ISSUE 9.08
HWL Ebsworth Australia’s most profitable firm?
Rugby World Cup Firms pack the scrum
Mahlab 2011 Salary Survey
Top in-house lawyers speak out
Australasia’s ALB 30 largest firms Revenue growth returns Market-leading analysis Comprehensive deals coverage debt & Equity market intelligence
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ISSUE 9.08
HWL Ebsworth Australia’s most profitable firm?
Rugby World Cup Firms pack the scrum
Mahlab 2011 Salary Survey
Top in-house lawyers speak out
I
n 1941, Reuters created the Trust Principles codifying our commitment to act at all times with integrity, independence and freedom from bias. The backdrop was World War II and the purpose was to fortify our correspondents in carrying out the difficult and delicate tasks with which they were faced. When Thomson Corporation bought Reuters, the Principles were adopted across the entire, merged company. Earlier this year, Thomson Reuters acquired Asian Legal Business, and although this publication does not cover acts of war, the Trust Principles are no less important and apply with equal rigor.
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Australasia’s ALB 30 largest firms Revenue growth returns Market-leading analysis CoMprehensive deals Coverage debt & equity Market intelligenCe
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IN THE FIRST PERSON “We don’t pick law firms based on the number of partners they have compared to junior lawyers. I would actually prefer to see more good quality senior associate candidates.” John Blair, Air New Zealand (32)
“The responsible lending reforms for example: the policy is sound, but the implementation of it through the detail and regulation is flawed. And that’s where it is costing the country and economy for no discernable material benefit.” David Cohen, Commonwealth Bank (32)
“When you are charging top tier rates, I’d imagine it’s easier to be profitable. But we’re often charging a half or two thirds of what they charge.” Juan Martinez, HWL Ebsworth (24)
Andrew M. Goldner Managing Director, Asian Legal Business Thomson Reuters
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Asian Legal Business ISSUE 10.6
EDITORial >> SYDNEY MELBOURNE P E RT H
For innovative, commercial solutions Tim Gole is one of the region’s most experienced advisors on core banking projects. Sheila McGregor is highly experienced in major technology projects. Peter Jones advises clients in Australia and the Asia Pacific on complex contracting arrangements. They are just part of the TMT team at Gilbert + Tobin. For more information go to www.gtlaw.com.au.
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News | deals contents >> >>
contents
ALB issue 9.08 44
24
Australasia’s largest firms
28
COVER STORY 12 ALB 30 ALB’s much anticipated annual list of Australasia’s largest law firms
ANALYSIS 10 M&A There’s nothing like a sense of closure on a good deal – but lawyers say that is exactly what’s been missing from the M&A mix this year.
22 Appointments
PROFILES
18 UK Report
21 Carbon tax Lawyers review the key implications of the carbon scheme
24 Managing partner profile: Juan Martinez, HWL Ebsworth Dispelling some of the myths around one of Australia’s fastest growing firms
FEATURES
44 In-house profile: Brett Walker, CSIRO Where law meets science
28 US report We review how law firms are faring in the world’s troubled economic powerhouse 32 In-house 10 Ten of the best from the in-house profession share their views on the pressing issues of the day 40 Rugby World Cup How major sporting events are generating exposure and workflow for law firms
4
48 Postgraduate education Reviewing the latest trends and offerings for lawyers considering further study
COLUMNS 16 In-house Q&A
COMMENTARY 9
New Zealand Buddle Findlay
REGULARS 6 DEALS 18 NEWS • Mid-tier firms at carbon cross-roads • Tasmanian government criticised for using Minters • Junior miners fighting for funds in risk adverse market • Corrs sets diversity targets for 2015
Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as Australasian Legal Business can accept no responsibility for loss.
australasian legal business ISSUE 9.08
NEWS | deals >>
deals in brief
By Kalianna Dean
• Johnson Winter & Slattery has also advised long time client CP2 on its involvement in two earlier capital raisings; a A$450m capital raising in November 2008 and a further A$421m raising in August 2009 • Johnson Winter & Slattery also advised on CP2’s participation in the proposed A$7.2bn bid for Transurban in May 2010 • Blake Dawson has previously advised on Melbourne transport infrastructure projects. It was legal advisor to the winning bidder (Keolis/Downer EDI) during the worldwide tender for the operation of Melbourne’s tram and train networks, announced in July 2009
| Property | ►► Frasers Property/Sekisui House Central Park Joint Venture – A$2bn
| M&A | ►► ArcelorMittal/Peabody takeover bid for Macarthur Coal – A$5.1bn Firm: Corrs Chambers Westgarth Lead Lawyer: Teresa Handicott, Braddon Jolly, Jeremy Horwood Client: Macarthur Coal Firm: Freehills Lead Lawyer: Tony Damian Client: Peabody Firm: Henry Davis York Lead Lawyers: Roger Dobson, James Lonie Client: Merrill Lynch and UBS Firm: Mallesons Stephen Jaques Lead Lawyers: David Friedlander, Greg Golding Client: ArcelorMittal • ArcelorMittal and Peabody Energy Corporation have made an offmarket takeover bid for Macarthur
6
| Debt |
of Melbourne’s EastLink tollway. CP2 already owns 35% of ConnectEast
Coal to acquire 100% of Macarthur Coal shares. Peabody would own the majority of shares, 60%, while ArcelorMittal would own the remaining 40% • Mallesons Stephen Jaques has advised ArcelorMittal previously, but was not able to disclose details of this work
| M&A | ►► CP2/Horizon acquisition of ConnectEast – A$2.2bn Firm: Blake Dawson Lead Lawyer: John Sartori Client: ConnectEast Firm: Johnson Winter & Slattery Lead Lawyer: Damian Reichel, John Keeves • This A$2.2bn proposal will see CP2’s vehicle Horizon Roads Limited (Horizon) acquire the remaining units of ConnectEast, owner and operator
Firm: Allens Arthur Robinson Lead Lawyers: Alan Maxton, Mark Stubbings, Tony Sheehan Client: Frasers Property Australia Firm: Blake Dawson Client: Sekisui House Firm: Holding Redlich Lead Lawyers: Neville Allen, Carolyn Chudleigh Client: Frasers Property Australia • Frasers Property Australia has entered into a joint venture with Japanese developer Sekisui House for a CBD-based property development • Blake Dawson has advised Sekisui House on previous Australian property deals, including a 50/50 joint venture with Lend Lease to develop the Serrata 144 apartment complex in Melbourne’s Docklands and further agreements to develop land adjacent to the Hyatt Coolum resort and the subsequent sale of the interest in the Hyatt Coolum Resort on 1 July
►► AGL syndicated loan facility and export credit facility – A$1.2bn Firm: Allens Arthur Robinson Lead Lawyer: Mark Kidston Client: Lenders Firm: Freehills Lead Lawyer: John Angus Client: AGL • export credit facility, which matures in 2031, will be provided by a Danish export credit agency • The credit will be used to finance AGL’s interest in the Macarthur Wind Farm joint venture • Allens Arthur Robinson partner Kidston has also advised AGL’s lenders on other syndicated loan facilities put in place in 2006 and 2009 • Freehills also advised AGL , alongside New Zealand company Meridian Energy, on the construction and maintenance of the Macarthur Wind Farm in August 2010
| Property | ►► Abacus/Heitman Joint Venture – A$600m Firm: Blake Dawson Lead Lawyer: Les Koltai, Lisa Simmons, Michael Ryland, Matthew Farnsworth, Rahul Parrab Client: Heitman Firm: Freehills Lead Lawyer: Justin O’Farrell Client: Abacus • Abacus and Heitman have entered into a joint venture worth A$600m to target direct investment in Australian real estate. • Freehills has assisted Abacus on other joint ventures in the past nine months, including those for Sydney’s Birkenhead Point and 350 George St
Australasian Legal Business ISSUE 9.08
NEWS | deals >>
►► Your month at a glance
| Debt | ►► North Queensland Airports refinancinG –
Firm
Jurisdiction
Deal name
Value ($Am)
Practice
Allen & Overy
Australia
Allied Gold restructuring and triple listing
700
Resources
Allens Arthur Robinson
Australia
AGL syndicated loan facility and export credit facility
1,200
Debt
Australia/Canada
Canada Pension Plan Investment Board sale of stake in Transurban
903
Equity
Australia
JBS refinancing
850
Debt
Australia
GIC/Australand logistics joint venture
450
JV
Australia
BT Investment Limited equity raising
275
Equity
Australia
Zijin Mining Group investment in Norton Gold Fields
27.7
Mining & Resources
Australia
Franklin Templeton Investments Australia acquisition of Balanced Equity Undisclosed Management (BEM)
M&A
Australia
News Limited acquisition of Kidspot
45
M&A
Ecolab/Nalco merger
7,443
M&A
A$530m Firm: Freehills Lead Lawyer: Andrew Booth Client: Northern Queensland Airports (NQA) Firm: Gilbert + Tobin Lead Lawyer: John Schembri Client: Syndicate of five banks
Arnold Bloch Leibler
Australia/India
Indophil Capital Raising
183
Equity
• A syndicate of five banks has agreed to refinance A$530m worth of debt facilities originally used to acquire the Cairns and Mackay airports.
Bell Gully
New Zealand
Contact Energy rights issue
281
Equity
Blake Dawson
Australia
CP2/Horizon acquisition of ConnectEast
2,400
M&A
Australia
Abacus/Heitman Joint Venture
600
JV
Australia
TRUenergy windfarm acquisition from Roaring 40s
157
Energy & Resources
Chapman Tripp
New Zealand
Contact Energy rights issue
281
Equity
Clayton Utz
Australia
Collins Foods IPO
235
Equity
Australia/China
Sundance Resources acquisition of Hanlong Mining Investments
1,440
M&A
Australia
UBS acquisition of ING Investment Management limited
Undisclosed
M&A
• Another recent airport financing for Freehills was the Australian Infrastructure Fund (AIF) issue of a fully underwritten A$80m placement to raise funds for the purchase of an additional 2.21% stake in Australia Pacific Airports Corporation (APAC), which owns Melbourne and Launceston Airports • Gilbert + Tobin has also advised ANZ and Investec on the financing of the QEII Medical Centre Car Parking PPP and various parties on the financing of the Mundaring Water Treatment Plant, both in Western Australia
Baker & McKenzie Australia/US
Corrs Chambers Westgarth
Australia/US
ArcelorMittal/Peabody takeover bid for Macarthur Coal
5,100
M&A
Australia
Memocorp acquisition of Sydney Suncorp Plaza building
395
Property
Australia
QEII Medical Centre Car Parking PPP
140
PPP
Cravath Swaine & Australia/US Moore LLP
Ecolab/Nalco merger
7,443
M&A
Freehills
Australia
AGL syndicated loan facility and export credit facility
1,200
Debt
Australia
Collins Foods IPO and ASX listing
235
Equity
Australia
Abacus/Heitman Joint Venture
600
JV
Australia
North Queensland Airports refinancing
530
Debt
Australia
Toga Group/La Salle co-investment in Macquarie Park
350
Property
New Zealand
Contact Energy rights issue
281
Equity
Australia/China
Gindalbie entitlement offer and placement to Ansteel
209
Mining & Resources
Australia
QEII Medical Centre Car Parking PPP
140
PPP
Australia
UBS acquisition of ING Investment Management limited
Undisclosed
M&A
| Property | ►► Memocorp acquisition of Sydney’s Suncorp Plaza building – A$395m
Gadens
Australia
Stockland acquisition of three retirement villages
Undisclosed
Property
Firm: Corrs Chambers Westgarth Lead Lawyer: Henry Self Client: Commonwealth Property Office Fund
Gilbert + Tobin
Australia
North Queensland Airports refinancing
530
Debt
Australia
QEII Medical Centre Car Parking PPP
140
PPP
Australia
Orange acquisition of 19% stake in Charter Hall REIT
Undisclosed
Equity
Hall & Wilcox
Australia
Health Super Fund merger with First State Super
Undisclosed
M&A
Firm: Henry Davis York Lead Lawyer: Justin Madden Client: Memocorp
Henry Davis York
Australia/US
ArcelorMittal/Peabody takeover bid for Macarthur Coal
5,100
M&A
Australia
Memocorp acquisition of Sydney Suncorp Plaza building
395
Property
Australia
Orange acquisition of 19% stake in Charter Hall REIT
Undisclosed
M&A
Holding Redlich
Australia
Zijin Mining Group investment in Norton Gold Fields
28
Mining & Resources
HopgoodGanim
Australia
Arrow Energy acquisition of ERM’s 20.5% interest in the Braemar 2 power station
66
M&A
Australia
Indigo/Australia Post national distribution deal
Undisclosed
TMT
CP2/Horizon acquisition of ConnectEast
2,400
M&A
• This A$395m deal is reportedly the biggest property deal in Sydney this year and may help establish a new benchmark for Sydney property prices • Henry Davis York has been advising Memocorp on property related www.legalbusinessonline.com
Johnson Winter & Australia Slattery
7
NEWS | deals >>
Mallesons Stephen Jaques
Australia/US
ArcelorMittal/Peabody takeover bid for Macarthur Coal
5,100
M&A
Australia/China
Sundance Resources acquisition of Hanlong Mining Investments
1,440
M&A
Australia
JBS refinancing
850
Debt
Australia
GIC/Australand logistics joint venture
450
JV
Australia
Toga Group/La Salle co-investment in Macquarie Park
350
Property
Australia
BT Investment Limited equity raising
275
Equity
Australia/India
Indophil Capital Raising
183
Equity
Australia
Franklin Templeton Investments Australia acquisition of Balanced Equity Undisclosed Management (BEM)
M&A
McCullough Robertson
Australia
Arrow Energy acquisition of interest in Braemar 2 power station
66
M&A
Australia/US
Thiess sale of Burton Coal Mine interest to Peabody
35
M&A
Minter Ellison
Australia/UK
Campbell Brothers acquisition of Stewart Group
222
M&A
Australia/US
Thiess sale of Burton Coal Mine interest to Peabody
35
M&A
Undisclosed
Property
Australia
Stockland acquisition of three retirement villages
Morrison & Foerster LLP
Australia
Franklin Templeton Investments Australia acquisition of Balanced Equity Undisclosed Management (BEM)
M&A
Norton Rose
Australia
Allied Gold restructuring and triple listing
700
Mining & Resources
Australia/China
Gindalbie entitlement offer and placement to Ansteel
209
Mining & Resources
Page Seager
Australia
TRUenergy windfarm acquisition from Roaring 40s
157.6
M&A
Pinsent Masons
Australia/UK
Campbell Brothers acquisition of Stewart Group
222
M&A
Skadden, Arps, Australia/US Slate, Meagher & Australia Flom LLP Australia
Ecolab/Nalco merger
7,443
M&A
JBS refinancing
850
Debt
BT Investment Limited equity raising
275
Equity
Webb Henderson Singapore
SingTel sale of assets to separate business trust
1,890
TMT
Does your firm’s deal information appear in this table? Please contact
matters for over six years • Corrs Chambers Westgarth has advised on other recent significant property deals, including the commercial leasing in May of 357 Collins St in the Melbourne CBD
| Property | ►► Toga Group/La Salle co-investment in Macquarie Park – A$350m Firm: Freehills Lead Lawyer: Wendy Gwyn, Murray Dearberg Client: Toga Group Firm: Mallesons Stephen Jaques Lead Lawyer: Sue Kench Client: La Salle Investment • A$350 million project will comprise 561 apartments to be developed in five stages over a five year period
8
alb@thomsonreuters.com
61 2 8587 7484
• Freehills also advised Growthpoint on its recent takeover bid for Rabinov, announced in June. That deal increased Growthpoint’s property portfolio to 38 properties valued at A$1.17bn
| Resources | ►► TRUenergy stake acquisition in Gunnedah Basin gas reserves – A$284m Firm: Blake Dawson Lead Lawyer: Peter Stirling Client: TRUenergy Holdings Pty Ltd Firm: Freehills Client: Santos Firm: Piper Alderman Client: Eastern Star Gas (ESG) • Deal will see TRUenergy sell its stake in ESG to Santos in exchange for 20% working level permits in the
Gunnedah Basin • Freehills recently advised Santos on the agreements between Santos and KOGAS which formed part of the GLNG joint venture between Santos, PETRONAS, Total and KOGAS, including a A$500m capital raising • Piper Alderman last advised ESG on its 2010 October capital raising, worth A$132m
| Equity | ►► Contact Energy rights issue – A$281m Firm: Bell Gully Lead Lawyers: Brynn Gilbertson, James Gibson Client: Contact Energy
Client: Contact Energy • This pro-rata renounceable rights issue will allow Contact Energy to pursue various growth opportunities, including the 166 megawatt Te Mihi power station at Wairakei on New Zealand’s North Island • This was the first New Zealand rights issue to combine rights trading with a post-close shortfall book build. • Bell Gully also advised Contact Energy on its acquisition of Rockgas LPG from its Australian parent company Origin. • Bell Gully also advised a review of the Electricity Commission’s pricing methodology for the electricity transmission grid
| PPP | ►► QEII Medical Centre Car Parking PPP A$140m Firm: Corrs Chambers Westgarth Client: Victorian State Government Firm: Freehills Lead Lawyer: Josh Sgro Client: Capella Parking Firm: Gilbert + Tobin Lead Lawyer: Ros O’Mally Client: ANZ and Investec • Gilbert + Tobin has also advised ANZ, along with Westpac, as arrangers and JLMs in connection with the A$350m fixed rate notes issuance conducted by Australia Pacific Airports in September 2010 • Corrs has previously advised the Victorian State Government, most recently on its tender for the A$3.5bn Victorian Desalination Plant PPP in 2009, the largest public sector investment in water infrastructure in Australia’s history
Firm: Chapman Tripp Lead Lawyer: John Strowger Client: Underwriters Firm: Freehills Lead Lawyer: Philip Podzebenko Australasian Legal Business ISSUE 9.08
Firm Profile |
NEWS deals >>
NZ Commentary
CHRISTCHURCH QUAKE SHAKES UP LEASE AGREEMENTS Buried in the back of many leases are clauses which relate to both force majeure events and damage and destruction. For many years in New Zealand (and presumably Australia) these clauses were largely untested and were considered boilerplate. In light of recent natural disasters, and notably the Christchurch earthquakes, these clauses are being interpreted and applied in a manner which has had some surprising results. The “drop-zone” or cordon issue Typically a lease states that if a building is damaged (so as to make the building untenantable) then the lease will automatically terminate. This is standard language that is used in most leases in New Zealand. In an earthquake scenario this is easily applied, provided as a matter of fact it can be shown that the building is not tenantable as a result of damage. There is some limited case law in New Zealand that describes what “tenantability” means: “[Tenantable] means nothing more nor less than able to be used and enjoyed by tenant. [It] involves some degree of permanence. In other words, something which is merely transitory or temporary will not make a building untenantable. However, where there is a substantial interference with the tenant’s ability to enjoy, use and operate, particularly when one is talking about commercial premises, then you have ‘untenantability’.” There are a number of buildings in Christchurch where tenants cannot gain access to them because they are within a cordon, or a “dropzone” of other buildings which may collapse. However, it is as a result of health and safety, not damage, that the buildings are not able to be entered into and used. Therefore the standard wording does not apply. Because leases are typically silent on this point, the lease will not automatically terminate and remains in place. Whether an abatement of rent and outgoings will apply will depend on the individual lease and possibly the consent/ agreement of the landlord. The standard form of lease however, only abates rental where there has been damage – not a lack of access. Under standard provisions, it is the tenant who assumes this risk.
www.legalbusinessonline.com
Who should bear the risk? Going forward, the question is raised as to who should bear the risk of not being able to access the workplace – the landlord or the tenant? Most people consider that in this situation the tenant’s obligations should be relaxed or terminated on a “user pays” argument i.e. if the tenant cannot use the premises, then the tenant should not pay for it. However, how long does a tenant have to be “locked out” before termination or rent abatement should apply? The tenant may be able to source alternative premises and continue to work – a lot of professional firms for example have sufficient remote access that business can continue from home, or other temporary offices. Many tenants have business continuity plans in place and are able to keep operating if the premises are inaccessible. In that light, a tenant is better placed to manage the risk than the landlord. The landlord is not so lucky. As the owner of a property in a “drop-zone” they cannot relocate the building. The building may still be tenantable. The landlord is holding up its end of the bargain under the lease and the tenant has contractually agreed to pay the rent. And of course, there are still bills to pay – the landlord’s financier is not going to stop charging interest on any debt outstanding on the property, and expenses may continue to accrue.
a tenant access, then this will increase the landlord’s insurance costs. This will be passed through to the tenant by way of increased operating expenditure and/or the rent. Alternatively, the tenant could insure this risk itself. Some of the major corporate tenants with group policies may find this more cost-effective. To date, the response we have seen from insurance brokers has been mixed; brokers on some leasing transactions differ as to which party is best placed to hold this insurance. This uncertainty is not surprising given the current state of the insurance market generally, in the wake of recent natural disasters. In the meantime the commercial arm-wrestle between tenants and landlords as to who bears the cordon or “drop-zone” risk will continue.
