ISSUE 7.2
Cost cutting Firms get lean‌ and mean
M&A 2009 Distress brings opportunity
Capital markets Rights issues surge
In-house issues:
Corporate lawyers face winds of change
John Carrington, Blake Dawson: The evolution continues n DEALS ROUNDUP n LATERAL MOVES n UK, US REPORTS n news analysis n MARKET STATS
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ISSUE 7.2
EDITORIAL >>
Cost cutting Firms get lean… and mean
M&A 2009 Distress brings opportunity
Capital markets Rights issues surge
IN-HOUSE ISSUES:
In-house counsel: Indispensable – not inferior
A
career in-house is traditionally viewed as a path chosen by those incapable of making it in private practice. Although this is long outdated, in-house counsel remains obsessed with justifying their existence to their respective organisations with stock-standard statements like: “We add value to the business and assist in its risk management”. On the other hand, what partners contribute to a firm is not up for discussion – it’s a given. Could it be that in-house counsel is suffering from a collective inferiority complex? Even today, going in-house is seen largely as a ‘lifestyle’ choice rather than a ‘career’ one – not to mention the fact that the position is not nearly as handsomely remunerated as their partnership peers in private practice. Further evidence of the apparent lack of appreciation of the role is that during the current economic downturn, some in-house counsel jobs have been deemed an unnecessary expense and therefore expendable – especially with outside counsel waiting in the wings to assist when required. Perhaps some of these factors are contributing to in-house counsel’s feelings of insecurity… ? Nevertheless, it appears that the yardstick by which organisations measure the value-add of the in-house legal department is none other than private practice lawyers – thus compounding matters. For example, providing advice at less cost than an external advisor is one way to add value – although it may contribute to the inferiority complex; being better informed than external counsel due to their close association with the business is a second; adopting a number of roles in the company that it would be hard for an external service provider to pull off is a third; and ensuring that external counsel are given proper instructions resulting in highquality outside legal advice is a fourth. In all these instances, external counsel is the benchmark for the provision of legal services and in-house is merely attempting to measure up. However, it has become increasingly clear that the appropriate in-house team not only adds value in their own right, but also are an indispensable part of any corporate management structure. We have seen the rise of partners and partnership candidates opting for in-house roles, making a senior in-house role a viable alternative to partnership. Proctor & Gamble corporate counsel and director Nimalan Rutnam (page 28) asserts that going in-house has better prepared him for a corporate leadership role than private practice would have. He chose in-house over private practice because he wanted to be “more than just a lawyer”. He is an example of someone who did not want to work less hours and have an easier life, but rather to earn a seat at the leadership table and wield more influence, which requires just as much – if not more – effort, energy, commitment and knowledge as a private practitioner.
Corporate lawyers face winds of change
John Carrington, Blake Dawson: The evolution continues DEALS ROUNDUP LATERAL MOVES UK, US REPORTS NEWS ANALYSIS MARKET STATS
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IN THE FIRST PERSON “There is a top tier, but it’s not limited to three… ” John Carrington, managing partner, Blake Dawson, on the ‘big six’
“Recapitalisation across all sectors will continue in the first half of 2009. As credit markets remain challenging, placements and rights issues will dominate” Bill Koeck, partner at Blake Dawson, on the equity markets
“I don’t believe in tendering as, if we were to adopt that approach, every two or three years I would have to spend too much time bringing the new law firm up to speed” Suzanne Reintals, corporate counsel at Origin energy, on using external law firms
… during the current economic downturn, some in-house counsel jobs have been deemed an unnecessary expense and therefore expendable … 2
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25/02/2009 4:13:32 PM
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CONTENTS >>
contents
ALB issue 7.2 50
46 COVER STORY 46 ALB-LexisNexis Managing Partner series: John Carrington, Blake Dawson Taking over the reins at Blake Dawson after the departure of John Atkin, John Carrington has some big shoes to fill. He talks to ALB about his vision for the firm
ANALYSIS 12 Law firm cost-cutting Slash and burn, or just routine fiscal responsibility? Firms speak out on the delicate issue of controlling costs in a downturn 14 Water trading: the new conveyancing? ALB investigates what could potentially be the next major new practice area for lawyers 15 Capital markets: rights issues bring more work – but for how long? IPOs are in the doldrums, but capital raisings are still keeping firms busy – for the moment
FEATURES 28 In-house perspective: Nimalan Rutnam, Procter & Gamble Nimalan Rutnam turned down partnership to go in-house. He tells ALB why 32 In-house issues Corporate counsel spills the beans on what they want – and don’t want – in external legal advisers 36 ALB Guide: Intellectual Property 09 Clients nominate the best IP firms and lawyers in Australia and NZ
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50 M&A 2009 M&A transactions are down, but distressed sellers and opportunistic bidders are sure to keep the deals coming in 2009. ALB investigates 56 Ediscovery: navigating the digital maze There’s more to electronic discovery than an automated ‘search’ key 62 Beyond digital dictation Improving your dictation tools could save your firm considerable cost
REGULARS 6
32
12
DEALS
16 NEWS • Middletons WA: the one that got away • Johnson Winter & Slattery anticipates boost from energy bill • World sees ‘buoyant’ Aussie property market, says Freehills partner • Thomson Playford Cutlers to merge with Dibbs Abbott Stillman • Corrs Chambers Westgarth did not bill A$4m, says partner • Dying breed: Minter Ellison sells off the last major publicly owned airport
• Gilbert + Tobin concerned over competition pricing • Baker & McKenzie acts on first AQUA listing • Victoria: lawyers help bushfire victims • Aussie capital markets work keeps Allens busy
COLUMNS 17 UK report 19 US report 21 IT report 64 Sign off
COMMENTARY 20 NZ update: Buddle Findlay
Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as Australasian Legal Business can accept no responsibility for loss.
