia
Undisclosed
Infrastructure/Major Projects
Curtis Island water infrastructure agreement
Australia
Meridian Energy project financing of Macarthur Wind Farm
386
Project Finance
Australia/South Africa
Investec financing for Gold One
185
Mining & Resources
Australia
NAB Residential Mortgage Backed Securities Issue
196
Equity Capital Markets
7
NEWS | deals >>
• Blake Dawson was also an advisor to Gold One on an earlier financing and takeover bid by a Chinese consortium led by South African bank Business Connexion Group (BCX)
| equity | ►► Ivanhoe institutional placement and capital raising – A$180 million Firm: Freehills Lead Lawyer: Philippa Stone Client: UBS AG, Australian branch, Morgan Stanley Australia Firm: Minter Ellison Lead Lawyers: Ashley Dayman, Jeremy Blackshaw Client: Ivanhoe Australia • Ivanhoe has successfully completed the institutional placement of A$88 million as part of a planned A$180 million equity capital raising. The placement will be raised via the issue of approximately 63 million new shares at A$1.39 (C$1.41) per share • Freehills advised the same underwriters, UBS AG and Morgan Stanley, on Ivanhoe’s A$269 million entitlement offer and institutional placement in 2010 • Minter Ellison also acted for client Ivanhoe Australia on the institutional placement in 2010 as well as Ivanhoe’s initial IPO and listing on the ASX in 2007, for a market capitalisation of A$625 million
| M&A | ►► SEA6/Headland Capital acquisition of 26.5pct stake in Miclyn – A$144 million Firm: Allen & Gledhill Client: Headland Capital/SEA6 Firm: Clayton Utz Lead Lawyers: Rod Halstead, Karen Evans-Cullen Client: Headland Capital/SEA6 • This deal will see Headland Capital and affiliate company SEA6 acquire a 26.5 percent stake in Miclyn Express Offshore Ltd
8
• Clayton Utz advised on another recent takeover, Jonesville Limited’s bid for Territory Resources, announced in July this year • Miclyn had no confirmed external legal advisors
| debt | ►► Fusion Retail Brands establishment and Colorado debt for equity swap – A$125 million Firm: Allens Arthur Robinson Lead Lawyers: Cameron Price, Chris Patten, Tania Cini Client: Ferrier Hodgson Firm: Blake Dawson Lead Lawyers: Bill Koeck, James Marshall, Ian Kellock, Jamie Ng, Kenneth Tang Client: Colorado Group Limited (CGL) Lenders • CGL senior lenders elected to undertake a debt for debt and equity swap, whereby it will sell profitable assets including the Diana Ferrari, JAG, Mathers and Williams brands to Fusion Retail Brands in consideration for drawing down A$90 million debt from CGL and issuing A$35 million in shares to CGL lenders • Blake Dawson has been involved in a number of significant restructuring and insolvency matters, including for ABC, Alinta, Allco, Babcock & Brown and Centro
| equity | ►► Kentix equity and mezzanine financing recapitalization of AJ Lucas Group
Richard Hayes Client: AJ Lucas
• This building, comprising a car park and retail shops, was sold to an undisclosed private investor
• Kerogen has agreed, subject to approvals, to subscribe to a share placement equal to a 15 percent interest in AJL to provide mezzanine finance of A$66.5 million
• Other recent property transactions the Henry Davis York team has advised on include the sale of Suncorp Plaza in George Street, Sydney and 32 Walker Street, North Sydney
• Holding Redlich has previously advised AJ Lucas on sale of the 70 percent interest in the Gloucester Basin, purchase and on-sale of Sydney Gas (both to AGL Energy), sale of 15 percent interest in ATP651P to Toyota and a joint venture with Riverstone Carlyle Group for Cuadrilla Resources
| M&A | ►► Straits Resources sale of Hillgrove Antimony-Gold Project to Court Resources WA – A$40 million Firm: Corrs Chambers Westgarth Lead Lawyers: Bruce Adkins, Stephanie Daveson Client: Straits Resources Limited • Straits, a mining company focused on copper and gold resources in Australia and Asia, has acquired the Hillgrove Antimony-Gold project for A$40 million. The price includes A$20 million cash and the balance in shares • The renamed Court Resources entity will be called Ancoa. Ancoa’s IPO prospectus is expected to be lodged with ASIC on or about October 31 2011 • Corrs has acted for Straits over many years, including in their recent demerger and listing on ASX of their copper business • Court WA did not engage external legal advisors for this transaction
– A$110 million Firm: Allen & Overy Lead Lawyers: Tony Sparks, Aaron Kenavan, Chris Robertson Client: Kentix (wholly owned subsidiary of Kerogen) Firm: Holding Redlich Lead Lawyers: David Walker, Jon Cane Client: AJ Lucas (AJL) Firm: Mallesons Stephen Jaques Lead Lawyers: Shannon Finch,
| property | ►► GPT Group sale of 224-250 La Trobe St Melbourne – A$29 million Firm: Henry Davis York Lead Lawyer: Andrew Steele Client: GPT Group Firm: Maddocks Client: Undisclosed private investor
| equity | ►► Lemur Resources IPO – A$25 million
Firm: Gilbert + Tobin Lead Lawyer: Marcello Cardaci Client: Lemur Resources • Lemur Resources has announced its IPO, valuing the company at A$25 million • Another IPO for Gilbert + Tobin this year was the Royal Wolf IPO with market capitalisation of A$184 million • There were no other firms confirmed as advisors on this transaction
| equity | ►► MetroCoal placement of shares to DADI Engineering Development – A$24 million Firm: HopgoodGanim Lead Lawyer: Michael Hansel Client: MetroCoal Limited Firm: McCullough Robertson Client: Tenement to Terminal Limited (TL3) - party to related export agreement • MetroCoal has issued a placement of 32 million shares to Chinese coal group DADI Engineering Development, raising A$24 million before costs • MetroCoal also entered an agreement to export 15 million tonnes of coal from a proposed new terminal in Gladstone as part of plans to export more from the Southern Bowen and Surat Basins. HopgoodGanim partner Hansel also advised on the export agreement • DADI Engineering Development carried out all its legal work inhouse Australasian Legal Business ISSUE 9.10
k o o B l a e p p A 1 3 Volumes 10 Copies Filed & Served s m e l b o r P o N can be Appeal Book Preparing an ourt ocess. Each C a daunting pr m quirements fro has different re of at, methods indexing, form es neral procedur ge pagination to one s is M . followed that need to be d an ts en requirem of the rules or l ea pp A ed a reject run the risk of valuable time. Book, wasting legal k staff has the Our Appeal Boo e to nc rie pe ars of ex k expertise and ye oo B l ea pp A ugh the guide you thro en es t lowing you to pr process thus al onally. si ctly and profes your book corre n on preparatio We can advise prepare lift documents, procedures, up in the ok bo compile the the index and mplete co re su at. To en appropriate form with a Draft e present you satisfaction, w int & bind. ior to the final pr for approval pr for a no and quote ALB y da to us l al C ing your ussion regard obligation disc . requirements
www.lawinorder.com.au
Sydney
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NEWS >>
appointments
Gadens
►► lateral partner hires Name
Practice areas
Organisation coming from
Organisation going to
Matthew Allchurch
Banking & finance
Allens Arthur Robinson
Johnson, Winter & Slattery
Adrian Baron
Construction
John Holland
Allens Arthur Robinson
Ralph Bönig
Insurance
Fountain + Bönig
Finlaysons
Cameron Cooling
Property
Norton Rose
Gadens
George Cooper
Workplace relations
Freehills
Blake Dawson
Dominic Emmett
Banking & finance
Corrs Chambers Westgarth
Gilbert + Tobin
John King
Oil and gas
VICO Indonesia
Clayton Utz
Wally McDonald
Corporate
Clayton Utz
Piper Alderman
David Morfesi
IP
Office of the United States Trade Representative
Minter Ellison
Catherine OatesSmith
Management
Gadens
Kemp Strang
Warwick Painter
Corporate
Allens Arthur Robinson
DLA Piper
Richard Pascoe
IT&T
Gilbert + Tobin
Truman Hoyle
Sean Rush
Banking & finance
Maddocks
Baker & McKenzie
Martyn Taylor
Corporate
Gilbert + Tobin
Norton Rose
David Watson
Corporate
Mars Inc
Baker & McKenzie
Michael Westaway
Property
TressCox
HWL Ebsworth
Corrs
Gilbert + Tobin
G+T nabs Corrs corporate restructuring expert Gilbert + Tobin has hired former Corrs Chambers Westgarth corporate restructuring lawyer Dominic Emmett as a partner in its banking & finance group in Sydney. Emmett specialises in non-contentious restructuring and insolvency work. During his time at Corrs Emmett advised Allco Finance on Australia’s largest corporate restructure involving 12 banks and also worked on the Centro Properties restructure. Financial institutions Emmett has advised during his career include NAB, ANZ, Westpac, Suncorp and Lloyds International, JP Morgan and a host of others.
Gilbert + Tobin
Truman Hoyle
Truman Hoyle recruits G+T partner Sydney-based Truman Hoyle has appointed telecommunications and technology lawyer Richard Pascoe to its leadership team. Pascoe, who was a partner at Gilbert + Tobin for 10 years and has almost two decades of experience in the Information Technology and Telecommunications (IT&T) sector, will head up the firm’s media and content practice under the title of special counsel. Pascoe has also previously worked for and in a number of local and international IT&T companies including Batelco, a Bahrain Telecommunications company.
10
Fountain + Bönig
Kemp Strang hires COO from Gadens Kemp Strang has hired former national business development director at Gadens Lawyers, Catherine Oates-Smith, to become its new Chief Operating Officer (COO). The COO role has been specifically created as part of Kemp Strang’s strategic and governance review conducted this year, to position the firm for growth during the next three years. Oates-Smith has a corporate finance and insolvency law background.
Clayton Utz
Piper Alderman
Clutz partner joins Piper Alderman Piper Alderman has appointed senior Clayton Utz partner Wally McDonald as a partner in the firm’s Sydney office. A prominent corporate, government, TMT and major projects lawyer, McDonald has previously held departmental managing partner and chairman roles in the corporate and energy and resources group at Clayton Utz, together with a number of other senior leadership positions. During his career he has acted for a wide range of leading Australian and international corporations such as AWE Limited, Cable and Wireless plc, Department of Defence, Telecom New Zealand, the New South Wales Government and the New South Wales Casino Liquor Gaming Control Authority.
Bönig to Finlaysons
Bönig leaves firm he co-founded for Finlaysons South Australian Law Society president Ralph Bönig has departed the firm he helped co-found to join Finlaysons. Bönig, who is also a director at the Law Council of Australia, has left Fountain + Bönig, along with senior associate David Rostron and to become a fulltime special counsel at Finlaysons. Bönig has extensive experience in professional indemnity insurance, public liability, medical malpractice and industrial relations litigation both as a solicitor and as in-house counsel.
VICO Indonesia
Kemp Strang
Clayton Utz
Oil and gas corporate lawyer joins Clutz A former senior legal counsel at VICO Indonesia, a joint venture between Eni Australia and BP, will join Clayton Utz in mid November. John King will join as a partner at the firm’s Perth oil and gas practice. King has more than 15 years experience advising major participants in the petroleum and petrochemical sectors on a wide range of energy related matters. Prior to VICO he was a senior legal counsel at Eni Australia and a partner at Corrs Chambers Westgarth.
Maddocks
Baker & McKenzie
Bakers hires former Maddocks B&F head Baker & McKenzie has welcomed back a former staff member as a partner in the banking and finance team. Sean Rush was most recently head of the Maddocks banking and finance team in Sydney and previously worked for Baker & McKenzie in the Santiago and London offices. He specialises in advising borrowers, sponsors and lenders on leveraged acquisition, corporate and project financing transactions as well as high-value, complex, multi-jurisdictional and cross border financing transactions. He has also assisted a number of foreign multinationals with their Australian projects.
Allens Arthur Robinson Johnson Winter Slattery
JWS secures Allens’ partner Allchurch Johnson Winter & Slattery (JWS) has recruited Matthew Allchurch as a partner from Allens Arthur Robinson. Prior to joining Allens in 2001, Allchurch was at Clayton Utz. Based in the Sydney office, Matthew Allchurch Allchurch will join the borrower Australasian Legal Business ISSUE 9.10
NEWS >>
focused finance team. The team specialises in acting for corporate borrowers, structured product arrangers, sponsors and investors. Since April 2011, JWS has acted on corporate finance deals (including acquisition finance and syndicated facilities) with an aggregate value of more than A$3.5 billion.
Painter was a partner at Allens for 11 years and prior to his role there he had spent 14 years as inhouse corporate counsel at Westpac, including six years as head of corporate and institutional legal for the bank.
Urban Taskforce
Gadens
Norton rose
Gadens
Partner
Buddle Findlay appoints new partner New Zealand law firm Buddle Findlay has appointed Adam Jackson as a new partner in its Wellington office. Jackson is a member of the banking and corporate teams, and specialises in debt financing, capital markets, derivatives, general Adam Jackson banking law and commercial contracts.
Gilbert+Tobin
Norton Rose
Corrs
Norton Rose
Norton Rose strikes again with two new partners Norton Rose has appointed two new partners from rival firms, taking the total number of lateral partner appointments at the firm to 20 since January 2010. Former Gilbert+Tobin corporate partner Martyn Taylor and former Corrs Chambers Westgarth senior associate Scott Millar will join Norton Rose’s Sydney and Melbourne practices respectively. Taylor specialises in competition matters and telecommunications and energy regulatory issues. He has particular expertise in telecommunications access, merger clearances, utilities and infrastructure, regulatory investigations and providing strategic advice on complex regulatory and commercial matters. Miller specialises in corporate and commercial lending, in particular, structured property and corporate finance. He also has expertise in securitisation and a range of other commercial financing transactions.
Gadens adds Norton Rose practice and Urban Taskforce CEO Norton Rose partner Cameron Cooling and his 12 strong retail leasing team are moving to Gadens Lawyers Brisbane while Urban Taskforce chief executive Officer Aaron Gadiel is to join Gadens Lawyers Sydney. Cooling has more than 25 years in property practice and is responsible for leasing some of Queensland’s major retail developments. He is an active member of the Property Council of Australia, and has advised on the impact of proposed legislative change on the industry, including recent amendments to the Retail Shop Leases Act in 2000 and 2008. Gadiel will take up the role of director in the firm’s planning, environment and government team.
Freehills
Blake Dawson
Blakes hires Freehills practice head Blake Dawson has poached former Freehills practice leader George Cooper head its new workplace practice in Asia. Singapore-based Cooper has led the Freehills workplace law & advisory - Asia practice since 2007 working with major corporate clients in the resources, banking and various other industries on workplace relations strategies and solutions across the region. He regularly deals with employment contract and policy reviews, termination and transfer issues and workplace risk management, and specialises in crossborder employment matters.
John Holland Group Allens Arthur Robinson Allens Arthur Robinson
DLA Piper
DLA Piper picks Painter from Allens DLA Piper has hired former Allens Arthur Robinson partner Warwick Painter as a partner in its corporate practice, Sydney. Painter’s experience as a corporate partner includes advising on high profile and complex mergers and acquisitions, capital raisings for debt, equity and listed funds and restructurings. In addition, his expertise includes advice on regulatory issues impacting the financial services sector and he has advised on a number of significant insolvency restructurings.
www.legalbusinessonline.com
Allens adds partner to growing QLD practice Allens Arthur Robinson has appointed a former inhouse counsel to its Brisbane practice as a partner. Construction and infrastructure specialist Adrian Baron will join the office following seven years at John Holland Group, where he was general counsel from 2004 to 2010, before being appointed as the company’s national commercial and risk manager last year. In his new role he will be located within the Asiawide projects team and will focus on problem solving, claims management and dispute resolution in the construction and infrastructure fields.
Baker & McKenzie
XXXXXXX
Bakers recruits talent from Mars Baker & McKenzie has secured the services of former Mars Incorporated regional general counsel, North America, David Watson and Maddocks partner Sean Rush. Joining as a partner at the firm’s Sydney office Watson will be based in the corporate markets practice. During his career he has worked in London, Dubai, New York and Washington D.C, and prior to joining Mars, he was a corporate partner at Minter Ellison, Sydney. Rush was most recently head of the Maddocks banking and finance team in Sydney and previously worked for Baker & McKenzie in the Santiago and London offices. He specialises in advising borrowers, sponsors and lenders on leveraged acquisition, corporate and project financing transactions as well as high-value, complex, multi-jurisdictional and cross border financing transactions. He has also assisted a number of foreign multinationals with their Australian projects.
TressCox
HWL Ebsworth
TressCox partner finds new home at HWL Ebsworth HWL Ebsworth has appointed Michael Westaway as a partner in the firm’s property practice. Westaway acts for a broad range of clients, including several significant private and public companies, listed property trusts, property developers and aged care providers. Most recently a partner at TressCox, his experience extends to all types of commercial property transactions, including sales and acquisitions, commercial and retail leasing, joint ventures and developments. Westaway, who is joining the Melbourne office of HWL Ebsworth, is expected to commence with the firm in early November 2011. Westaway will also be joined by his team (including Matthew Powell, who is currently an associate at TressCox).
OUSTR
Minter Ellison
Minters hires IP/ trade law specialist Minter Ellison has hired David Morfesi, an intellectual property and international trade specialist as special counsel in South Australia and the Northern Territory. Morfesi has 10 years experience working for the United States government as an advisor and negotiator. His last position was senior director for Intellectual Property and Innovation with the Office of the United States Trade Representative. The trade representative serves as America’s chief trade negotiator and principal advisor to the President.
11
NEWS >>
industry >>
HDY adds a touch of blue to Martin Place
A
s a long-term supporter of Bowel Cancer Australia, Henry Davis York (HDY) went blue for the month of September from foyers to Friday. Chairman of the HDY partners, Philip Crawford said that when the firm supported a cause, they got behind it in a big way. "We choose charities and causes we have a strong belief in and then we look at a range of ways in which we can help. That's typically more than just fundraising - it's about having some fun and getting some serious messages out to our employees too," he said. Blue September was in aid of raising awareness about cancers that affect men. ALB
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Australasian Legal Business ISSUE 9.10
Firm Profile
NEWS >>
NZ Commentary
If you have goods in storage you can breathe easy again It didn’t create too much of a splash, but the recent New Zealand Court of Appeal case of Rabobank New Zealand Ltd v McAnulty 1 resolved a significant issue in New Zealand – albeit one that most people probably weren’t aware of. The case revolved around the definition of “lease for a term of more than 1 year” in the Personal Property Securities Act 1999 (PPSA). The court’s interpretation was that the definition excluded bailments where the bailor was not regularly engaged in the business of bailing goods. Had the court based its decision more closely on the literal wording, it would not have made this exclusion, and many people could have been caught out. Leases for a term of more than 1 year To appreciate the significance of the exclusion, it is necessary first to understand the significance of the term “lease for a term of more than 1 year”. Under the PPSA, if there is a “lease for a term of more than 1 year” between two entities (referred to in this article as the lessor and lessee) in relation to any goods, the lessor is deemed to merely have a security interest in those goods. In other words, the lessor’s rights are, in many respects, given the same status as those of a financier that has taken security in the leased goods. The principal consequence is that if the lessee grants a security interest in those goods to a third party (such as a bank), the lessor cannot simply recover the goods on the basis that it is the owner of them – it must show that its rights as lessor are a security interest which has priority over the security interest of that third party. There is a protection for lessors, which is that if they register a financing statement on the Personal Property Securities Register (PPSR) within 10 working days of the lessee taking possession of the goods, their security interest takes priority over other security interests. However, despite this protection, the width of the definition of “lease for a term of more than 1 year” is still very significant. This is because many lessors do not realise (or have not historically realised) that they have a security interest, and therefore do not register a financing statement in time to gain this protection. Further, even those that do realise, need to go to the trouble of registering, and satisfying other requirements in the PPSA.