This article was written by Lloyd Davies, a Senior Associate in the Wellington office of Buddle Findlay, one of New Zealand’s leading law firms. Lloyd specialises in commercial property transactions, including acquisition and due diligence, property finance and securitisation, development agreements, fit-out agreements, and leasing. He can be contacted on +64 4 462 0470 or email lloyd.davies@buddlefindlay.com
Drafting new clauses As the standard damage and destruction clause does not apply, leases currently being drafted in New Zealand are anticipating the “drop-zone” scenario. Typically they are being redrafted by tenants who want to ensure that they have the flexibility of being able to terminate the lease if, in the event of a natural disaster, they cannot access their building. This sort of clause will apply even when the building has not been damaged.
Lloyd Davies Buddle Findlay
This risk issue is, as you would expect, ultimately being decided by insurance brokers. Is the tenant or landlord in the best place to get business interruption insurance for this contingency? Typically if a landlord is going to take on the risk of a major disruption denying
9
NEWS | analysis >>
Analysis >>
Rising M&A volumes M&A volumes are up, but lawyers are not convinced that a boom is underway, writes Kalianna Dean. ►► Top legal advisors - Australia target/ acquirer M&A, year to date Rank
Legal Advisor
Ranking Value inc. Net Debt of Target ($Mil)
Mkt. Share
Number of Deals
1
Allens Arthur Robinson
28,316.77
28.0
29
2
Allen & Overy
24,576.87
24.3
17
3
Clayton Utz
23,242.25
23.0
32
4
Sullivan & Cromwell
22,772.96
22.5
4
5
Freehills
20,223.70
20.0
48
6
Morgan Lewis & Bockius
19,536.13
19.3
3
7
Simpson Thacher & Bartlett
15,453.42
15.3
3
8
Latham & Watkins
14,763.23
14.6
1
9
Mallesons Stephen Jaques
14,525.36
14.4
32
10
Hogan Lovells
12,912.28
12.8
3
11
Cravath, Swaine & Moore
9,965.39
9.8
2
12
Blake Dawson
9,261.57
9.2
35
13
Corrs Chambers Westgarth
7,770.69
7.7
12
14
Osler Hoskin & Harcourt LLP
7,480.39
7.4
2
15
Ogilvy Renault
7,459.73
7.4
1
16
Minter Ellison
6,795.00
6.7
29
17
Johnson Winter & Slattery
5,659.93
5.6
6
18
Baker & McKenzie
5,377.84
5.3
24
19
Wachtell Lipton Rosen & Katz
4,750.00
4.7
1
20
Gilbert + Tobin
3,770.43
3.7
10
21
Herbert Smith/Gleiss Lutz/Stibbe
1,816.51
1.8
3
22
Vinson & Elkins LLP
1,500.00
1.5
1
23
Piper Alderman
704.15
0.7
1
24
Norton Rose
621.64
0.6
16
25
Clifford Chance
559.84
0.6
9
Subtotal with Legal Advisor
91,702.56
90.6
254
Subtotal without Legal Advisor
9,491.22
9.4
700
“I think because we’ve experienced absolute boom times, sometimes [if we have] anything less than that, people get disappointed”
Industry Total
101,193.78
100.0
954
Rebecca Maslen-Stannage, Freehills
Source: Thomson Reuters
10
A
ccording to Thomson-Reuters statistics, Australian/ NZ M&A volume for the first half of the 2011 calendar year is up by 111% (announced deals) and 323% (completed deals) in comparison to the same period last year. However, the number of deals is down and lawyers say that volume statistics can be skewed by a small number of large deals. Despite the rise in completed deals, investment banks are disappointed at the number of deals that did not reach financial close. “Investment banks in particular probably got their hopes up that we were back to the exuberant times of a few years ago. There’s also a touch of disappointment among the banks themselves,” said Freehills M&A partner Rebecca MaslenStannage. However, she points out that the story is not all doom and gloom: “I think because we’ve experienced absolute boom times, sometimes [if we have] anything less than that, people get disappointed,” she says. “There’s some good deals out there - we just did the Centro Blackstone deal. If you look at how the market performed in the first half compared to the last few years, it’s excellent.” A volatile market was seen as the culprit for the number of deals which failed to close: “I don’t think the results are of themselves an indicator. The volume of work is still solid, but the transactions themselves are still quite
Date: August 1, 2011 Australasian Legal Business ISSUE 9.08
NEWS | analysis >>
fail to excite market their radar. One week they might do some more work on a deal and then they’ll leave it a month or two. People don’t want to be opportunistic. Assets aren’t going to get snapped up within a month or two,” he said. Seller expectations are cited as a further reason for stalemates arising. “From the seller’s perspective, prices aren’t great at the moment…no one knows what the Australian dollar will do,” added Pathak.
volatile. The word choppy is being used quite a lot,” said Mallesons M&A partner Craig Semple. According to him, getting deals over the line may be a case of improving party engagement. “We’ve seen over the last couple of years in Australia companies get approached by private equity houses and others. Sometimes those approaches become public but nothing happens and a strange stalemate situation arises,” he added. Speaking prior to the recent market meltdown, Gilbert + Tobin M&A partner Neil Pathak says that lawyers were still seeing a steady workflow. “People have got things on
Interviews for this feature were completed prior to the recent global equities slump. Further coverage of this issue will follow in issue 9.9 of ALB.
Neil Pathak Gilbert + Tobin
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11
FEATURE | ALB 30 >>
Growth is back
Despite a fragile Australasian economy, law firm revenues have bounced back in FY2011. Renu Prasad reviews the headcount and revenue trends at Australasia’s largest 30 law firms.
P
artisan commentators from within the “big six” firms always like to claim that the “six” is comprised of three high quality firms and three chasing firms. We’ll leave it to the clients to assess the merits of each firm – but as this year’s ALB30 reveals, the “big six” is a story of two halves in quite a different sense. Three of these firms – Clayton Utz, Freehills and Minter Ellison – have retained their traditional size, hovering at the 1000 lawyer mark. The three remaining firms, Mallesons, AAR and Blake Dawson are looking decidedly slimmer by comparison, in the low 700 lawyer range. The next group of firms (Corrs, Gadens and Norton Rose) are not far behind. Caution should be applied in the interpretation of these figures - see the discussion of the survey parameters below - but it is clear that the “six” are employing distinct strategies to the local market and that perceptions about where the “six” are collectively heading need to be challenged. Last month, ALB reviewed partnership figures between 2008 and 2011 and concluded that while the market perception that top tier partnerships were shrinking was generally correct, Minter Ellison
12
and Blake Dawson were moving in the opposite direction. Firms have also denied any conscious strategy in this respect – AAR’s Michael Rose has pointed out that some of the fluctuation is due to generational change in the partnership and a Freehills spokesperson told ALB that there was no major fluctuation in Freehills partner numbers when the recent figures are viewed in the longer term historical context.
Revenue growth
Despite upbeat talk from the mining sector, the Australian and New Zealand economies continue to be jittery. Talk of the “two speed” economy continues and downgrades in the growth forecast for the US economy and talk of default of US treasuries have added to a skittish economic environment. It is therefore somewhat surprising to find that nearly every major law firm surveyed by ALB managed to increase revenues in FY2011. Last year, ALB noted that the Australian market was a story of two halves: a flourishing midtier and a top tier which was suffering the clear effects of a paucity of premium work. One would have expected that trend to have continued in FY2011, but
Minter Ellison, Freehills and Blakes have managed to defy pessimism with some respectable growth. Clayton Utz also recorded some growth, while Allens – which continues its policy of secrecy in relation to revenues – is also understood to have had a satisfactory year. The notable exception to this pattern of growth was Mallesons, which contracted by 1%. Blake Dawson is leading the top tier results with 8% growth, a figure which managing partner John Carrington says is likely to be exceeded next year. “The strong level of activity in the final quarter of last financial year has continued into the current quarter – and this growth has been seen across the firm,” says Carrington. “Brisbane and Perth have been particularly busy, not just in the pure resources work but other areas such as M&A and employment. Banking & finance, litigation and IP have also been strong across the board.” Blake Dawson has also enjoyed a significant role in the NBN negotiations. Like many of its rivals, Blakes is looking to Asia as a source of growth. It opened Singapore and Tokyo offices during the depths of the GFC and is now investigating Beijing and South Australasian Legal Business ISSUE 9.08
FEATURE | ALB 30 >>
►► Largest firms by lawyer headcount – Australia and NZ only Rank
Firm
CEO or equivalent
Total
Lawyers
Partners
2010 rank
1
Minter Ellison
John Weber
1079
794
285
1
2
Clayton Utz
Darryl McDonough
1004
802
202
4
3
Freehills
Gavin Bell
979
782
197
3
4
AAR
Michael Rose
726
559
167
5
5
Mallesons Stephen Jacques
Robert Milliner
723
562
161
2
6
Blake Dawson
John Carrington
712
526
186
6
7
Gadens
Ian Clarke
601
472
129
10
8
Norton Rose
Don Boyd
579
432
147
9
9
Corrs Chambers Westgarth
John Denton
548
421
127
8
10
DLA Piper
Tony Holland
454
341
113
7
11
HWL Ebsworth
Juan Martinez
345
221
124
11
12
Middletons
Nick Nichola
283
217
66
14
13
Sparke Helmore
Jesse Webb
281
230
51
13
14
Baker & McKenzie
Chris Freeland
277
187
90
12
15
Gilbert + Tobin
Danny Gilbert
266
200
66
16
16
Maddocks
David Rennick
239
176*
63
18
17
Russell McVeagh
Gary McDiarmid
234
194
39
15
18
Thomsons Lawyers
Adrian Tembel
213
157
56
25
19
Simpson Grierson
Kevin Jaffe
212
164
48
16
20
Henry Davis York
Sharon Cook
209
152
57
19
21
Bell Gully
Roger Partridge
207
160
47
21
22
Chapman Tripp
Andrew Poole
206
155
51
19
23
McCullough Robertson
Brett Heading
201
153
48
22
24
Hunt & Hunt
Maureen Peatman
196
143
53
196
25
Lander & Rogers
Andrew Willder
194
141
53
26
26
DibbsBarker
Alan McArthur
181
134
47
23
26
Moray & Agnew
Michael Pitt
181
120
61
27
28
Buddle Findlay
Peter Chemis
178
136
42
23
29
Holding Redlich
Chris Lovell
177
124
53
29
30
Macpherson+Kelley
Damian Paul
140
88
52
new
arrow
n/a
* ALB estimate - no figures received
www.legalbusinessonline.com
13
FEATURE | ALB 30 >>
►► Firms just out of the 30 Rank Firm Piper Alderman
31
CEO or equivalent
Total
Lawyers
Partners
2010 rank
Tony Phelps
137
81
56
30
32
Hebert Geer
Bill Fazio
135
87
48
28
33
Mills Oakley
John Nerurker
134
102
32
new
34
Hall & Wilcox
Tony Macvean
122
93
29
new
35
HopgoodGanim
Bruce Humphrys
101
75
26
new
No figures were received from TressCox or Kensington Swan. ALB estimates that these firms would have been ranked approximately between 30th and 35th on the list. Johnson Winter & Slattery also did not participate and ALB has no historical data upon which to make any estimate.
►► Revenues – FY2011 Firm
FY2011 revenue ($Am)
FY2010 revenue ($Am)
% change
Minter Ellison
525 ($Am)
503 ($Am)
4
Freehills
512 ($Am)
477 ($Am)
7
Mallesons
491 ($Am)
494 ($Am)
-0.6
Clayton Utz
445 ($Am)
442 ($Am)
0.7
Blake Dawson
382 ($Am)
355 ($Am)
8
Corrs Chambers Westgarth
252 ($Am)
234 ($Am)
8
Norton Rose
240 ($Am)
220 ($Am)
9
Baker & McKenzie
169 ($Am)
154 ($Am)
10
Gilbert + Tobin
141 ($Am)
123 ($Am)
15
HWL Ebsworth
120 ($Am)
107 ($Am)
12
Henry Davis York
101 ($Am)
97 ($Am)
4
Sparke Helmore
101 ($Am)
97 ($Am)
4
McCullough Robertson
83 ($Am)
76 ($Am)
9
Dibbs Barker
70 ($Am)
68 ($Am)
3
Thomsons Lawyers
76 ($Am)
67 ($Am)
13
Moray & Agnew
75 ($Am)
67 ($Am)
12
Lander & Rogers
67 ($Am)
60 ($Am)
11
Holding Redlich
63 ($Am)
58 ($Am)
9
Herbert Geer
61 ($Am)
61 ($Am)
0
Piper Alderman
56 ($Am)
52 ($Am)
8
Hall & Wilcox
41 ($Am)
35 ($Am)
19
Mills Oakley
41 ($Am
33 ($Am)
24
arrow
ALB is grateful to those firms which supplied revenue figures. Not all firms submitted these figures and the list is therefore incomplete.
Korea as possible new locations, if the requisite approvals can be obtained. “The driver will be following regional capital flows,” says Carrington. “These have principally coming out of Japan and China, but increasingly they are coming out of Korea. Those capital flows have resulted in increasing opportunities for us.”
How to interpret the ALB30 tables
Sharp-eyed readers may have noticed 14
that the figures published in the annual ALB30 survey occasionally vary from those published elsewhere. Why? The results of each survey are dependent on the way the information is collected. ALB collects information about firm size by lawyer headcount, but it is also possible for this information to be expressed as a full time employee (FTE) count. Similarly, other surveys may include paralegals or graduates in their calculations,
whereas ALB only counts qualified lawyers. Most importantly, the ALB30 survey relates to the Australian/ NZ market only and firms are specifically asked to exclude any headcount based offshore. This is done to avoid the distortions likely to result from international firms including their Asia-based lawyers in their calculations: while it may be interesting and perhaps portentous for a list of Australasia’s largest firms to be topped by the likes of Baker & McKenzie or Allen & Overy, this would not give an accurate picture of their true scale in Australia. For this reason, the survey is confined to Australia and NZ. We would refer those interested in the Asia market to the ALB50, the corresponding survey conducted by ALB’s sister publication Asia Legal Business across the Asian jurisdictions. For ease of reporting, the revenue figures listed in this feature are for each firm overall and not confined to Australian operations.
Eligibility
The ALB 30 has traditionally included multiple partnership firms, provided that these firms all operate under common branding. This is consistent with the conventional market perception of such firms: names such as Gadens and Minter Ellison are commonly accepted as single firms, whatever the disadvantages (or advantages) of their partnership structure. The “common branding” rule has been somewhat more generously applied this year. Hunt & Hunt and Macpherson + Kelley are two newcomers to the ALB30 and both firms include state-based entities which continue to trade under their own local brands. Both of these firms are well established names and while their inclusion in the 30 is to an extent an anomaly, this is a more satisfactory outcome than excluding them altogether. These inclusions have resulted in Piper Alderman and Herbert Geer dropping out of the 30 for this year, although they only missed a spot by a narrow margin. ALB Australasian Legal Business ISSUE 9.08
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Q A FEATURE | Q&A >>
&
In this new segment, ALB asks leading legal professionals to provide a short commentary on a selected topic each month. This month’s question: Are Australian law firms doing enough to promote females into senior roles such as partner and managing partner? Why or why not?
16
Elizabeth Broderick Sex discrimination commissioner There are good things happening, but there is much more that needs to be done. Just this last current intake of partners contained almost twice as many women as last year, if you look at the top 36 firms, which is a really positive development. However, this year 71% of law graduates across Australia will be female and only around 22% of partners in large law firms are female. That is not sufficient progress – more needs to be done. We have to stop saying “what’s wrong with women that they can’t make it into partnerships?”, and we need to change that around to say “what’s wrong with law firms if they can’t retain and promote what is a majority of educated lawyers in the country?” Women are doing well at university and in law school; it’s not sustainable to continue to have this leakage of female talent, which normally occurs about five years before partnership according to research; that leakage has a significant cost to law firms and the industry and to an extent our international competitiveness. It’s not going to be one initiative which is going to change the picture of women at the partnership level. Targets will be important, but by themselves they will not be sufficient, there needs to be a raft of bold and innovative initiatives which is directed at increasing the number of women at leadership level across the profession. We need to focus on three areas: We take the view that there is only one model of work, which is a 24/7 model for senior management, but we need to explore alternative models. The second thing we have to do is engage men, we need more senior male lawyers saying this is not good enough and we need to work together to create change. The last thing I would say is that we need to achieve critical mass. We need to move to the critical mass, which would be around 35% of partners quickly; because it’s the critical mass of women in partnership level that would change the nature of legal practice, rather than the other way around. Because there is not a critical mass of women, other women look ahead and say “is that what I want for my life - no”, and they self-elect out.