australasian legal business ISSUE 7.2
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NEWS | deals >>
deals in brief | AUSTRALIA/UK | ►► Xstrata equity raising A$8.98bn
Firm: Mallesons Stephen Jaques Leading lawyer: Nick Pappas Client: Xstrata • Diversified global mining group Nick Pappas, Xstrata proposed Mallesons GBP4bn equity raising to pay down debt and help fund Prodeco thermal coal asset acquisition from Swiss commodities trader Glencore • Raising was announced to London Stock Exchange and Mallesons handled Australian securities law aspects for Xstrata and undertook the due diligence for Australia, Canada and South America • Mallesons has previously acted for Xstrata on key acquisitions including MIM, Jubilee Mines, Resource Pacific and Cumnock Coal
| AUSTRALIA/US | ►► Wesfarmers capital raising A$2.9bn
Firm: Mallesons Stephen Jaques Lead lawyers: Jason Watts, Evie Bruce Clients: ABN AMRO, Deutsche Bank, Goldman Sachs JBWere, JP Morgan, Macquarie Capital, UBS Firm: Sullivan & Cromwell Lead lawyer: Waldo Jones Clients: ABN AMRO, Deutsche Bank, Goldman Sachs JBWere, JP Morgan, Macquarie Capital, UBS Firm: Blake Dawson Lead lawyer: Sarah Dulhunty Client: Capital
Jason Watts, Mallesons
Waldo Jones, Sullivan & Cromwell
| AUSTRALIA/US |
Sarah Dulhunty,
• Wesfarmers’ Blake Dawson equity capital raising (A$2.9bn) was one of the largest in recent months, incorporating accelerated pro rata entitlement offer, marked by institutional component of A$2bn • Raising also included additional placement of A$900m to two strategic investors and retail entitlement offer
Firm: Allens Arthur Robinson Lead lawyers: Tom Story, Ewen Crouch Client: Wesfarmers Firm: Sidley Austin Lead lawyer: Robert L Meyers
Client: Wesfarmers
• Equity raised will lower debt following acquisition of Coles Supermarkets Tom Story, AAR
►► Newmont MiningBoddington Gold Mine acquisition A$1.67bn Firm: Allens Arthur Robinson Lead lawyers: Igor Bogdanich, Scott Langford, Gerard Woods Client: AngloGold Ashanti
• Sale expected to complete by the end of March 2009, pending finalisation of Newmont’s financing, approval from South African Reserve Bank, Australian Foreign Investment Review Board, among others Igor Bogdanich, AAR
Firm: Watsons Lawyers Lead lawyer: Peter Watson Client: Newmont Mining Firm: Freehills Lead lawyer: Justin Little Client: Newmont Mining
Firm: Wachtell Lipton Rosen & Katz Lead lawyer: David A Katz Client: Newmont Mining Firm: Shearman & Sterling Lead lawyers: George Karafotias, Richard Price Client: AngloGold Ashanti • Newmont Mining Corporation’s acquisition of Boddington Gold Mine in Western Australia included sale of mine owner AngloGold Ashanti’s indirect 33.33% JV interest in Boddington
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• Sale consists of initial US$750m cash payment, another US$240m in cash or Newmont stock (or combination) in December 2009, and royalty of up to US$100m in Boddington’s future production starting in Q2 2010
| Australia, Japan | ►► Asahi-Cadbury beverage acquisition A$1.19bn Firm: Freehills Lead lawyers: Martin Shakinovsky, Kristin Stammer Firm: Baker & McKenzie Lead lawyers: Kristin Stammer, Steven Glanz, Freehills Hiroshi Kondo, Skip Rankin Client: Asahi Breweries • Asahi Breweries’ acquisition of Cadbury’s Australian beverages business involved coordination across numerous practice areas: M&A, intellectual property, IT, Australasian Legal Business ISSUE 7.2
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NEWS | deals >>
►► Your month at a glance Firm
Jurisdiction
Deal Name
AGL Legal
Australia
AGL-Sydney Gas takeover bid
186
M&A
Allens Arthur Robinson
Australia
APA Group infrastructure vehicle establishment
700
Infrastructure
International
Monster Worldwide-News Limited JV
N/A
TMT, JV
Australia, US
Newmont Mining-Boddington Gold Mine acquisition
1,660
Australia, US
Wesfarmers capital raising
2,900 Equity
Australia, Japan
Asahi-Cadbury beverage acquisition
1,190
Australia
Australian Drilling-Colby-Peak private equity acquisitions
N/A
PE, energy & resources
Australia
ETF Metal Securities AQUA listing
N/A
Equity
Australia
Vectis-Espreon takeover offer
33
M&A
Australia
IOOF-Australian Wealth Management merger
N/A
M&A
Baker & McKenzie
Blake Dawson
“This is one of the most significant transactions in the Australian nonalcoholic beverages industry. It gave rise to a number of challenging commercial and legal issues and required us to navigate an array of complex brand and other contractual rights” Martin Shakinovsky and Kristin Stammer, Freehills environmental and employment • Completion of the transaction subject to right of negotiation granted by Cadbury to The Coca-Cola Company in 1999