Risk of PPSA being overlooked The principal part of the definition of “lease for a term of more than 1 year” states that it is “a lease or bailment of goods for a term of more than 1 year”. This captures a number of transactions which are not financing transactions, and thereby affects many people that are not accustomed to dealing with finance regulation, and do not naturally consider it or monitor changes to it. For example, in New Zealand, many gaming trusts have arrangements under which they place gaming machines in pubs. Although there is no lease, there is almost certainly a bailment 2, so it is likely that gaming trusts hold a mere security interest in their machines. The fact that a financerelated statute applies to such arrangements would surprise many people and is easily overlooked. The experience in New Zealand to date has been that many initially overlooked the application of the PPSA to their businesses. The most significant early cases related to leases for a term of more than 1 year which the lessors had not identified as security interests. However, over time, it appears that those whose business it is to regularly enter into leases or bailments have become aware of the issue. Law firms and industry groups have, by and large, identified such businesses and warned them of the risks. Issue considered in Rabobank New Zealand Ltd v McAnulty The definition of “lease for a term of more than 1 year” has a significant exclusion, which is that it excludes “a lease by a lessor who is not regularly engaged in the business of leasing goods”. However, there is an apparent gap when you put the wording of that exclusion together with the principal part of the definition and read “ a lease or bailment 3 of goods for a term of more than 1 year ... [excluding] a lease by a lessor who is not regularly engaged in the business of leasing goods”. The gap is that, while bailments are brought in by the principal part of the definition, the exclusion does not mention them. In the case of Rabobank New Zealand Ltd v McAnulty, the court had to consider whether this meant that a bailment by a bailor who is not regularly engaged in the business of bailing goods is a mere security interest.
been identified and educated by law firms or industry groups about potential PPSA risks. For example, very few people going overseas and leaving their furniture with a storage company would think to register a financing statement against that storage company. (I know this from the surprised and outraged phone call one of my friends received from a storage company when he did that very thing.) To give a more commercial example, it is unlikely that all organisations that have major computer systems housed in data centres run by third parties will have registered against those third parties. Decision in Rabobank New Zealand Ltd v McAnulty The court noted that the literal words may suggest that the exclusion does not apply to bailments. However, it considered that the intention must have been for that exclusion also to apply to bailments, and ruled that the use of the words “lease” and “lessor” in the exclusion must be short-hand for “lease or bailment” and “lessor or bailor”. Consequently, bailments of goods by those who are not regularly engaged in the business of bailing goods are outside the scope of the PPSA.
This article was written by Adam Jackson, a partner in the Wellington office of Buddle Findlay, one of New Zealand’s leading law firms. Adam specialises in debt financing, derivatives, general banking law advisory work, and commercial contracts. Adam can be reached on +64 4 498 4346 or email adam.jackson@buddlefindlay.com
Adam Jackson
Buddle Findlay
The consequences if this was the case were potentially far reaching. People who are not regularly engaged in the business of bailing goods are unlikely to have
1. [2011] 3 NZLR 192 2. A bailment is an arrangement under which possession, but not ownership, passes. 3. Emphasis added.
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13
NEWS >>
industry >>
Blake Dawson, Ashurst to merge B
lake Dawson has announced a series of steps which will lead to a full merger with Silver Circle firm Ashurst. Stage one will involve rebranding of all Blake Dawson offices to Ashurst and integration of the Asia offices by March 2012, while a financial merger of the Australian operation is expected to take place by 2014. The full merger is conditional on a further vote of the partnerships and it is expected that this vote will take place in early 2014. Blake Dawson managing partner John Carrington has cited complex regulatory issues and taxation hurdles as the reason for limiting the first stage of the merger to Asia. Carrington told ALB the variety of different jurisdictions and tax issues associated with integrating offices across more than 20 countries
14
were “complex” and would take some time to work through. “Combining our offices in Asia in March next year, gives us time to do that in an orderly way,” he said. “What we are setting out to achieve here is a single partnership profit pool.” Blake Dawson chair Mary Padbury said this was a case of moving straight to where the firm wants to finish. “Blake Dawson has a long history in Australia, but we think what we need to succeed in a globalising world is to be part of a firm that has an international brand,” she said. “It’s a great show of faith and trust in us by Ashurst to allow us to use their name in Australia, not withstanding that they will have no interest or control yet and a positive statement by us that we will ultimately merge with them.” Carrington said the merger will provide Blake Dawson with
ASHURST
BLAKE DAWSON
Number of partners: 230
Number of partners: 192
Number of lawyers: 900
Number of lawyers: 828
Offices: 16
Offices: 11
Revenue 2011:A$462 million
Revenue 2011: A$380 million
opportunities for growth regionally and internationally, which might not have been available otherwise. “It’s not something we could achieve through organic growth in any realistic period of time,” he said. While both firms have offices in Singapore and Tokyo, no job losses are expected as part of their integration according to Carrington. “We see opportunities for growth and will look to expand our combined presence in those locations,” he added. “I anticipate we will continue to make strategic acquisitions in terms of lateral appointments in the coming months.” The combined Asia operations of Blake Dawson and Ashurst will see 31 partners working across Singapore, Shanghai, Hong Kong, Tokyo, Jakarta and Papua New Guinea. In Hong Kong Ashurst works in association with local firm Jackson Woo & Associates, while in China it has a strategic alliance with one of the largest Chinese firms, Guantao. Blake Dawson has a similar agreement with local Indonesian firm, Oentoeng Suria & Partners. ALB
Australasian Legal Business ISSUE 9.10
NEWS >>
Analysis >>
Blake Dawson’s elephant in the corner The Blakes-Ashurst merger has finally been unveiled – but the question that counts has been postponed till 2014.
T
wo things have always been understood about the push by Australian national firms to find an international partner. First, convincing an international firm to financially integrate with one of the Australian mega-firms was always going to be a big ask: as ex-Minters partner John Poulsen commented last month, Aussie top tiers are somewhat large morsels to digest. Secondly, there was the question of whether Australian firms should be aligning themselves with what has been described as the “old world” - UK or US headquartered firms – at a time when economic dominance has clearly switched to Asia. These are challenges not fully answered by Blake Dawson’s announcement of a tie up with Silver Circle firm Ashurst. It is certainly encouraging to see that the Ashurst brand is to be applied in Australia as part of the first stage of the union. All indications are that both firms are pursuing the merger in earnest; as one commentator put it, this is more than simply “kicking the tyres.” However, there is an elephant in the room: full financial integration. Integrating the smaller Blake Dawson Asia practices is one matter; integrating the large Australian partnership is a challenge on entirely a different scale. This is an announcement which captures the excitement of an Australian firm going global but postpones the most difficult part of the equation till 2014. Blakes managing partner John Carrington has explained the delay by reference to the variety of jurisdictions and tax issues associated with integrating offices across more than 20 countries. Given the firms intend to resolve those issues in 19 of those countries by early 2012, one
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can only assume that the tax regime in Australia must be particularly diabolical. Still, other firms such as Norton Rose are on the record as having made similar observations. The second point of note is Ashurst’s UK origins. Blake Dawson’s decision to bed down with a UK firm is in contrast to comments by Mallesons’ Robert Milliner last month that a global firm could have its genesis in Asia, in contrast to other global firms which are essentially UK or UScentric firms which happen to have an Asia presence. While Australian top tier firms are in agreement on the importance of Asia, we are beginning to see a clear difference of strategy as to how this market will be pursued. Some, such as Blakes, may pursue the path of mergers with established global players. Mallesons appears
to be taking a somewhat different approach, with Milliner hinting that the firm may choose to build its own presence through a series of steps rather than a grand merger. If this is the case, it will be interesting to see whether the Mallesons partnership holds its nerve and resists the temptation to revert to a “grand merger” strategy if this becomes the dominant paradigm. Blake Dawson and Ashurst will rightly feel a sense of achievement at having progressed to the stage that they have. These are not easy negotiations by any means. The firms have made a commitment to a full merger by 2014. Clearly there is confidence that both partnerships fully support the integration. If that is the case, 2014 will truly be a milestone for these firms. ALB
This is an announcement which captures the excitement of an Australian firm going global but postpones the most difficult part of the equation till 2014. 15
NEWS >>
news in brief >> National profession reform in jeopardy Recent efforts to reform the regulation of the legal profession still fall short of producing a truly national legal profession, critics have told ALB. Attorney General Robert McClelland last month released the draft legislation, however only four jurisdictions - New South Wales, Victoria, Queensland and Northern Territory – have committed to the new scheme. These jurisdictions account for approximately 85 percent of Australia’s legal practitioners. Tasmania Law Society president Bill Griffiths and South Australian Law Society president Ralph Bönig are unconvinced changes made to the scheme in the new legislation go far enough to address their members’ concerns. “How the changes might affect the views of those many people who don’t like it – I don’t know,” said Griffiths. “Tasmania does not see a benefit; only more expenses and bureaucracy, which we do not need.” Bönig says he can see some positive amendments to the scheme in the latest legislation but that the changes may not go far enough to change South Australia’s position at this stage. “We look forward to further discussions about the overall structure of the scheme,” he told ALB. “What has not been addressed is the cost of the scheme, both per practitioner and for the firms.” McClelland said he was committed to resolving outstanding matters, including transitional costs and selection of a host jurisdiction, before October 1 so legislation can then be presented in the host jurisdiction’s parliament soon. “We are hopeful that other states and territories will sign on once they can see the benefits of the reforms in practice,” said McClelland. “I still believe very strongly that we can no longer justify the disparate regulation that exists for such an important profession that generates around A$13 billion in economic activity each year.” Online lawyer network to link small practices A lawyer with a penchant for IT has launched an online network aimed at connecting ‘good lawyers’. Christopher Eddison-Cogan launched GoodLawyers earlier this year with the aim of providing a networking service for likeminded legal practitioners and legal service consumers. He is the director of BHL Software, a partner of Barringer Leather Lawyers and is a member of the Law Society of NSW IT committee. The network now has 14 members, who refer work to each other and receive referrals from the network itself. “For sole or small practice practitioners we are trying to replicate the social and professional aspects of a large law firm, but with broader flexibility,” said Eddison-Cogan. Referring work out to other lawyers for a valued client can often be daunting for lawyers, which is why Eddison-Cogan has made the network invitation only. “Bad service from the lawyer they refer the work to can backfire on them, which is why they are reluctant to refer the work in the first place”, said Eddison-Cogan.
16
industry >>
Perth IP firm expands in the east W
est Australian IP firm Wrays has announced plans to open a Brisbane office in the coming weeks. The move follows new offices in Sydney and Adelaide in recent months. Wrays CEO Frank Hurley said that the expansion was in response to an increased demand from clients, who are keen to allocate more work to the firm. “Wrays’ growth has also been driven by overseas client and associate demand as well as a recruitment strategy to source highly qualified IP specialists who can assist with this growth,” said Hurley. “IP is increasingly being viewed as a critical success factor in business strategy and planning. Now more than ever, especially against an uncertain economic backdrop we are seeing companies wanting to protect one of
the most important aspects of their business; that being their IP.” The number of trademarks registered in the past financial year hit a record high. IP Australia recorded 69,003 trademark applications in the 2011 financial year. The highest number were registered in NSW where 26,290 applications were lodged, followed by Victoria on 20,333 and Queensland with 11,814. The firm is in the process of recruiting for its new Brisbane and Adelaide offices. The expansion coincides with imminent launch of their new brand and culture practice and the firm’s own brand revamp. Having expanded into new areas of law, the firm will from early October be known as Wrays, instead of Wrays Intellectual Property. ALB
m&a >>
Foster’s bid provides cheer for M&A lawyers T
he board-endorsed bid for Foster’s Group by SABMiller is a positive and significant result for the Australian M&A market, say lawyers. Mark Pistilli, managing partner of Clifford Chance Australia, which provided advice to the financiers of the deal, said the transaction, expected to be completed by December 16, is a significant result for the local M&A market for a number of reasons. “It shows that there is an appetite for big ticket M&A despite the global economy,” said Pistilli. He added that the deal also demonstrates that there is debt available and that M&A is happening outside the mining and resources sector. He also said it showed there is interest in the Australian market despite the stronger local currency. “There is no doubt that the strength of the currency has made Australian targets more expensive to international buyers, but as this deal shows, buyers are interested if it’s an attractive enough target,” he told ALB.
This is a sentiment echoed by Freehills partner Tony Damian: “The deal demonstrates the continuing high levels of interest in Australian assets. Along with other deals in the market, Foster’s shows that the high Australian dollar is not deterring foreign bidders wishing to make cash bids,” he said. Mallesons Stephen Jaques partner Dave Eliakim also stated that the deal shows foreign investors are not put off by the high Australian dollar. In addition, he added that it demonstrates to foreign investors that Australia welcomes investment, as there has been no sign of Foreign Investment Review Board resistance “based on Foster’s iconic Australian brand image”. Allens Arthur Robinson is the lead advisor to Foster’s Group and stands to profit a tidy sum from the transaction. Corrs Chambers Westgarth, who advised the brewer on its demerger of the wine business earlier this year, made A$10 million from the transaction. ALB Australasian Legal Business ISSUE 9.10
NEWS >>
m&a >>
Australian M&A levels recover: report A
ustralia’s M&A market activity last financial year rose to its highest levels since the GFC, according to the third annual Freehills Public Mergers & Acquisitions Report. “The number of M&A deals announced in FY2011 rose to 104, with a total value of A$79 billion committed by bidders, compared to the low point of 72 deals in FY2009 during the GFC,” said Freehills partner Simon Reed. Deals are also getting larger, with more than half of the deals exceeding A$100 million and a quarter of deals exceeding A$500 million. The success rates recorded for FY2011 are the highest since Freehills has been gathering this data. More than 70 percent of deals were successful, compared to 55 percent in FY2010 and only 49 percent in FY2009. Even the plus A$1 billion deal range has improved, with 76 percent of the ‘mega deals’ completed, compared to 27 percent in FY2010. The leap in success rates was contributed to by a number of factors, including more higher value deals being launched, with perhaps proportionally fewer speculative bids; improved success rates in hostile deals; an increase in the use of deal protection mechanisms and an increase in the proportion of friendly deals, according to the report. The report also found that cash is still king when it comes to funding. Cashonly deals enjoyed a slightly higher success rate in FY2011 compared to scrip and cash/scrip deals. The use of cash indicates that a number of companies have been building “war chests” during the GFC, says the report. Cash reserves were the funding source in more than 60 percent of deals in FY2011 and are set to continue to play an important role in M&A activity. However, inconsistent data for the first few months of FY2012 has left many hedging their bets on how the M&A market will fare in the short term. July 2011 saw a significant drop off in activity with only five deals announced compared to 15 in July 2010. www.legalbusinessonline.com
►► M&a Legal advisor rankings: Australian announced deals Rank
Legal Advisor
Ranking Value inc. Net Debt of Target ($Mil)
Mkt. Share
Number of Deals
1
Allens Arthur Robinson
39,788.75
32.3
43
2
Blake Dawson
29,033.52
23.5
57
3
Mallesons Stephen Jaques
28,842.39
23.4
50
4
Clayton Utz
27,255.74
22.1
44
5
Allen & Overy
25,302.53
20.5
21
6
Freehills
24,689.27
20.0
57
7
Corrs Chambers Westgarth
23,833.52
19.3
23
8
Sullivan & Cromwell
23,566.26
19.1
4
9
Morgan Lewis & Bockius
20,329.43
16.5
3
10
Simpson Thacher & Bartlett
16,274.99
13.2
3
11
Latham & Watkins
15,972.53
13.0
2
12
Hogan Lovells
12,820.44
10.4
3
13
Cravath, Swaine & Moore
12,705.11
10.3
3
14
Cleary Gottlieb Steen & Hamilton
12,418.51
10.1
1
15
Johnson Winter & Slattery
10,305.66
8.4
10
16
Minter Ellison
8,212.21
6.7
51
17
Norton Rose
8,153.87
6.6
20
18
Osler Hoskin & Harcourt LLP
7,480.39
6.1
2
19
Gilbert + Tobin
6,936.69
5.6
15
20
Baker & McKenzie
6,304.92
5.1
29
21
Wachtell Lipton Rosen & Katz
4,750.00
3.9
1
22
Dechert
3,956.10
3.2
1
23
Clifford Chance
3,758.19
3.0
10
24
Skadden
3,466.53
2.8
5
25
Baker Botts LLP
2,739.72
2.2
1
Subtotal with Legal Advisor
111,342.64
90.3
359
Subtotal without Legal Advisor
11,961.58
9.7
858
Industry Total
123,304.22
100.0
1,217
Source: Thomson Financial
A flurry of deals were then announced in late August, taking the total of deals announced in the first two months of FY2012 to 18. A significant number of those deals that have been announced are relatively high in value, added Reed. Additional findings of the report were: • Fewer hostile deals, but success rates for those hostile deals launched jumped from 31 percent in FY2010 to 61 percent in FY2011
Date: 28 September
• Foreign bidders were again a key driver in high-end M&A, with foreigners launching 83 percent of deals over A$1 billion in FY2011, compared to 67 percent in FY2010. • A notable increase in the rate of success by Chinese and Indian bidders, indicating that bidders from these regions are becoming more adept in their Australian public M&A activity. ALB 17
FEATURE | Q&A >>
Q A &
This month’s question: With only four of the eight jurisdictions in Australia committed to the national legal profession reform, what should be the next move by the Federal Government in winning over other jurisdictions to make it a truly national scheme?