Australasian Legal Business ISSUE 9.08
FEATURE | Q&A >>
Darryl McDonough Chief executive partner, Clayton Utz Australian law firms, like many other businesses, have been criticised for the low level of representation of women in their partnership and senior management ranks. Arguably some of this criticism may be warranted; however I suspect the main reasons why firms have had historically low numbers of female partners are more complex than is often portrayed or realised. Clayton Utz has several long-serving partners who are women. We also have, and have had, women in our senior management ranks. We continue to recruit large numbers of female law graduates, and more than 50% of our current lawyers are women. I believe we will continue to see more women promoted as firms become better at retaining their female legal talent by providing more flexible work options that reflect an individual’s needs and career ambitions. I recall that in my own group in Brisbane a few years ago we had a majority of lawyers who were women, which was fantastic. However, for various reasons, most decided to opt for careers outside the partnership. Two went on secondment to clients, and stayed; another went in-house; and another moved interstate but is now a partner. Clayton Utz is continually looking at ways to support women with flexible work and parental leave arrangements so that they do not feel partnership or senior management is not a viable option for them. That is one of the reasons we enhanced our parental leave benefits to provide for up to 36 weeks’ leave for eligible staff. We are also investing in technology solutions that will support flexible work arrangements for the benefit of all staff. It is extremely important for our future that we work continuously at engaging our whole workforce so that we may retain the very best talent to enable us to continue to provide excellent service to our clients.
www.legalbusinessonline.com
Andrew Willder Chief executive partner, Lander & Rogers While the changing demographics of law school graduates is resulting in greater numbers of female lawyers entering the legal profession, the number of women in partner positions does not yet reflect this trend. The opportunity cost of female lawyer attrition in law firms cannot be under-estimated in terms of: lost talent and potential, lost expertise, lost institutional knowledge; and impact on diversity and firm culture. We believe there are great benefits for law firms that focus on this issue and get it right. Most important is the genuine commitment from those in leadership roles to foster and encourage the retention of female lawyers, and ensuring that flexible work arrangements are part of firm culture and supported at every level. With an appropriate level of support, it is possible to achieve greater retention of female lawyers into the ranks of partnership. For example, this kind of support could include a comprehensive paid parental leave policy and supporting flexible work arrangements, such as flexible work hours, job sharing, part time work, working from home, extended leave of absence and the ability to purchase additional annual leave. We believe that support could also include: introducing a formal ‘reintegration’ program for female lawyers returning to work, and introducing flexible leadership programs that offer career progression and mentoring based around the individual lawyer’s strengths and interests.
17
NEWS >>
news in brief >> uk report Bird & Bird, Clyde & Co among top performing U.K. firms The U.K.’s top 50 firms have posted their best results since the GFC began in 2008, according to the AM Law Daily. Gross revenue rose an average of 3.4 percent, to £12.33 billion (US$20 billion). Average PEP grew 4.4 percent, still down from the 8.8 percent rise during the 2009-10 financial year. Bird & Bird, Clyde & Co, Freshfields and DLA Piper have emerged as some of the strongest performing firms over the last five years, according to research conducted by Legal Week. One notable trend was the strength of smaller firms, such as Bird & Bird and Clyde & Co, and how they grew faster than their Magic Circle and top ten rivals. Bird & Bird saw the highest percentage revenue increase, a 121.9 percent jump since 200506. Revenue in GBP has risen from £96.7 million to £214.6 million in 2010-11. The results for the whole five years indicate that a number of other smaller rivals such as Kennedys and DWF expanded faster than their rivals. Those firms’ grew top line revenue by 135.5 percent and 144.8 percent respectively. Linklaters latest firm to be briefed on News Corp ‘Hackgate’ scandal Linklaters has been called upon to advise News
Corporation’s Management and Standards Committee as it oversees the aftermath of the ‘hackgate’ scandal which saw The News Of The World shutdown by News Corp CEO Rupert Murdoch. The committee, chaired by News International general manager William Lewis alongside head of corporate affairs Simon Greenberg, is responsible for “all matters related to The News of the World phone-hacking scandal and payments made to the police, including police inquiries and the public inquiry led by Lord Justice Leveson,” according to a statement. SNR Denton puts out the call to salaried partners Non-equity partners at trans-Atlantic firm SNR Denton are to make capital contributions for the first time, according to The AM Law Daily. According to a firm spokesperson the decision was part of the original merger agreement, where partners “buy into the concept of one global firm” and is not related to falling profit levels. “All of the firm’s U.S. partners already contribute capital in this way,” the spokesperson said. The question was raised because the firm’s PEP has fallen 36 percent since the merger, and reports of European partner exits from the U.K. and Paris continue.
ROUNDUP • Clifford Chance beat Allen & Overy on retention, posting a newly qualified retention rate of 83 percent, meaning it will keep 43 out of 52 Autumn qualifiers. Allen & Overy will retain just 72 percent, or 39 of its 53 qualifiers. Slaughter and May also announced its retention rate. It will retain 100 percent of its trainees. • Freshfields has named corporate partner Julian Long as head of its London corporate practice. Long will succeed Mark Rawlinson, who is vacating the position following his election as London managing partner, announced on June 27. • Norton Rose has hired former Freshfields corporate of counsel as partner to boost its London energy M&A capabilities. Conlin was promoted to of counsel in 2010 and was previously in-house counsel at the Perenco Group and seconded at Mobil North Sea and BP. • Slaughter and May is to have a new London neighbour. Trowers & Hamlin will relocate its London headquarters to 3 Bunhill Row in 2012. The space, next door to Slaughter and May, was formerly a secondary office for Linklaters. Trowers & Hamilin also opened a new office in Birmingham on July 1. • Clifford Chance has elected a new leader for its German real estate practice. Cornelia Thaler will take up the role on September 1, for a four-year period. Thaler has been a partner in Clifford Chance’s Frankfurt office since 2000 and she will replace outgoing leader Klaus Minuth • On July 14, The Law Society of England and Wales announced it will cut the cost of practicing certificate fees by 23 percent. The change brings the cost of individual certificates for solicitors down from £428 to £328. Fees paid by firms will fall by the same amount.
18
Mergers: Mallesons and Blakes next in line, according to rumour mill Speculation remains rife in the Australian legal market that two more local firms are set for international tieups. Mallesons Stephen Jaques has reportedly been in “discussions” with leading Chinese law firm King & Wood according to Fairfax Media while Blake Dawson is apparently in talks with UK firm Ashurst according to The Lawyer. The Mallesons and King & Wood alliance was first hinted at on July 21, following news that chief executive partner Robert Milliner sent an email confirming that the firm had been exploring a number of possible alliances with firms around the world as part of a broader internationalisation strategy. “We have spoken to King & Wood as one of a number of Asian firms,” he said in the email published by The Lawyer. “However, we continue to review the best option for the long term future success of our firm.” Beijing-based King & Wood also confirmed discussions between the firms stating that they had been “on again, off again” and were currently “on again.”
AMP and AXA legal panels set for review Three months after the AXA-AMP merger, AMP general counsel and company secretary Brian Salter is looking at reviewing panel arrangements. Salter told ALB that he will be undertaking a thorough review of external legal providers during the next six months with the aim of creating a new panel before December 31. A review of the New Zealand legal providers will not be occurring at this point in time as the AMP panel was only established last year. However, a combined panel is likely to be implemented in NZ in due course. To read more about Salter’s approach to panels, refer to the In-house 10 feature in this edition where Salter is a featured GC.
ILH buys Pacific-focused law firm ASX-listed Integrated Legal Holdings (ILH) has acquired PLN Lawyers under a tuck-in acquisition with existing member firm Argyle Lawyers. PLN Lawyers is a Sydney-based commercial law firm and houses the Pacific Legal Network (PLN) which was established in 2002. Its mission is to be the leading provider of legal and business advisory services to corporations and international institutions operating in the Pacific region. The firm consists of eight staff including founder and principal John Ridgway, and has an approximate annual fee income of A$2m. Once joined with Argyle Lawyers, the two firms will have a combined staff of 40, including six principals, and an annual fee income of more than A$10m.
Australasian Legal Business ISSUE 9.08
NEWS >>
Carbon Scheme >>
Mid-tier firms at carbon cross-roads C
arbon strategy and sustainability are no longer the preserve of large national law firms and mid-tier firms need to consider their response, Grant Thornton director Bill Shew has told ALB. “The big conversation we’ll see is whether or not specialisation is really the play of the larger firms,” said Shew. “Larger firms are in that space because the demand was from their client base, the larger organisations. The carbon tax is pushing that down to every business, which means the mid-tier
firms are going to see more demand for [carbon] advice.” Shew says that mid-size firms are at a cross-roads. “They need to think strategically about whether they want to play in this space,” he said. “If they don’t, that’s fine but they need to understand the implications. In essence, they may be opening the avenue for other firms to take that space.” Shew says that while the large firms have already established themselves in the carbon and sustainability area, there is still an opportunity for mid-
size firms to take the ‘first mover advantage,’ whereby the first firms to embrace the area will gain longer term ascendency. “One or two mid-tier firms are already in this space,” he observed. “I still believe there is an opportunity for the mid-tiers to make a mark, but they have to do so relatively quickly. Definitely the mid-tier space is there for the taking.” Shew names contract review and reporting and disclosure as some key areas of legal work likely to arise from the tax. ALB
Industry >>
Tasmanian government criticised for using Minters A
rift has developed between the Law Society of Tasmania and the Tasmanian Government after it was revealed the government allocated a substantial amount of work to a firm on the mainland. Right to Information documents obtained by the Tasmanian Liberals show the government paid Minter Ellison Melbourne more than A$1m in the past two years for work they a proposed Promotins ALB Ad completed 8/8/11 on 2:41 PM Page 1
redevelopment of Hobart’s Parliament Square including the preparation of documents and overseeing the tender process. Law Society of Tasmania president Bill Griffiths told ALB he did not understand why it was necessary for the government to allocate the work to a firm which does not have a presence in the state. “There might be occasions where you need to send an element of work outside for expertise, but not the
whole project,” said Griffiths. According to media reports, the government has justified the use of Minters because of the need for “high level and specific expertise”. Griffiths disagreed, stating that there was nothing about the project which he considered to be complex and beyond the capability of a local firm. “And overall I can’t imagine a local firm would charge that amount,” he added. ALB
Not just a different perspective now a broader perspective. Curwoods Lawyers would like to congratulate our latest promotions and welcome Renae Hamilton to the firm. Top left: Kiley Hodges,Partner, Property Damage Liability Top right: Sally Morshead, Senior Associate, Property Damage Liability Bottom left: Belinda Wightley, Special Counsel, CTP Bottom middle: Michael Poulos, Special Counsel, Employers Liability & Latent Diseases Bottom right: Renae Hamilton, Special Counsel, CTP T: (02) 9231 4166 www.curwoods.com.au
curwoodslawyers A DIFFERENT PERSPECTIVE
NEWS >>
Mining >>
Industry >>
Junior miners fighting for funds in risk adverse market
W
hile a number of junior miner IPOs have taken place of late, such as Broken Hill-based Silver City Minerals’ A$9.8m raising and WA-based Australasia Consolidated (now Adept Solutions Limited) A$10m raising, lawyers report that capital raising conditions are becoming increasingly difficult for juniors. “The IPO market in the exploration space and in general is considerably more lacklustre than it has been in the past few years,” said HopgoodGanim partner Michael Hansel. “This can be attributed to a number of factors but in the main, most people’s appetite for risk in the pure IPO exploration space and IPOs in general has tightened up somewhat.” Gadens partner Kym Livesley, who acted on the Silver City Minerals IPO, agrees stating that IPOs have come to a “grinding halt” for junior miners. Even in the resource friendly state of WA, not a large number of IPOs are happening at the moment, according to Will Moncrieff, partner at McKenzie Moncrieff Lawyers. “It’s not that they are not looking for funds, it’s just that there is not as much interest in the market,” said Moncrieff who was involved in the Adept Solutions capital raising. A number of factors are affecting the
sector, according to the partners: the general state of the world economy and continued instability in Europe and the US; the introduction of the carbon tax and the proposed mining resources rent tax. “The carbon tax and mineral resources rent tax have created the perfect storm,” said Livesley. “The carbon tax itself doesn’t necessarily apply to the junior mining end; it’s more the general effect it will have on the overall economy.” Moncrieff agrees, adding that many junior miners, while not directly affected, will be concerned about how investors will react. “With the two taxation changes announced some overseas investors will be wondering if Australia is still a stable tax regime,” he added. However, it’s not all bad news. All three partners said junior gold miners and explorers could expect success in the market as a result of the record price of gold and the fact that gold is considered a safe option for investors. Livesley and Moncrieff are also seeing activity in the rare earth and mineral sands space as a result of the large amounts of construction occurring in China. “Investors are still very cautious, but they are still interested where there is a strong project that ticks all the right boxes,” said Livesley. ALB
Corrs sets diversity targets for 2015 C
orrs Chambers Westgarth has announced it will be publishing an annual diversity policy. The move is in line with ASX policy for listed companies. From January 2012, ASX listed companies will need to disclose what diversity policies they have in place. Corrs is the first large Australian law firm to publicly disclose its policy, despite not being listed. As part of the policy Corrs has also announced it is increasing its target proportion of women to at least 35% in the partnership and 40% in senior management roles by 2015. The firm is also introducing a sponsorship program for women in the partnership pipeline. Each female partnership candidate will be assigned a partner to support their business case and introduce them to networks and clients. ALB
Hill climber. Fox Tucker congratulates Stephen Hill on his promotion to the position of Partner. Stephen leads our Property team. His expertise in the field is vast. Service ethic impeccable. [And his peak’s still to come.]
L 14, 100 King William St Adelaide SA 5000 p: +61 8 8124 1811 www.foxtucker.com.au
COMMERCIAL | TAXATION | INSURANCE 20
Australasian Legal Business ISSUE 9.08
NEWS >>
Carbon Scheme >>
Tim Hanmore partner, McCullough Robertson
Grant Anderson partner, Allens Arthur Robinson
Michael Graves partner, Allens Arthur Robinson
A price to pay… Following the release of details of the Australian government’s carbon scheme, ALB approached lawyers for their initial reaction ALB: What steps should companies be taking in response to the carbon scheme? Tim Hanmore: The first step will be to determine whether the carbon liability applies, and if it does where it lies. There has been a shift on that point since Kevin Rudd’s CPRS – liability will now rest with the company within the group that has operational control of the facility. From there, companies will need to determine that the costs are appropriately shared. Firstly, this means joint venture arrangements will need to be considered for appropriately proportional allocation of costs. Again, there has been a change since the CPRS – the sharing of liability between joint venturers is better facilitated. The implications of this will vary for each joint venture. Secondly, this means that the passthrough of costs to customers needs to be considered. Even though Prime Minister Gillard has conceded that the carbon price will operate a bit like one in the first three years at least, it is not a ‘tax’. Supply agreements that allow for the pass-through of a tax or impost might not cut it. A change in law clause might work, depending www.legalbusinessonline.com
on the circumstances – including the corporate structure. Supply contracts moving forward and existing ones, particularly those that will run for longer terms, might need to be drafted or amended to ensure costs will be passed-through. These are just the first steps a company might consider. Of course, there are related implications – like whether funds are available under the various plans and programs that Prime Minister Gillard has announced and when and whether ASX Listing Rule 3.1 will require market disclosure. ALB: What are the implications for the coal industry? Grant Anderson: While coal is a major export and the carbon pricing scheme imposes liability on fugitive emissions, coal mining is not treated as an emissions-intensive tradeexposed industry. Instead, only particularly gassy coal mines will receive any assistance - and that will be limited to up to 80% of their above-threshold emissions over six years. On the Government’s own figures, these gassy coal mines will incur a carbon cost that (absent any
assistance) is between $7.40 and $25 per tonne of coal. A real question is how these mines will compete after this assistance runs out. Also, while new emissions-intensive trade-exposed projects will receive assistance, the assistance to coal mines is limited to existing mining operations, which means that new gassy deposits may not be exploited. The industry’s response will be driven by economics - some mines will shut or curtail production, others may be able to reduce emissions through changing processes or capturing the released methane, and there will be a focus on exploiting lower-emissions coal seams. Michael Graves: As a specialist in the area of renewable project development, I can say that the challenge is as much for those in the renewable sector as the coal miners. The key challenge arising out of the carbon pricing scheme is managing the transition away from coal as a source of base load electricity. If the potential of renewables is to be fully realised then there will need to be substantial investment in the solar, wave and geothermal industries, as well as the augmentation of Australia’s electricity grid. ALB 21
NEWS >>
appointments
Blake Dawson
►► lateral partner hires Name
Practice areas
Organisation coming from
Organisation going to
Clare Corke
banking & finance
Blake Dawson
Corrs Chambers Westgarth
Simon Dewberry
workplace relations
Freehills
Allens Arthur Robinson
Adrian Fong
commercial
TressCox Lawyers
Macpherson + Kelley (M+K)
Calum Henderson
competition and market regulation
Norton Rose
Johnson Winter & Slattery (JWS)
Jim Holding
corporate
DibbsBarker
DLA Piper
David Marriott
property
Herbert Geer
Macpherson + Kelley (M+K)
David Richardson
intellectual property & technology
DibbsBarker
DLA Piper
Jim Holding
DLA rebuilds Brisbane DLA Piper has begun rebuilding its presence in Brisbane. Jim Holding and David Richardson from DibbsBarker will join the corporate and intellectual property & technology teams respectively. Coming with them
Corrs banking on new B&F capabilities with partner hire Former Blake Dawson banking & finance specialist Clare Corke has joined Corrs Chambers Westgarth as a partner. Her appointment forms part of Corrs’ 2015 strategy, which lists the firm’s banking & finance and major projects practices as strategic priorities. Corke has extensive experience advising on banking & finance transactions over the past fourteen years, having advised on major projects, infrastructure, resource finance, asset acquisition, leveraged finance and syndicated debt transactions.
Company secretary to general counsel
DLA Piper
DibbsBarker
Corrs
will be a number of lawyers, including a special counsel, Peter Burden. These appointments are in addition to special counsel appointments Mark Baker-Jones from P&E Law (Maroochydore) and Stephen Ross from HWL Ebsworth.
New GC for Telstra announced Telstra has announced a replacement for outgoing general counsel Will Irving. Company secretary Carmel Mulhern has been appointed to the role of group general counsel, while Damien Coleman will take up the role of company secretary. He was previously general counsel, finance and administration.