Steven Glanz, Baker & McKenzie
• Provision gives Coca-Cola the right to negotiate a competing transaction with Cadbury until March 2009
A$m Practice
Energy & resources, M&A M&A
Australia, US
Wesfarmers capital raising
Brown Partners
New Zealand
Downer EDI Excell-McFall acquisition
N/A
M&A
Chang, Pistilli & Simmons
Australia
APA Group infrastructure vehicle establishment
700
Infrastructure
Chapman Tripp
New Zealand
Downer EDI Excell-McFall acquisition
N/A
Equity, M&A
Corrs Chambers Westgarth
Australia
AGL-Sydney Gas takeover bid
186
M&A
Deacons
International
Monster Worldwide-News Limited JV
N/A
JV
Australia, Canada
NEMI-Aviva proposed merger
Australia, US
HeartWare redomiciliation
Australia, Canada
NEMI-Aviva proposed merger
Australia
APA Group infrastructure vehicle establishment
Australia, Japan Australia
DLA Phillips Fox
Freehills
2,900 Equity
22
M&A
N/A
Health
22
Energy & resources
700
Infrastructure
Asahi-Cadbury beverage acquisition
1,190
IP, IT, M&A
Brisbane Airport divestment program
1,030
Equity, property, M&A
Australia, US
Newmont Mining-Boddington Gold Mine acquisition
1,660
Energy & resources, M&A
Australia
AGL-Sydney Gas takeover bid
Australia
Brisbane Airport divestment program
1,030
Henry Davis York
Australia
BMW-RMB automotive loan portfolio acquisition
N/A
M&A
HopgoodGanim
Australia
Cape Alumina IPO
15
Equity
Kensington Swan
New Zealand
Datacom Identity Verification Service
15
IT
New Zealand
Downer EDI Excell-McFall acquisition
N/A
M&A
Australia
APA Group infrastructure vehicle establishment
700
Infrastructure
Australia
IOOF-Australian Wealth Management merger
N/A
M&A
Australia
Vectis-Espreon takeover offer
33
M&A
Gilbert + Tobin
Mallesons Stephen Jaques
186
M&A Equity, property, M&A
Australia, US
Wesfarmers capital raising
2,900 Equity
Australia, UK
Xstrata equity raising
8,981
Equity
• In 1990 Baker & McKenzie acted for Asahi on the 19.9% stake acquisition in brewer Elders IXL, which later became Foster’s Group www.legalbusinessonline.com
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NEWS | deals >>
| Australia, Japan |
►► Your month at a glance (cont) Firm
Jurisdiction
Deal Name
A$m
McCullough Robertson
Australia
Big River Timbers–Cukuna Sales acquisition
Australia
CBio pro-rata rights issue
15 4 10
Practice M&A Corporate
Australia
GBST–Emu Design acquisition
Australia
Occupational & Medical Innovations private placement
Minter Ellison
Australia
Brisbane Airport divestment program
1,030
Minter Ellison Rudd Watts
New Zealand
Datacom Identity Verification Service
15
Peter Lark & Co
Australia
Australian Drilling-Colby-Peak private equity acquisitions
Shearman & Sterling
Australia, US
Newmont Mining-Boddington Gold Mine acquisition
1,660
Energy & resources, M&A
Sidley Austin
Australia, US
Wesfarmers capital raising
2,900
Equity
Skadden
Australia
QBE Insurance-QBE Capital exchange
700
Securitisation, insurance
Soloman Brothers
Australia
Australian Drilling-Colby-Peak private equity acquisitions
N/A
Energy & resources
Sullivan & Cromwell
Australia, US
Wesfarmers capital raising
2,900
Equity
Wachtell Lipton Rosen & Katz
Australia, US
Newmont Mining-Boddington Gold Mine acquisition
1,660
Energy & resources, M&A
Watsons Lawyers
Australia, US
Newmont Mining-Boddington Gold Mine acquisition
1,660
Energy & resources, M&A
N/A
N/A
M&A Health, Equity M&A, Government IT Energy & resources
Does your firm’s deal information appear in this table? Please contact
alb@keymedia.com.au
61 2 8437 4700
►► CORRECTION
In issue 6.12, the ALB Guide: Infrastructure 2008 suggested that after a competitive process, Yilgarn Infrastructure would oversee construction of the Oakajee Port & Rail Project. Oakajee Port & Rail Consortium, comprising of Mitsubishi and Murchison Metals, was in fact declared the successful bidder in August 2008, advised by a team of lawyers from DLA Phillips Fox, led by partner Robert Edel. In the Brisbane Report feature of issue 7.1, certain commentary was attributed to “Herbert Geer partner Ian Wright”. The correct attribution should have been to Ian Commins, Special Counsel at Herbert Geer. Ian Wright was not a partner at Herbert Geer at the time of publication and was not interviewed for this piece. Also the photo of Patrick Mead states that he is from Mills Oakley, he is in fact a partner at Carter Newell. ALB apologises for the error. In the news story, South Australia: the new frontier, the photo of Simon Fraser states he is from Buddle Findlay. Simon Fraser is in fact a partner at Blake Dawson as is indicated in the story.
| Australia | ►► Brisbane Airport divestment program A$1.03bn Firm: Minter Ellison Lead lawyers: Andrew Rentoul, Bruce Cowley, Cameron Charlton Client: Queensland Government.