Alexander Ward President of the Law Council of Australia The Law Council welcomes the news that the Council of Australian Governments (COAG) National Legal Profession Reform Project is still moving forward as a result of productive discussions involving the attorneys-general of the participating jurisdictions (NSW, Northern Territory, Queensland and Victoria) on 6 September. The Law Council also understands that work is still being undertaken to try to deal with the concerns with this project expressed by Tasmania and the ACT to see if these concerns can be satisfactorily addressed to allow these jurisdictions to fully support this important project. The Law Council sees it as positive that the revised draft legislation has been made available for the profession and others to see. The Law Council looks forward to the selection of the host jurisdiction and to a positive conclusion of discussions with the ACT and Tasmania in relation to their further participation in this project. The Law Council remains hopeful that once this project is in the implementation phase, further discussions can be had with the non-participating jurisdictions (ACT, South Australia, Tasmania and Western Australia) to try to enlist their support for this project so that it once again becomes a truly national project. With the over three-quarters of Australia’s lawyers practising in New South Wales, Victoria, Queensland and the Northern Territory, there will be plenty of time before implementation of the law for other jurisdictions to see the benefits of a national profession, as well as protection for clients of lawyers, and come on board. Ward has more than 25 years of experience as a solicitor and barrister in civil litigation. He was president of the Law Society of South Australia in 2004-05 and remains a member of several of its committees. He is currently the chair of the Law Council’s Legal Education Committee and is on the board of the Commonwealth Lawyers Association. Ward is a legal officer in the Royal Australian Navy Reserves and has been a Guard Commander in the Parade and Ceremonial Division in South Australia.
Ralph Bönig President of the South Australian Law Society When the Federal Government embarked on the latest attempt to promote uniform legislation for the regulation of the legal profession in Australia, it did so on the basis that there were efficiencies and costs savings to be gained by uniform regulation. Unfortunately, the first draft of the legislation did not reflect this. The South Australian legal profession and the government saw no benefit and in fact there was a considerable downside in agreeing to adopt the proposed model. The latest draft which was released early this month does contain some amendments which appear to go some way to addressing some of the concerns expressed. However, these
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Australasian Legal Business ISSUE 9.10
Stuart Westgarth
>>
In-house Q&A
President of the NSW Law Society What the Federal Government needs to do is persuade the smaller states and territories, Tasmania and the ACT, that they have fundamentally a lot to lose if they are not part of the national legal reform process and much to gain if they are. If the scheme goes ahead with just the four current states it makes it very difficult for the other four to have any influence on the scheme or to have any representatives on the board. I would have thought in those terms, rather than being concerned with the little details of the legislation itself these states and territories should be taking a big picture approach to these reforms. The NSW Law Society recognises that a system of uniformity across Australia could bring substantial savings for solicitors and for law firms because they would only have to comply with one set of national requirements. There will be a direct benefit for those members of the profession who practice across state boundaries and an indirect benefit for those who practice only within a state boundary if there are savings in the overall cost of regulating the profession and the associated compliance costs. With all of this in mind we will continue to work at a federal and state level to ensure that the model for national regulation is adopted and is efficient, effective and affordable for those who consume, provide and regulate legal services. Westgarth is a highly experienced litigation lawyer and has for the past three years been a partner at HWL Ebsworth. Prior to this, he was a partner (including managing partner) at Corrs Chambers Westgarth. He has taken an active role in the Law Society of NSW since 2007 when he became a councillor. During this period he has been a member and chairman of the Law Society’s Litigation and Court Practice Committee, the Audit Committee and the Ethics Committee.
amendments avoid the major concerns of appropriate representation on the National Board, the cost and who bears it and over regulation. It is proposed that some of these issues will be further considered once the National Board is in place. Questions have now been raised as to whether those jurisdictions which at this stage have indicated that they will not be participating will have any say in the ongoing development of the project, including the composition of the board. If the Federal Government wishes to have a truly national profession it must ensure that those jurisdictions who have at this stage indicated that they are not participating, at least continue to be involved in the ongoing evolution of the project. To alienate them at this stage will be counter-productive. Bönig commenced his legal career at Baker McEwin (now Minter Ellison) in 1980, becoming a partner in 1988. In 1993 he co-founded Fountain+Bönig where he remained until earlier this year when he joined Finlaysons. He has been a member of the law society council since 2005 and a member of the executive since 2006. www.legalbusinessonline.com
Graeme Finlayson Company Secretary and General Counsel
Ergon Energy
1
In your opinion, why have in-house lawyers become an increasingly indispensable part of an organisation?
The push for improved governance over the last decade or so and the pace of technology, legal and regulatory change in the business world have all given inhouse lawyers higher profiles within their companies. In-house legal teams play an increasingly crucial role in helping companies better understand, adapt to, thrive, survive and cope with incremental and sudden changes in the increasingly global marketplaces, supply chains and heavily regulated environments companies must now face. Of course, the in-house team is also always very handy to have around to help out with the odd corporate scandal, major class action, reputational crisis or other compliance lapse!!
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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?
I already wear lots of these ‘hats’ and I am probably expected to wear all the other colours in the De Bono range of headgear as well - although that’s not yet in my PD. The diversity of my role certainly makes in-house life for me more demanding than I thought it would be when I took up my first in-house role in the late nineties, but also more interesting as well. In my view, this ‘many hat’ model is becoming the ‘new normal’ for many in-house lawyers - and is a natural evolution of the traditional ‘black and white’ legal business model. To cope well in this space, manage the pressure to do more with less and address the need to make decisions at the right pace, you need the support and backing of a solid legal team (in-house and external), and other allied governance professionals. Building solid partnerships and crossfunctional operating styles with other key C-Suite execs (especially CEO, CFO and Corporate/Reg Affairs) are also key ingredients needed in order to make sensible decisions in today’s business environment. Keeping very frank and open lines of dialogue between management and the Board members is always an absolute must. By working together as a team, moving information to the right points in the business quickly and through open and honest sharing of our various perspectives on problems and solutions, our in-house legal team is able to partner with the business effectively to craft commercially and legally sensible risk-based decisions.
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In your opinion, what do you consider to be the main challenges you and your team will face in 201?
Our team’s challenges for 2011 will probably be basically the same as many in-house legal teams will face. Balancing cost, coverage, compliance and client satisfaction in an increasingly more uncertain, faster paced and more heavily regulated business environment is now just part of life. Boards that stand at the ‘apex’ of the governance structure, as the Court put it in the Centro Case, are also increasingly looking to GCs and in-house legal teams ( as well as the CFOs, CROs and the audit function) to ensure that this governance structure is built on solid ethical foundations and that decisions made are able to withstand the deepest scrutiny from customers, shareholders, regulators and governments in today’s increasingly interconnected global economy.
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NEWS >>
news in brief >> Mallesons to publish gender equality data Mallesons Stephen Jaques has become the second Australian law firm to sign the UN Women’s Empowerment Principles. The principles have seven core requirements of signatories, including the requirement that they measure and publically report on progress to achieve gender equality. Mallesons chief executive partner, Robert Milliner, told the attendees at the official signing of the principles that “what gets measured gets done”. Allens Arthur Robinson was the first Australian law firm to sign the principles earlier this year, however, no news on when or what the firm will be reporting in relation to gender equality was available at time of publishing. Milliner said Mallesons had not yet mapped out how and when it would publically report on progress, but that they would meet whatever was required. “It was one of the reasons to sign on,” said Milliner. “If you have an obligation to report it, you can use that as a lever for change. Good intents are not sometimes the most affective levers.” The firm has been measuring gender equality for some time, but not in a public sense, he added.
Gilbert debates diversity The Diversity Council of Australia’s Annual Diversity Debate on September 22 saw Gilbert + Tobin managing director and founder Danny Gilbert arguing that quotas for women on boards were unnecessary . Gilbert, who was second speaker on the negative team, said quotas would result in companies thinking they had done enough about gender equality and diversity simply because they had met the quota. He also argued that there could be a risk of companies appointing women to the board who were not of the calibre of other board members. “It’s counterproductive to make concessions to quality because of quotas,” said Gilbert. “They need to be there on merit, not because of some mandatory regulatory approach.” The affirmative team, led by Carol Schwartz, founder of the Women’s Leadership Institute Australia, ended up winning the debate 61 percent to 39 percent, as voted by more than 130 industry leaders and professionals.
NZ Law Society calls for more support for women The New Zealand Law Society has called for the legal community to look at ways it can better support women in the profession. As at 1 September 2011, 4 958 of New Zealand’s 11 271 practising lawyers were women, or approximately 44 percent. However, women make up less than half that proportion among the top echelons of the profession, where only 21 percent of directors or partners are women. “
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Analysis >>
Property: CBD action heats up Foreign investors are showing an interest in Australian commercial property – but this time they’re looking for a more active role in development, reports Kalianna Dean.
D
espite the high Australian dollar, there has been a spate of foreign investment in the Australian property market. Recent examples in Sydney include K-REIT Asia’s acquisition of a 50% stake in Mirvac’s 8 Chifley Square project and ANZ selling 20 Martin Place to a party represented by Boston-based Pembroke Real Estate. “The market is quite surprising. If you had asked me six, or even twelve months ago, I would have said that the rising Australian dollar would have affected the level of interest in property investment,” notes Freehills partner Julie Couch, a partner with Freehills.
Getting in at ground level
Karen Ryder is Baker & McKenzie’s relationship partner for Pembroke Real Estate. In her view, there is a trend towards investors seeking to get involved in property transactions
at “ground level” – i.e, involved with development aspects. “Apart from [the 20 Martin Place] transaction, over the last two years I’d say everything significant we’ve been involved in has had a development aspect to it…almost buying the ground from a developer,” said Ryder. Couch agrees and says this is a recent trend. “Until recently foreign investors I’ve encountered have been looking for fully leased completed buildings with blue chip tenants to ensure a steady long term income stream,” she said. However, clients are now more prepared to invest in sites which require redevelopment because the low price compared to a premium building is appealing. “These purchasers see the potential upside of increased value resulting from the redevelopment,” said Couch. However, interest in established buildings appears to be returning although these buildings may also
►► SOME RECENT PROPERTY TRANSACTIONS Deal name
Description
Stockland asset swap with Brookfield
Sale of 50 percent interest in Bank West Aus/US Tower to U.S. investor Brookfield for A$130 million Acquired two separate properties in WA
Bendigo and Bendigo and Adelaide Bank will have its Adelaide Bank head office at the former Harris Scarfe site head office lease at 80 Grenfell Street, Adelaide.
Jurisdiction Legal advisors
Aus
Freehills , Mallesons (Brookfield); Norton Rose Australia (Stockland)
Freehills (Bendigo and Adelaide Bank);Mallesons Stephen Jaques (Pacific Shopping Centres Pty Ltd)
KWAP acqisition KWAP acquired 737 Bourke St, Melbourne, Malaysia/Aus Freehills (KWAP); of 737 Bourke St from Equiset, a Grollo company Mallesons Stephen Jaques (Equiset/ Grollo) Australasian Legal Business ISSUE 9.10
NEWS >>
>>
Technology in practice
Q&A with
Damian Huon Legal firm technology strategy specialist with over 20 years experience working with Australia’s leading firms. As CEO of Huon IT, Damian and his team achieve business outcomes for professional service organisations with ‘everything technology’.
On the fence – should my firm really go paperless? With all the benefits of electronic filing, why is paper consumption still increasing by 7% each year? Many firms sit on the fence when facing the challenges of converting to electronic filing systems. require some degree of redevelopment and refurbishment, as is likely to be the case with 20 Martin Place.
Risk management
The most successful legal advisors in this area are the ones able to help the client master all the risks associated with redevelopment, including leasing, environmental and project costs. “All of these risks are usually assessed by due diligence and then residual risks are dealt with by relatively well-established mitigation strategies, but a developer will still need to receive a premium for managing them,” notes Simone Menz, a partner with Mallesons Stephen Jaques. According to Menz, there is no ‘checklist’ that can be applied when advising clients on development risk in a particular jurisdiction. “Each real estate development is different, and the best real estate lawyers are able to quickly identify which of the risks are material for the particular client and the particular project and then come up with a commercially palatable means of mitigating that risk,” she said.
Forward funding
In some cases, developers are still having difficulty with arranging forward funding for new developments. Clayton Utz partner Gary Best is literally in a good position to comment – the new Sydney Clayton Utz offices are located in Dexus’s 1 Bligh St development, where many floors remain vacant. He says that this forward funding challenge is a factor in the trend towards developers selling equity to foreign investors at an early stage. Best says that it is likely that a number of commercial tenants might contemplate new premises in the future. “There are large tenants on the market looking for places to go,” he said. However, Couch notes that there is a risk for tenants in such a situation. “A downside of moving to new space is that it can bring some risk for the tenant in terms of making sure that the premises are ready on time and ensuring that there is no (or a minimal) period when the tenant pays rent in both ALB www.legalbusinessonline.com
1 Is the notion of a paperless office realistic? No. From both a practical and compliance standpoint, hard copies of documents will remain common practice for some time. Internally staff often hold on to paper-based methods out of habit, and externally most firms still receive volumes, albeit reduced, of physical communication. That said there is opportunity to drastically improve how you handle this reality. Instead of setting unreachable goals, firms should aim for a “Paperlight” office.
2 Is my system ready to support a Paper-light office?
While some firms have developed bespoke software, you might be surprised what technology you already have in place for electronic filing. Many multifunction devices and fax systems have Optical Character Recognition (which converts images into text), and most Document Management Systems offer modules (such as email management) to automate, or at the very least intelligently ‘predict’, filing. In short, all manners of information, including documents, letters, emails and fax, can be captured at the perimeter and filed. Staff are then simply emailed a link and can get straight to work – a huge boost for both compliance and efficiency.
can I deal with staff resistance against this shift in 3 How culture? Electronic filing systems actually remove much of the discretion and hassle of filing from your staff. From Senior Partner through to support teams, these systems make working much easier. No longer will staff need to hunt in the abyss (or someone’s desk) for a file, version control becomes a breeze, remote workers are empowered, and disaster recovery is made easy. One savvy ‘paper-light’ firm in Sydney has it down to a fine art, with just one filing clerk supporting all 200+ staff. Beyond simply providing training, “internal PR” will build confidence in this process. From the outset, user expectations should be managed honestly, and even the most stubborn users included in test groups and encouraged to ‘champion’ the change within their team. By demonstrating both the individual and firm benefits, the notion that electronic filing is a burden is erased and your firm can gear up to gain productivity, improve collaboration, cut costs and save space. Email your questions to alb@huonit.com.au
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Analysis | Shareholder Class Actions >>
Analysis >>
Share the blame Class actions are on the increase – and it’s shareholders who are at the forefront of the trend, writes Kalianna Dean
A
ccording to a recent Mallesons survey, 38 percent of ASX 200 company directors listed class actions as an “organisational concern.” Given the high profile of class actions of late, this figure has been seen by some experts as unexpectedly low. “I’d be surprised if it is only 38 percent of ASX 200 companies who are concerned about class actions,” notes John Emmerig, head of class actions at Blake Dawson. Leighton Holdings is the latest company to be involved in a class action, but other actions against defendants ranging from Centro Properties, the large banks and even the Church of Scientology have ensured that the topic rarely remains out of the headlines. However, this does not necessarily mean that the raw number of class actions has increased dramatically. “Class actions are still incredibly rare events within corporate Australia. Leighton shows that they are not going away though,” said Mallesons partner Greg Golding. Earlier research published in 2009 by Monash University professor Vincent Morabito ►► Shareholder class actions – a rising trend? Year
Securities Class Actions
1999, 2003, 2004, 2005
1 commenced in each year
2006
2 commenced
2007
5 commenced
2008
2 commenced
2009
5 commenced
2010
6 commenced
2011 (to April 30)*
2 commenced
Source: Allens Arthur Robinson *At least nine other securities class actions have been announced or foreshadowed since 2008, but had not yet commenced as at April 30 2011
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found that class action numbers were steady at an average of about 12 to 14 per year between 1992 and 2009. Emmerig says that the raw figures for class actions actually filed do not tell the full story. “It may well be that there were only 12 to 15 major class actions filed this year but all were substantial matters and there is no doubt that class actions are still on the rise. Certainly, threats of class actions against targets were vastly in excess of that number,” he said.
Shareholder class actions
Shareholder actions have been a particularly hot topic and many of the major class actions of late (Leighton, Centro, Gunns) have fallen into this category. But are shareholder actions on the rise? Research conducted by Allens Arthur Robinson indicates two shareholder class actions were commenced in 2011 by April 30. There were six in 2010 and five in 2009. Between 1999 and 2005 one shareholder class action was commenced each year except 2001 and 2002, which had none at all. At least nine other shareholder class actions have been announced or foreshadowed since 2008, but had not yet commenced at the time of the AAR survey. This seems to show that shareholder actions are on the rise, however the higher number of actions in 2009 and 2010 may be partially explained by the fact that some actions were put on hold in preceding years pending a decision as to whether litigation funds would be declared managed investment schemes. Andrew Watson, principal at Maurice Blackburn, does not believe there has been an increase in the overall numbers of securities class actions being run. “If you analyse March 09 to date you would find no dramatic increase at all in numbers of actions commenced. Looking at the current 12 month period I’m not sure we’d even be on track for 12,” he
said. Other experts, such as AAR’s Ross Drinnan, believe that there has been a “marked increase” in securities actions in recent years and predict that this trend is highly likely to continue.
Self regulation
Shareholder class actions are sometimes seen as a way of ‘selfregulating’ corporate governance standards. However, there is no clear indication class actions that reach a court will provide a more coherent or workable solution or guidance for directors. “There’s a new paradigm – when you’ve got a badly performing business you have to not only solve the problem of having a badly operating business, you’ve also got the issue of continuous disclosure and class actions to consider,” says Golding. Emmerig is concerned about the combined impact of class actions and increased regulator activity. “At the moment the risk is we’re moving towards an unhealthy balance where there’s a prospect of increasing numbers of shareholder class actions running parallel to prospective overregulation,” says Emmerig. “You can’t rely on class actions to derive better governance in companies. It requires regulatory action as well.” Trish Hyde, chief executive of the Australian Corporate Lawyers Association (ACLA) does not believe that class actions will ever become the primary tool in corporate governance issues. “I think that compliance with the law and dealing with regulators is still paramount,” she said. “I would suggest that regulatory intervention remains a more likely event.” ALB Hear from John Emmerig on class actions at the ALB Litigation & ADR Masterclass series. See p.67 for more details Australasian Legal Business ISSUE 9.10
4–7 December 2011, Sofitel Wentworth Sydney, Australia In the past few years, isolated events, both fiscal and natural, have had global repercussions. If ever there was a need for a global approach to governance, it is now. CSA’s 2011 Annual Conference takes a world view of governance and risk. To be prepared, you need to be there. To view the program, visit www.csaconference.com. Special offer for overseas delegates: Receive a 50% discount off the normal registration fees. To register, please contact Kathy Nguyen at kathy.nguyen@CSAust.com or call +61 2 9223 5744.