Carmel Mulhern
Time to get real about real estate? An insider’s perspective, skill in identifying and resolving the real issues and excellent commercial outcomes are hallmarks of our national property group. Get the inside running on financing, developing or owning real estate. Melbourne
Helen Scott
T: +61 (0)3 9321 9866
E: helen.scott@holdingredlich.com.au
Sydney
Carolyn Chudleigh
T: +61 (0)2 8083 0440
E: carolyn.chudleigh@holdingredlich.com.au
Brisbane
Michael Byrom
T: +61 (0)7 3135 0616
E: michael.byrom@holdingredlich.com.au
www.holdingredlich.com.au 22
HR ALB - Commercial Property August 9.8 2011 FINAL.indd 1
1/08/2011 10:08:19 Australasian Legal Business ISSUEAM 9.08
NEWS >>
Due to the substantial amount of work currently underway as a result of the NBN, the appointments will not take effect until January 1. Simon Brookes, currently Telstra’s deputy group general counsel, will be acting group general counsel in the interim period. The appointments follow a series of senior management shifts within Telstra which saw Irving promoted to the role of group managing director of Telstra Business, commencing August 12. Mulhern, like Irving, is an ex Mallesons Stephen Jaques lawyer and joined Telstra in 2000. Telstra currently divides its legal work between Mallesons and Gilbert +Tobin.
>>
In-house Q&A
Rohan Slater General Counsel
JWS
Norton Rose Senior associate to partner
JWS adds Norton Rose partner, promotes two Johnson Winter & Slattery (JWS) has lured Norton Rose competition and market regulation partner Calum Henderson to its Sydney office. The firm has also announced two internal partner promotions. Sarré Cousens has been appointed partner in the board, executive and stakeholder services division while Prashanth Kainthaje has been appointed partner in the taxation group.
Herbert Geer
Macpherson+Kelley
M+K expands property practice with Herbert Geer partner David Marriott has joined Macpherson+Kelley’s (M+K) Melbourne office as principal (partner equivalent) in the property services group. Marriott joins the firm from Herbert Geer where he was a partner and has more than 13 years experience in property law. His experience includes advising clients on property related matters, including property development, retail, commercial & industrial leasing.
Board member to chairperson
Corrs announces new chairperson Corrs Chambers Westgarth has announced Teresa Handicott as the new chair of the firm’s board. Handicott is a recognised leader in her area, with more than two decades of experience in mergers and acquisitions. She was a member of the Takeovers Panel for nine years and awarded ALB Magazine’s “Australian Dealmaker of the Year” in 2008. She succeeds Corrs partner, John Kelly, who stood down from the position and continues his full time practice as a senior partner with the firm. The appointment is for four years.
Freehills
Bow Energy Limited
Allens Arthur Robinson
Senior associate to special counsel
New workplace relations partner, senior counsel for Allens Allens Arthur Robinson has hired Freehills senior associate Simon Dewberry as a workplace relations partner and promoted Luke Gattuso to special counsel. Dewberry began his legal career at Allens’ Brisbane office in 2000 and then joined Freehills as a senior associate in 2007. Gattuson was promoted internally from the Melbourne office. Both will be based in the firm’s Melbourne workplace relations practice from August 1.
1
In your opinion, why have in-house lawyers become an increasingly indispensable part of an organisation?
As General Counsel for Bow Energy Limited, I believe in-house lawyers play an integral part of an organisation’s success. Given the ever increasing risks faced by organisations, the need for inhouse lawyers has become a key component in any organisation. The higher standards of corporate governance, disclosure and prudential issues require a professional who is required to deal with a challenging spectrum of varying difficult legal issues. This point highlights that in-house lawyers require a broad skill set that is not only limited to legal matters, but also strategy and management issues in order to assist the organisation achieve its goals.
2
In recent times, the role of the General Counsel has diversified into a multi-faceted role, (where the General Counsel can wear the ‘hat’ of Lawyer, Legal Manager, Compliance Manager, and Company Secretary). In your opinion, do you believe this has increased your risk profile? The varying nature of my role coupled with the increased statutory, regulatory and common law duties of senior executives means that the role of a General Counsel in and of itself comes with additional risk. One only needs to look at the James Hardie decision to have this point confirmed, which ultimately reinforced the responsibilities of a General Counsel.
3
In your opinion, what do you consider to be the main challenges you and your team will face in 201? The complex environment in which Bow Energy is involved as a coal seam gas company comes with varying and exciting challenges. Bow Energy’s various coal seam gas projects across several of Australia’s producing basins are rapidly growing. With this growth and our conventional oil and electricity generation projects come the challenges of meeting the requirements of the business to allow it to continue to capitalise on energy demand across Australia and the Asia-Pacific region.
Luke Gattuso
www.legalbusinessonline.com
23
profile | managing partner >>
ALB 2011 MANAGING PARTNER SERIES
Juan Martinez, HWL Ebsworth
Australia’s most profitable firm? HWL Ebsworth has earned a reputation as one of Australia’s most acquisitive firms – but as managing partner Juan Martinez explains to Renu Prasad, profitability and sound management are where the firm is really making its mark.
D
ouble digit revenue growth. Double digit profitability growth. 50% profit margin. It’s fair to say that HWL Ebsworth has had a reasonably good year. “For our size, I think we blow [the competition] out of the water,” says Juan Martinez. Most firms do not disclose their profitability, so we may never know whether he is correct. However, these figures certainly stand HWL in good stead against the more profitable top tier firms such as Clayton Utz, which is reportedly operating with a margin in high 40s. “When you are charging top tier rates, I’d imagine it’s easier to be profitable,” says Martinez. “But we’re often charging a half or two thirds of what they charge. When we talk to people from Freehills or Mallesons, they can’t believe it. We have a vision to be highly profitable, but not at the expense of the client. It’s profitable because we run a good business.” HWL Ebsworth is one of those
24
►► HWL Ebsworth – quick facts Managing partner
Juan Martinez
Number of lawyers
221
Number of partners
124
2011 graduate intake
18
Number of offices
4
Revenue for FY2011
$119.9m
Revenue for FY2010
$107.2m
% revenue change
11.85%
firms that seems to polarise market opinion. The firm’s rapid expansion late last decade with high profile targets such as Ebsworth & Ebsworth and Abbott Tout left it open to criticism that it was pursuing a “growth at all costs” strategy; an amalgamation of partnerships without a soul. Martinez is familiar with this line of criticism and counters it with evidence of the firm’s cohesion and direction: “Over the last six or seven years, we added over 100 partners.
That’s a stunning statistic in anyone’s language,” he says. “And of those partners, I’d say over 90% would still be with the firm today. Our staff attrition rate is significantly below market rate - we’re about 10% below average for legal practices. Having a high level of partners staying with the firm is consistent with a good strong culture people want to stick around.” More recently, HWL has been somewhat quieter on the acquisition front, although it did manage to pick up six ex-DLA Phillips Fox partners in Canberra ahead of the DLA Piper integration in May. “We’ve had Canberra as a possible strategic market for some years but we kept our powder dry until we had a strong opportunity to go in with a strong team,” explains Martinez. “And that’s what I mean – there’s this perception that we’ve got this aggressive mentality of growth at whatever cost and instead Canberra shows the true position is that we’re actually very patient. We Australasian Legal Business ISSUE 9.08
profile | managing partner >>
www.legalbusinessonline.com
25
profile | managing partner >>
do things when it’s right. You seize on opportunities as they arise and you do it on the basis of the quality of the opportunity - not because we have a set plan for a certain amount of growth. We do these things as merit dictates.”
Partnership structure
“It doesn’t have to be a place where aspiring financial partners sit and become disgruntled. ”
26
Some of the partnerships acquired by HWL were of the old lockstep variety and in a distressed state. “They were based on the traditional legal partnership models,” says Martinez. “Lockstep, and if you got to a certain position in the firm and became a partner usually you would stay there regardless of merit.” This is anathema to the way HWL Ebsworth functions, employing a flat meritbased structure which Martinez says can only increase in prevalence as the market becomes more competitive. “I think a number of successful firms are on record as having moved towards that performance-based model rather than the traditional lockstep,” he says. “I think some firms are comfortable and familiar with lockstep and to that extent it may well survive for a while longer, but if you ask me whether it will survive ultimately - I’d be very surprised if it does. There is more complexity and competition in the market and I think it’s inevitable that you have to become more competitive and have a sharper performance focus.” HWL has both fixed draw and equity partners, although it is unusual for partners to remain at the fixed draw level for more than a couple of years. “We believe that there is a proper role to be played by fixed draw partners,” says Martinez. “It doesn’t have to be a place where aspiring financial partners sit and become disgruntled. That’s what it is in many firms, but it doesn’t have to be like that. It is a legitimate position to learn what it means to be a financial capital partner and to work on the skills you need in that leadership role. I would have thought for an appropriate candidate one or two years is really the timeframe you’d be looking at ideally - but of course there are exceptions.” These include retiring financial partners and partners who are remaining fixed draw by mutual agreement. “What we don’t do is pretend that you’re
there temporarily and then keep you forever by some kind of hoodwinking exercise,” says Martinez.
Capital contributions and partnership exit
Incoming HWL Ebsworth financial partners pay a capital contribution which is paid out when the partner leaves the firm. A limited recourse loan facility is provided by the firm. “The idea is that you want partners to have some skin in the game, but you don’t want it to become an obstacle to entry,” explains Martinez. At the other end of the scale, the firm has a non-solicitation clause for departing partners which prohibits the solicitation of work from the firm’s clients during a set period. However, the firm does not believe in “nocompete” clauses. “My philosophical view is that clients will do what they think is best,” says Martinez. “It’s insulting for lawyers to think that they can contractually bind an exiting partner or control the thoughts of a client as to who they wish to engage. Clients are sophisticated buyers of services - they can make up their own mind. The strongest clause we have is a non-solicitation clause and that’s basically to stop ex-partners from annoying or badgering clients. But if a client wants to engage an ex-partner, we don’t prohibit them from doing so as long [the partner] did not solicit it.” It is arguable that the client cannot make an informed choice about their advisor if they can’t be contacted, a point which Martinez rejects. “All you’d have to do is advertise the fact that you’ve now started at a different partnership and anyone who likes you would be entitled to use you,” he says. “For exampIe, I wouldn’t need to solicit my clients if I moved - they’ve known me for 30 years.” The firm’s traditional strengths in transport, maritime and insurance have been complemented by a growing expertise in the financial services space, where several top tier hires have occurred. “We’re in a position to reward these people - we’re a good firm, a good business; we have high profitability but at same time our rates are very reasonable,” says Martinez. So what’s the secret to enjoying a high profit margin? “Join HWL Ebsworth!” replied Martinez. ALB Australasian Legal Business ISSUE 9.08
A cu ltu re o f e xc e l l e nc e
ALB special report | Melbourne 2011 >>
USA 2011: White shoes, debt and economy blues
L
awyers in Australia and New Zealand will be as familiar with the woes of the US economy as they are with economic conditions at home. The latest IMF forecasts predict that the US economy will grow by 2.5% this year and 2.7% next year, a minor downgrade on its previous forecast. Unemployment continues to hover around the 9% mark and public debt is nearing 100% of GDP. As this edition of ALB was going to print, global markets had gone into a tailspin as investors voted with their feet on the US Government’s 11th hour plan to raise the debt ceiling. This was not the confidence booster that President Obama, or indeed the business community at large, was seeking. Irony abounds.
28
US law firms have been eyeing the dreaded double dip recession for some time. As workflow contracts, large law firms have been shedding lawyers at a rate which the National Law Journal has described as unprecedented in the 34 years the journal has been surveying the industry. The NLJ’s annual survey of the 250 largest US firms found that the group had collectively lost nearly 3000 lawyers in 2010 and close to 10,000 since 2008. In March, anti-trust, IP and litigation firm Howrey became the latest victim of the economic malaise, closing its doors after a series of high profile partner departures. Remarkably, the closure took place only three years after the firm announced record revenues – a salutary reminder of the speed at which a partnership can disintegrate.
Revenue figures across the legal industry have improved, but not to the extent where one can confidently state that the recovery has begun in earnest. The American Lawyer found that the top 100 US law firms collectively grew revenues by 4% last year, a turnaround from 2009’s 3.4% drop. However, growth across the board was modest and very few firms made double digits. Revenue figures were also skewed by a change in the composition of the 100 firms surveyed, and the American Lawyer noted that the real growth figure for the top 100 was a little over 1%. Unsurprisingly, the real movement was in PEP which grew by 8%. US firms have been taking steps to control costs, mostly notably headcount, which explains why lawyer numbers are continuing to decline Australasian Legal Business ISSUE 9.08
ALB special report | Melbourne 2011 >>
►► Am Law 100 – largest firms by gross revenue
The latest outbreak of economic chaos has cast a shadow over the long awaited US recovery, reports Renu Prasad.
Rank
Firm
2010 revenue (USm)
Growth%
Lawyers
Equity partners
1
Baker & Mckenzie
2104
-0.4
3738
717
2
Skadden Arps
2100
0
1859
430
3
DLA Piper
1961
NA
3348
416
4
Latham & Watkins
1929
5.9
1931
451
5
Hogan Lovells
1665
NA
2363
512
6
Kirkland & Ellis
1625
14
1379
280
7
Jones Day
1616
6.3
2502
828
8
Sidley Austin
1341
-1.2
1538
297
9
White & Case
1278
-2.2
1814
269
10
Greenberg Traurig
1236
5.4
1721
317
11
Weil, Gotshal
1185
-3.9
1152
194
12
Mayer Brown
1107
-1
1645
269
13
Morgan, Lewis
1085
1.5
1239
245
14
Sullivan & Cromwell
1079
8.4
749
166
15
Gibson, Dunn
1063
6.8
1029
277
16
K&L Gates
1056
2
1763
294
17
Cleary Gottlieb
1050
8.8
1127
191
18
Wilmer
962
2.2
890
297
19
Reed Smith
958
1.7
1449
316
20
Morrison & Foerster
930
5.3
1029
270
Source: The American Lawyer
while revenue begins to move in the opposite direction.
Economy
Data from the first half of 2011 reveals an improving picture, albeit one which is highly volatile as the economic events of the last few weeks have demonstrated. According to figures from Renaissance Capital, the filing of IPOs is up 26% on last year, while US$26bn in proceeds has been raised in the year to date, nearly 150% up on last year. Thomson-Reuters stats also show that M&A activity has also increased. In the first five months of 2011 announced transactions reached a total value of US$454bn, a 39% increase over the same period in 2010. Notable announced transactions this year include AT&T’s acquisition www.legalbusinessonline.com
of T-Mobile USA (US$39bn), the US$29bn merger of Express Scripts and Medco Health Solutions and BHP’s US$15bn bid for Petrohawk Energy. “The market is still choppy but there have been a number of large transactions in the last six to nine months,” says Sullivan & Cromwell partner Robert Chu. “M&A activity as a whole has not picked up as dramatically as at the US$10bn plus range. We’re starting to see the return of transactions that make strategic sense – but we’re not quite seeing the US$30bn, US$40bn leveraged buyouts. There have been less large scale private equity transactions, but it is expected that they will come back at some point because they have a lot of money they need to put to use.” Needless to say, the latest outbreak
of equity market chaos has cast a long shadow over the situation. “There continues to be concern over the state of the US and broader global economy,” says Waldo Jones, who heads up Sullivan & Cromwell’s Sydney office. “Until there is greater certainty regarding the US fiscal and regulatory situation, we would not expect a broad improvement in business confidence or an associated increase in M&A activity in the US.” Another key development has been the Dodd-Frank Act, a hefty piece of legislative reform aimed at increasing the regulation and improving the supervision of financial institutions. The Act was passed in July 2010 but its full effect still remains unclear. Congress delegated responsibility for the formulation of specific rules to 29
ALB special report | Melbourne 2011 >>
various agencies and, according to a Davis Polk study, nearly 90% of these rules were still incomplete by late July 2011. Inevitably the Act has led to work for law firms, although more of an advisory nature than the transactional work which is the lifeblood of many big firms. “Financial industry players are reluctant to make a lot of significant business decisions until the specific Dodd-Frank regulations have been settled,” says Jones. “The financial industry has largely adopted a ‘wait and see’ attitude. It is also a very political environment. Heading into presidential election season with the Republican-controlled House of Representatives, it is difficult to predict how the details of many of the regulations will come out.” Meanwhile, many of the top Wall Street firms have their lawyers spending significant amounts of time commenting on the proposed regulations issued by the various government agencies and assisting their financial institution clients with implementing the necessary changes to cope with the transition. “It will be a continuing source of work for the law firms that service financial institutions and other participants in the financial markets,” says Jones. “Like Sarbanes–Oxley nine years ago, there’s likely to be a wide range of work advising clients on compliance with the Act and the related regulations.”
between a top Wall Street firm and a Magic Circle firm. That goal remains unfulfilled, perhaps because of the PEP discrepancy between the Wall Street and Magic Circle firms. Slaughter & May is regarded as one possible exception, but there is no expectation of an imminent merger while the PEP gap remains. However, lawyers are watching the latest round of mergers with interest. “I think those are very significant mergers,” says Chu. “Although we do not see many of those firms on the work that we regularly perform, they obviously do a lot of work for a wide range of clients and the combination is going to make a difference for those clients.” Meanwhile, the Magic Circle – Wall Street rivalry has moved to Asia. Most of the top US firms traditionally have not advised on local Hong Kong law but a surge of client interest has resulted in Davis Polk, Simpson Thacher and Sullivan & Cromwell all announcing the establishment of local HK practices in the past year, poaching leading M&A and capital markets lawyers from the Magic Circle firms along the way. Robert Chu says the increased interest in HK stems from the Chinese macro-economic picture and new measures taken by the HKSE to broaden its appeal. “There have been a number of significant non-Chinese companies listing in HK, including Prada, Samsonite, Glencore and Rusal,” he says.