Andrew Rentoul, Minter Ellison
Firm: Freehills Lead lawyer: Simon Haddy Client: Private Capital Group
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Infrastructure Fund (financing) Firm: Gilbert + Tobin Lead lawyers: John Schembri, Caroline Power Client: Private Capital Group Infrastructure Fund (banks)
Asset Management and UniSuper (completed October 2008)
• Sale results reflect the continuing willingness of investors to buy quality infrastructure assets despite the world economic downturn
• Included long-term lease (A$208.8m) of Mackay Airport sold to consortium Private Capital Group's The Infrastructure Fund (completed December 2008) and sale of Cairns International Airport’s long-term lease (A$530m) to consortium (completed January 2009).
• Program involved sale of 12.4% stake (A$289.4m) in Brisbane Airport to existing shareholders including Industry Funds Management, Schiphol Australia, Colonial First State
• Proceeds from sale of shares in Brisbane Airport and long-term leases of Cairns and Mackay airports were earmarked for new and expanded hospitals in Cairns, Mackay and Mt Isa
►► APA Group infrastructure vehicle establishment A$700m Firm: Chang, Pistilli & Simmons Lead lawyer: Jason Mendens Client: APA Group Firm: Allens Dominic Arthur Robinson Bortoluzzi, Lead lawyer: Phillip Mallesons Cornwell Clients: ANZ, Westpac, CBA, BNP Paribas, Bank of Tokyo-Mitsubishi, Sumitomo Mitsui Firm: Mallesons Stephen Jaques Lead lawyer: Dominic Bortoluzzi Client: Energy Infrastructure Investments Firm: Freehills Lead lawyers: Robert de Boer, Andrew Blacoe Clients: Marubeni Corporation, Osaka Gas Company • Firms worked for eight months on establishing the APA Group's new infrastructure vehicle called Energy Infrastructure Investments • Transaction was challenging due to the global financial crisis and various complexities involving the sale of assets, such as coal steam gas processing plants, power facilities and pipelines • Deal was intensive due to tight credit markets and had diverse assets leased into the fund with numerous project financings • Deal involved investment by Marubeni Corporation and Osaka Gas Company, whereby APA Group retained a 19.9% interest in the vehicle
| Australia, US | ►► QBE Insurance-QBE Capital exchange A$699.7m Firm: Skadden Lead lawyers: Adrian Deitz, Christopher Kell Client: QBE Insurance Group • QBE Insurance Group offered to exchange US$301.11m of
Adrian Deitz, Skadden
Australasian Legal Business ISSUE 7.2
25/02/2009 9:58:55 AM
NEWS | deals >>
capital securities of QBE Capital Funding II L.P. for US$210.77m of US dollar 9.75% senior notes due 2014 of QBE • QBE Insurance Group also offered to exchange £272.5m of capital securities of QBE Capital Funding L.P. for £190.7m of Sterling 10.00% senior notes due 2014 of QBE • US dollar and Sterling senior notes have also been listed on the Irish Stock Exchange • Transaction involved complex range of cross-border issues across a number of jurisdictions: Australia, US and Ireland
| Australia | ►► AGL-Sydney Gas takeover bid A$186m
Firm: Corrs Chambers Westgarth Lead lawyers: Braddon Jolley, Sandy Mak, Jaclyn Riley-Smith Client: Sydney Gas Firm: Gilbert + Tobin Lead lawyers: Gary Lawler, Philip Breden Client: AGL Energy Firm: AGL Legal Lead lawyer: John Fitzgerald Client: AGL Energy
target's statement on 19 January 2009, AGL had a 63% interest in Sydney Gas through acceptances and on-market acquisitions
Gary Lawler, Gilbert + Tobin
• The Corrs team facilitated an offer, which contained minimal conditions and imposed limited obligations on Sydney Gas under its implementation agreement with AGL
We have experience in placing lawyers in Singapore, Hong Kong, China, the Middle East, UK as well as throughout Australia. Our clients include a mixture of UK, US and Australian firms and an impressive list of multi-national companies. All our consultants are former lawyers who have lived and practised in a variety of countries in Asia, Australia, UK and the Middle East. We have placed lawyers with law firms and multinational organisations in all these regions and are able to offer expert adice on:
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• Offer is open until 13 February 2009 unless extended
| Australia, Asia, US, Middle East | Philip Breden, Gilbert + Tobin
• AGL Energy’s off-market takeover bid for Sydney Gas has been unanimously recommended by the Sydney Gas board • When Sydney Gas lodged its www.legalbusinessonline.com
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"We had a legal structure that delivered pre-bid commitments from the major shareholders, plus an offer structure that allowed AGL to buy Sydney Gas shares onmarket before its offer was sent to shareholders. This facilitated AGL obtaining voting power in Sydney Gas of 50% by 2 January, having only announced the offer on Christmas Eve – a good outcome" Philip Breden, Gilbert + Tobin.