Platinum sponsor:
Gold sponsors:
Silver sponsor:
Supported by:
ALB hot 40 2011 >>
►► ALB HOT 40 2011 – alphabetical first name order 1. Adam Levine, Rockwell Bates
40 HOT
2011
2. Anthony Latimer, Norton Rose 3. Antony Dapiran, Davis Polk 4. Barry Brown, Chapman Tripp 5. Bill Kritharas, Sparke Helmore 6. Bridgette Styles 7. Cheng Lim, Mallesons 8. Chew Seng Kok , Zaid Ibrahim (ZICOlaw) 9. Dominic Emmett, Gilbert + Tobin 10. Doug Jones, Clayton Utz 11. Chris Freeland, Baker & McKenzie 12. Danny Gilbert, Gilbert + Tobin 13. Eugene Fung, Thomsons 14. FirmSpy 15. Garry Besson, Gilbert + Tobin 16. Graham Goerke, Jackson McDonald 17. Greg Gaunt, Lavan Legal 18. Joe DeRuvo, Fox Tucker 19. John Greig, AAR 20. John Knox , Advent Lawyers 21. John Poulsen, Squire Sanders 22. John Tuck, Corrs Chambers Westgarth
ALB’s annual look at who’s hot in the legal profession returns for 2011. Welcome to the ALB Hot 40 for 2011. This is the feature where we take a light-hearted look at the year to date and nominate the key players: those who have pulled off admirable strategic manoeuvres, those involved in the top deals and, perhaps most importantly of all, those who have become “water cooler” conversation material in law firms around Australia and New Zealand. Needless to say, the selection process is subjective and we have neither sought nor received assistance from the firms themselves in compiling this list. The Hot 40 does not purport to be a comprehensive listing of the most meritorious lawyers across Australasia; 24
our objective is more humble than that. The aim is simply to provide an entertaining recap of the key events of 2011 and the people who have inspired, provoked and amused the profession. For a more serious look at the top dealmakers and lawyers, we would direct readers to the annual ALB Law Awards. The winners and nominees of these awards can be found on the ALB website. The Hot 40 covers private practice lawyers only. The corresponding feature for the in-house profession, the In-House 10, can be found in issue 9.08 of the magazine. Congratulations to all of the 2011 Hot 40 – may the intrigue continue in 2012.
23. John Weber, Minter Ellison 24. Jon Webster, AAR 25. Kristy Calvert, Ogier 26. Leigh Warnick, Lavan Legal 27. Malcolm Stephens, AAR 28. Mark Pistilli, Clifford Chance 29. Martin Wiseman, DLA Phillips Fox 30. Martijn Wilder, Baker & McKenzie 31. Michael Blakiston, Gilbert + Tobin 32. Michael Bradley, Marque Lawyers 33. Michael Lishman, Clifford Chance 34. Natalie Gullifer, Lander & Rogers 35. Robert Milliner, Mallesons 36. Stuart Fuller, Mallesons 37. Paul Buetow, Kensington Swan 38. Phil Breden, Blake Dawson 39. Sasha Ivantsoff, Piper Alderman 40. Tony Sparks, Allen & Overy Australasian Legal Business ISSUE 9.10
ALB hot 40 2011 >>
BEST OF THE WEST 1
Greg Gaunt Lavan Legal There have been a few disputes between law firms and ex-partners of late: Clayton Utz v Grant Fuzi; Chang Pistilli & Simmons v Atanaskovic Hartnell and, on the West Coast, a less than amicable split between Lavan Legal and former partner Martin Bennett, who departed the firm with some colleagues to resurrect his boutique practice Bennett + Co. The parties traded comments in the press: Bennett was reported as claiming that the split would cost Lavan almost A$10m in fees, a figure strenuously disputed by managing partner Greg Gaunt. However, in an interview with the Australian, Gaunt offered an olive branch of sorts: “If Martin is pleased with himself and we are very comfortable with our situation, then we can all conclude that this is a win-win situation,” he said. Nice turn of phrase.
www.legalbusinessonline.com
This year’s Hot 40 kicks off with a West Australian flavour. There’s no doubt that Perth has been the hottest Australasian legal market over the past two years – and here are some of the people behind the big plays.
Two months ago, the majority of partners in Minter Ellison’s Perth office voted to break away and join Squire Sanders. It’s a move which reinforces the view that the glory days of the big national partnerships are well and truly gone. Poulsen, who will be heading up the U.S. firm’s new Perth office, may seem to be in step with the trend of market globalisation – but as he points out, it’s a lot easier to spot trends in hindsight. International mergers are a long time in the making and it would have taken some fortitude for the Minters Perth partnership to commence negotiations at a point when this particular path was less travelled.
Goerke is in the Hot 40 as a representative of the team which brought together this year’s merger of Jackson McDonald with local boutique McKenzie Moncrieff. This group, which also includes McKenzie Moncrieff executive director Rob McKenzie and Jackson McDonald CEO John McLean, have spearheaded a move that will ensure that Jackson McDonald has the scale and depth to compete with Perth’s best – according to figures published by WA Business News, JacMac now has the second largest practice in Western Australia, behind only Freehills in lawyer numbers.
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Leigh Warnick Lavan Legal Lavan Legal recruited ex Blake Dawson partner Warnick earlier this year, the
2
John Poulsen Squire Sanders
3
Graham Goerke Jackson McDonald
corporate specialist citing the firm’s “willingness to invest in the Perth market” as one of the reasons for the move. It is interesting to reflect that this concludes another chapter in the Blake Dawson – BHP relationship: Warnick was a lead advisor for BHP in its proposed iron ore joint venture with Rio Tinto in 2009. Back then he was working alongside Blakes partner David Williamson, who went on to head up the legal team at BHP. No doubt there will be plenty of other partners to continue the BHP relationship at Blakes. 25
ALB hot 40 2011 >>
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When Gilbert + Tobin began making overtures towards Blakiston & Crabb in 2009, some wondered if rival boutique Cochrane Lishman had missed the boat. It turns out that Messrs Cochrane, Lishman, Carson & Luscombe – we won’t miss choking on that mouthful of a firm name – were waiting for a boat of a rather different variety. Clifford Chance certainly had the luxury of Michael Lishman choosing between some Clifford Chance very well credentialed Perth boutiques and despite the media tipping a three-way Gilbert + Tobin/ Blakiston & Crabb/ Clifford Chance merger, it was CLCL which was ultimately anointed as the Magic Circle firm’s Perth partner.
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Blakiston & Crabb officially “tied the knot” with G+T this year after a 12 month trial period. According to Blakiston, junior and mid-cap miners are becoming more sophisticated and in turn their requirements for legal advice are also evolving – hence Michael Blakiston the need for access Gilbert + Tobin to G+T’s depth of service. That’s an important point which has implications for boutique law firm operators in the Perth market – will they be able to remain independent or is some kind of tie-up with a larger firm inevitable?
NO EXPLANATION REQUIRED The following gentlemen will be very familiar to readers – so well known that we could almost run the photos without further elaboration. Of this trio, one’s retiring from the CEP role, one’s just been promoted to CEP and the third has some surplus CP&S signage and stationery to sell at a very reasonable price. Drop him a line.
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The well respected Milliner, who steps down from the CEP role at Mallesons at the end of the year, was the winner of ALB’s Managing Partner of the Year Award for 2011. In addition to his role at Mallesons, he has performed a number of other important functions including leading the Large Law Firm Group and serving on the board of the Business Council of Australia and the Australian Charities Fund. A keen hiker, he’s looking forward to climbing mountains – literally, not metaphorically – next year.
Robert Milliner Mallesons
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Australasian Legal Business ISSUE 9.10
ALB hot 40 2011 >>
8
Stuart Fuller Mallesons
Incoming Mallesons CEP Stuart Fuller has been handed the keys to the kingdom - but the barbarians are at the gate. It is hard to imagine a firm which has more to lose than Mallesons as competition for premium work and top talent intensifies – however, it is also difficult to imagine a firm of this calibre allowing its destiny to slip away. One to watch in 2012.
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We try to avoid repeat listings in the Hot 40 in consecutive years unless the lawyer has reached a Philippa Stone-esque level of fame. However, the reason for including Pistilli in this year’s Hot 40 after last year’s appearance will be selfevident to readers: if luring Clifford Chance down under doesn’t make Mark Pistilli you a hot topic, nothing will. Let’s Clifford Chance hope being part of a global firm does not blunt the entrepreneurial spirit we’ve come to expect from Chang, Pistilli & Simmons.
THEY’LL BE RIGHT
We all know that it’s a challenging market for law firms – but 2011 has proved to be more challenging for some than others. Take the following examples….
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It’s never nice to discover that your partner has been flirting with other people – particularly when that partner is no less than PRC heavyweight King &Wood. It’s not clear how far the PRC firm has progressed with its discussions with Mallesons and whether these arrangements will automatically Danny Gilbert negate its relationship with G+T, but as Gilbert himself has conceded, Gilbert + Tobin things are looking a little uncertain. Still, G+T boasts some enviable talent in its ranks which will continue to keep the firm in good stead, regardless of what happens off-shore.
Weber now has the task of rebuilding Minters in Perth following the departure of the majority of that partnership for Squire Sanders. That is a minor challenge compared to the broader implications for the firm. What is the road ahead for Australia’s largest national firm in an era where size is often seen as a liability? However, Minters is not as John Weber large as commonly assumed – offices Minter Ellison such as New Zealand and Adelaide are still financially separate and represent nearly a third of the overall number of partners. All top tier firms are unique in their own way – but perhaps Minters has the most distinctive set of strengths and challenges.
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www.legalbusinessonline.com
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Baker & McKenzie always did pride themselves on their ability to build a truly local firm in whatever jurisdiction the firm chose to have a presence. Trouble is that they may have been a little too successful in Australia: when the invasion of the Australian Chris Freeland market by international law firms Baker & McKenzie is discussed by the media, Bakers rarely gets a run. Freeland has the task of giving journalists a history lesson in which the year 1964 (Bakers’ Australian arrival) features heavily. We feel your pain, Chris.
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Martin Wiseman DLA Phillips Fox
We’re not sure who left whom behind, but when the DLA Phillips Fox Australia partners hopped on board the DLA Piper express, their erstwhile colleagues in Auckland were making their own travel plans. Wiseman is head of the Auckland practice, which is continuing under the Phillips Fox brand for the moment. He’s keen to reinvigorate the practice and has already started the process with a slew of internal partner promotions.
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ALB hot 40 2011 >>
SWIMMING AGAINST THE TIDE With the global legal industry on the verge of major upheaval, we pay tribute to those who have had the courage to challenge industry orthodoxy – in more ways than one.
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At first we thought that the media’s captivation with Michael Bradley and Marque Lawyers was some kind of passing fad, rather like hula-hoops or the Spice Girls, to whom Bradley admits to having a partiality. However, Marque has continued to hold the spotlight after several Michael Bradley years in business. The truth is that Bradley really Marque Lawyers does have something original to say and knows how to get his message across. Intelligence, originality and a touch of irreverence is sometimes all you need.
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Styles is the former Clayton Utz lawyer who launched an action against her old firm on grounds of alleged workplace harassment. This case was still in progress at time of publication. Regardless of the outcome, the high profile Bridgette Styles nature of this case certainly warrants Styles’ inclusion in this year’s Hot 40. Our objective in this instance is not to provide commentary on Styles or Clayton Utz, but simply to record this dispute as one of the high profile incidents involving the profession in 2011.
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Joe DeRuvo Fox Tucker
The defection of the Phillips Fox partners in Brisbane perhaps had a precedent in the departure of the firm’s Adelaide partners in 2010 to form Fox Tucker. The straight-talking DeRuvo has no qualms that this was the right decision for his partnership and says that profitability has increased dramatically since the split, particularly because of reduced overheads. With all the talk of globalisation going round at the moment, that’s a story worthy of attention.
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Someone who is not afraid to put the boot into Clayton Utz is online gossip blog FirmSpy, which has become the forum of choice for the industry rumour mill. Receiving anonymous tip-offs from insiders, FirmSpy the site has often been the first to break news of crises, defections and mergers at the top firms. Supporters have praised the blog’s acerbic wit and willingness to criticise the industry, while others argue that the site is inaccurate and even defamatory. The identity of the author(s) of FirmSpy remains a mystery. The most common conjecture is that the site is the lovechild of disgruntled ex-Clutz lawyers or alternatively an industry journalist blogging away after dark. Let’s hope whoever it is has expertise in creative asset management – baiting lawyers may prove to be an expensive hobby.
Australasian Legal Business ISSUE 9.10
ALB hot 40 2011 >>
GREENER PASTURES In this environment, we could fill the entire top 40 with high profile lawyers who have made the move to another firm. Talent is certainly fluid – and here is our pick of the top moves. Fung appears in the Hot 40 as a representative of the 15 DLA Phillips Fox partners (nine in Brisbane and six in Canberra) who voted with their feet on the DLA Piper integration and parachuted out of the firm shortly before the merger was due to take effect. The defectors headed to Thomsons Lawyers in Eugene Fung Brisbane and HWL Ebsworth Thomsons in Canberra. The Brisbane moves must have come as a particular disappointment to DLA Piper – partners such as Fung, with backgrounds in M&A and finance, would have been an ideal fit for the global firm.
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No edition of ALB would be complete without the compulsory “Magic Circle firm gobbles top tier talent” headline. There are no shortage of candidates to fill this role in the Hot 40, but we thought the departure of the respected Sparks from Freehills for A&O was a particularly notable case in point. Rumours of Philippa Stone also Tony Sparks making the move to A&O have Allen & Overy circulated – but these were also around last year. Idle minds make mischief; no smoke without fire – make your inference and choose your cliché.
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Commercial Dispute Resolution - results, no surprises Our national CDR group focuses on the best approach to achieve our clients’ goals. Our expertise in negotiation, mediation and commercial litigation coupled with a deep understanding of the issues delivers great outcomes. For strategic results without surprises, contact our team today. Melbourne Sydney Brisbane
Howard Rapke Harold Werksman Paul Venus
T: +61 (0)3 9321 9742 T: +61 (0)2 8083 0405 T: +61 (0)7 3135 0613
E: howard.rapke@holdingredlich.com.au E: harold.werksman@holdingredlich.com.au E: paul.venus@holdingredlich.com.au
www.holdingredlich.com.au HR ALB - Commercial Dispute Resolution October 2011 FINAL.indd 1 www.legalbusinessonline.com
19/09/2011 2:27:30 PM
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ALB hot 40 2011 >>
Breden made the move from Gilbert + Tobin to Blake Dawson, an interesting move which contrasts Phil Breden to the usual Blake Dawson traffic from the “big six” to G+T. Breden, who was at G+T for almost 14 years, has plenty of major clients and transactions to his name, including advising Shell on the sale of its stake in Woodside and Fletcher’s acquisition of Crane. Blakes also recruited M&A specialist Jason Lambeth from G+T last year.
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Dominic Emmett Gilbert + Tobin
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It may not have the glamour of corporate or banking & finance, but workplace relations law has been one of the John Tuck hottest areas Corrs of practice in recent years as employers struggle to keep up with the Fair Work Act. There have been many significant senior movements in this space, but the recruitment of Tuck, formerly head of workplace relations and employment law at DLA Phillips Fox, is particularly notable. Corrs later followed up this appointment by recruiting Joanna Glynn from Freehills
Emmett has advised on some of the most high profile restructuring matters in Australia of late, including the ALB Award-winning A$2.5bn Alinta restructure and the Timbercorp liquidation. Emmett, formerly a star partner at Corrs, was recruited by Gilbert + Tobin in September. He’s the eighth partner in G+T’s revitalised banking & finance group
Meanwhile, Norton Rose has pushed ahead with important hires in other areas - John Moutsopoulos, Zein El Hassan and Paul Humphreys joined from Clayton Utz and Tessa Hoser has joined from in-house. Anthony Latimer’s hire from Corrs is another important senior Anthony Latimer appointment. Latimer was formerly co-head of Corrs’ China Business Norton Rose Group and is an example of how the global platform offered by Norton Rose appears to be a factor in persuading talent to make the move across to the Silver Circle firm.
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While Freehills was undertaking its Leading Practices Review, some partners were also making strategic decisions Natalie Gullifer about their future. ExLander & Rogers Freehills financial services partner Natalie Gullifer departed for Lander & Rogers in May in another sign of the mobility of talent in this market and the capacity of mid-size firms to recruit well. Meanwhile, Freehills CEO Gavin Bell said that the move was unrelated to the Leading Practices Review and that the firm remained committed to its superannuation practice.
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There have been plenty of positive recruitment stories at Norton Rose since the merger, but a few senior lawyers have also headed for the exit. One of the more interesting moves was that of workplace relations expert Bill Kritharas. He was named as a new partner by Norton Rose in April, but opted to make the move to Sparke Bill Kritharas Helmore instead. He’s also Deputy Mayor of Canterbury City Council in Sparke Helmore Sydney, where one of his projects has been the provision of legal advice, in partnership with Salvos Legal, to those who are otherwise unable to access such services.
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Paul Buetow Kensington Swan
They tried a CEO-led structure and apparently decided they liked the managing partner model better. Construction lawyer Buetow is the new managing partner at NZ firm Kensington Swan after CEO Chris Heilbronn departed the firm. The shift from CEO to a managing partner-led firm structure has also occurred at Chapman Tripp, where outgoing CEO Alastair Carruthers was replaced by managing partners Andrew Poole and Mark Reese.
Australasian Legal Business ISSUE 9.10
ALB hot 40 2011 >>
PRACTICE MADE PERFECT
In between the law firm mergers and lateral hires and general plotting, some lawyers actually managed to practise some law in 2011. Here are some of the more interesting highlights.
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Class action culture is on the rise in Australia and firms are positioning themselves accordingly. Piper Alderman has had no hesitation in nailing its colours to the mast: partner Sasha Ivantsoff hit the media circuit earlier this year to drum up business for a class action Sasha Ivantsoff against Vodafone. It might seem like an unusual move, but the firm Piper Alderman has maintained that it’s business as usual in the disputes practice: there has been no shift towards a plaintiff-oriented model.
One of the highlights of the year to date has been the reaching of agreements between the government, NBN Co and various telecommunications companies over participation in the Australian National Broadband Network. Leading the charge has been Mallesons’ Cheng Lim, who has Cheng Lim been clocking up the hours on Mallesons Telstra’s A$11bn deal with the government. Lim is proud of the milestone – but as he points out, it’s only the first step in a journey of many miles for everyone concerned.
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Brown was named NZ Dealmaker of the Year at the 2011 ALB Law Awards. Deals which Brown has advised on include acting for Shell on NZ’s biggest M&A deal of 2010, the sale of Shell NZ’s refining and downstream business to a consortium and Shell’s A$353m divestment of cornerstone stake in infrastructure contractor Fulton Hogan. Brown also advised on the Heartland bank merger, a particularly unique transaction. www.legalbusinessonline.com
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Barry Brown Chapman Tripp
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Jon Webster AAR
Webster was named ALB’s Australian Dealmaker of the Year in the 2011 Law Awards. This award has shown no geographical bias in recent years, crossing from Sydney-based Philippa Stone (Freehills) to Perth-based Nic Tolé (AAR) to Melbourne-based Webster. Highlights for Webster which would have impressed the ALB judges include advising on Newcrest Mining’s A$9.6m merger with Lihir Gold and Shell’s joint A$3.4bn acquisition of Arrow Energy.