Trans-Atlantic mergers
Australia – US capital raising
In May 2010, Washington-based Hogan & Hartson and London-based Lovells came together to form a transAtlantic firm with over 2500 lawyers worldwide. Six months later, UK-based Denton Wilde Sapte and US-based Sonnenschein Nath & Rosenthal came together to form a second transAtlantic firm, this time with over 1200 lawyers. These mergers are significant, but the merger which the market is really waiting for is a tie up
Since the introduction of the SarbanesOxley Act in 2002, US-Australia dual listings have dropped off, but lawyers say that this has been compensated by an increase in the number of Rule 144A and other private (institutional) offerings by Australian financial institutions and corporates. “Even though a number of Australian companies have delisted [from the US exchanges], many are raising more money now in the US than what they
were doing ten or 20 years ago and they still require US lawyers to advise them on compliance with the US disclosure and exempt offering requirements,” says Jones. Australia’s ‘big four’ banks are among the largest borrowers in the US debt capital markets of any issuers in the world. “The simple reason is that the Australian retail funding and wholesale capital markets are not sufficiently deep to satisfy the funding requirements of the major financial institutions,” he says. “The US remains an indispensible piece of their funding strategy.” According to rating agency Standard & Poor’s, Australian borrowers have raised more than US$66bn of debt so far this year, with about 80% of that debt raised by investment grade borrowers and over 50% raised in US dollars. A number of top Australian corporates, such as Woolworths, Wesfarmers, Telstra, Woodside and Asciano, have issued debt in the US this year. “Many of the investment grade rated Australian corporates can sell their debt to US institutional investors at costs lower than what they can borrow in the local market, even after factoring in the costs of swapping the US dollar proceeds into Australian dollars. They also typically can issue securities with longer-dated maturities than those usually available in the Australian or Euro markets,” says Jones. The US high yield bond market also provides an attractive funding option for non-investment grade rated Australian companies. Over the past 12 months, Fortescue, Boart Longyear, Midwest Vanadium and Mirabela Nickel have issued bonds in that market. With S&P estimating that Australian companies will need to refinance US$548bn of corporate debt by the end of 2015 and US$110bn through 2011, lawyers expect that the US debt markets will continue to remain an attractive source of funding for Australian financial institutions and other companies. ALB
“Financial industry players are reluctant to make a lot of significant business decisions until the specific Dodd-Frank regulations have been settled”
30
Waldo Jones
Sullivan & Cromwell
Australasian Legal Business ISSUE 9.08
Darwin - Litigation Roles Associate to Partner level
Top-tier Darwin firm
Darwin is a modern capital city with a bustling commercial centre nestled amongst some of Australia’s most spectacular scenery. A move to Darwin will make commuting a thing of the past, offer a relaxed lifestyle and place you at the gateway to Asia. Cridlands MB is the leading firm in the Darwin market, with a professional focus, strong client base and up-front values.
keeps them stimulated. For senior lawyers and partners there is an opportunity to drive growth and build on relationships as well as influence the strategic direction of the practice. More junior lawyers are encouraged to develop their client facing skills, run files with support, and be mentored in an open and up-front manner.
The disputes group at Cridlands MB is respected locally and regarded nationally as one of the leaders in the top-end. Its clients come from a range of industries including property and construction, B&F, energy and resources, government and insurance. It is well established and is made up of loyal and high-quality clients. Cridlands MB prides itself on its values, client service, relaxed approach and work/life balance. It offers assistance with relocation, and realistic opportunities for progression, including partnership.
Cridlands MB now seeks expressions of interest from litigation lawyers seeking to move to Darwin either immediately or in the short to medium term. Specifically, lawyers whose skills fit into the practice areas listed above, who have quality experience and are looking for either a medium or long term move to a lifestyle location like Darwin. Both mid-level and senior lawyers are sought and an appointment to salaried partner is possible for the right lawyer.
Litigation lawyers at Cridlands MB are encouraged to develop key areas of interest while retaining a breadth of practice that
Melbourne In-house Construction 4-7 PAE Assist with complex major works
projects Australia-wide. Challenge your commercial skills as much as your legal skills in this hands-on role, playing a
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assisting senior legal counsel to advise upper management.
In-house Commercial 2-5 PAE This role in a household-name
international company is exclusive to
Sydney Corporate (Energy & Resources) Great role for a 3-5 PAE lawyer. Take a front seat in project development and finance, mergers and acquisitions and regulatory matters. Learn from a gun partner servicing leading energy utilities and government bodies. Excellent remuneration.
Corporate (M&A) Senior Associate Top national practice with blue-chip
us. Reporting to a down to earth GC in a
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dealing with a range of stakeholders on
senior associate to join their team.
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offers a genuine work-life balance.
friendly, close-knit team, you will enjoy
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Salary is above market and the role
To discuss these exclusively retained roles call Paul Burgess on 03 8676 0372 or email a CV to paul@bplr.com.au (Direct and 3rd party applications will be forwarded to Burgess Paluch.)
Perth Partners
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Rare role. Join this highly regarded team in a broad litigation role and experience a premier, positive environment. Progressive national firm seeks lawyer for high level general commercial litigation, contractual disputes, insolvency and trade practices.
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to support and sit within HR. Advise on a range of employment matters. Language not required. A very rare opportunity to jump straight into
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www.bplr.com.au Paul Burgess 0414 687 629 Doron Paluch 0438 004 445 Paul Garth 0434 113 355 Chris Papas 0438 057 161 paul@bplr.com.au
Feature | In-house 10 >>
In-house ALB’s showcase of Australasia’s top in-house lawyers ALB presents our annual showcase of the in-house lawyers who have distinguished themselves over the past year: there are some new faces, some familiar faces and, as always, some stimulating commentary on the pressing issues facing Australasian corporate and financial institutions.
Introduction by William Fazio, managing partner, Herbert Geer
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s we reflect on the past year, we know that the legal landscape has, and will continue to change. We are operating in a world that is increasingly complex and competitive. General Counsel as key members of the senior executive team, are involved in influencing and setting the strategic direction for their organisation as well as charting a safe path through an expanding and changing regulatory environment. This complexity means that there is heavy reliance upon General Counsel to assist organisations to manage risk. Never has there been a stronger need or pressure to “get it right”. As new demands on in-house counsel continue to grow they are still being asked to keep tight control on budgets, extract maximum value from their relationships with law firms and to
manage obstacles to their companies growth. We understand the need for General Counsel to continue to drive lawyers for better service, industry knowledge and value, and that as a result firms need to be approachable, commercial and responsive while being committed to achieving client’s business objectives in a fast changing environment. By recognising the Top 10 In-house, ALB Magazine is highlighting those at the top of their profession. Congratulations to those who have made the Top 10 In-house for 2011. It is a great achievement to be recognised as an industry leader. We are proud to again support and partner this year’s feature. Regards William Fazio managing partner Herbert Geer Australasian Legal Business ISSUE 9.08
Photographed by Thilo Pulch
Feature | In-house 10 >>
Sandra Steele
Charles Spillane
Assistant General Counsel, Lend Lease Project Management & Construction Australia ( LLPM&C)
General Counsel and General Manager, Auckland International Airport (AIA)
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teele was recently named ALB’s In-house Lawyer of the Year at the 2011 ALB Awards. She is also chairperson of the National Association of Women in Construction and is a registered adjudicator under the NSW Security of Payment legislation. She has advised on several major front end transactions and major disputes for LLPM&C during 2010.
ALB: What do you consider your own and your team’s greatest achievement in the past 12 months? Steele: The legal team at LLPM&C has undergone a restructure and has almost doubled in size in the past 12 months so it has been a time of significant change. We now have lawyers dedicated to specific regions to enable relationships to develop and to ensure consistency in the service provided. ALB: What is your panel strategy? Steele: LLPM&C’s legal panel was first established in July 2010. A series of interviews was conducted and a number of firms were shortlisted to form this panel. We are intending to review our panel in 12 months’ time. Factors that we took into consideration (and will again take into consideration) when reviewing our panel is what law firms can offer us in terms of expertise, experience and as importantly, whether those firms align with the culture of Lend Lease. We also ask firms not only to be competitive when it comes to fees, but to also be creative. ALB: What are your views on partner contact? Steele: I have noticed an increase in partner contact. Obviously a partner’s involvement must be at the appropriate level, but a “hands on” approach is welcome in my view. I see a partner’s role in a matter to be mainly a strategic one. It is therefore important that our panel firms have an intrinsic understanding of our business.
www.legalbusinessonline.com
pillane was this year named the Corporate Lawyers Association of New Zealand (CLANZ) In-house Lawyer of the Year. It has been a busy 12 months - in 2010 AIA purchased a 24.6% stake in North Queensland Airports from Westpac Bank and a 24.99% stake in Queenstown Airport from Queenstown Lakes District Council. Spillane and his team have been kept very busy with regulatory work associated with these investments and also securing new airlines to the airports.
ALB: Do you believe the level of regulation is excessive? CS: Increased regulation always creates a burden on business, but we are continuing to grow our business even with the increased regulation. Regulation has undoubtedly increased the workload on us, and the new information disclosure regulations will require us to create an entirely new information infrastructure within the organisation. But, at the same time we realise that the NZ government has taken steps to work with business to create a better environment for business to operate in. ALB: Do you have a legal panel? CS: We don’t have a panel, but Russell McVeagh plays an integral part of the legal function at AIA. They have been working with the organisation for the past 10 years. They have developed a deep understanding of our business. For specific areas of law, including IP and conflict work we go to other firms. We also use Freehills for Australian-based work. ALB: Do you find you are busier now than 12 months ago? CS: We have been busy for the past three years. But I do feel that the economy is now starting to grow again. I think things will keep getting busier. Regulatory processes are going to be key drivers of work in the next 12 months.
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Feature | In-house 10 >>
without being non-compliant in another. One issue for us is to make regulators aware of the fact we are in a global market and getting them to talk to each other to make it feasible for a global firm. We want to be involved if reforms are coming through so we can help the regulators understand what we are currently doing at the moment to implement and meet [regulations]. We have had to bring in resources to manage a number of the projects that are on the go so that we can still maintain the day-to-day running of the company. ALB: Do you have a legal panel in place? AS: We don’t have a panel as such, but we certainly have law firms we have strong relationships with, which we have built up over many years. We always undergo informal and formal reviews every year and we will again before the year is out. Across the business there are about 10 firms we would use regularly. Allen & Overy is a new firm that we are dealing with, the rest are firms we have consistently dealt with over a number of years. We have a very strong relationship overseas with Clifford Chance and I think we are always open to the idea that we might engage with a new firm if it has the right expertise and we can agree on the right arrangement. Expertise is key, but it’s also important that the firm has enough depth, so that the experience is shared amongst the lawyers in the firm. Depending on the type of matter, if it’s one that might go on for a while, we would like to know that there is a partner who can take over if the original partner becomes unavailable.
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ALB: Do partner moves affect your choice of firm? AS: I’m interested to follow the movements of partners which have occurred so far this year and to see how some of those partners are settling into their new firms and how they structure the offering. We would certainly look at moving to a new firm if the partner was someone we knew had expertise we needed. But the relationships we have have meant that we don’t move the entire business to a new firm when a partner moves.
ALB: Do you believe the level of regulation is excessive? AS: Certainly from an investment banking perspective, yes we are definitely seeing and feeling the impact of a lot of reforms coming through. Being a global bank, we also have to manage the way different regulators in other jurisdictions are looking to regulate a similar issue and make sure that we are compliant in one location
ALB: Have you started using or starting looking to use any outsourced legal service providers (LPO/ LSO) this year? AS: We have used Advent before; we are open to the idea of using outsource legal providers, but just at this stage have not had an identified need to do it. We know the option is there if something came up and some of our overseas offices have used them. It would be nice if firms put LPO or LSO up as an option. If they thought it made sense, then I would be happy to have a discussion on why and what the benefits would be. It would be most sensible to me - if it’s a situation where I would have paid an outsource provider myself, I’m quite happy to pay for the law firm to arrange it.
Annette Spencer General Counsel, UBS he UBS team was again named the ALB Investment Bank In-house Team of the Year in 2011, continuing a long tradition of success for UBS at the Awards. During 2010 UBS underwrote equity deals with a value of A$9.3bn, A$6.2bn more than its nearest competitor. The legal and compliance team also advised on a number of landmark transactions, including the AMP/AXA merger, the ASX/ SGX merger and Tabcorp demerger and the QR IPO. Spencer cites the introduction of Chi-X and Personal Property Securities (PPS) reform as two major upcoming matters of interest.
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eid was recently honoured with the title of ACLA’s Young In-house Lawyer of the Year. SP AusNet is an Australian unit of the state-owned Singapore Power and manages a A$6.3bn electricity and gas network. The team is notable for its strong emphasis on in-house expertise and building a strong sense of ownership of outcomes, as distinct from simply outsourcing work. ALB: Do you have a legal panel? KR: Given our preference to retain work in-house, we do not have a formal panel as such. We would deal with only a handful of firms, perhaps five or six. We are being assisted by an external firm in relation to class actions, and in relation to some smaller litigious matters. We also seek external advice when we believe it is necessary for a particular transaction, such as some of our finance transactions or industrial relations; but our goal is for the in-house team to be the ‘provider of choice’ for legal services to the business.
Karena Reid Legal Manager, SP AusNet 34
ALB: How can law firms better assist you and your team? KR: The in-house landscape is very different to working in a firm. I think it is very difficult for lawyers working in firms to understand the immediate, corporate and sometimes political demands placed on in-house lawyers. I believe firms can really add value when they take the time to understand all facets of their clients’ business, including the forward business plan to have a greater understanding of the path the business is trying to pursue and trying to anticipate some of the legal challenges that may impact those plans. Australasian Legal Business ISSUE 9.08
Feature | In-house 10 >>
Brian Salter General Counsel, AMP
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alter and his team were named ALB Banking & Financial Services In-house Team of the Year at the 2011 ALB Awards. Earlier this year AMP-AXA merged, a complex transaction involving multiple submissions to the ACCC, a raft of domestic and international regulatory approvals and settling the explanatory memorandum in record time. The Australian legal team supports offices in Beijing, Tokyo, Singapore and London and established new offices in Mumbai, New York, Hong Kong and Bahrain. ALB: Do you have a legal panel? Salter: We have had a long established panel at AMP dating back to 2000 and AXA has a panel, with a little overlap. One of our goals for this year is to have a single panel for the merged businesses by 31 December. We are starting that process now. Currently we have seven firms on the AMP panel and AXA has about an equivalent number. I’m not looking for a panel of 14, but I think seven is unrealistic. The composition of the panel will turn on the principles that we decide on. The makeup of AMP’s panel tends toward the top and second tier national and international law firms, whereas AXA’s approach has been for relatively low value, low impact work to move to low cost providers and it may well be that we as a group move towards that. ALB: How important is partner contact to you? Salter: It depends on the type of work. Where the work is of high strategic importance to the organisation, then we have a preference to just deal with partners. However, there are other transactions where it’s very appropriate that we deal with middle ranking solicitors in the organisation, as opposed to more senior lawyers. We have a philosophy of trying to produce the most cost effective outcome for the business. We think in-house lawyers are in the best position to do this because they understand the business so well and they work hand in glove with the business, so they have the opportunity to contribute quite valuably.
You. At the centre of everything we do. Winner - Best Law Firm ($50m - $200m revenue) in the BRW Client Choice Awards 2011 Winner - Employer of Choice in the ALB Awards 2011 Winner - Melbourne Law Firm of the Year in the ALB Law Awards 2011
We never forget what you want
Feature | In-house 10 >>
David Cohen CBA Group General Counsel
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mong other achievements at CBA, the CBA Legal/ Colonial First State Investments/ CommInsure in-house team was named Insurance In-house Team of the Year at the 2011 ALB Awards. Well known GC David Cohen and his team have had a whirlwind two years following the A$2.1bn acquisition of BankWest, class actions and ongoing regulatory changes. The bank is also in the process of modernising its core IT banking system, through a A$1.1bn project. The extreme weather events which occurred across the country earlier this year have also impacted on the business, particularly its insurance division. ALB: Do you believe the level of regulation in Australia is excessive? DC: I think the financial services industry generally has had an avalanche of legislation and regulation in recent years. My view is that we are well and truly into the land of diminishing returns. I think the social benefit that the country and the economy derive from all of this is in degrees of benefit that just don’t justify cost. The responsible lending reforms for example: the policy is sound, but the implementation of it through the detail and regulation is flawed. And that’s where it is costing the country and economy for no discernable material benefit. ALB: Anything you would like to see from the law firms they are not doing yet? DC: The one thing that I think we would love to see, particularly in the way law firms market and pitch their services, is greater tailoring. Rather than telling us how good they are or the range of services they provide, actually being able to apply their skills to a situation we face or that they think we may face is far more informative to us than just a plain vanilla explanation about what they do. Being proactive – tailoring their work to our business, and giving us strategic advice. I recognise that it can take time and money, and may come to nothing, but that is where relationships become important.
John Blair General Counsel, Air New Zealand
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lair has made important contributions to the debate on issues affecting the business community such as regulator accountability and also leads the team which was named ALB’s NZ In-house Team of the Year at the 2011 ALB Awards. Important work for 2010 includes advising on a trans-Tasman alliance with Virgin Blue and advising on the sale of Air New Zealand’s interest in Travel Software Solutions Pty Ltd. New challenges include air safety regulation, carbon tax and dealing with the aftermath of the ash cloud airspace ban of April 2011. The team is also advising on a number of ongoing class actions in Australia and the US. ALB: Do you have a legal panel? JB: No we don’t have a legal panel and we never have. Because the work at Air NZ is very varied we tend not to have a large amount of any particular type of work, which is normally required for panels to work well. Panels have their place. I understand that there can be efficiencies from having a panel when it comes to rates, but they can also be constraining. I find I am able to negotiate good rates, even without a panel. On some larger projects, I will hold a mini tender amongst those firms I use regularly for that work. I’m holding one presently for a significant piece of work in New Zealand. But it is unusual for me. ALB: Law firms sometimes boast of providing a high level of partner contact. How important is partner contact to you? JB: I would not particularly target work to someone because they are a partner. I would be equally happy giving it to a qualified senior associate or associate, provided they have the expertise. I would almost be cautious of there being more
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than one partner on a matter or at a meeting. When we allocate work to a firm, we expect it to be done with the right level of expertise and at the right price. We don’t pick law firms based on the number of partners they have compared to junior lawyers. I would actually prefer to see more good quality senior associate candidates. Australasian Legal Business ISSUE 9.08
It has been a significant time of expansion for Fortescue Metals Group (FMG), which last year sold A$3.54bn of high-yield bonds in the US market among other capital deals and has hinted at plans to float on either the Hong Kong or Shanghai stock exchanges in the near future. There has also been a fair share of controversy: founder and former CEO Andrew Forrest was found to have breached his director duties by the Federal Court and he and FMG have since launched an appeal in the High Court. No shortage of work variety, then, for chief counsel Peter Huston and his team. ALB: What are some of the key projects your team is working on at the moment? PH: We fulfil a key role here in any of the debt fundraising objectives of the company. We have done, from memory, in excess of A$5bn of fundraising since 2006. In addition we have our general ongoing major contract work. When you are doing an A$8bn expansion program of mining operations, it involves many complex, sizeable and critical construction contracts. In addition, there is the Mining Resources Rent Tax (MRRT). [We] are fervently opposed to this tax, because of the unfairness of the tax and its impact on companies such as FMG and smaller mining companies compared to the big three miners. We are carrying out a key role in the legal review of that tax, and ultimately any legal challenge to it. There has been much talk about the increased regulatory burden for Australasian corporates of late. Do you believe the level of regulation is excessive? PH: There needs to be change at a legislative level to recognise the different roles of executive and non executive directors to more clearly understand and reflect the roles and interplay between executive management and the board, and to provide the board, particularly non executive directors, with appropriate and responsible balance. If directors, particularly executive directors, are making decisions made on a reasonable and honest belief, then they should not be the subject of prosecution.