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►► Monster Worldwide-News Limited JV Firm: Deacons Lead lawyer: Tim Flahvin Client: Monster Worldwide Firm: Allens Arthur Robinson Lead lawyer: Kylie Brown
Suite 606, 343, Lt. Collins Street, Melbourne Victoria 3000, AUSTRALIA TEL: +613 9029 6303 FAX: +613 8610 1662 AUSTRALIA
ASIA
UNITED KINGDOM
www.dtassociates.com.au 9
25/02/2009 9:59:11 AM
NEWS | deals >>
"The volume – over 10,000 finance facilities – and diversity – loans, leases and hire purchase agreements – [of work on the BMW-RMB automotive loan portfolio acquisition] created practical difficulties in documenting the mechanism for calculating the amount outstanding on which the purchase price was based, including some interesting GST issues. These were overcome by working very closely with management, Caliburn and PwC to gain a full appreciation of the complexities" Ben Mortimer, Henry Davis York
Client: News Limited • US-based recruitment firm Monster Worldwide and media corporation News Limited in 50/50 joint venture, where Monster will combine with CareerOne • Deal will combine News' strategic marketing ventures with Monster's technological component to tap into the competitive recruitment market • JV follows Monster Worldwide’s recent US$175m acquisition of ChinaHR.com in a move which boosted its position in the Asia market
| New Zealand | ►► Downer EDI Excell-McFall acquisition Firm: Kensington Swan Lead lawyers: Rob Noakes, Marilyn Wright Client: Downer EDI Works Firm: Chapman Tripp Lead lawyer: John Strowger Clients: Excell Corporation Firm: Brown Partners Lead lawyer: Gerard Brown Client: Transpacific Industries Group (NZ)
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John Strowger, Chapman Tripp
• Downer EDI Works acquired Excell Corporation and McFall Enterprises and then sold environmental management services part of business to Transpacific Industries Group • Excell's environmental management business, forming 25% of the company, will be absorbed by Transpacific Industries
| Australia | ►► BMW-RMB automotive loan portfolio acquisition Firm: Henry Davis York Lead lawyers: Ben Mortimer, Grahame Cooper Client: RMB Australia Holdings Firm: Minter Ralph Ayling, Ellison Minter Ellison Lead lawyer: Ralph Ayling Client: BMW Australia Finance • BMW Australia Finance acquired a substantial Australian automotive loan portfolio owned by RMB Australia Holdings (trading as MotorOne Finance) • Transaction was structured as an asset sale and required resolution of complex formulas for price calculations and adjustments, assignment, Uniform Consumer Credit Code, privacy and GST issues
Gerard Brown, Brown Partners
• Henry Davis York’s team worked on the sale process for 11 months
| Australia | ►► ETF Metal Securities AQUA listing Firm: Baker & McKenzie Lead lawyer: Bill Fuggle Client: ETF Metal Securities Australia • ETF Metal Securities Australia was first to list on the new AQUA platform
Bill Fuggle, Baker & McKenzie
• Listing included five new structured products, one of which is ETFS Physical Gold – the first product to be moved from ASX to AQUA • Five securities give investors beneficial interests in gold, silver, platinum, palladium which have different price performance compared to shares (eg, gold value rising, share value falling) • Equity listing rules continue to apply to A-REITS and Warrant Rules continue to apply, but other new products are capable of trading on the ASX markets under the AQUA Rules
• HeartWare’s redomiciliation in the US saw HeartWare International become the new parent company of HeartWare Group
Catherine Merity, DLA Phillips Fox
• Only been a handful of similar transactions in the past decade and almost all were simpler as various exemptions were David Morris, relied on by DLA Phillips Fox the Australian company, due to it being a foreign private issuer for US securities law purposes • Transaction involved admitting HeartWare International to the ASX and listing its common stock in the form of CHESS Depository Interests (CDIs) • Transaction was effected through three schemes of arrangement in respect of shares, options and performance rights
| Australia, US | ►► HeartWare redomiciliation Firm: DLA Phillips Fox Lead lawyer: David Morris, Catherine Merity Client: HeartWare Australasian Legal Business ISSUE 7.2
25/02/2009 9:59:14 AM
Firm Profile NEWS | deals >>
Gilbert + Tobin.
Short selling – the current regulatory environment Introduction Since September 2008, significant regulatory changes have occurred in response to concerns that extensive short selling of shares has contributed to extreme market volatility. These changes effectively prohibit naked short selling and certain “covered” short selling. A disclosure regime has also been implemented in relation to short selling transactions involving securities lending arrangements.
What is short selling? Short selling involves a person selling financial products that they do not own at the time of sale. The rationale behind this is that the person expects the price will decline, allowing them to purchase the financial products at a lower price than they were sold for. Section 1020B(2) of the Corporations Act 2001 (Cth) prohibits the sale of securities, managed investment products and certain other prescribed financial products (together, Section 1020B Products) unless at the time of sale the person has a “presently exercisable and unconditional right to vest” the products in the buyer. That is, the person must have the power to direct a transfer of the products, and that transfer must provide the person with the absolute ability to give the buyer title to the products. Where this right to vest arises as a result of securities obtained under a securities lending arrangement, ASIC requires the lender to give the borrower, at the time of sale, a legally binding commitment to deliver the products.