With his regular press commentary and books on international arbitration, Jones must be one of the highest profile Clutz partners since Grant Fuzi left the place. Jones is president of the Chartered Institute of Arbitrators in London, the president of the Australian Centre for International Commercial Arbitration (ACICA) and he’s also continuing as a partner at Clayton Utz. Jones has been a keen advocate of commercial arbitration in Australia and some of the initiatives of ACICA have drawn praise from industry heavyweights such as BHP.
Some lawyers refer to it as the “Gary and Garry” show – G+T’s well credentialed M&A pair Garry Besson and Gary Lawler. Besson, a finalist in the 2011 Australian Dealmaker of the Year category, was also an advisor on Shell’s sale of its Woodside stake and a series of complicated transactions involving Arrow Energy which went on to take the title of Energy & Resources Deal of the Year at the ALB Awards.
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Doug Jones Clayton Utz
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Garry Besson Gilbert + Tobin 31
ALB hot 40 2011 >>
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Malcolm Stephens AAR
Stephens led the legal team that has worked on two landmark High Court decisions in the last 12 months. The first involved the rights of asylum seekers arriving on Christmas Island and the second case was the very high profile ruling which halted the Commonwealth Government’s plan to send asylum seekers to Malaysia. The implications of this verdict are too complex for it to be characterised simply as a victory for asylum seekers, but no doubt the decision was a very welcome one for the asylum seekers originally destined for Malaysia.
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Martijn Wilder Baker & McKenzie
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John Greig AAR
Last year’s float of QR – also the Australian Deal of the Year at this year’s ALB awards – was the fruit of the labours of many lawyers and cannot be credited to one firm or individual. However, the AAR team which advised the Queensland government and was led by partner John Greig, is our choice to represent this deal in the Hot 40. AAR reportedly collected A$4.8m in fees for this work, according to Fairfax. Also worthy of a mention is Clayton Utz, which advised the joint lead managers on the float under the leadership of ECM head Stuart Byrne.
Back in 2007, when both major Australian political parties were making soothing noises about the imminent introduction of an emissions trading scheme, ALB predicted that Wilder’s hour had finally arrived. Wilder, of course, is a notable example of an “early mover” who has built a reputation in the area of emissions trading. The path to an Australian scheme has proved to be fraught with difficulty but now, as we gear up for the formal commencement of the Gillard government’s carbon scheme, carbon lawyers finally have some real detail to advise on – barring a snap election or some other disruption in Canberra. Perish the thought.
FIVE OF ASIA’S BEST With all eyes on our Asian neighbours, here are six big names of particular relevance to Asia-Australian law firm relationships.
36. Chew Seng Kok
37. Antony Dapiran
Zaid Ibrahim (ZICOlaw)
Davis Polk
With all the attention on Magic Circle entrants, you could have been forgiven for overlooking the arrival of Malaysian firm Zaid Ibrahim in Australia. Managing partner Chew Seng Kok is at the helm of a rapidly changing firm. In an effort to establish the firm as an “Asean brand”, Zaid Ibrahim has recently rebranded its regional offering under the moniker ZICOlaw and has named Singapore as its regional hub. It has also announced plans to expand into Indochina within the next two years.
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Aussie firms aren’t the only ones revising their Asia strategy. U.S. firms have been becoming progressively more serious about diversifying their offering in the region and Hong Kong is high on the list of priorities. A key trend is U.S. firms poaching from Magic Circle firms to build local HK expertise and exFreshfields Dapiran is but one example of this. Dapiran has advised on many of the largest and most complex IPOs in the China market, on transactions raising more than US$60 billion, including the IPOs of Agricultural Bank of China and Industrial and Commercial Bank of China. Australasian Legal Business ISSUE 9.10
ALB hot 40 2011 >>
38. Adam Levine
39. John Knox
40. Kristy Calvert
Rockwell Bates
Advent Lawyers
Ogier
Rockwell Bates is a Melbourne-based boutique practice with a very cool name. Earlier this year, the firm announced a mutual referral and preferred partner relationship with Mumbai-based firm Rajani Associates. The association, which is not based on exclusivity or any “best friend” relationship, will give Rajani access to the local laws of Australia through Rockwell Bates and give clients of the Australian firm a reference point for their activities in India. This is certainly a relationship to watch in the months ahead: will it succeed where the ‘best friends’ model has failed?
www.legalbusinessonline.com
Advent Lawyers, with its unusual secondment-only style model, became the seventh Australian law firm to enter the Singapore legal services market earlier this year. Knox, the firm’s founder and chief executive officer, has his sights set on penetrating lucrative South East Asian markets such as Malaysia, Thailand, Vietnam, Indonesia and India. Advent is no stranger to India in particular - in early 2010, the firm signed a collaboration agreement with Indian LPO Pangea3 which enables the latter to export its service to Australia. The firm’s business model, within and outside of its relationship with Pangea3, has proved immensely successful over the past few years so much so that the firm counts companies such as Macquarie Bank, Merrill Lynch and Cisco as regular clients.
The former legal director for China/ Asia at Anglo- Australian mining giant Rio Tinto was poached earlier this year by offshore law firm Ogier to head up its Shanghai office. While the firm is not licensed to advise on offshore law from its location, Calvert will play a big role in drumming up business in what is set to become one of the largest markets for offshore law advice in Asia. Watch for her to lean on her in-house and private practice clients in the energy & natural resources sectors.
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Feature | interview >>
In-house perspective
Emma Zipper, Bupa Australia
A real Zipper of a story Bupa Australia general counsel and company secretary Emma Zipper tells Olivia Collings about the secret ingredients to an award winning in-house team and how to manage family commitments.
“There is a myth to in-house that you don’t do as much work. I’m working as hard as I did at Mallesons,”
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hen Emma Zipper decided to take the plunge and go in-house she thought she would be decreasing the workload and pressures she felt as a senior associate at Mallesons Stephen Jaques. She was wrong. “There is a myth to in-house that you don’t do as much work. I’m working as hard as I did at Mallesons,” says Zipper, general counsel at Bupa Australia. In the seven years Zipper has been at the healthcare company, the size and scope of Bupa has changed dramatically and so has her team. In 2008 Bupa merged (through a friendly takeover worth A$2.41 billion) with Australian Insurance group’s MBF. Last year Zipper and her team completed the final piece of the puzzle, merging the three health funds operated by Bupa (HBA, MBF and Mutual Community) into a single fund in addition to advising on the sale of the Bupa financial services arm. Zipper started her career at Freehills working in the IP and patent litigation practice. She then went to Mallesons
where, as a senior associate, she carved out a practice dedicated to the IT and IP landscape during the years of the dot.com boom. “I developed expertise in telecommunications, the regulatory and commercial side of it. As new things were developed I would have to learn about the regulation that covered it. I was involved with new technologies and new business models; it was a very exciting time,” she recalls. When she first joined Bupa, Zipper was the sole in-house lawyer, but within six months her work load had increased so dramatically she needed to add another lawyer. Since then the inhouse team has grown to 11 full-time legal roles (a team of 13 lawyers) and was last year named In-house Team of the Year at the Australian Corporate Lawyers Association (ACLA) Awards. Zipper was also a finalist for in the Corporate Lawyer of the Year Award.
Work place philosophy
The Bupa in-house team operates on a centralised model, with individual lawyers dedicated to separate areas of Australasian Legal Business ISSUE 9.10
Photography by Thilo Pulch
Feature | interview >>
www.legalbusinessonline.com
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Feature | interview >>
the business. “They each have specific clients and individuals in the business that they deal with, so it is almost like a law firm,” says Zipper. While each business area has their own contact the team members cross-reference work between each other behind the scenes to ensure the best possible advice, says Zipper. “We don’t have one person who does all the work for that one area, but they will be the first point of contact,” she states. Operating the team in this manner also assists in justifying new staff to the business, adds Zipper. “If you have lawyers who are dedicated to particular client relationships overtly, with titles that say so, when you go into management and tell them you need a lawyer that does (X) for client area (X) then they are more likely to say yes,” she states. She also employs time sheets for one month a year to assist in collecting data on where and what her team are doing and for which areas of the business. Lawyers in the team are highly experienced and enjoy a great deal of autonomy and flexibility under Zipper’s watch. “I have recruited people who have basically made it to the senior associate level in the top tier law firms, who can function very well autonomously,” she explains. “I’m here to give guidance, but I believe in empowering people to make decisions.” Indeed, having worked as a senior associate in a growing practice at a top tier law firm while starting a family, delegation has been somewhat of a cornerstone of Zipper’s legal career. “Delegation, particularly when I had a young family was essential,” she says. “I worked for a partner in the early days at Freehills who was a fantastic delegator… I think a lot of people take too long to delegate and I don’t think you can succeed if you are hanging onto everything.” Holding onto work unnecessarily is also bad for clients, according to Zipper. “I was always conscious of economic consequence of what I was doing and
the impact on clients that it has. It’s inefficient to hang onto everything,” she states. In addition to staff making important decisions on their own Zipper also places a high priority on staff choosing when and how they will do their work. One of the criteria the team was judged on by ACLA was the flexible work practices utilised by them, while still managing to complete close to 90 percent of the company’s legal work. “I have always questioned the nine to five mentality,” says Zipper. “I don’t think these days, with the availability of new technologies that you need to be sitting in a room at an office to get work done.” Having employed flexible work hours herself, Zipper says it’s important to provide staff with the same option, particularly when it comes to retention. “I think the inflexibility of a lot of places means they lose people,” she says. Her team work on a variety of formal and informal work arrangements, including job share. “As long as the work is getting done, I have never had the view that you can’t be flexible,” she adds.
Seeking advice
While a lot of work is completed inhouse, the team still relies on external firms for assistance, particularly with M&A, litigation and property work. In the past Zipper has used Freehills and Mallesons as well as Arnold Bloch Liebler for property work, but did not have a formal panel structure as the volume of work briefed was not substantial enough to warrant a panel. However since the merger with MBF and the sale of the life insurance and wealth management businesses to MMC Contrarian Limited for A$195 million, both of which were handled by Freehills, things have changed. As of last month Bupa Australia has announced formal legal panel including four firms. As part of the tender process for the panel Zipper asked the firms to agree to participate in a global benchmarking exercise along with firms in other
“I’m here to give guidance, but I believe in empowering people to make decisions” 36
jurisdictions. “We think it will be a good practice for everybody, because we get to see how the firms we use in Australia rate against those overseas,” says Zipper. In addition to being in-line with other Bupa jurisdictions, Zipper says the move to a formal panel is also value driven. “We think it is good practice to have some formality around legal services to manage costs and to demonstrate to the business the value of the external advice and spend,” she adds. When it comes to external legal advice Zipper describes herself as being ‘picky’. “We look for partner level engagement - for us the only point of going external is for a partner and their expertise,” she says. As a result of this she deals very closely with lead partners and relationship partners to make sure that the people working on the matter are “the best”. However, just because she is using the best, doesn’t mean she is willing to pay for partners running up the clock. Instead, Zipper prefers to have firms provide her with tight estimates that she can take to the business. “Certainty is better than cheap,” states Zipper. “Even if it’s a bigger number, you are better off having that when working within the budgeting system of a company.”
What next?
Having already grown a team from one to 11, and merged three funds into one, it would be easy to expect Zipper’s work load to be easing, but it’s not. Bupa Australia remains an active player in the M&A market and although the three funds are now officially merged, there is still a lot of work to do in terms of strategy of the business and bringing back end operations together. “Bupa has become quite large in the health and care sector in the region, it plans to continue to grow and the legal team is supporting that process,” explains Zipper. The industry in which Bupa operates is also a key factor in what is coming across Zipper’s desk. “Health is highly regulated; it’s very high on the political agenda,” says Zipper. “You need to have an understanding of where the world is going and what community expectations are and what government wants and expects.” ALB Australasian Legal Business ISSUE 9.10
feature | insurance >>
The insurance work boom While the Australian insurance industry has seen its fair share of tough times, on the upside, current market conditions are leading to busier and bigger practices, reports Olivia Collings
“Natural disaster claims are taking a long time to work through the system because of the sheer volume of claims” Matthew Harding
HWL Ebsworth.
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t’s certainly been a tough year for the global insurance industry. Global re-insurer Munich Re is on record as describing 2011 as the most expensive year to date for the industry, while Lloyd’s of London described it as the second most expensive year for insurers. Local insurers have also felt the full force of various natural disasters across the region, although some less than others. Sydney-based insurer QBE Insurance Group managed to book a first half net profit of A$649.7 million— an increase of 53 per cent compared to last year. At Suncorp Group the results were less positive; the insurer posted a 42 per cent drop in full-year net profit from A$780 million in June 2010 to A$453 million in June 2011. As of August this year, 57,730 claims relating to the floods in Queensland had been made, while A$1.2 billion had been paid to 71 per cent of settled claims. More than 70,000 claims related to Cyclone Yasi, and of those, only 61 per cent were closed. It is estimated the full costs of the cyclone to the industry will be closer to A$1.25 billion, on top of A$2.45 billion worth of flood damage.
This means more work for lawyers, although they have not seen a huge spike yet. “Natural disaster claims are taking a long time to work through the system because of the sheer volume of claims,” says Matthew Harding, a partner at HWL Ebsworth. “Often the issue is the quantification of loss, which can involve a long and detailed process of establishing what the loss was.” Indeed the time lag aspect is particularly strong when it comes to large scale natural disasters. Sparke Helmore’s Rhett Slocombe is just now beginning to do work associated with the Black Saturday fires which occurred in early 2009. “We are also still involved with litigation relating to the Canberra bush fires that happened many years ago,” he says. However, in recent months, he has received instructions from some of the large property insurers to provide them with advice on claims they have paid out following the events earlier this year. “A majority of insurers on the ground have taken the view that they will pay out on most claims, and are now going back through those claims to see if there is a possible recovery or a re-insurance issue that they can seek to mitigate their exposure,” he says. Australasian Legal Business ISSUE 9.10
feature | insurance >>
Slocombe expects to see more work related to the events of early 2011 later in the year and early next year. “If you look at it in waves, the first wave of work is advice work around indemnity and whether a claim should be paid,” he states. “The second wave of work will be dispute work around claims.” Insurance lawyers are also being called on to provide advice to clients involved in the various inquiries associated with the disasters. The Queensland Flood Inquiry, Victorian Bushfire Commission and the Natural Disaster Insurance Review (NDIR) are all placing additional pressures and requirements on insurers and their lawyers. Cooper Grace Ward is advising one such insurer involved in the flood inquiry, which is generating work for partner Andrew Cheetham and his team.“This back half of the commission of inquiry is focusing on the conduct of insurers. It’s very busy right now and after the commission, there will most likely be recommendations made and then the implementation of those recommendations will lead to work for us, along with advising our clients on the appropriateness of those recommendations.” Cheetham says the volume of work coming through the www.legalbusinessonline.com
door has forced him to add two new lawyers to the team, and he doesn’t see it slowing down anytime soon.
Regulatory bodies ramping up
In 2008, the Australian Securities and Investment Commission (ASIC) merged the three biggest complaints schemes operating in the financial services industry, including the insurance ombudsman, to form the Financial Ombudsman Service (FOS). Since then, the scope and volume of claims running through FOS have increased
significantly, according to insurance lawyers who spoke to ALB. “I’m seeing a lot more activity involving FOS,” says Fox Tucker partner Bastiaan Sparreboom who leads the insurance practice. “As recently as five years ago, I would have had six matters go to trial every year— now I’m doing an average of a mediation a week and I hardly ever go to trial.” All personal indemnity policies provide cover for policy holders who find themselves at FOS, in front of
►► CURRENT DISASTER STATISTICS at 25 August 2011 Event
Date dd/mm/yy
Location
QLD Flooding
21/12/2010 to 14/01/2011
VIC Flooding
State
Numbers of Claims
Cost (Current figures)
QLD, Rural, Toowoomba, QLD Lockyer Valley
57,730
A$2.45 billion
13/01/2011 to 18/01/2011
VIC
VIC
7,791
A$114 million
QLD Cyclone YASI
02/02/2011 to 07/02/2011
QLD
QLD
71,145
$A1.25 Billion
VIC Severe Storms
04/02/2011 to 06/02/2011
Melbourne & Suburbs
VIC
48,962
A$384 million
WA Perth Bushfires
05/02/2011 to 07/02/2011
Perth & Surrounds
WA
410
A$35 million
Source: Insurance Council of Australia.
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feature | insurance >>
►► Top five insurance companies in Australia (alphabetical order) Group
Brands
Size
Allianz Australia (Part of the Allianz Group)
*Allianz Australia Insurance *Club Marine *Allianz Life Plan *Allianz Global Corporate & Specialty
Has a combined premium income of more than A$2.4 billion and investment assets of approximately A$4.6 billion
AXA Australia and New Zealand / AMP
*AXA Australia Individual Insurance *AXA Australia Group Insurance
In March 2011 AMP officially merged with the Australian and New Zealand aspects of AXA Asia Pacific in a A$4.15 billion deal, creating a company with net annual premiums of A$1.53 billion in 2010.
Insurance Australia Group (IAG)
*NRMA Insurance * CGU *SGIO *SGIC *Swann Insurance *The Buzz *NZI and State Insurance
In the 12 months to 30 June 2011 IAG businesses reported gross written premiums of A$8.05 billion.
QBE Australia (part of the QBE Insurance Group)
*QBE Personal Insurance *QBE Business Insurance *QBE Workers Compensation
QBE has been providing insurance for more than 125 years. In the 12 months to June 2011 the group reported a gross written premium of $8.942 billion
Suncorp Metway
*AAMI *GIO *Suncorp *Vero *Apia *Shannons *About Suncorp Life *Suncorp Life *Asteron *Tyndall
Suncorp is a top 25 ASX-listed company with over A$95bn in assets. IN the 12 months to June 2011 it wrote A$7.28 billion worth of insurance premiums
ASIC or in court, which is where the insurance lawyers come into the mix. In recent years, lawyers have seen the number of professionals being pursued is on the increase, and as a result, more professional indemnity policies kicking into action. “We are seeing growth in professional liability claims,” says Sparreboom. According to most lawyers, this is a result of a number of factors, including the global financial crisis, greater regulation and investors looking to recoup losses. “There are some aggressive second-tier lenders, in terms of market penetration and getting loans out, who, when things go wrong, become equally aggressive in terms of getting their money back from professionals associated with failed or collapsed investments,” says Sparreboom. Insurance brokers in particular are a target in these disputes, says Sparreboom. “There has been a significant increase in our work
Tony Park Partner T 61 7 3231 2460 E tony.park@cgw.com.au
Specialists in Insurance
Terry Batch Partner
Cooper Grace Ward Lawyers’ Insurance team comprises 25 highly experienced lawyers including six partners. The Insurance team has an expanding focus on professional indemnity insurance including traditional lines, financial services and medical malpractice. Solicitors Engineers Architects Real estate agents Directors and officers Valuers
• Stockbrokers • Financial planners • Insurance brokers
E terry.batch@cgw.com.au
Carol Lee Partner T 61 7 3231 2935 E carol.lee@cgw.com.au
The team specialises in defending claims against: • • • • • •
T 61 7 3231 2921
• Health professionals • Hospitals
The firm is delighted to welcome Craig McIver as a specialist in financial services.