Peter Huston Chief counsel, Fortescue Metals Group
You. At the centre of everything we do. Winner - Best Law Firm ($50m - $200m revenue) in the BRW Client Choice Awards 2011 Winner - Employer of Choice in the ALB Awards 2011 Winner - Melbourne Law Firm of the Year in the ALB Law Awards 2011
We never forget what you want
Feature | In-house 10 >>
Justin Forsell
Dan Last
Chief Legal Counsel, NBN Co
General Counsel and Company Secretary, Foster’s Group
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orsell and his team have played a key role in the legal processes behind the Australian Government’s A$35.9bn National Broadband Network (NBN). In recent months NBN Co has signed billion dollar deals with telco giants Telstra, SingTel Optus and Ericsson. The A$11bn deal with Telstra will see it decommission its copper network, shift customers to the NBN, allow access to its infrastructure, meet universal service obligations and retrain staff. Optus reached an A$800m agreement with NBN Co to migrate customers to the network, while Ericsson will build the wireless element of the network. ALB: How does your panel work? JF: We do have a panel and followed a fairly rigorous selection process last year to establish it. Firms on the panel include Blake Dawson, Clayton Utz and Webb Henderson. We intend to formally review performance across our total panel mix every 12-18 months. Obviously we also provide real-time feedback to our firms as needed. As a Government Business Enterprise (GBE) we have to be particularly conscious of costs. Beyond excellent value in terms of fees, we need our firms to provide a range of additional value-added benefits, and are always interested in creative differentiation regarding quality of service and service delivery. So far, we are pretty pleased with how our firms have stood up, especially as we have put them under significant pressure. However, in terms of law firm panels, on any particularly large transaction or issue I don’t really think anymore about using one particular firm. I simply try to use the best individuals I can identify for the job wherever they are, which might mean a mix of firms being represented. I might have a lead commercial firm, but use a specialised litigator or litigation team from another firm, and perhaps a top tax counsel from a third firm to supplement the lead team. This can create some management complexities which require attention, but in my experience this produces a better outcome as you have a front row of the best individuals representing you. I don’t really care if the lawyer supporting me is a partner, special counsel or senior associate etc. I just care about quality of work, responsiveness and overall performance, plus good value of course. They definitely need a good sense of humour.
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oster’s Group is another corporate with an interesting long term strategy which has generated plenty of high profile work for Dan Last and his team. In May this year Foster’s Group officially demerged its wine business from the combined wine and beer business. The A$66.2m demerger saw the establishment of two separate businesses, Foster’s Group and Treasury Wine Estates. In recent months Foster’s Group has become the target of an acquisition by global beverage business SABMiller. ALB: How is the proposed merger affecting the team? DL: It is difficult to predict how this will evolve, but if SABMiller or another bidder decides to take further action, it will involve a significant amount of work for the legal team. However, until that time comes, we’re continuing to focus on the implementation of the operational improvements to our business. For example, we are in the process of implementing a new IT system, which will have a number of significant milestones over the next six to 12 months. ALB: Do you have a panel? DL: Foster’s has not had a legal firm panel. Historically we have preferred more flexibility through not having one and there are no plans to change that in the next 12 months. We are relatively happy with the legal providers we deal with. Corrs Chambers Westgarth was responsible for the work associated with the demerger. We also use Allens Arthur Robinson for defence work and have a number of mid-tier firms we use, including Gadens, Middletons, JWS and Lander & Rogers for specialist areas of expertise. Work is allocated on a matter by matter basis. ALB: How important is partner contact to you? DL: Partner contact is important, but it also depends on the matter. It’s important for me to have relationships with partners, but equally important for the whole team to have continuing contact with partners and the external legal teams that we use. I see the mid-tier firms focusing on partner contact as a point of difference between them and top tiers.
Australasian Legal Business ISSUE 9.08
Feature | Major Events >>
With the Rugby World Cup just weeks away, ALB’s Kalianna Dean spoke to lawyers about how firms can capitalise on their sponsorship of major sporting or cultural events.
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ponsoring a major sporting event has proved to be a valuable way for law firms to get their name into the bright lights of the public arena. Russell McVeagh is the official sponsor of the Rugby World Cup 2011, the most recent in a list of associations between law firms and major events. Other examples include Allens Arthur Robinson’s association with the RWC in 2003 and the 2006 Melbourne Commonwealth Games and Middletons’ partnership with the Perth 2011 ISAF Sailing World Championships and six year relationship with the Australian Open Tennis Championships. Sponsorship is not limited to sports events. Allens, for example, has sponsored the 2006 Institute of Arbitrators and Mediators conference and the Australian Subscription Television and Radio Association (ASTRA) conference held in 2008.
What’s in it for firms?
Sponsorship is a way for firms to engage with clients through means such as exclusive access to corporate boxes. When Allens was the official law firm of the RWC in 2003, partners sent game invitations to clients accompanied with an original blade of grass from the World Cup playing fields. Allens’ director of corporate affairs, Chris 40
Fogarty, says he has never seen a faster response rate or more enthusiastic participation from business clients. “Obviously the World Cup experience attracted an enormous amount of client interest and comment as a discussion point,” recalls Fogarty. Similarly, Russell McVeagh is looking forward to entertaining clients at most of the games and the firm will organise associated client events held around that. “For us it was a real opportunity to [engage with clients] in a way others don’t have the opportunity,” says Russell McVeagh partner Tim Clarke. “New Zealand is a country that loves rugby, and our client base is hugely interested in the tournament and intrigued by our involvement. It is great profiling.” Sponsorship also allows promotion of the firm brand more generally. There are many Australasian lawyers who will recall that Clifford Chance sponsored the World Cup when it was held in UK and France last decade. Russell McVeagh is hoping to have similar exposure. Clarke says some Russell McVeagh lawyers have been noticed by international firms and their careers have benefited from the chance to do a secondment with the International Rugby Board or sports conglomerate IMG. This allows those individuals to develop their own careers
as well as further the reputation of the firm with those organisations.
Legislation
The legal work involved with this year’s RWC has been heavily influenced by New Zealand’s Major Events Management Act (2007) (MEMA). This legislation applies to all major events other than special events such as the Olympics or Commonwealth Games, which have their own individual legislation. One important purpose of the MEMA is to prevent ambush marketing, where companies spruik their products or services alongside the event without being officially affiliated. The MEMA is less than four years old, and its application is evolving. There was no similar legislation during the 2007 or 2003 World Cups, meaning there was no specific protection for entities sponsoring the event. “Comparable legislation was not in force for RWC 2007 or RWC 2003, for which more traditional intellectual property laws had to be relied upon,” notes Kate Walters of IMG. The new act presents a whole host of challenges to small and medium sized businesses wanting to be involved. “We’ve done quite a lot of article writing, presentations, conferences, speaking to small businesses and Australasian Legal Business ISSUE 9.08
Feature | Major Events >>
looking at ways they can involve themselves in the RWC,” says AJ Park partner Corinne Blumsky. Clients have been extremely cautious, seeking proper education on the legislation. “People are coming to see us wanting to be compliant, they’re aware that there could be legal issues,” says Blumsky. She says that businesses and community groups are even stopping normal activities in some cases for fear of falling foul of the legislation. For example, a school which traditionally allowed rugby fans to park in its grounds and walk to a nearby venue has stopped allowing people to park there during the games for fear of upsetting the authorities. One area where unfair conduct has been successfully controlled is ticket scalping. Richard Wells, a partner with Minter Ellison Rudd Watts, notes that there has been remarkably little scalping activity, despite the one millionth ticket being sold in the first week of July. He attributes this to the success of New Zealand’s version of e-bay, TradeMe, refusing to allow people to sell tickets to games. Ticket selling arrangements have also been changed to discourage scalping.
Legal work
All in all, Clarke estimates that between 30 and 40 Russell McVeagh lawyers have been engaged on RWC work since 2009. Minter Ellison Rudd Watts has also established a ‘sports and events’ team following the introduction of MEMA. IP firm AJ Park has two teams, commercial and trademark, working on the RWC in both Wellington and Auckland but it is also trying to position itself as ‘go-to’ firm for any MEMA related matters. Russell McVeagh has not found it necessary to create any new teams to cater for the RWC work.
“There is work being done by a whole range of teams - IP, commercial, finance, public law - but there was no need for a ‘restructure’ of any of the firm’s practice groups,” says Clarke. IP was identified as a key area for RWC work by all firms ALB spoke to. As the IRB was already a client of Russell McVeagh during the policy development and legislative drafting phase prior to MEMA’s enactment, both parties were acutely aware of the need to establish clear terms of what would and would not be acceptable marketing practices, use of the Rugby World Cup phrases and emblems. Disputes are another area to watch in terms of RWC work. Plans for Christchurch were thrown off when the city suffered further earthquakes in February and June. Moving all of the games timetabled to be played in Christchurch out of the area meant arrangements needed re-negotiating. Terms between suppliers, organisers, local councils, the IRB and local businesses were all of a sudden thrown out the window and new ones had to be put in place. Lawyers agreed that this is one area where there might be the potential for disputes to arise. “You can rest assured there are people with business interruption insurance who will be watching very closely how the event tracks,” Wells says. Tickets to the Christchurch games are not expected to sell out and tourism around the event may suffer from a dip in visitor numbers as a result of the earthquakes. Businesses that were expecting a surge of tourists will be impacted. These kinds of dispute-related matters will probably not be fully identified until closer to the World Cup itself. “If there’s going to be a dispute it will probably be closer to the time and more likely during,” notes Blumsky. ALB
“New Zealand is a country that loves rugby, and our client base is hugely interested in the tournament and intrigued by our involvement. It is great profiling.” www.legalbusinessonline.com
►► MEMA Act fast facts: To date, five events have been declared ‘major events’ under the Major Events Management Act (2007) • FIFA Under-17 Women’s World Cup 2008 • FIFA Under-19 Men’s Basketball World Championships 2009 • World Rowing Championships 2010 • Under-19 Cricket World Cup 2010 • Rugby World Cup 2011 A number of Rugby World Cup emblems and words have been declared ‘major event’ emblems and words’ under the Act • Rugby World Cup • World Cup 2011 • RWC • World in Union • Rugby New Zealand 2011 • Total Rugby • Webb Ellis Cup • IRB
Tim Clarke
Russell McVeagh
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Feature | interview >>
In-house perspective
Brett Walker, CSIRO:
New frontiers in law and science Working alongside the country’s best scientist and inventors, CSIRO GC Brett Walker is helping to shape the future of Australia. By Olivia Collings.
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s general counsel for the country’s leading scientific and research organisation, you might assume Brett Walker has a science background, but you would be wrong. Walker, who holds the title of general counsel at the Commonwealth Scientific and Industrial Research Organisation (CSIRO) began his career as a banking & finance lawyer and even spent five years in-house at the Commonwealth Bank before joining CSIRO as the sole in-house counsel for the division of plant industry affairs. “I was thrown into the world of plant science,” recalls Walker. “After five years of being embedded I was mistaken for a molecular biologist at times because I could talk the language and understand the nuances.” The structure of the organisation then changed and the legal team developed a more corporate approach, which saw Walker become a team leader, before being appointed general counsel in August 2009.
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Walker has had an unusual career path, jumping in and out of in-house roles. Following CBA he joined the Mallesons Stephens Jaques office in Canberra before ending up at CSIRO. “I think a lot more lawyers are moving from in-house to private practice and back again depending on the opportunities and time in their careers,” states Walker. “It’s a phenomenon I have observed more regularly. The old way used to be you stayed in private practice until you jumped across to corporate – where you stayed.” As chief legal officer to the organisation, Walker’s primary role is to provide legal advice to the executive members of the organisation and those who report to them – but to do that he needs a team and so a large part of his role is managing the 45 odd lawyers who work across the organisation.
Team Structure
Since taking over the top job Walker has made a few minor changes to the
legal team in terms of its structure. Originally the legal division was divided into three geographical teams, but the organisation is not structured in this way and so he decided the legal team shouldn’t be either. “It’s an interesting challenge as to how you structure a team that is geographically dispersed,” says Walker. The teams are now embedded across the major business units (seven in all), but work in more than 50 sites across the country. To help ensure a smooth operation of legal services Walker employs senior lawyers; most have about 10 years experience, and encourages a non hierarchical structure. “We don’t have a highly supervised model,” he says. “The team leaders report to me, but they work very closely with their key clients – the group executives of those science and corporate areas.” Walker also expects individuals to contribute to the broader function of the legal team, outside of the area they are working in. “It’s not sufficient for Australasian Legal Business ISSUE 9.08
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This is a common issue Walker sees facing the legal profession in general, but he has noticed it changing over the years. “The legal profession is getting better at treating leadership as a distinct skill set,” he states. “There is obviously technical leadership, and you need a certain level of technical competence…but there is a jump between that and a general counsel role. As you get closer to the general counsel role you have to make the very difficult decision of leaving the technical work behind to give yourself space and to do the management work.”
What do they do?
“You have to treat the management of legal work as equally as important as the technical work” them to just do the work for the clients,” he states. Members of the legal team are encouraged to move across the various science groups and make the most of opportunities in the business. However, moving from a technical legal role to a more managerial and advisory role is not without its difficulties, says Walker. Having been a specialised lawyer for many years, embracing the non-legal work responsibilities of his role was a difficult transition. “You have to treat the management of legal work as equally as important as the technical work,” he says. “I used to say to my wife, ‘I haven’t done any real work today’, but you have to change your mind set. It took me a while to realise that real work wasn’t just drafting the perfect contract.” 46
The legal team at CSIRO work on a variety of legal matters as a result of working for a scientific and research organisation. Some of the more common requirements of the team revolve around establishing and operating large research facilities, often in partnership with other organisations; funding arrangements, IP matters and the usual corporate work. “The nature of science and the nature of the equipment we use is that we work in a fairly heavily regulated environment,” says Walker. “A lot of the challenges [we face] are around giving advice on transactions or projects where outcomes are uncertain.” This last point in particular was a significant challenge for Walker who had come from the very rigid area of taxation. “In corporate law you know what the finished product should and will look like, whereas we are in a different world - you don’t know at the time where you are sitting down to document a project what the outcomes will be,” he says. In the past 10 years the research space has become increasingly focused on contracts and legal arrangements according to Walker. “When I started there was a fairly free exchange of ideas and materials and alike between institutions without documentation,” he says. However this has changed as organisations realise the need to better protect and control IP, creating more work around contracts and confidentiality agreements, which has led to an increase in contract work and the need for legal resources.
In the past 12 months some of the major projects Walker and his team have been focusing on include the establishment of a radio telescope in Western Australia, called the Australian Square Kilometre Array Pathfinder (ASKAP) and the procurement and development of a new scientific research vessel. The ASKAP is particularly important as it will be a test bed for the Square Kilometre Array (SKA) project, an international development to create a telescope with 10,000 times the power of present day instruments. The new vessel has also been a significant process for the legal team, starting with the submissions to the Commonwealth Government for funding, followed by the designing and procurement of the vessel. “It’s very unusual to build a scientific vessel,” says Walker. “A once in a 20 year opportunity”. While one would expect all this vast and diversified work to require substantial external input, according to Walker the in-house team completes about 90% of the organisation’s legal work, a little more than what it would have done five years ago. However, despite this CSIRO has an official legal panel including Mallesons, the Australian Government Solicitor (AGS) and Minter Ellison. Work allocated to these firms revolves mainly around litigation, specialised corporate advice and specialised IP advice. “Depending on the nature and size of the transaction we will hold a mini tender across those firms to decide where to allocate the work, or alternatively we may go to a partner in the firm to ascertain what their capabilities are,” says Walker, who adds that the procurement of legal services is heavily regulated by the Commonwealth. However, despite being a Commonwealth organisation, CSIRO operates quite independently of the government according to Walker. “In terms of regulatory issues, we very much work on the assumption that we operate similarly to a private company,” he says. A Commonwealth organisation acting like a public company, what will they think of next? ALB Australasian Legal Business ISSUE 9.08
Feature | postgraduate study >>
Pondering postgrad options Postgraduate study can provide lawyers with a multitude of experiences and options, report Kalianna Dean and Olivia Collings.
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s legal markets become increasingly competitive, lawyers are finding that postgraduate study is becoming more and more necessary to gain a career edge. However, career benefits may vary according to the type of postgrad study and lawyers are advised to consider their options carefully. “Postgraduate study is a significant investment in time and money and students should ensure that they derive real and lasting benefit from it,” says Cheryl Saunders, associate dean at the Melbourne Law School, Melbourne University. Nathan Kensey is a lawyer in the Attorney-General’s department and is also undertaking a masters of laws. “I remember a department secretary saying that if you have a masters degree it increases employability by 30-40%; whereas a PhD only increases it by 5-10%,” says Kensey. However for some lawyers, postgrad study is more than just about improving employability – it is also about a complete new career direction. Laura McKoy, a Cambridge law undergraduate who is completing her LLM with an international humanitarian law specialisation, is surprised by the number of her colleagues who fall into this category. “There are so many commercial bankers and the like in my humanitarian law and human rights masters subjects who wanted a complete career change,” she observes. McKoy herself was motivated by a desire to work internationally and potentially with international organisations such as charities, which caused her to look to Australia as a place to pursue her studies. She says that she has gained an insight into issues across the Asia-Pacific she might not have otherwise gained studying closer to home, and it has also allowed her to build up contacts.
The case for LLMs
Despite the rise of alternative qualifications, there are many who argue that the LLM is still the safest route. According to the students and lecturers who spoke to ALB, there is still a level of prestige attached to www.legalbusinessonline.com
the title. “The LLM is the traditional degree with the longest history,” says Saunders. In-house lawyers can also benefit. “It’s much better to have a masters qualification than a graduate diploma. Masters are more recognised,”says Coralie Kenny, principal legal counsel at Suncorp Life. The fact that the units within the LLM are being constantly monitored and updated by Australian academic institutions also adds to its enduring appeal, according to Ann Monotti, associate dean at the Monash University Faculty of Law. In terms of attracting a variety of students from Australia and all over the world, this helps the LLM cater to the widest market. While LLMs with a specialised focus are becoming progressively more common, one can also avoid the stigma or “badge” of being regarded as having too narrow a focus. “Students can select an LLM when they don’t want to have a ‘badge’ attached at the end,” says Monotti. A masters gives a practical edge for practitioners. “I think having a masters degree adds another dimension to being able to answer my clients’ questions,” says Carter Newell associate and masters student Johanna Kennerley. For Kennerley, the decision to obtain a master of laws specialising in Environmental Resources Law at QUT was easy because she was committed to the area after five years of practice. She doesn’t see the sense in doing an LLM simply to gain the title. “You should not do it to have a masters, you should do it to do those subjects,” she adds. “It’s something that I always thought I would do once I was settled in an area of law. Now that I am, I feel it’s worthwhile.”