What is the practical effect of the changes? Three key changes have been effected through ASIC Class Orders and the introduction of the Corporations Amendment (Short Selling) Act 2008 (Cth) (the Amending Act), as set out below.
(a) Repeal of previously existing exceptions to the prohibition on short selling The 5 former exceptions to the s 1020B(2) prohibition on short selling have been repealed, with effect from 8 January 2009. The only exception that survives is that which was formerly s 1020B(4)(c). www.legalbusinessonline.com
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Accordingly, even if a seller of Section 1020B Products does not have a “presently exercisable and unconditional right to vest” the products in the buyer at the time of sale, they may still sell those products if they entered into a contract to buy those products before the time of sale and have a right to have those products vested in the person that is conditional only upon all or any of the following: • payment of the consideration for the purchase; • the receipt by the person of a proper instrument of transfer in respect of the products; and / or • the receipt by the person of the documents that are (or are documents of title to) the products. Further exemptions to the prohibition, are set out in ASIC Class Orders CO 08/764 and CO 09/1051.
(b) General prohibition of short selling of financial securities where securities lending arrangements are in place If the seller’s presently exercisable and unconditional right to vest the security or product in the buyer arises because of a securities lending arrangement entered into before the time of sale, ASIC Class Order CO 08/751 prohibits short selling of certain securities, being those in the S&P/ASX 200 Financials and shares in 5 specified companies with APRA regulated businesses (together, Financial Securities). ASIC has indicated that the ban on this kind of “covered short selling” of Financial Securities is expected to continue until 6 March 2009. The following transactions are exempt from this prohibition: • hedging by market makers to manage the financial consequences arising from their market making activities; • selling Financial Securities as part of a dual listed entity arbitrage transaction or index arbitrage transaction; • managing the risk of underwriting dividend reinvestment plans, share purchase plans and convertible bonds and hybrids; and • hedging to manage the financial consequences of pre-22 September 2008 exposures.
(c) Enhanced disclosure requirements A greater level of disclosure requirements has also been introduced. Class Order CO 08/751 requires certain disclosures in respect of sales of s 1020B products, and Schedule 3 of the Amending Act introduces disclosure requirements in relation to short sales covered by securities lending arrangements of listed Section 1020B Products. As of 30 January 2009, the commencement date of Schedule 3 had not been specified.
The view from here The changes introduced by the Class Orders and the new legislation provide a level of comfort to market participants and their advisors in relation to the short selling regulatory environment. It seems that the regulatory regime is, at least for now, fairly certain. How the market will react to the commencement of the disclosure requirements in Schedule 3 of the Amending Act and the lifting of the ban on “covered short selling” of Financial Securities remains to be seen. Authors: Jason Lambeth (Partner, Gilbert + Tobin); Emma Ringland (Lawyer, Gilbert + Tobin) and Jade Droguett (Lawyer, Gilbert + Tobin)
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25/02/2009 9:59:15 AM
NEWS | analysis >>
ANALYSIS
Fiscal responsibility: order of the day Managing a firm in a downturn means managing expense. But as firms tell ALB, that’s not necessarily a bad thing
I
t is possible, we’re told, to gauge the state of Australia’s economy from the difficulty one encounters in securing a reservation at Melbourne’s more salubrious restaurants. And, according to one partner in the know, the prognosis is not good. Whether justified or not, the perception is that times will become yet leaner. Fiscal responsibility has, therefore, become the order of the day.
Discretionary costs
The downturn provides an opportunity for firms to do the housekeeping they were too busy to do in boom times, said Holding Redlich managing partner Chris Chris Lovell, Lovell. “There are a lot Holding Redlich of totally discretionary costs that we should have looked at
before but we overlooked because everyone was too busy. Things like IT add-ons and tools which frankly I’m not sure people were using anyway. We have also postponed some IT upgrades and scaled back some marketing functions – we still have them, but not as many.” Lovell said that the firm has also made good savings by implementing proper inventory control over items such as stationery and food. “We’re careful not to upset the culture of the firm,” he said. “We certainly don’t want to compromise the integrity and robustness of the business. But there were a lot of frills and fripperies for which there was no glaring demand.”
Flexible overhead
Efficient and flexible use of resources, rather than cost control alone, is a key value at Corrs Chambers Westgarth.
Corrs CEO John Denton described strong control of overheads as “a critical part of the firm’s DNA” which applied regardless of the prevailing economic climate. Corrs particularly places great store in the efficient use of its workforce without any geographical barriers. The firm has increased its investment in IT and business information systems this year, believing that the John Denton, expense is outweighed by Corrs the improved integration and efficiency of its national offices. The firm has no physical offices overseas, which means there are no fixed costs associated with maintaining premises. “It’s a relationship-based approach rather than an [office-based] one,” said Denton.