Kevin Bartlett Partner T 61 7 3231 2496 E kevin.bartlett@cgw.com.au
Quentin Owen Partner T 61 7 3231 2910 E quentin.owen@cgw.com.au
Andrew Cheetham Partner T 61 7 3231 2960 E andrew.cheetham@cgw.com.au
Finalist - ALB Australasian Law Awards 2010 (Insurance Specialist Law Firm of the Year)
Craig McIver Special Counsel T 61 7 3231 2518 E craig.mciver@cgw.com.au
T 61 7 3231 2444
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www.cgw.com.au Australasian Legal Business ISSUE 9.10
feature | insurance >>
related to brokers,” he says. A common reason for this is that during the GFC, companies which were not as profitable or on the verge of collapse would often downgrade or cancel their insurance policies altogether. “A company will tell their broker they no longer need or want to [provide] cover (x). The broker cancels it, then a few months later, a claim arises and [the holder] is not covered. So they pursue the broker for failing to adequately explain the situation to them or for not conveying what their risks exposure is,” explains Sparreboom. Disputes such as these will regularly be heard in FOS before proceeding to court. FOS requires parties involved in a dispute to undertake mediation through an informal process conducted over email and phone calls. Sparreboom says the growth of FOS cases can be directly attributed to the increasing costs of litigation which he describes as “hideously expensive”.
Wotton + Kearney partner Nick Lux has also witnessed the increased presence of FOS in his work. “If I look at what financial services claims are on my shelf now – FOS is half of those claims,” he says. “A large part of my practice is acting for financial planners who have ended up at FOS. It has become the key forum for disputes.” FOS’s jurisdiction was further expanded as a result of new terms of reference which came into effect on January 1 2010. This increased a monetary limit of claims that could be heard at FOS. “I think general insurers are increasingly involved with FOS,” says Harding.
Bastiaan Sparreboom
Fox Tucker
Directors and officers
Along with professionals, directors and officers are increasingly utilising their insurance cover to gain legal advice in actions against them by various parties. “I’m seeing a lot more activity in the directors and officers
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“We are seeing growth in professional liability claims,”
2011 41
feature | insurance >>
“A large part of my practice is acting for financial planners who have ended up at FOS.” Nick Lux
Wotton + Kearney
42
space because of company collapses and ASIC,” says Sparreboom. “Nearly every director and officer policy has a provision that the insurer will provide support during an ASIC investigation.” A High Court decision in 2005 has forced insurers to send in lawyers to assist policy holders under ASIC scrutiny much earlier according to Sparreboom. “Prior to the Rich decision (Rich v CGU Insurance Ltd), insurers would sit on the fence because the policy would not kick in until they had been convicted of something. But now, when there are ASIC investigations against directors and officers we are coming in to assist them much earlier. It’s adding to our workload and bringing it forward.” Slocombe agrees the director and officer space has picked up not only in terms of the volume of claims and investigations but also the value of the claims. “Some of the claims coming off the back of the GFC are quite large and some directors themselves or their organisations will take [a] hit,” he says. Harding says an increased amount of regulation on directors is resulting in more activity in the sector. “There are more onerous obligations on them, which means they need more assistance and support from external advisors,” he states. While there’s more regulation, ASIC is also increasingly holding directors and officers to account, adds Harding. “It brings civil proceedings and breaches of The Corporations Act to the front,” he says, “A lot of the work involves section 19 examinations. Prior to litigation being commenced by ASIC, we advise insurers and their clients on whether they have to comply with ASIC and answer questions.” The harmonisation of Occupational Health & Safety laws across the country from January 1 next year will require many organisations to review their director and officer insurance policies. One key aspect of the new laws is directors and officers may be liable in circumstances where they have failed to exercise due diligence to ensure the company complies with its OHS obligations. This liability is not dependent on a contravention of
the OHS laws by the company and is a standalone obligation.
Inbound work
Australian insurance practitioners have been working for London-based clients for some time, but the volume of work flowing south is rising, according to lawyers. “Six years ago, I might have had 10 per cent of business coming out of the London market— it’s now about 80 per cent,” says Sparreboom. He says a large amount of this increase in work from the London market— the biggest insurance market in the world— can be attributed to the collapse of HIH Insurance in 2001. HIH was Australia’s second largest insurance company and their collapse is considered to be the largest in Australia’s corporate history. “With the collapse of HIH, capacity to write professional risks and commercial lines in the Australian market disappeared. It went to the London market where that capacity exists,” states Sparreboom. In the 10 years since the collapse, there have been rumours that Australian insurers are moving into the area left vacant by HIH’s demise, but it has not happened yet, according to Sparreboom. “What we are in fact seeing is underwriting agencies being established here who manage claims and files on behalf of London insurers,” he says. Harding has also seen more work coming out of London insurers and onto his desk – but via a local source. “Traditionally, we have had to report to London, but now we can report to someone in Sydney or Australia,” he says. This increased interest from the London market is not only related to the gap in the market locally, but also [because] the Australian market is profitable, says Harding. But Slocombe says the perception that there is more work coming out of London is a correction post tort reform, not an actual increase. “What we are seeing is just a return of the London market post tort reform, which happened about a decade ago,” he says. Slocombe and Sparke Helmore in general has been working for London clients for many years, but in recent Australasian Legal Business ISSUE 9.10
feature | insurance >>
times, that market has begun to see more Australian firms active. He says many of his London clients are running books of insurance that local insurers simply cannot cover. “Large infrastructure projects in the northwest shelf, for example are insured by them,” he states. While it’s undoubtable that many of the policies covered by London-based insurers are larger than the local insurers, the work is predominantly the same. “It is different in so far as they have more capacity and more depth to absorb large claims. As a rule, claims you get from London are at the larger end, but otherwise it’s the same,” says Lux. According to Harding, the way in which lawyers report to the Londonbased clients is also different. “With the London market, you will often be reporting to multiple insurers on one matter,” he states. ALB Rhett Slocombe
Bright Sparkes
Sparke Helmore – Insurance Law Firm of the Year 2011 One claim we won’t dispute. We are delighted to be Insurance Law Firm of the Year and will continue to provide the same high level of service that won us this award. Thanks to our clients and our people for your great support and loyalty. www.sparke.com.au adelaide | brisbane | melbourne | newcastle | sydney | perth | upper hunter
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profile | managing partner >>
ALB 2011 MANAGING PARTNER SERIES
Shane Barber, Truman Hoyle:
To thyself be true As the ranks of Sydney boutique firms slowly diminish, Shane Barber is holding his ground – he says that his firm is committed to a one city, specialist strategy
“ Anyone who’s over the age of 40 and chasing money in this profession really hasn’t worked it out yet.”
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P
eople sometimes jokingly refer to Truman Hoyle as the post mid-life crisis firm: the firm for lawyers who have climbed the corporate ladder and have a new set of life priorities. Priorities which don’t involve 12 hour days and working weekends. “Many of our partners have been in law for more than 25 years,” says Shane Barber. “There is a point where you have to accept that life is moving on. You can’t spend your entire time just working because time will run out. It’s a reality we all face. Once you get that perspective you make some pretty sensible decisions and this is the kind of place that supports that. Increasingly we can attract partners who are at the top of the game but looking for something a bit more out of life.” Lateral partner movement may be at an all time high, but according to Barber salary is one of the least relevant drivers. He’s not sure the salary variation between corporate
law firms is particularly significant anyway. “It’s not so much that you would change jobs or seek out a firm just for money,” he says. “You would hope not anyway. Anyone who’s over the age of 40 and chasing money in this profession really hasn’t worked it out yet.” Young lawyers are conditioned to work hard and gain quality experience in a top firm in their 20s and 30s, but what comes next? “So you get to the late 30s and early 40s and you’ve climbed the corporate ladder. Then you ask, what is my life achievement going to be?” asks Barber. “People can pursue position and money and not only does it not satisfy them, but society does this strange thing where they say what we value is people who make a difference and make a contribution to society as a whole. And you think about the people you admire most, it’s not those who make the most money. It’s people in arts or science who really make a contribution to society as a whole.” Australasian Legal Business ISSUE 9.10
profile | managing partner >>
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profile | managing partner >>
New economy
Truman Hoyle is known for its focus on “new economy” clients: areas such as technology, telecommunications and biotechnology. It’s a specialised approach which paradoxically aims to provide a “one stop shop” for these clients. That doesn’t mean the firm is full service: however, it does mean that it aims to capture a large proportion of the work on offer from the target client base. Practice areas such as media and IP law are predictable firm staples, but the presence of other disciplines such as workplace relations may come as a surprise. According to Barber, it’s a natural fit for any firm dealing with intellectual property. “One thing that was very clear to us was that much of the intellectual capital in the business of our clients was tied up with the staff, so we made the decision very early on to engage a couple of IR/ employment law partners as part of the service offering,” he explains. “That’s been a big factor in the success that we’ve had. It’s also an area of constant reregulation as governments change so it can also be a standalone source of work.” Inevitably, comparisons arise with another famous new economycentric firm: Gilbert + Tobin. Truman Hoyle resembles G+T in its earlier incarnation as a one-city telecommunications firm, prior to the expansion interstate and towards a broader corporate practice. Barber acknowledges that his firm “owes a lot” to G+T – indeed, some of its partnership are ex G+T. “They are a friend of the firm,” says Barber of G+T. “We’ve shared many clients, we’ve done many jobs together , we’ve referred jobs back and forth to each other. They’ve decided to take on a more expansive corporate focus - you can see that makes sense. We’ve made a different decision. We’re very happy to stay a smaller specialist, one city firm and that’s a decision we are very comfortable with.”
Not mid-tier
Some of Truman Hoyle’s lawyers are from mid-tier firms and have vowed never to return. According to Barber, mid-tier firms frequently suffer from 46
an identity crisis. “As individual [mid-tier] practitioners, it’s very hard to get a sense of what you’re selling to clients,” he says. “Having been a partner at a mid-tier firm, I can say the sales proposition was always strained when you went to the boards of major corporates – they didn’t understand why they would want to use you.” In Barber’s experience, premium specialist operations have a far easier message to sell. “We spend very little time marketing directly to new clients because they tend to find us and that’s because we’ve been careful to maintain a point of difference,” he says. “That also has the secondary effect of giving people within the firm a sense of what the firm is about – without that, I think you’ll get a lot of drift of employees and partners.”
Testosterone culture
Barber says that the Australian legal market appears to have moved on from what he describes as a phase of “heat and testosterone” where a “league table culture” – a culture where firms jealously eyed each other over revenue and deal volume – took precedence in the heady days prior to the GFC. “People would measure themselves at the drop of a hat on bizarre measures which had nothing to do with the value of the service you’re providing the client,” he recalls. “It was about how much money a client had to spend on a transaction, which had nothing to do with the lawyers at all. That was all just facile metrics – you wouldn’t see an anaesthetist, for instance, saying this is the net worth of all the people I’ve put under this week. It wouldn’t be tolerated [in other industries] why do we tolerate it? ” Barber says that the new pressures of globalisation has forced a more mature approach. “I think people are looking now at the quality of the service offering and the quality of experience for lawyers and clients over and above facile metrics,” he says. “There’s been some introspection which is healthy and more collegiality: many of the UK firms who have opened here are going out of the way to build relationships in Australia - they don’t want to be seen as a threat or as interlopers.” ALB Australasian Legal Business ISSUE 9.10
A cu ltu re o f e xc e l l e nc e
ALB special report | Asia 2011 >>
Revealed: Asia’s largest law firms
I
n the August issue, Australasian Legal Business published a list of the 30 largest law firms in Australia and New Zealand, as determined by lawyer headcount. This month, we take a broader perspective and repeat the exercise Asia-wide, producing a definitive list of the largest firms across Asia. Such an exercise is timely. The headlines surrounding firms such as Blake Dawson, Ashurst or Clifford Chance might allow the casual observer to develop the perception that the movers and shakers in the
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Asia market are all international firms. The truth is that nine out of the ten largest firms in Asia are from China, with Dacheng maintaining its status as the largest law firm in Asia. Chinese firms are continuing to grow at an astonishing rate. The median size of this year’s top 10 domestic Chinese firms stands at 899 lawyers – a 39 percent increase over last year’s median of 548. Dacheng alone grew by an additional 621 feeearners in the past 12 months. New entrant in the Chinese domestic top ten, PRC firm Logan jumped into
seventh place in the overall regional table with 656 partners and lawyers, up from 20th position last year. It more than doubled its size from 310 to 656 lawyers this year – a 52 percent spike in numbers. Meanwhile, international firms are also increasing in scale but not to the same extent. Baker & McKenzie is the only international firm in this year’s overall rankings to make it into the top 20, although it has slipped somewhat in the face of the Chinese surge. Indian, Korean and Japanese firms have also performed strongly on Australasian Legal Business ISSUE 9.10
ALB special report | Asia 2011 >>
Asia is the hottest legal services market in the world and it is no secret that firms from Australia, UK and the US are jealously eyeing the region. However when it comes to lawyer size, these firms are yet to make any substantial impact on local heavyweights.
this year’s chart, pushing out many international firms from the region’s overall rankings.
South East Asia
At 323 lawyers, Rajah & Tann is the largest Southeast Asian law firm. It has even surpassed Allen & Gledhill – traditionally the largest domestic firm in Singapore – and it has done so through its multiple office launches across the region this past year. Rajah & Tann currently has regional offices in Shanghai, Vientianne, Kuala Lumpur and Ho www.legalbusinessonline.com
Chi Minh. “The firm will continue to maintain and enhance its very strong presence in Singapore but the growth in this mature market will be incremental and opportunistic, probably not more than 10 percent in terms of fee-earners,” Rajah & Tann managing partner Lee Eng Beng said. “We expect that this will be outstripped by the growth of our regional offices and practices. In the last 12 months, we have opened two offices in Vientiane and Ho Chi Minh and we will soon be making an announcement on the launch of
another office in a popular Asian city.” KhattarWong’s dramatic split in early 2011 has made it the biggest casualty in this year’s rankings in terms of size. Losing almost half its fee-earners to new entity RHT Law – the exodus led by previous managing partner Tan Chong Huat – the firm has dropped from 103 total fee-earners to 80 lawyers and partners. RHT Law, with its recent tie-up with Taylor Wessing, is looking to expand from its 53 lawyers and partners beyond the shores of Singapore. 49
ALB special report | Asia 2011 >>
List of Asia’s largest firms by lawyer headcount – Australia excluded
50
Rank
Firm
Home Jurisdiction
Partners
Lawyers
Partners & Lawyers
1
Dacheng
PRC
620
1180
1839
2
YingKe
PRC
179
1404
1583
3
King & Wood
PRC
210
780
990
4
Baker & McKenzie
US
259
592
843
5
DeHeng
PRC
176
622
798
6
Grandall
PRC
142
570
712
7
Longan
PRC
138
518
656
8
Zhong Lun
PRC
160
461
621
9
Zhongyin
PRC
68
526
594
10.
AllBright
PRC
114
450
564
11
Kim & Chang
Korea
120
425
545
12.
Amarchand & Mangaldas
India
49
481
530
13.
FoxMandal Little
India
50
400
500
14
Nishimura & Asahi
Japan
91
389
480
15
Zhong lun W&D
PRC
40
400
440
16
Guanghe
PRC
104
305
409
17
Jun He
PRC
101
298
399
18
Lee & Ko
Korea
102
221
386
19
Clifford Chance
UK
84
282
366
20
Nagashima Ohno & Tsunematsu
Japan
78
254
341
21
Mayer Brown JSM
U.S.
74
265
339
22
Anderson Mori & Tomotsune
Japan
80
247
327
23
Rajah & Tann
Singapore
101
222
323
24
Bae Kim & Lee
Korea
98
224
322
25
Mori Hamada & Matsumoto
Japan
92
226
318
26
Allen & Gledhill
Singapore
133
179
312
27
Shin & Kim
Korea
86
219
305
28
Yoon & Yang
Korea
89
215
304
29
Drew & Napier
Singapore
222
77
299
30
Khaitan & Co
India
45
250
295
31
TMI Associates
Japan
64
230
294
32
Luthra & Luthra
India
38
252
290
33
DLA Piper
U.S.
55
223
278
34
Allen & Overy
UK
76
201
277
35
J Sagar & Associates
India
50
225
275
36
Hogan Lovells
U.S./UK
47
227
274
37
WongPartnership
Singapore
85
187
272
38
Yulchon
Korea
69
202
271
39
Jones Day
U.S.
70
175
245
40
AZB & Partners
India
19
221
240
41
Dua Associates
India
40
190
230
42
Freshfields
UK
27
203
230
43
Tahota
PRC
42
187
229
44
Norton Rose
UK
52
172
224
45
Jincheng Tongda & Neal
PRC
89
128
217
46
White & Case
U.S.
46
165
211
47
Herbert Smith
UK
45
155
200
48
Fangda Partners
PRC
35
155
190
49
Guantao
PRC
55
135
190
50
Tian Yuan
PRC
49
138
187
India
Although moving five places down to 11th place on the regional chart, Amarchand & Mangaldas still remains the largest Indian firm, swelling its numbers by an additional seven partners and a total of 13 new hires. The firm’s next phase of growth should see it expand beyond 500 lawyers. Meanwhile, rival Kocchar & Co became the first Indian law firm to expand into the Middle East by establishing a presence in the United Arab Emirates and Saudi Arabia through collaboration with local firms.
Korea
Two notable Korean firms merit special mention for their achievements in climbing up the rankings this year. Yoon Yang Kim Shin & Yu and Yulchon rose 11 places and 10 places to arrive at 27th and 34th respectively in 2011. Although all Korean firms ranked in the ALB50 have grown by at least 10 percent, their numbers could hardly match the insatiable appetite for growth by acquisition of the Chinese firms. Kim & Chang, at 545 lawyers and partners this year, up 94 fee earners, still managed to fall five places from 8th position last year to 13th in 2011.
Japan
Japan’s big four firms have traditionally done well in the ALB50, with all four firms usually ranking in the top half of the table. This year was no different, although Japanese firms generally went backwards on the table: Nishimura & Asahi at 12th was down five spots, Nagashima Ohno & Tsunmatsu at 19th was down four and Mori Hamada & Matsumoto and Anderson Mori & Tomotsune were both down two places to finish at 23th and 25th positions respectively. Nishimura & Asahi by far has the largest regional presence and accordingly, has the most number of fee-earners. Last year, the firm launched a representative office in Beijing and an office in Ho Chi Minh City. Plans to open a Hanoi office in the autumn are currently underway.