Graduate Diplomas
Kenny studied the Graduate Diploma of In-house Legal Practice offered by the College of Law before deciding to convert to a full masters. “Graduate diplomas allow for study in a greater variety of areas, and the courses are shorter,” she says. “However, [the in-house diploma] was extremely thorough, it’s academically sophisticated. It covers in a very
►► Postgraduate law student numbers Institution
No. of students enrolled
College of Law
2361
Australian Capital Territory Australian National University
1807
University of Canberra
192
New South Wales Macquarie University
174
Southern Cross University
51
University of New England
148
University of New South Wales
1047
University of Newcastle
10
University of Sydney
1310
University of Technology, Sydney
797
University of Western Sydney
60
University of Wollongong
347
Northern Territory Charles Darwin University
50
Queensland Bond University
466
Griffith University
265
James Cook University
17
Queensland University of Technology
662
University of Queensland
253
University of Southern Queensland
59
South Australia Flinders University
38
University of Adelaide
61
Tasmania University of Tasmania
72
Victoria Deakin University
27
La Trobe University
140
Monash University
669
University of Melbourne
1240
Victoria University
291
Western Australia Curtin University
5
Edith Cowan University
2
Murdoch University
111
University of Notre Dame, Australia
24
University of Western Australia
107
TOTAL
12863 Source: The Good Universities Guide
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“For some, they don’t think they have the time to undertake a masters and a diploma can help them improve their skills and knowledge in a core area”
Cheryl Saunders
practical manner all of the areas that in-house counsels, particularly senior in-house counsels, need to understand how a company works and the value legal input can have on their operation.” However, to the extent that the purpose of postgrad study is to impress prospective employers, there may be a difficulty for in-house lawyers, who frequently are assessed for positions by non-lawyers. “Non lawyers are the ones who will be promoting or hiring you; senior management, boards etc - they might not recognise the importance of the course and how it helps you to be a good in-house lawyer,” says Kenny. According to Saunders, a graduate diploma can be attractive for students looking to gain a specialisation in a shorter period of time. “For some, they don’t think they have the time to undertake a masters and a diploma can help them improve their skills and knowledge in a core area,” she
Develop your legal career graDuate StuDieS in law The ANU College of Law offers a variety of coursework programs for lawyers and non-lawyers in the public and private sectors. Graduate courses may be taken individually to suit personal and professional development. Most courses are offered intensively, with some courses offered online. • • • • • •
anu college of law 02 6125 0510 or pgadmin.law@anu.edu.au
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Law, Governance & Development (new for 2011) Government & Commercial Law Environmental Law International Law Legal Practice Migration Law
The College offers innovative and flexible teaching, based on world-class research. We have wellrecognised expertise in many areas of law with special strengths in the above areas. Individual courses can be undertaken on a non-assessment or non-award basis. cricoS# 00120c 220211alB
Australasian Legal Business ISSUE 9.08
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says. Monotti adds that a number of students commence diplomas because they are unsure of how well their working life will accommodate extra study, but when they find it does, they switch to a masters. “Some articulate into a masters degree when they have completed a few units successfully and find the study is manageable, rewarding and useful,” she says.
What’s new in postgrad?
As new laws are introduced, new practice areas develop and new skills are required and universities and educational institutions are responding with new and improved options. “We’re continuing to see even more specialised fields developing,” says Don Rothwell, a professor with ANU College of Law. “This demonstrates that students are interested in gaining very precise types of qualifications, because they think this will give them a particular edge.” Rothwell says the university is very conscious of the need to continue to respond to students’ interests and student demand as a result of regulatory changes. These changes are occurring as a result of litigation and new perspectives on existing legal practices. “To that end we are
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Feature | postgraduate study >>
undertaking a significant strategic review of our masters programs,” Rothwell adds. “We try to have concern for the future directions where students’ interests might lie.” Some new postgraduate subjects at the school this year included Comparative Constitutional Law, Australian Disaster Law, Climate Change and Displacement Telecommunications Law; new subjects and courses for 2012 have not yet been decided. At Melbourne Law School a raft of new subjects were again added to the list of options available to postgraduate students this year including Secured Transactions (dealing with the new Personal Property Security Act); Law of Intergovernmental Relations; Human Rights beyond Borders and many others. In 2012 the school will be offering an entirely new course, a Masters of Private Law, in addition to more than 30 completely new subjects. The College of Law is also keeping up with new trends in law and earlier this year offered for the first time a Master of Applied Law (Wills & Estates) and a Master of Applied Law (in-house Practice). This semester the college will be offering new subjects including
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Intellectual Property Litigation; Family Provision; Legal Aspects of Financial and Estate Planning and Advanced Issues in Wills & Estates. Angie Zandstra, director of applied law programs at the college says the wills and estates course has been particularly popular. “With an aging population it is a growing practice area,” she says. “There seems to be a real need in the profession for practical postgraduate education in this area.” The field itself has also become far more complicated than it has been in the past with the
advent of self-managed super funds, complicated investment structures and the tax implications associated with such schemes. “These issues are not uncommon anymore and I think that is why we have had so much interest,” states Zandstra.
An international education
Not surprisingly, Australian postgraduate legal education is going global – both in terms of the students undertaking it and the outreach of the subjects offered. “Our international student cohort
“Even in areas such as commercial law, the rationale is that it’s increasingly important to put that information into the international market perspective” 52
Sheryl Jackson
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has increased significantly compared to just three or four years ago,” said Sheryl Jackson, director of graduate programmes for the law school at QUT. “International students are very interested in units developed for our professional market - for example in insolvency law. However, these units might once have been almost solely Australia focused. We are increasingly offering units such as cross-border insolvency and related units, and this has really added to our international appeal.” Rothwell said that at ANU, migration law courses have a proved popular with overseas registered agents or lawyers who want to practice here as migration agents. To help encourage this interest from overseas, a number of Australian universities are offering foundation courses, research training and articulation arrangements with www.legalbusinessonline.com
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foreign learning institutions which allow part of a candidate’s prior study to be credited towards a domestic qualification. Providers are looking to invest in the development of new units and courses which are suitable for this new international audience: “Even in areas such as commercial law, the rationale is that it’s increasingly important to put that information into the international market perspective,” said Jackson. The other aspect of globalisation is the larger number of Australian students who want to take their studies overseas. They are choosing to do so with Australian institutions where possible, according to ANU’s Rothwell. “We’ve seen a definite increase in the number of Australian universities exploring joint overseas programs. For example, the 53
Feature | postgraduate study >>
There is a place for law
►► POST-POSTGRADUATE LAW EMPLOYMENT DIRECTIONS Public sector
33%
Private sector
22%
Private practice
34%
Overseas
7% Source: The Good Universities Guide
►► AUSTRALIAN POSTRGRADUATE LAW STUDENTS: AN OVERVIEW From non-English speaking backgrounds
25%
International students
1,685
Studying part time
54%
Studying externally
8%
Women
55% Source: The Good Universities Guide
University of Sydney is offering part of its master’s programme in Europe, Monash the same thing. There’s also definitely interest in offering courses in China and India as well as attracting students from those areas. They’re entering into partnerships designed to minimise the cost to students,” he said. Rothwell attributed a lot of the change to demand in the west for a
better understanding of the Chinese legal system, as well as increased interest in India as a global force and - as to be expected - an interest in being in the international political and financial hubs of Europe and the US. Whether it’s summer schools in the US, Beijing or Shanghai, courses in Malaysia or Italy (where Monash and QUT both have offerings) or reciprocal agreements with universities in the US and Europe, Australian postgraduate learning providers appear to be creating opportunities for a truly international education.
Postgraduate law for the nonlawyer:
ANU, The University of Melbourne, Monash University and QUT all specifically offer units of study to nonpractitioners who want to gain a legal perspective on their particular area or further a career in government, policy development or another field other than law, as an example QUT is combining units with its existing school of justice and offering a new major in criminology to capitalise on existing resources. David Barda, a scientist, graduated with a masters
Monash University Law Chambers, CBD, Melbourne www.law.monash.edu
CRICOS Provider: Monash University 00008C
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►► Summary of postgrad options – by Kalianna Dean Institution
Dean/Head of law faculty Postgraduate contact
Post-graduate courses
ANU College of Law, Australian National University
Professor Michael Coper, Dean of ANU College of Law Professor Don Rothwell, Director, Graduate Programmes, ANU College of Law
E-mail pgadmin.law @anu.edu.au or phone 02 6125 0510
LLM specialising in New specialisation within the environment, government and LLM, Law, Governance and commercial, international law Development or legal practice
$2,400 per 6 unit course or $4,800 per 12 unit course
Bond University
Professor Geraldine Mackenzie
Use the general enquiry form: http://www.bond.edu.au/ about-bond/contact-us/ general-enquiry/index.htm or E-mail lawadvisor@bond.edu. au or phone 07 559 52008 Programme advisors Samantha Devine, Marissa Jacques or Tanya Merrrotsy
LLM (Legal Practice) LLM (International Legal Practice), Master of Business Law, Post-graduate Diploma in Legal Practice and Juris Doctor
LLM or Master of Business Law cost $28,840. It costs $11,536 for the postgraduate diploma in law or $15,416 for the diploma in legal practice ($7,336 on-line) Based on current 2011 costs, other courses vary in cost and are subject to change. Refer to the Bond website: www.bond.edu.au for current schedule of fees.
College of Law
Neville Carter
Enquire through the College on-line form found here: http://www.collaw.edu.au/ Utility-Links/Contact-Us/ Australia/ or Phone 02 9965 7102 to contact Angie Zandstra, director, applied law programmes, College of Law
Graduate Certificate, Master of Applied Law (Wills & Graduate Diploma or Master Estates) commenced end 2010 of Applied Law (Commercial Litigation), Graduate Certificate, Graduate Diploma or Master of Applied Law (Family Law) Legal Practice Management Course, in-house Legal Practice (Graduate Diploma)
Melbourne University
Professor Carolyn Evans
Please contact the Law LLM, graduate diplomas, Masters office masters degrees, Juris Doctor Law-masters@unimelb.edu. and research programs au or via phone on (03) 8344 6190
Masters of Private Law commeicing in 2012. Approximately 30 new subjects for 2012
Masters degrees cost $32,640 or $4,080 per subject. Graduate diploma costs $16,320
Monash University
Professor Arie Freiberg
law-postgraduate@ monash.edu or for content specific inquiries Dr Ann Monotti, Associate Dean (postgraduate studies) Monash university. Phone (03) 9903 8500
LLM, seven specialist areas, Master of Regulatory Study and graduate diplomas in six specialist areas
Courses available via the new website: http://www.law. monash.edu.au/future-students/ postgraduate/ New additions for earlier in 2011 included Innovation: Labour, Competition and Intellectual Property Law - as part of an LLM offered in Prato, Italy. The conference can also be attended separately
$25,700 per year for LLM or graduate diploma (both 1yr full time or 2 yrs part time)
Queensland University of Technology
Professor Michael Lavarch
E-mail general inquiries to: lawandjustice@qut.edu.au Contact person: Sheryl Jackson, director graduate programmes, school of law, QUT.
5 awards in the post-grad programme, including LLM. LLM has six specialist majors, Graduate certificate in law has 11 specialisations
New criminology major as well as new units in international and comparative law, development law and Australian human rights law
$9,800 for the graduate diploma in legal practice $9,000 per semester for LLM (1 yr full time) Masters of IP law $7,600 per semester (1yr full time)
University of Adelaide
Professor John Williams
Phone (08) 8303 4020 Post-graduate coursework administrator pglaw@adelaide.edu.au
LLM, The 2012 programme includes LLM or Graduate Diploma Master of Laws/ Master of over 20 courses with a strong costs $19,000 per year of Commerce and international and commercial focus full-time study Master of Comparative Law – with 12 specialisations. Also offers Doctorate of Laws
www.legalbusinessonline.com
New Courses/subjects in 2011 Fees
Offerings have not changed for the end of 2011. Subjects and units range from Animal Law to Corporate Governance and IP as well as Law and investment in Japan. For a full list see the Bond website: www.bond.edu.au and follow the links
$7,500 across all streams. Subject costs vary from $750 to $1,125
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in IP law from Monash University in 2010. Having been in his job performing research for a tech start up for a few years that involved ’commercialising’ technology Barda realised that he would benefit from a fuller understanding of IP law and management. He said the experience made him feel like he’d missed a great opportunity when deciding what to do at university because the whole discipline of law was ‘fascinating and stimulating’. Barda undertook his studies alongside professionals who were practicing in IP firms and doing the course as a pre-requisite to becoming a patent attorney, although there were also others working in the area of technology development who wanted to gain a better understanding of patent law. IP law in particular was viewed by him as an area of interest which easily intersects with other disciplines. ALB
MASTERS
“The Masters program appealed to me because it is not just a purely academic course, but one which is relevant to every day practice” AMy BArWICk, MILLs OAkLEy LAWyErs, CUrrENT MAsTErs sTUDENT
“The College of Law Masters program has provided me with not only a better understanding of various legal concepts, but also the practical and procedural steps that apply to those principles. It appealed to me because it is not just a purely academic course, but one which is relevant to every day
practice that complements my specific area of work. The online learning platform provides me with great flexibility in my studies.” Choose from Commercial Litigation, Family Law, In-house Practice or Wills & Estates. For further information call 1300 856 111 and move your career forward.
visit www.collaw.edu.au/alp today 56
Australasian Legal Business ISSUE 9.08
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University of New South Wales
Professor David Dixon
law@unsw.edu.au or via phone(02) 9385 2227
University of Sydney
Professor Gillian Triggs
University of Western Australia
Winthrop Professor William Ford
LLM with 11 specialisation areas, 21 other graduate course programmes including Graduate Diplomas and Juris Doctor (JD)
New Programs in 2012 include a Masters and Graduate Diploma of International Law and Security and Masters and Graduate Diplomas of Media, Law and Journalism. New International courses in New York and Vietnam. New exchange agreement with the University of Lausanne in Switzerland
2012 tuition fees to be finalised by September. $450 per unit of credit $2700 per course (6 units of credit per course) $21,600 for an 8 course Masters program. A Commonwealth Supported Place for the JD costs $8,859 per year
Associate Dean LLM, and 12 specialist master (Postgraduate Coursework) programs, 11 Graduate Professor Roger Magnusson. Diploma in law courses E-mail contact is law.info@sydney.edu.au or via phone 02 9351 0351
Specialisation in energy and resources law commenced early March 2011. New units in energy and resources law, Islamic and Asian law, climate and environmental law, IP, and banking and finance law
$3540 per unit except Criminology units which are $2460 per unit. 8 units to complete an LLM and all Masters degrees. 4 units to complete a graduate diploma. Single unit enrolment for nonaward or audit
Contact via e-mail law-fao@law.uwa.edu.au or enquiries@law.uwa.edu.au or via phone (08) 6488 2961. Director of postgraduate studies Winthrop Professor Richard Bartlett
N/A
$11,043 for the Graduate Diploma in law $22,086 for LLM
Graduate Diploma in Law, Graduate Diploma in Commercial and Resources Law, Graduate Diploma in Energy Law and LLM
Set your own precedent Leading experts. Innovative programs. Extraordinary experiences. The Melbourne Law Masters. Enrolling now. www.masters.law.unimelb.edu.au
MLS22075_Masters ABL_FA.indd 1 www.legalbusinessonline.com
4/08/11 4:56 PM
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CRICOS No. 00213J bcm:qula 118
A university for the real world
®
QUT knows ideas are valuable.
The WIPO-QUT Master of Intellectual Property Law The world depends on great ideas and innovation; that’s why we’ve created the Master of Intellectual Property Law in partnership with WIPO. Lecturers from WIPO, IP Australia and other leading IP experts will provide you with knowledge of principles and processes for the protection of Intellectual Property rights. You’ll learn about international conventions and treaties including the role of WIPO in addressing IP in relation to global challenges like climate change, public health and food security. Visit www.qut.edu.au/study/mipl or contact Professor Kamal Puri +61 (0)7 3138 1290 kamal.puri@qut.edu.au
Asia Pacific’s first IP Law degree created with the World Intellectual Property Organization.