►► Word on the street
With cost-cutting such a sensitive issue, a great deal of information was received ‘off the record’ or not verified by the firm in question. Here are some of the more interesting snippets – with names taken out to protect the innocent. • A few firms are understood to be attempting to sublet their premises. It is not clear whether this is because of redundancies or surplus space unrelated to the downturn. • Another firm has adopted a policy of discouraging ‘open ended’ travel bookings. Savings can be made by purchasing airline tickets with a specific return date and time. • Firms are quietly looking into the credit-worthiness of potential clients prior to accepting their business. Prompt payment is also increasingly ‘encouraged’. • At one top-tier firm, lawyers have been admonished for use – or abuse – of taxi and meal facilities provided for those working late. Lawyers had reportedly been collecting a free meal from the firm’s kitchens in the evening – and then disappearing homeward.
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Australasian Legal Business ISSUE 7.2
25/02/2009 12:15:06 PM
NEWS | analysis >>
“There were a lot of frills and fripperies for which there was no glaring demand” Chris Lovell, Holding Redlich Disbursements
Clients looking to cut costs are placing increased pressure on firms to bear the cost of disbursements. Take the mundane matter of photocopying for example. “Larger firms producing in excess of five million copies per annum absorb 20–50% of the photocopying disbursements that might have been on-billed to their clients. This cost can quickly have a negative impact on their profitability,” said Val Pitt, director of LitSupport, a company that provides firms with outsourced print and copy services. Clearly, improving print room and copy centre efficiency is a priority – but are firms in a position to make such an investment at a time when expenditure on ‘non-core’ internal functions is being increasingly deferred? Firms such as Corrs that have outsourced their copy and print functions avoid this particular problem. While print centres are still located on Corrs’ premises, the operations are managed by LitSupport. The result is a saving in staff recruitment, training and management costs for Corrs, as well as access to additional off-site resources when greater capacity is needed for urgent deadlines.
Rents down?
The latest figures from the Property Council of Australia showed a dramatic rise in the vacancy rates for office buildings across Australia – in fact the sharpest six-month jump in 17 years. The national vacancy rate for CBD properties was 5% last month, up from 3.4% six months ago. All these statistics bode well for firms due to renegotiate their leases. AAR in Melbourne recently signed a 12-year lease on office space at a planned development at 567 Collins St, Melbourne. The bargaining power of the respective parties was perhaps www.legalbusinessonline.com
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►► Office space: the silver lining? While many law firms are locked into long-term leases, those due at the negotiating table may take heart from higher vacancy rates across Australia. The only exception is Adelaide – let’s hope Blake Dawson got a good deal on their new lease last year. Market
Vacancy rate – Vacancy rate – Jan 2009 (%) July 2008 (%)
Vacancy rate – January 2008 (%)
Perth CBD
1.3
0.3
0.5
Hobart CBD
2.8
n/a
2.2
Adelaide core
3.4
4.0
4.3
Brisbane CBD
4.2
1.2
0.7
Melbourne CBD
4.8
3.1
4.4
Sydney CBD
5.4
4.3
3.7
Canberra
8.5
6.1
2.2
Average
5.0
3.4
3.0
Source: Property Council of Australia
demonstrated by subsequent rumours that the development was on the verge of being cancelled owing to a lack of prospective tenants – rumours which are now understood to have been scotched by the securing of more tenants. But it does not follow that firms are picking up Melbourne tenancies at bargain prices. “Melbourne was never as tight a market as Sydney or Brisbane,” said one partner. “Certainly if your firm’s lease is coming up for renewal in either of those cities, you’ll get a better deal than 12 months ago, but Melbourne is coming off a lower base.” Another market where firms cannot expect much relief is Perth – still the tightest Australian market for office space, with a 1.3% vacancy rate. One firm that will be keeping a close eye on the market is HWL Ebsworth, which currently operates its Brisbane practice out of two offices – the legacy of an earlier merger which was never consolidated in one place because of the notoriously tight Brisbane CBD property market. With vacancy rates recently rising to 4% – the highest level since early 2005 – the firm may now be
in a position to consider shopping for a new home and saving some overhead costs along the way. Meanwhile, vacancy rates in the Auckland CBD are also continuing to rise, partly due to a number of office developments coming online. Some commentators are predicting vacancy rates of up to 10% by the end of the year.
Debt
Clifford Chance recently took steps to shore up its finances by calling for capital contributions from its partnership. DLA Piper also looked at partner contributions as part of a raft of measures to minimise the firm’s exposure to bank debt. But is debt an issue for firms in Australia and NZ? “There are some firms that I’d imagine should be having a very close look at their debt levels,” said one partner. “You must manage cash flow well and keep debt low to be financially secure.” Another partner disagreed: “Apart from when a firm expands beyond its means, I don’t see [debt] as a major issue for the industry. If anything, the banks should be wanting to see more of us.” ALB 13
25/02/2009 12:15:06 PM
NEWS | analysis >>
ANALYSIS
Water trading: The new conveyancing With the trade in permanent water entitlements and seasonal water allocations exceeding A$1.5bn and rising, could water become the new conveyancing for lawyers?