Australasian Legal Business ISSUE 9.10
PARTNERSHIP OPPORTUNITIES Marsden has a reputation for excellence and a commitment to providing a first-class service to all our clients and candidates. A core part of our business in Australia is partner level recruitment. Successfully transitioning partners between firms requires an in-depth knowledge of the rapidly changing Australian legal landscape, current information regarding the growth plans of the firms, an understanding of the way different partnership structures operate and remunerate, and a commitment to managing the day to day interactions between firm and individual in the most discrete and proactive way to ensure a smooth and informed process both parties. The Marsden team prides itself on delivering excellence in all of these areas to our impressive list of partner level candidates. Finance Partners | Top firm – Sydney We have a long standing relationship with this expanding national firm. The firm has a strategic need to grow its finance team at partner level to further cement their strong market position. This firm is known for its focus on people and culture, and for delivering excellence in relation to their work and clients. You will have a portable practice or a strong track record of business development.
Corporate/Commercial Partner | Mid Tier Firm – Sydney This strong mid tier player is actively trying to grow a corporate/ commercial capability. They are well regarded in all other key areas of practice and have a collegiate and supportive culture. You will not only have a well established practice in the corporate/commercial space but will also have the drive and enthusiasm to build a capability within a firm.
M&A Partners | Boutique firm – Sydney, Melbourne & Brisbane This high profile boutique firm is gaining more and more attention. They are seeking high quality M&A partners to add to their strong capability in this area. They are renowned for their ability to deliver high end advice and transactions for Australia’s top companies. You will have a high profile in the M&A space and will have a corporate client base.
Construction Partners | National Firm – Sydney Our client is a highly profitable and rapidly growing national firm with strong management and looking to expand its construction and projects capability. The firm is seeking partners who have either front or back end construction, infrastructure or projects expertise and who can add to the practice in terms of skills and clients. This is a transparent, meritocratic environment.
For a confidential discussion on your options as a partner, contact: Sarah Melton; sarah.melton@marsdengroup.com; +61 (0) 2 8014 9051; +61 (0) 411 564 849 Jonathan Walmsley; jonathan.walmsley@marsdengroup.com; +61 (0) 2 8014 9050; +61 (0) 434 532 530
To search Australian and global job opportunities go to www.marsdengroup.com or download our free iPhone App (search iTunes – Marsden Job Search) - legal job searching just got easier.
ALB special report | Asia 2011 >>
Admission in Australia Australia is a natural choice for Asia, US and UK qualified lawyers to find an overseas posting. But what does it take to get admitted in Australia? ALB reviews the key requirements.
“Sponsorship would usually only be for candidates who offer at least a few years of exceptional experience” Lucy Duncan
Mahlab
52
G
iven the comparative strength of the Australian economy, a number of overseas lawyers have become interested in the possibility of taking up a position in Australia. Talent remains at a premium: according to a recent Mahlab survey, the average pay increase for Australian private practice lawyers in FY2011 was 23% and the majority of firms indicated that they intended to increase their lawyer numbers in FY2012. Admittedly, this survey was conducted before the latest round of global economic gloom and revised growth forecasts from the IMF. Overseas lawyers may nonetheless find it worthwhile to investigate their options in Australia. According to Mahlab recruitment consultant Lucy Duncan, areas of particular demand are banking & finance, corporate,
M&A, energy and resources and workplace relations. Jill McKeough, Dean of the law faculty at the University of Technology Sydney (UTS), who has been involved at a senior level with the lawyer admissions process, is another who believes that there is a market for offshore candidates in Australia. “Firms are generally keen on lateral hiring. I think most lawyers with some experience would probably find a job in an Australian law firm,” she says. However, Duncan believes that sponsorship could be a challenge for those without the right to work in Australia. “Firms consider the business case very carefully now. Sponsorship would usually only be for candidates who offer at least a few years of exceptional experience. These days partners consider lateral hires really carefully,” she cautions.
Australasian Legal Business ISSUE 9.10
ALB special report | Asia 2011 >>
►► Key points to note about the Australian admissions process • T here is at present no national process for lawyers wishing to practise in Australia. Lawyers must register in the individual state they wish to work in. • A mutual recognition scheme is in operation which generally permits lawyers admitted in one state to practise in another. • T he basic requirements for being admitted to practice in Australia are a recognised law degree, completion of a practical legal training (PLT) course
Admissions process
Australia has a federal system of government, meaning that regulatory responsibilities which one might ordinarily associate with a national government are performed by individual state governments, often with different approaches. This situation applies to the regulation of the legal profession: while the Australian government has made attempts to introduce a national system of regulation, at the time of writing lawyers were still governed by statebased regulations. The result is that there is no single national process for lawyers wishing to practise in Australia and lawyers must register in the individual state they wish to work in. However, a mutual recognition scheme is in operation which generally permits lawyers admitted in one state to practise in another, so the situation is not as www.legalbusinessonline.com
or a clerkship and passing a character test. • The bodies responsible for assessing applicants and issuing a certificate vary from state to state. The Supreme Court in each state is the ultimate admissions authority. • Evidence of good character – for example, police history checks in the jurisdictions were the applicant has resided – are commonly required.
complicated as it may initially seem. In addition, all Australian admitting authorities have agreed to apply uniform principles for assessing overseas applicants, where permitted by the legislation in their jurisdiction. “The basic premise of the uniform principles is that all persons admitted to the legal profession in Australia should have substantially the same minimum level of knowledge of and competence in the fundamental aspects of the practice of Australian law,” says Deb Macdonald, Admissions and Registrations Coordinator for the Legal Practice Board of WA. However, there is no standard formula for determining the outcome of applications, which are assessed on a case by case basis for each individual. “Applications are assessed on their merits. Assessments for people from the same jurisdiction vary considerably,” adds Macdonald. 53
ALB special report | Asia 2011 >>
Basic requirements
The basic requirements for being admitted to practice in Australia are a recognised law degree, completion of a practical legal training (PLT) course or a clerkship and passing a character test. A recognised law degree is one which covers 11 prescribed areas. These areas are administrative law, civil procedure, contracts, company law, criminal law and procedure, equity (including trusts), ethics and professional responsibility, evidence, federal and state constitutional law, property and torts. Clearly law degrees from foreign universities may or may not cover all of these areas and lawyers may be required to undertake further units of study to cover the 11 areas. This is a matter left for the determination of the relevant admissions authority: for example, in New South Wales
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Australasian Legal Business ISSUE 9.10
ALB special report | Asia 2011 >>
the Legal Profession Admission Board has an Academic Exemptions Sub-Committee which can make exemptions if “the system of law applicable in the jurisdiction, in which the person has been admitted and practised, and the nature and extent of the person’s practical experience is that he or she ought not to be required to undertake that examination.” Similarly, foreign lawyers may also be granted an exemption from PLT requirements. If a PLT course is required, this can take between six months to a year. Finally, applicants will need to provide evidence of good character – for example, police history checks in the jurisdictions where the applicant has resided . The bodies responsible for assessing applicants and issuing a certificate vary from state to state. The Supreme Court in each state is the ultimate admissions authority.
UK lawyers
Jill McKeough says that in her experience, UK lawyers on average need to complete four to six additional units of study. “Often they [applicants] will have to do some constitutional and property law but then it depends on what property law they studied in their law degree,” she says. Nicola Murphy, a lawyer originally from the UK who now works at DLA Piper obtained her NSW practicing certificate in 2009. She said the experience was well worth the effort and the six subjects she had to complete were done around work, with only a couple of weekend courses required. “I think any lawyer should show an interest and qualify in the jurisdiction they want to practise in,” she says. Within NSW, the LPAB resolved in December 2009 that UK lawyers ought not to be required to study Australian administrative law where they have studied it as a separate subject over a full course of study in a comparable jurisdiction. However, there may be issues within other states, and depending on the institution. “Admin law is another one often not covered, www.legalbusinessonline.com
sometimes equity too,” says Carter. In order to make the process easier for UK qualified lawyers, Jonathan Walmsley, principal of the Marsden Group, recommends applicants gain admission in either NSW or WA and get reciprocal rights if they want to practise in another state afterwards. “Generally speaking I think it’s easier for UK lawyers to qualify in NSW and WA than any of the other states. For other states they suggest they re-qualify in NSW or WA and then get reciprocal rights of admission,” he says.
Language
Apart from the need to demonstrate academic qualifications in the legal sphere, foreign qualified lawyers in some circumstances also need to demonstrate they have completed an International English Language Testing System academic module less than two years before seeking admission. According to the Uniform Principles, the minimum requirements are a score of 8 for writing, 7.5 for speaking and 7.0 for reading and listening.
PQE Regression
Recruiters believe that lawyers with the relevant experience stand a good chance of entering the Australian profession at the corresponding level of seniority at their old firm or at least shouldn’t expect to lost more than one year post qualification experience (PQE). “In our experience we’ve had lawyers with 3-4 years experience come in at pretty much the same level but both the lawyer and client agree that there are some skills the lawyer needs to work on,” says Duncan. “ In a worst case scenario a 3 year PQE lawyer from the UK will come in as a 2-3 year PQE lawyer here. They tend to knock them down a year but it very much depends on market conditions,” adds Walmsley. Duncan also notes that she has seen senior lawyers take on fifth year roles, which offered substantially the same type of work as what they were doing in their home jurisdiction. ALB 55
feature | Energy and resources >>
Energy and Resources
In-house Insights
The Australian energy and resource sector is one of the most regulated in the world yet, more regulation and operating constraints are on the way, Olivia Collings speaks to those at the coalface of those burdens.
Introduction by Nick Nichola, national managing partner, Middletons
56
Against a global backdrop of volatility and uncertainty, Australia is in relatively good shape largely due to the mining and the energy and resources sectors fuelling growth in the overall economy. However, with this growth has come continued change and reform in the energy and resources sector. Now more than ever general counsel are under increasing pressure to guide their executives through the legal maze to meet these challenges and develop new strategies. The proposed carbon pricing mechanism will have a direct cost impact on the 500 or so highest greenhouse gas emitting facilities and a significant indirect cost impact on electricity intensive businesses and those businesses will need to develop ways to best manage this exposure. There are also significant opportunities
that arise with the carbon pricing mechanism providing, through the Clean Energy Finance Corporation from July 2013, A$10 billion funding for clean energy and low emission projects. Harnessing Australia’s vast mineral and energy resources is a complex capital-intensive business that raises unique challenges around project structuring, finance, native title, environment and cultural heritage law, land tenure and industrial relations. Fundamental shifts in the way companies will need to operate provide immense opportunities for those that embrace these changes and are quick to evolve. Regards Nick Nichola National Managing Partner Middletons
Australasian Legal Business ISSUE 9.10
Mount Gibson Iron is an independent Australian “pureplay” hematite iron ore producer listed on the ASX. It has established itself as a bulk commodity provider to major Chinese steel industry customers, and has operations across Western Australia including Tallering Peak, Koolan Island and Extension Hill. In 2007 it completed the successful takeover of Aztec Resources Limited for approximately A$250 million.
1. Main highlights over the past 12 months for you and your legal team? For me, the renegotiation of our iron ore sale agreements to a new pricing system was a major highlight. Previously our agreements adopted annual benchmark prices published by the major producers such as Rio Tinto. With the benchmark system being abolished we successfully moved all our customers over to market clearing price system based on various published indices. The other highlights were the successful outcomes we had in two international arbitrations involving Chinese steel mills and traders. The benefit of undertaking that action through arbitration is that the results are recognised in various jurisdictions and improve the ability to recoup the awards. It remains a huge advantage for the company, as if we had relied on court proceedings, there would not have been any recognition of the outcome in overseas jurisdictions. 2. How much of your work is being driven by government regulation or new initiatives? In terms of new developments there has been an increase on the corporate side of things; recent changes to the Corporations Act and alike are driving a substantial amount of work for me, as are new listing rules and changes as a result of recent case law - for example the outwww.legalbusinessonline.com
David Berg
company secretary and general counsel, Mount Gibson Iron comes in the James Hardie and Centro cases. The amount of time I spend on government regulation or requirements is increasing. 3. A number of overseas firms have opened in Australia with the aim of capitalising on the energy & resources market. How interested are you in their offering? It’s an interesting development: at this point in time I see them as any other large Australian firm. The fact that they have offices in all parts of the world is of secondary importance; what remains a priority is getting the best team of
people working on the matter. I don’t really see a significant difference between what they are offering and what is already being offered in the market. We have managed to do work internationally with Australian and overseas law firms previously. Unless it is demonstrated to me that it provides a better service I remain of the view that what is more important that the firms understands what we are trying to achieve and have the capability to assist us in getting there - not the name plate of the firm involved. However, that view might change once I experience what they have to offer. 57
feature | Energy and resources >>
1. Main highlights over the past 12 months for you and your legal team? Being at the centre of the industry reform represented by the NSW electricity generation and retailer privatisation completed earlier this year has been a highlight for the team. TRUenergy emerged as a successful participant in that process. The legal effort, internal and external, which was required to make the bid successful for the deal to complete and then to drive the successful integration has been enormous. We have also been kept busy with substantial debt finance work, ongoing development projects, the restructuring of our wind farm portfolio and more recently a significant joint venture in upstream gas. 2. How much of your work is being driven by government regulation or new initiatives? Not surprisingly it’s a very significant proportion of our work. Our participation in the NSW privatisation process has fundamentally been a response to government policy; having effectively doubled the size of the business means we are much more active in jurisdictions where we were smaller previously and with that comes a new priority for some of relationships with regulators.
David Lambert
general counsel and company secretary, TRUenergy TRUenergy is a wholly-owned subsidiary of the CLP Group, which is listed on the Hong Kong Stock Exchange and has a market capitalisation in the vicinity of A$22 billion. TRUenergy bought the 58
Energy Australia retail business, the Delta West trading rights and some development sites as part of the NSW Government’s power privatisation earlier this year for A$2.1 billion.
We have a lot of people around our business working carbon pricing and its implications; the legal team is a support function for that work. While energy generators and retailers like our business participate in a national market, it can be challenging to also accommodate state-based regimes that don’t line up across the country. So product design that works in one state might not work in another, or reporting might be different between the states. This comes at a cost in terms of time and resources for the legal team. There are also various state and federal initiatives intended to drive investment in small and large scale renewable energy generation and energy consumption management which continue to drive a range of project activity, which in turn impacts the legal team. Australasian Legal Business ISSUE 9.10
3. What role do external law firms play in the undertaking of legal work at your company? It’s a very significant role. There are areas of expertise which our team does not attempt to maintain such as tax, HR and dispute resolution. These are areas where we defer to more current expertise which sits within external firms. When undertaking capital markets work, large M&A or other deals where there are lots of moving parts and time pressures we employ a blend of internal and external legal resources. We can’t pretend with 10 lawyers (sometimes less, sometimes more) to have the capacity to do all of the legal work that a business of TRUenergy’s size and complexity requires.
Aurora Energy is a fully integrated energy and network business, with complementary activities in telecommunications and energyrelated technologies. In Tasmania, it generates, distributes and is the retailer for electricity and provides wholesale telecommunications services using optical fibre networks. It is owned by the Tasmanian Government. 1. Main highlights over the past 12 months for you and your legal team? There has been a lot happening in the company and the industry over the past 12 months. The formation of a new Governance division at Aurora on 1 January, combining legal, corporate secretarial, compliance, business risk and information management has reinforced the importance of the independent oversight role played and the governance improvements that are possible when these areas work closely together. Changes in Aurora’s strategy and structure has led to the legal team being involved in changing how we do things, improving processes, procedures and www.legalbusinessonline.com
Earlier this year TRUenergy refreshed its legal panel, consolidating the number of firms on the panel – partly because we want our relationship to be more important for the firms we work with. 4. A number of overseas firms are or have opened in Australia with the aim of capitalising on the energy & resources market. How interested are you in their offering? We are always interested in accessing great experience, wherever it may have been acquired, where it’s delivered as efficiently as possible. If an overseas firm opening here can do that, then great. A number of the international firms are populated by local lawyers we have dealt with before so we don’t rule out
engaging with those firms as they form alliances and put their beach heads down here in Australia. However, TRUenergy’s mandate is predominantly domestic and is likely to stay that way, so one of the key aspects the international firms offer – the broad global office network – doesn’t offer us terribly much. That said, we are part of a bigger organisation, China Light and Power (CLP) listed in Hong Kong; the relationships CLP has with a number of the international firms, some of whom have a presence here now, could be influential in us making decisions about those firms. But right now we don’t have any of the international firms which have set up recently on our panel.
documentation including key supplier arrangements. Aurora acts as agent for NBN Tasmania on the roll out of the NBN. The optical fibre is either strung on Aurora’s poles or paid in cables next to our underground assets - this has required extensive legal input on all aspects. 2. What would you describe as the three biggest legal issues facing you and your team? An independent panel is currently conducting an investigation into the current position and future development of Tasmania’s electricity industry. It will provide advice to the Tasmanian Parliament in December. The outcomes could present major legal issues for Aurora. The other big legal issues are our revised regulatory price submission which is due to lodged with the Australian Energy Regulator in January and continuing our work on improving processes, procedures and documentation, with projects like strategic sourcing and mapping of our legal obligations. 3. A number of overseas firms have opened in Australia with the aim of capitalising on the energy & resources market. How interested are you in their offering?
Janelle O’Reilly
general manager governance company secretary and general counsel, Aurora Energy We haven’t used any of these firms as yet, but would certainly consider them where their expertise matched our requirements and the offering represented value for money. 59
feature | Energy and resources >>
Federal Government’s carbon policy has significant implications for the stationary energy sector, so the complexity of the Clean Energy Future policy must be fully understood to ensure that the implications and opportunities for the business are clearly identified. The continued uncertainty about the policy and the details of the scheme has added to the work to be done. The legal team works closely with the business to review the Clean Energy Future package, to identify potential solutions to issues which could be included in submissions and other discussions with government, and to prepare for the implementation of potential changes to the business. There have also been many other legislative and regulatory changes, or proposed changes, in recent years which are relevant to our business, including changes to renewable energy and energy efficiency schemes, the harmonisation of the occupational, health and safety laws and the Personal Property Security Act. 3. What would you describe as top legal issues facing you and your team?