MARKET DATA | M&A >>
market data | capital markets >>
In association with
M&A TRANSACTIONS AND STATISTICAL ANALYSIS Top 10 Announced Deals - Australasia (01 July, 2011 - 31 July, 2011) Announcement Date 14-July-11
Target Company
Target/Seller Legal Advisor
Bidder Company
Bidder Legal Advisor
PetrohawkÊEnergyÊCorporation
SimpsonÊThacherÊ&ÊBartlett
BHPÊBillitonÊLtd
MorganÊLewisÊ&ÊBockius;Ê SullivanÊ&ÊCromwell
AdvisingÊfinancialÊadvisorÊ (GoldmanÊSachs): LathamÊ&ÊWatkins
Seller Company
Deal Value (AUDm) 13,764
11-July-11
MacarthurÊCoalÊLimitedÊ (83.8%ÊStake)
CorrsÊChambersÊWestgarth
PeabodyÊEnergyÊCorporation;Ê andÊArcelorMittalÊSA
Freehills;ÊMallesonsÊ StephenÊJaques
3,527
22-July-11
ConnectEastÊGroupÊ (65%ÊStake)
BlakeÊDawson
CP2
JohnsonÊWinterÊ&ÊSlattery
2,449
19-July-11
CopenhagenÊAirportsÊA/SÊ BruunÊ&ÊHjejleÊ (30.8%ÊStake);ÊandÊTheÊBrusselsÊ AirportÊCompanyÊNVÊ(39%ÊStake)
OntarioÊTeachers'Ê PensionÊPlanÊBoard
AtanaskovicÊHartnell;Ê FreshfieldsÊBruckhausÊ Deringer;ÊTorys
18-July-11
SundanceÊResourcesÊ LimitedÊ(81.4%ÊStake)
ClaytonÊUtz
HanlongÊMiningÊ InvestmentÊPtyÊLtd
MallesonsÊStephenÊJaques
07-July-11
WAÊGasÊNetworksÊPtyÊLtd
AdvisingÊsellers:Ê Freehills
ATCOÊGroup
BennettÊJones;ÊJ ohnsonÊWinterÊ&ÊSlattery
18-July-11
EasternÊStarÊGasÊLtdÊ (79.1%ÊStake)
PiperÊAlderman
SantosÊLtd
Freehills
19-July-11
JÊOÊHambroÊCapitalÊ ManagementÊGroupÊLimited
BTÊInvestmentÊ ManagementÊLimited
ChristopherÊMillsÊ(privateÊinvestor);Ê JamieÊHambroÊ(privateÊinvestor);Ê andÊNicholaÊPeaseÊ(privateÊinvestor)
314
07-July-11
NorcastÊWearÊSolutionsÊInc
BradkenÊLimited
CastleÊHarlanÊInc
202
29-July-11
PTÊANZÊPaninÊBankÊ (14%ÊStake)
AustraliaÊandÊNewÊZealandÊ BankingÊGroupÊLimited
PTÊBankÊPanÊIndonesiaÊTbk
177
Notes:Ê Ê Ê
MacquarieÊAirportsÊLimited
1,596
1,125
DiversifiedÊUtilityÊandÊ EnergyÊTrust;ÊandÊWestNetÊ InfrastructureÊGroupÊLimited
1,000
630
Based on announced deals, including lapsed and withdrawn bids, from 01 July 2011 to 31 July 2011•Based on geography of either target, bidder or seller company being Australasia•IncludesÊallÊdealsÊvaluedÊoverÊUSDÊ 5m.ÊWhereÊdealÊvalueÊnotÊdisclosed,ÊdealÊhasÊbeenÊenteredÊbasedÊonÊturnoverÊofÊtargetÊexceedingÊUSDÊ10m•ActivitiesÊexcludedÊfromÊtableÊincludeÊpropertyÊtransactionsÊandÊrestructuringsÊwhereÊtheÊultimateÊshareholders'ÊinterestsÊÊ areÊnotÊchanged•League tables areÊrankedÊbyÊvalue•Q3 11 * = 1 July 2011 to 31 July 2011
League Table of Legal Advisors to Australasian M&A (July 01, 2011 - July 31, 2011)
League Table of Financial Advisors to Australasian M&A (July 01, 2011 - July 31, 2011) RankÊ
RankÊ
HouseÊ
ValueÊ(AUDm)Ê
DealÊCount
ValueÊ(AUDm)Ê
DealÊCount
Ê 1Ê
FreehillsÊ
3,880Ê
4
Ê 1Ê
HouseÊ UBSÊInvestmentÊBankÊ
5,151Ê
4
Ê 2Ê
MallesonsÊStephenÊJaquesÊ
4,692Ê
3
Ê 2Ê
MacquarieÊGroupÊ
4,279Ê
4
Ê 3Ê
CorrsÊChambersÊWestgarthÊ
3,671Ê
3
Ê 3Ê
GreshamÊAdvisoryÊPartnersÊ
1,831Ê
3
Ê 4Ê
JohnsonÊWinterÊ&ÊSlatteryÊ
3,449Ê
2
Ê 4Ê
GoldmanÊSachsÊ
15,360Ê
2
Ê 5=Ê
LathamÊ&ÊWatkinsÊ
13,764Ê
1
Ê 5Ê
JPMorganÊ
4,157Ê
2
Ê 5=Ê
MorganÊLewisÊ&ÊBockiusÊ
13,764Ê
1
Ê 6Ê
BankÊofÊAmericaÊMerrillÊLynchÊ
3,241Ê
2
Ê 5=Ê
SimpsonÊThacherÊ&ÊBartlettÊ
13,764Ê
1
Ê 7Ê
FlagstaffÊPartnersÊ
3,079Ê
2
Ê 5=Ê
SullivanÊ&ÊCromwellÊ
13,764Ê
1
Ê 8Ê
MorganÊStanleyÊ
2,217Ê
2
Ê 9Ê
BlakeÊDawsonÊ
2,449Ê
1
Ê 9Ê
RothschildÊ
1,100Ê
2
Ê10=Ê
AtanaskovicÊHartnellÊ
1,596Ê
1
Ê 10Ê
RabobankÊ
153Ê
2
Ê10=Ê
BruunÊ&ÊHjeileÊ
1,596Ê
1
Ê10=Ê
FreshfieldsÊBruckhausÊDeringerÊ
1,596Ê
1
Ê10=Ê
TorysÊ
1,596Ê
1
Australasian M&A Activity - Quarterly Trends 200
70,000
180
Value (AUDm) Volume
50,000
160 140 120
40,000
100 30,000
80
20,000
60 40
10,000 0
Number of deals
Value (AUDm)
60,000
20 0
Q1 03
Q2 03
Q3 03
Q4 03
www.legalbusinessonline.com
Q1 04
Q2 04
Q3 04
Q4 04
Q1 05
Q2 05
Q3 05
Q4 05
Q1 06
Q2 06
Q3 06
Q4 06
Q1 07
Q2 07
Q3 07
Q4 07
Q1 08
Q2 08
Q3 08
Q4 08
Q1 09
Q2 09
Q3 09
Q4 09
Q1 10
Q2 10
Q3 10
Q4 10
Q1 11
Q2 11
Q3 11*
Australasian Legal Business ISSUE 9.8
59
Special Focus | MAHLAB >>
Seismic Shifts:
Redefining the legal market Private Practice – Partners – Corporate Lawyers About Survey 2011 Mahlab Recruitment’s Survey 2011 is Australia’s most comprehensive survey of the legal profession encapsulating market trends and accurate, current remuneration ranges captured from the 2011 salary reviews. Conducted online in June 2011, input was provided by individuals and employers across Australia and internationally. Questions were focused on remuneration and benefits, work habits and practices, job and career satisfaction and retention and future employment intentions. Mahlab gratefully acknowledges the support of the Australian Corporate Lawyers Association (ACLA), Young Lawyers of the Law Society of NSW, the Young Lawyers section of the Law Institute of Victoria, The Victorian Women Lawyers, The Women Lawyers of South Australia, The Women Lawyers of Queensland and the Chartered Secretaries of Australia for circulating our questionnaire to their members. We appreciate their ongoing commitment to making Survey 2011 a success. The full report of survey 2011 is available at Mahlab.com.au
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Key Findings 1. 23% average salary increase for private practitioners with band increases of 6.53% 2. 3.93% national average drawings increase for partners 3. 4.69% national average salary increase for in-house lawyers
The Seismic Shifts 1. Changes to client / law firm relationship 2. Outsourcing work continues 3. Deleveraging continues 4. Strategic decisions have been made by firms regarding which practice areas to retain, remove or target to enhance their client offering 5. Some firms have pursued national expansion 6. More international players have entered the market 7. Labels such as “top tier” and “mid tier” no longer apply 8. Healthy salary increases and an increased willingness to pay for bonuses etc. 9. Steadily increasing levels of recruitment 10. Focus on retention of talent and, retention of women in firms. This has resulted in new firm policies around gender diversity
Private Practice - Australia • • •
23% national average salary increase Average national salary bands increase by 6.53% Tight legal recruitment market
The Market Redefined
The Australian private practice market is redefining long held beliefs of what constitutes ‘top tier’. ‘Top tier’ firms are no longer the only firms offering market leading remuneration. The gap in salary
offered by ‘top’ and ‘mid’ tier firms has narrowed. In addition, a handful of ‘boutique’ firms are paying well above market rate. Also, clients are moving their work from ‘top tier’ to ‘mid tier’. This means sustained levels of high calibre work is now available at practices other than the ‘top tier’ firms. ‘Mid tier’ firms are now far more appealing to those lawyers who seek a move away from the ‘top tier’ environment, but who do not want to forsake exposure to Australasian Legal Business ISSUE 9.08
Special Focus | MAHLAB >>
the type of work those firms had to offer. New definitions for firms are now required and this is reflected in Survey 2011. The defining criteria of what is a major, mid and small CBD commercial firm include: size, location(s), reputation, quality of work, expectations of employer, remuneration, desirability of employment, and training and development.
Remuneration
Movement in base salary levels within law firms has been significant this year. Mahlab reports an average salary increase of 23% nationally, compared to Sydney and Melbourne increases of 12-14% in 2009–2010 and 2.15% in the previous year. On average, salary bands increased by 6.53%. The range within bands is narrowing compared to previous years. Perth salaries have been increasing at a faster rate than other states and are now on par with Melbourne or in certain practice areas is higher. Brisbane salaries are following a similar trend. Lawyers, particularly those at more junior levels, are seeking structured training and hands on experience in non technical areas. Accordingly, many bonus schemes are now calculated on the demonstrated application of wider professional skills and contribution to the firm’s culture or success, in addition to meeting or exceeding budget.
Recruitment Activity
Recruitment activity lifted dramatically. The majority of firms anticipate a continuing increase in the number of their fee earning staff over the next financial year. Demand for high quality lawyers extends across the board, from junior lawyers through to special counsel and partners. The demand for junior, mid level and senior associate level lawyers has been most evident in banking and finance, front and back end construction, property development and property finance, planning and environment, energy and resources, insurance, workplace relations and litigation. In addition, corporate/M&A as well as infrastructure work have been high www.legalbusinessonline.com
demand areas in Perth and Brisbane. A newly invigorated legal market is emerging. The reshaping of leading practices has enhanced the competition by firms for high calibre work. Notably, it has also created alternative service offerings aimed at better meeting clients’ needs. While all the major players and most talented lawyers remain within the Australian talent pools of well resourced national and international firms, those lawyers are servicing their clients more creatively, more energetically and often under the letterhead of a different firm.
Career Development
With an abundance of quality roles available at all levels, an increase in the remuneration and benefits that firms are prepared to offer, a tight market for high calibre lawyers, and a relatively even spread of quality work across a large number of firms, experienced lawyers are well placed to actively pursue their ideal roles. Encouragingly in 2011 greater numbers of lawyers are looking to either return to private practice from other sectors or to establish long term private practice careers.
Salaries ►► Sydney Major Firms* Year Level Grad
Range
Mode
Low
High
$70,000
$80,000
$72,500
1
$76,000
$95,000
$80,000
2
$80,000
$110,000
$93,000
3
$88,000
$135,000
$106,000
4
$98,000
$140,000
$118,000
5+ (not SA)
$106,000
$145,000
$125,000
SA1
$138,000
$165,000
$146,000
SA2
$148,000
$180,000
$164,000
SA3
$163,000
$205,000
$180,000
SA4
$176,000
$230,000
$193,000
SA5 / SC
$183,000
$300,000
$250,000
►► Melbourne Major Firms* Year level 1
Range
Mode
Low
High
$66,000
$90,000
$74,000
2
$73,000
$110,000
$85,000
3
$86,000
$120,000
$95,000
4
$95,000
$135,000
$104,500
5
$104,000
$150,000
$120,000
SA1
$110,000
$165,000
$134,000
SA2
$130,000
$185,000
$153,500
SA3
$145,000
$205,000
$165,000
SA4
$155,000
$230,000
$175,000
SA5/SpC
$165,000
$320,000
$200,000
Given that firms take into account a range of factors when determine remuneration, an individual’s position within a band will vary based on their background, experience and performance. Lawyers paid at the higher end of the bands are usually top performers and/or employees who bring with them an additional skill that is over and above the general requirements of the role. For tailored advice please contact Mahlab. Figures include superannuation but do not include bonuses or other benefits.
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Special Focus | MAHLAB >>
Partners Key factors influencing partner movement include Australia’s increasingly global economy and China’s enormous appetite for our natural resources. These are reflected in law firm direction and the flow-on effect of partner movement. The rise in the number of international law firms has kept a steady pace over the past few years. The evolving global nature of our economy means the entry of international firms capable of handling cross-border and global client work will flourish. Major firms have made decisions on how to position the firm to meet these changes. Some firms are paring down the size of their partnership to core business areas and slowing down the progression to partnership in other areas. The boom in resources work has resulted in significant flow-on work in areas such as environment and planning, fundraising (banking) and M&A/joint
ventures, creating greater opportunities for partners in these fields. The trend of partners with transportable practices relocating to the mid firms continues. Size no longer translates to overall employment attractiveness. The relocating partners’ long-standing clients are generally more than happy with the resulting lower legal spend. Gone are the days that clients are wedded to a firm. The allegiance of inhouse legal teams is to their individual service provider rather than the firm. This is a trend that has solidified, and is reflected in the narrowing gap between partner drawings at the major and mid firms. With most decisions being made by a governing board or executive, many major firm partners have very little say in how the firm is run. This is another factor behind the continued movement of partners to firms offering greater opportunity for management input.
Over the next year or so the international firms will continue to grow and perform well, taking advantage of market conditions to acquire partners with specialist, transportable practices in order to strategically build their presence. As a result, the major firms will continue to streamline their services and building on their “gold standard” of service in key practice areas.
Salaries Sydney
Mode
Major
$1,380,000
Mid
$856,000
Small
$478,000
Melbourne
Mode
Major
$1,290,000
Mid
$765,000
Small
$420,000
Corporate Lawyers Relationships
Corporate legal departments are seeking better value and greater flexibility in their external fee arrangements. One third of respondents advised that their corporate department changed external legal providers in 2010–2011. 29% of respondents advised that their company had renegotiated new terms with their external legal providers in the last 12 months. In addition, 58% of companies surveyed advised that the volume of work briefed to external legal providers has decreased, compared to 33% in 2009–2010. One quarter of respondents advised that their companies are outsourcing legal work to offshore providers. This number is set to increase with almost one third of those surveyed advising that they intend to outsource legal work to offshore providers in the next 12–18 months. These figures illustrate the increasing popularity of outsourcing arrangements 62
and follows similar trends overseas, particularly in the USA and the UK. A broad range of work will be outsourced, including discovery on major litigation to corporate/M&A, fundraising and specific jurisdictional advice. A significant amount of high volume, junior level legal work is also being outsourced offshore. The decision to outsource will obviously impact the amount of work sent to local external legal service providers, and also the profile of in-house counsel recruited.
Remuneration
Modest salary increases were offered this year. Yet, a greater number of companies are paying bonuses, and at relative high rates. This reflects a generally positive outlook of the economy and a renewed confidence held by most corporations. 75% of respondents received salary increases this year, compared to just 44% in 2009–2010 and 36% in 2008–2009. This year the average
percentage increase in salaries for corporate lawyers is 4.69% compared to 4.06% in 2009–2010 and 3.5% in 2008–2009. Some companies continue to pay above the average and on occasion significantly higher to retain star performers. 68% of corporate lawyers advised that they were satisfied with the outcome of their salary reviews, compared with 62.5% in 2009–2010 and 56% in 2008–2009 during the height of the GFC. Bonuses are a focus. Of the 71% of corporate lawyers whose companies pay bonuses, 62% received a bonus this year, compared to 58% of the 73% of corporate lawyers in 2009–2010 who were entitled to receive a bonus. The average range for bonuses nationally remains between 10–50% of base salary with the higher end applying to more senior corporate positions. The bonus target for junior to midlevel lawyers is 10–20%. Interestingly, a number of newly appointed lawyers at Australasian Legal Business ISSUE 9.08
Special Focus | MAHLAB >>
this level had a fixed amount included in their package as a bonus rather than a percentage of their package, with the whole or a portion paid according to their individual and company’s performance.
Career Development
Corporate lawyers maintained a high level of satisfaction in their jobs, with 82% reporting that they are satisfied, compared to only two thirds of respondents in 2009–2010. Just over one third of corporate lawyers advised that they were considering leaving their current organisation, a fairly significant drop on last year’s 45%. 78% of these lawyers said they would be seeking another in-house legal role, compared to 87% last year. Interestingly, there is an increased interest in corporate lawyers seeking to join private practice, 7.4% this year, compared to 3.3% last year. Career development is the primary reason cited by corporate lawyers for moving to another organisation (60%). When asked if their organisation offered good career progression opportunities, 65% of survey respondents said their employer did not.
Recruitment Activity
Recruitment activity was steady throughout 2010–2011. Although contractors and secondees were once again relied upon by some companies, many chose to recruit on a permanent basis. Most opportunities are for junior to intermediate level lawyers (2–6 years’ post admission experience). While the corporate and government sectors have produced some interesting senior level roles, there are limited opportunities for the large pool of good quality senior lawyers. Senior lawyers have to be flexible in terms of their expectations. There has been a significant amount of recruitment by financial institutions, property and construction groups and energy and resources companies. There is also demand for corporate counsel in the IT, professional services, FMCG, media and entertainment, gaming and health and pharmaceuticals www.legalbusinessonline.com
industries. The Brisbane and Perth markets are very active and experiencing considerable growth. There is a high level of demand for junior to intermediate level lawyers with general commercial law backgrounds in both of these cities. Demand is outstripping supply for quality lawyers in these centres. A shortage of quality lawyers with relevant experience in Brisbane and Perth has led to a highly competitive market with employers often competing for the same pool of lawyers. This high level of competition has led to an upward pressure on salaries, particularly amongst lawyers with a highly sought after skill set. Energy, resources, engineering, construction and infrastructure organisations are often paying at the top end of the Australian market to secure quality lawyers. More lawyers from other states are willing to relocate to these states for in-house opportunities. The number of in-house counsel working part time has steadily increased over the last couple of years. 16% currently work part time, whereas the figure was 13% in 2009–2010 and 7% in 2008–2009.
Recruitment Outlook
A steady stream of in-house opportunities will be available, as companies remain cautiously optimistic about the economy. The focus will continue to be at the junior to intermediate end of the market. Some movement is anticipated at the senior end of the market.
►► Sydney Year Level
Range
Mode
Low
High
1
$65,000
$85,000
$78,000
2
$78,000
$98,000
$95,000
3
$92,000
$120,000
$115,000
4
$110,000
$145,000
$138,000
5
$130,000
$165,000
$160,000
6+
$140,000
$235,000
$192,000
DGC
$170,000
$280,000
$255,000
GC
$175,000
$600,000+ $305,000
►► Melbourne Year Level
Range
Mode
Low
High
1
$58,000
$80,000
$76,000
2
$73,500
$95,000
$90,000
3
$85,000
$115,000
$105,000
4
$95,000
$139,000
$125,000
5
$120,000
$160,000
$150,000
6+
$130,000
$225,000
$184,000
DGC
$155,000
$275,000
$225,000
GC
$180,000
$600,000+ $300,000
Salary bands in the corporate market tend to be very broad. An individual’s position within a band will depend on a number of factors including background and experience of the individual, size of the organization and its legal function, industry sector and level of management responsibility within the role. Please contact Mahlab for tailored advice. Figures refer to total package including benefits but excluding bonuses and share options.
Sydney
Melbourne
Level 9 6 O’Connell Street, Sydney 2000 T: (02) 9241 1199 E: syd@mahlab.com.au
Level 1, 525 Bourke Street Melbourne Vic 3000 T: (03) 9629 2111 E: melb@mahlab.com.au
www.mahlab.com.au
Tw: @mahlabrecruit.com
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