Corinne Ong
general counsel Australia, IPR - GDF SUEZ (International Power) International Power plc entered the Australian energy industry in 1996 and has grown to become the country’s largest private generator of electricity. In February 2011, International Power plc combined with GDF SUEZ’s Energy International Business Areas outside Europe and certain assets in the UK and Turkey to form a new entity. IPR – GDF SUEZ Australia owns and operates renewable, gas-fired and brown coal-fired generating plants in Victoria, South Australia and Western Australia. It also has a retail operation in South Australia and Victoria through Simply Energy. 60
1. What would you describe as the main highlights in the past 12 months for you and your legal team? Firstly, the combination between International Power plc and GDF SUEZ’s Energy International Business Areas outside Europe to form IPR-GDF SUEZ, a world leader in independent power generation. This combination has made us part of a larger and more diverse organisation, and opens up many opportunities both for the Australian business and for the legal team as individuals. The second highlight was the sale of our one third interest in the South East Australia Gas Pipeline in November 2010. 2. How much of your work is being driven by government regulation or new initiatives? A significant amount of our work is driven by government regulation, and this is not only due to the energy sector being a highly regulated sector. The
The Clean Energy Future package would be the biggest as we need to address its implications on the business – both in terms of the impact on the conduct of the business (including new processes and documentation) and also the new opportunities that this package presents. We are also working on refinancing the project debt on our two Latrobe Valley projects - Hazelwood Power and Loy Yang B. The third would be working on the implications and opportunities arising from the changes in law referred to in the previous question. 4. A number of overseas firms are or have opened in Australia with the aim of capitalising on the energy & resources market. How interested are you in their offering? We are committed to ensuring that we provide the most professional and efficient legal service to our business, so we are open to new advisers and new ways of working. However, we have strong and long standing relationships with our legal firms and individuals within those firms whose expertise we value, so it would certainly depend on the circumstances and the offering of new firms. Australasian Legal Business ISSUE 9.10
Australian Power & Gas (APG) reached 300,000 net customer accounts last month, following a period of record sign-ups averaging 10,000 per month. The milestone underscores the company’s growth in its first five years as a listed company. In June this year Japan-based Nippon Gas agreed to buy an 11.4% interest in Australian Power & Gas worth A$5 million.
1. Main highlights over the past 12 months for you and your legal team? Notable highlights for the team include significant transactional work (e.g. financing, wholesale energy), contributing to the entry into Queensland and NSW markets, involvement in a range of marketing and sponsorship initiatives, implementation of new regulation and laws (e.g. Australian consumer law). 2. How much of your work is being driven by government regulation or new initiatives? Some significant industry related issues that we have had to recently manage include the introduction of the Australian Consumer Law and the resultant Energy Assured scheme, the introduction of the Short Term Trading Market in NSW and (soon to be) in Queensland, the current reforms relating to the national energy customer framework, the proposed carbon pricing scheme and the evolution of the greenhouse gas abatement schemes.
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3. What would you describe as the three top legal issues facing you and your team? Ensuring that we consistently add value to the business – particularly in this period of dynamic growth; keeping up to date with ongoing regulatory and policy changes and increasing and maintaining a proactive role in the business. 4. A number of overseas firms are or have opened in Australia with the aim of capitalising on the energy & resources market. How interested are you in their offering? We look for counsel who have a commercial and pragmatic approach and who are a good fit to work with our team and management. We have established working relationships with Australian firms that we currently use and have no immediate intentions to change this.
Joanne Shatrov
general counsel, Australian Power & Gas
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1. Main highlights over the past 12 months for you and your legal team? The last 12 months has been frenetic for the Santos legal team. In that time, we have welcomed two new partners into our GLNG Project in Queensland with the sale of project interests to both Total and Kogas, and raised billions of dollars in debt and equity capital in preparation for the final investment decision early this year. In NSW, we have agreed to acquire the remaining shares in Eastern Star Gas via a scheme of arrangement. The legal team has also continued to support the business in its daily operations as it continues to explore and develop its petroleum interests in Australia and Asia. 2. How much of your work is being driven by government regulation or new initiatives?
Christian Paech general counsel, Santos
Santos is one of the country’s leading gas producers, supplying Australian and Asian customers and is the largest producer of natural gas to the Australian domestic market, supplying 16% of the nation’s gas needs. Santos has also developed major oil and liquids businesses in Australia and operates in all mainland Australian states and the Northern Territory. It also has operations in Papua New Guinea, Indonesia and is pursuing a new project in the Timor Sea. As at March 2011, Santos had a total market capitalisation of approximately A$13 billion, making it one of Australia’s Top 30 companies. 62
The oil and gas industry operates under a strict regulatory framework. Santos is a leading proponent of coal seam gas (CSG) production, an area which has attracted strong interest of government and regulatory bodies as activity expands. Santos has been an active participant in the recent Senate and NSW Parliamentary enquires to ensure that we have an informed debate in Australia about the benefits and impacts of CSG. There has been a considerable volume of proposed new legislation in key areas of our business such as overlapping tenures, the carbon tax and the new national model Work Health & Safety Laws which introduce a positive due diligence obligation, so our legal team has been working very closely with the business to ensure that we are compliant when this regime comes into effect. 3. What would you describe as the top legal issues facing you and yo ur team? Our legal team works within a dynamic global market. It is a constant challenge to ensure that we negotiate appropriate risk allocation in our material contracts while ensuring that we are able to secure those goods and services that are in high demand, so the company can meet its commitments to explore and develop. With operations in every Australian
mainland state and in six other countries, we operate across multiple jurisdictions. We need to understand the local legal regime and work within it, ensuring we have an acceptable legal position for a listed Australian entity. We are also closely monitoring the public debate around land access, which is drawing increased focus in the community. 4. What role do external law firms play in the undertaking of legal work at your company? We have a panel of law firms that assists us in supporting the business. The philosophy of the Santos legal team is to be experts in providing legal advice on our core operations. So we will generally handle gas sale agreements, drilling contracts, farming arrangements etc internally. When we engage in activities outside of our core business such as large scale M&A, debt raising or major environmental approvals we seek the help of our panel, who are able to provide us not only with the necessary expertise, but importantly the market intelligence that comes with being constantly engaged in a specific type of legal work. 5. A number of overseas firms have opened in Australia with the aim of capitalising on the energy & resources market. How interested are you in their offering? Santos has a very solid relationship with its panel firms and would not engage an international firm simply because it has opened an office in Australia. However, there is no doubt that we operate in a truly international environment and so there can be real value in being able to tap into the global networks and experience that the overseas firms offer. We have taken advantage of this when we raised capital through a hybrid bond in Europe last year and we have also used international energy specialists to assist us on our multibillion dollar LNG supply contracts. Ultimately our team likes to work with those individuals that provide first rate service and practical advice, but there is no doubt that in some areas of the law it is becoming a real challenge for those practitioners to provide that premium offering if they are not plugged into a global network. Australasian Legal Business ISSUE 9.10
Founded by Clive Palmer in 1985, Mineralogy Pty Ltd is a private Australian company engaged in the exploration and development of mineral resources. The company’s activities focus predominantly on the delineation and development of prospects from within its iron ore portfolio. Mineralogy has successfully concluded major transactions with a number of companies including the Chinese Government-owned CITIC Pacific Limited (Hong Kong listed), Australasian Resources Limited (ASX listed) and a Memorandum of Understanding with Fortescue Metals Limited (ASX listed). 1. Main highlights over the past 12 months for you and your legal team? The dynamic nature of our company and being able to be part of that, is always the highlight. Mineralogy is, thanks to its chairman Clive Palmer always ‘on the go’, evolving and breaking new ground. Naturally then the legal team is on a constant learning curve, often involved in transactions for which there are no precedents. For example, our subsidiary company Resourcehouse Limited became the first ‘genuine’ Chapter 18 resource development company to receive regulatory approval to list on the Main
www.legalbusinessonline.com
Board of the Stock Exchange of Hong Kong (HKEX). Although the board of directors ultimately decided not to proceed with the proposed IPO given global market conditions, the process was challenging and extremely interesting and involved numerous firsts in Hong Kong, not only for us but every one of our legal, technical and financial advisers as well as the HKEX. 2. How much of your work is being driven by government regulation or new initiatives? The industry is naturally heavily regulated and as a result at least one third of my work is driven by government regulation. Whilst parts of the regulatory system governing our industry have improved over the years there remains plenty of room for improvement, particularly in the areas of environmental regulation, tenement approvals, processes and land access. Our industry is innovative by nature with constant improvements being made, for example, to mining methods and environmental protection and rehabilitation of sites. Governments should take advantage of this and engage the industry more rather than take a prescriptive approach to regulation which curtails innovation and increases compliance costs for both the company and government. 3. A number of overseas firms have opened in Australia with the aim of capitalising on the energy & resources market. How interested are you in their offering? We have, in our overseas operations, used a number of overseas firms which have
Baljeet Singh
legal director, Mineralogy or will open in Australia but haven’t (yet) a reason to consider using any of them in Australia. We are very happy with the relationships we have formed and the quality of service we receive from the external firms we use at present.
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feature | Energy and resources >>
implementing recommendations of the Bushfires Powerlines Taskforce, whilst being constrained by revenue restrictions imposed by the Australian Energy Regulator. SP AusNet is very aware of the public’s concern about rising power prices and it is our challenge to deliver quality service, continue to improve and avoid risks while being constrained by our regulated revenue stream. Although this is not inherently a legal issue, it involves numerous issues on which our legal team is asked to assist.
Susan Taylor
general counsel and company secretary, SP AusNet SP AusNet is a diversified energy business, providing three key network services: electricity transmission; electricity distribution and gas distribution. When combined these three areas represent A$6.3 billion worth of electricity and gas networks servicing more than one million customers in south east Australia. SP AusNet is 51 percent owned by Singapore Power International and is listed on the ASX. 1. Main highlights over the past 12 months for you and your legal team? In the last 12 months, our legal team has become consolidated and operates now as we had hoped. We had deliberately taken some time to build up the areas of expertise that we considered were needed for our business, making sure that the chemistry of the team was right. We now have a full complement of lawyers who share work and expertise, guide and learn from each other.. We have observed what we call the “Meerkat” experience on many occasions, when one team member will be discussing an interesting new development or result, only to find all the other heads popping up from behind their respective desks to participate in the discussion and learn what has transpired. It is delightful to watch We have continued to achieve some great wins for the business through undertaking complex matters in-house, rather than briefing out to external law firms. The team completed the legal work on the recent Australian Dollar bank debt facilities that the company executed, and has negotiated and 64
settled some complex operational agreements. The other major project the team has undertaken is the running of the Electricity Distribution Pricing Review (EDPR) appeal in-house, which, although the result is not yet known, has saved significant legal costs that would otherwise have been spent. In cases such as this we feel we have achieved a better result for our company than would have been the case if the work has been done externally, due to our knowledge of the business, its risk appetite and its corporate personality. 2. What would you describe as the top legal issues facing you and your team? Our company is facing some significant challenges at present. One is the ongoing litigation arising from the Black Saturday bushfires. This involves one of the largest class actions in Australia and is a matter for which we have sought specialist, external legal advice. However, our legal team - and many others from around the business - is integrally involved in the extensive preparations that go into such an action. Another challenge is the imperative to continuously improve our operations, reliability and safety, including by
Finally, the current global financial situation poses challenges for us as we continue to require funding for maintenance and growth. SP AusNet has a well-diversified debt maturity portfolio, and we are well placed to continue to source appropriate funding. Our legal team works closely with our finance team to find finance as required and to close these deals. For Australian Dollar finance, our legal team manages the legal aspects of these transactions without external legal assistance. Not only does this allow for cost-savings, but it is an area of work that is considered interesting and satisfying by members of our team. 3. What role do external law firms play in the undertaking of legal work at your company? We seek external legal assistance for specialist matters only. We see most complex litigation matters as those which require expertise that is beyond that of our legal team. In addition, the logistics, data management and document preparation that is a part of such litigation is more efficiently managed by an external law firm. We would also use external law firms for complex tax matters and international transactions, such as debt finance sourced from overseas. Despite that, we have managed some matters that have a litigation flavour ourselves, such as our involvement in the appeal of the Australian Energy Regulator’s Distribution Pricing Review for 2011-2015. We sought guidance from external legal firms on occasion through this process, but otherwise, we ran this process from within, including briefing barristers directly. Australasian Legal Business ISSUE 9.10
NEWS | UK Report >>
uk report UK M&A set for overhaul following Kraft acquisition of Cadbury Strict new rules to strengthen UK target companies against foreign companies seeking to prey on their business came into effect on September 19. The new Takeover Code will require a declaration of intention to bid or withdrawal within 28 days of potential bidders being identified. The changes are being implemented following the anger over Kraft reneged on its promise not to close a Cadbury factory following the controversial acquisition in 2009. Other changes introduced by the new Code include a requirement that target companies announce all bidders when an offer period launches, the banning of break fees and greater disclosure requirements on advisor’s fees, bidder financing and plans for the target company. “There has been a major review of the rules. The last time this happened was after Nestlé’s takeover of Rowntree so it’s the biggest change for 20 years.” Linklaters partner Nick Humsby told The Independent. Freshfields Paris duo break away to set up regulatory boutique firm A pair of associates who worked together for five years at Freshfields Bruckhaus Deringer’s Paris office, Jean-Baptiste Poulle and Nicolas Spitz, launched their own two-partner firm, Spitz & Poulle, in September. One of the pair, Poulle, told
The Lawyer, that the pair had identified a gap in the French market and saw the need for a dedicated financial regulatory law firm. Generally, financial regulatory matters are handled by members of the corporate or finance practice of one of the larger firms. According to Poulle, regulatory advice can be better given by a small, flexible firm. Spitz & Poulle’s client base is expected to be mainly boutique financial institutions, but the pair expects to cater for larger credit institutions and banks as well. The pair is also considering adding litigation to the firm’s offering. Magic Circle firms continue partner remuneration reviews Allen & Overy is the latest firm to review its partner remuneration structure, currently a modified lockstep with a 15 year equity ladder. The firm is reportedly considering changing the length of the equity ladder. One partner suggested to Legal Week that the time partners are on the salaried rung could also be extended. The review is being led by senior partner David Morley and managing partner Wim Dejonghe and reports state that the firm will not be moving away from lockstep as a pay system. Recently Freshfields and Linklaters have both also confirmed they are considering plans to change their remuneration structures. Clifford Chance has confirmed it is not reviewing its remuneration model.
ROUNDUP • Linklaters is one of two main legal advisors on the tie up between Greece’s second and third largest banks – Alpha Bank and Eurobank. The merger will create an entity with an estimated €147 billion in assets. Linklaters is advising Eurobank while U.S firm Skadden Arps Slate Meagher & Flom will advise Alpha Bank • Clifford Chance has set about rebuilding a depleted funds practice, following a senior hire from Debevoise & Plimpton. International counsel Gerard Saviola joins the firm’s London team following the shock departure of its four-partner funds team in June. Saviola’s clients include Morgan Stanley • Linklaters has added to its Paris practice with the hire of Gide Loyrette Nouel corporate partner Patrice Doat. Doat brings three associates from Gide, and had been partner for seven years. This is also the second partner loss for the French firm. In April Hugues Mathez left for White & Case • US firm Weil Gotshal & Manges has been invited to tender for the Royal Bank of Scotland (RBS) legal panel following completion of the firm’s first ever mandate for the bank. Weil Gotshal advised RBS on the £191 million sale of its stake in luggage manufacturer Samsonite • The European Court of Justice ruled that Marks & Spencer (M&S) can continue to use Interflora’s trademark as part of its keyword advertising on major search engines. However, domestic courts will still have to determine whether the florist’s trademark rights have been breached
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Australasian Legal Business ISSUE 9.10
MARKET DATA | M&A >> market data | M&A>> In association with
M&A TRANSACTIONS AND STATISTICAL ANALYSIS Top 10 Announced Deals - Australasia (17 August, 2011 - 16 September, 2011) Announcement Date
Target Company
Target/Seller Legal Advisor
Bidder Company
Bidder Legal Advisor
Seller Company
17-Aug-11
Foster's Group Limited
Allens Arthur Robinson; Corrs Chambers Westgarth
SABMiller Plc
Allen & Overy; Hogan Lovells
26-Aug-11
Coal & Allied Industries Limited (14.09% Stake)
Gilbert + Tobin
Rio Tinto Limited; and Mitsubishi Development Pty Ltd
Allens Arthur Robinson; Blake Dawson
18-Aug-11
Flavoured Beverages Group Holdings Limited
Chapman Tripp
Asahi Group Holdings Ltd
Freehills
Pacific Equity Partners; and Unitas Capital Pte Ltd
1,222
Bain Capital LLC
Clayton Utz; Corrs Chambers Westgarth; Ropes & Gray
HarbourVest Partners LLC; and Archer Capital Pty Ltd
1,200
11,024
1,525
Advising sellers: Clayton Utz
21-Aug-11
MYOB Limited (undisclosed majority stake)
Advising sellers: Allens Arthur Robinson
17-Aug-11
Lafarge Boral Gypsum Asia Ltd (50% Stake)
Advising seller: Boral Limited Cleary Gottlieb Steen & Hamilton
24-Aug-11
Ivanhoe Mines Ltd (2% Stake)
25-Aug-11
Cabot Corporation (Supermetals business)
30-Aug-11
Lafarge SA
Rio Tinto Limited
Linklaters
Advising seller: Jones Day
Global Advanced Metals Pty Ltd
Allen & Overy
Count Financial Limited
Minter Ellison
Commonwealth Bank of Australia
Freehills
22-Aug-11
Southern Iron Pty Ltd; Central Iron Pty Ltd; and Coober Pedy Resources Pty Ltd
Advising seller: Maddocks
OneSteel Limited
Allens Arthur Robinson
12-Sept-11
Hunnu Coal Limited (86.15% Stake)
Steinepreis Paganin
Banpu Public Company Limited
Allen & Overy
Notes:
Deal Value (AUDm)
589
512
Cabot Corporation
383
367
Western Plains Resources Ltd
346
300
Based on announced deals, including lapsed and withdrawn bids, from 17 August 2011 to 16 September 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 volume•Q3 11 * = 1 July 2011 to 16 September 2011
League Table of Legal Advisors to Australasian M&A (Aug 17, 2011 - Sept 16, 2011) Rank
House
League Table of Financial Advisors to Australasian M&A (Aug 17, 2011 - Sept 16, 2011)
Value (AUDm)
Deal Count
Rank
Value (AUDm)
Deal Count
13,316
5
1
House JPMorgan
12,074
4
2,760
4
2
Goldman Sachs
11,968
4
3,357
4
12,224
2
1
Allens Arthur Robinson
2
Clayton Utz
3
Minter Ellison
450
4
3
UBS Investment Bank
4
Allen & Overy
11,707
3
4
Morgan Stanley
5
Freehills
1,657
3
5
Nomura Holdings
2,422
2
6
Corrs Chambers Westgarth
11,624
2
6
Macquarie Group
1,795
2
7
Chapman Tripp
1,241
2
7
Gryphon Partners
729
2
8
Blake Dawson
1,060
2
8=
Gresham Advisory Partners
11,024
1
9
Hogan Lovells
11,024
1
8=
Moelis & Company
11,024
1
10
Gilbert + Tobin
1,525
1
8=
Royal Bank of Scotland Group
11,024
1
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
68
Number of deals
Value (AUDm)
60,000
20 0
Q1 03
Q2 03
Q3 03
Q4 03
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
Q3 11*
Australasian Legal BusinessISSUE ISSUE9.10 9.9 Australasian Legal Business