T
he arrival of Captain Arthur Phillip in Australia 221 years ago not only brought a fleet carrying English convicts but – among other things – a heritage of statutory and common law rules governing the sale of land, which was eventually superseded by the introduction of the Torrens system in 1858. Yet, despite water making up 70% of the earth’s surface, the rules governing the trade of water in Australia are still largely underdeveloped. Severe water shortages, however – particularly in the Murray-Darling Basin – have created the need for policy makers to devise a framework to allow stakeholders to trade water entitlements efficiently and profitably. Ironically though, Australia’s legacy of sale of land principles is firmly entrenched, and these have become the cornerstone of this policy development. According to Lawlab CEO Ian Perkins, the rules governing the trade of water are still in the developmental stage,
while real estate is a mature market that also has entrenched principles which can be applied to the nascent water trading market. “Common themes exist for both conveyancing of land and conveyancing of WAE. Rather than attempt to develop new best practice conveyancing processes for the sale of WAE, it is feasible to promote a more efficient WAE market, modelled on mature real estate conveyancing processes,” Perkins says. The trade of water entitlements has been possible in states since the 1980s, with the Murray-Darling Basin Commission establishing the Pilot Interstate Water Trade Project in the 1990s to explore trade between states to the south of it. This was followed by the expansion of interstate trade in 2006. Indeed, from a practical standpoint, standard documents can be used in WAE conveyancing based on standard sale of land documents such as: Contract between principal and agent, sales advice from agent
►► Six Similarities between land and water conveyancing
Issues in relation to Water Access Entitlement (WAE) market participants, such as regulation on intermediaries are in common with the land market. In fact the behaviour of solicitors and financial institutions is regulated by the same legislation for both WAE and land. Similarly, solicitors already carry professional indemnity insurance which may be a market participant’s only protection in certain circumstances. 1) Financial Institutions lend money using mortgages on land and WAE to secure the loans 2) Agents – agents involved in WAE trades often began in business as real estate or stock and station agents, and they are familiar with the conveyancing and land processes 3) Solicitors – rural solicitors who usually act in WAE conveyancing are highly experienced in land conveyancing 4) Registries – Often the same registry manages land and water, eg, VIC, NSW and Queensland 5) Sellers – even if a seller has not bought or sold WAE, they have often bought and sold land; and 6) Buyers – even if a buyer has not bought or sold WAE, they have often bought and sold land.
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notifying solicitor of trade, due diligence enquiries, contract for sale of WAE, leases and mortgages. And the similarities do not end there:
Investigating title
A system of conveyance is designed to ensure that the buyer secures title to the land along with all the rights that run with it, and is notified of any restrictions in advance of purchase. According to Perkins the exact same principles apply to the trade of water entitlements “All water is not the same,” he states. “As with a house, a WAE must be verified and inspected to discover its location, its limitations, its security and the numerous attributes given to it by the relevant water authority. Like a house too, even water in the same neighbourhood may have certain things attached to it that makes it more desirable – or less – than those around it. When buying a house, we know it’s important to check with the local council for details that may affect the land, such as zoning. A WAE may have just as many hidden differences: It may already be leased or mortgaged; it may have future obligations to return water to another party – like a snowy borrow – or the opposite may be true and there may be suspended allocations or carryover attached to the licences under review,” he adds.
Profitable enterprise
Policy makers involved in water reform Australasian Legal Business ISSUE 7.2
25/02/2009 12:15:08 PM
NEWS | analysis >>
ANALYSIS
Surge in rights issues brings more work – but for how long? As business conditions continue to deteriorate, capital markets practices are expecting the recent surge of rights issues to continue. Unfortunately the same cannot be said for IPOs. Cabral Douglas investigates
are also looking for improvements in the maturing water market such as increased confidence for investors, streamlining the process and efficiency of operations. Commissioner for Water Security (SA) Robin McLeod would like to see more trading between states. “I am a big advocate of interstate trade that would enable water to go to the most efficient uses. I would like to see the caps on trading lifted, so we have encouraged other state jurisdictions and our own water corporation to do that here,” she says. In order to achieve this, the Water Act 2007 enables the Commonwealth, in conjunction with the Basin States, to manage the Basin water resources in the national interest. More importantly, it also sets out Basin water market trading objectives and principles, which aim to facilitate efficient water market trading objectives in the Murray-Darling Basin. According to McLeod, as policy develops, water trading will emerge as a substantially profitable enterprise. “If the market is working properly, your water is valued at the rate the market is willing to pay for it. So you can decide if you want to put your water into crops or on the market. I am a strong believer that the market will operate if we give it the right tools and set it up in a robust transparent fashion whereby everybody can play evenly in it,” she says. ALB For more information please visit: http:// watercongress.infrastructurenewsonline.com.au www.legalbusinessonline.com
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S
ince the year began, Australian-listed companies have raised an impressive $10.5bn in capital. In the face of bearish market conditions, surprisingly, this figure puts ASXlisted companies on pace to eclipse the $61.8bn raised in the last financial year. The combination of a frozen debt market and reduced profit expectations has effectively forced companies to tap into equity markets in droves, keeping capital markets practice groups busy and helping to compensate for the sharp reduction in IPOs coming on stream as a result of persistent market instability and asset devaluations.
Placement and rights issues to dominate
However, unlike previous capital-raising frenzies during the days of the bull market, which were largely to finance expansion, this time around many Brendan Groves, companies have been Clayton Utz forced to act from a position of relative weakness to secure their own survival while a minority of others, sporting strong balance sheets, have sought to bolster their defences. According to Clayton Utz partner Brendan Groves: “The debt markets are effectively closed, so many companies who need to repay debt – whether it be bank debt or bonds due – have no choice but to raise funds. And often when debt refinancing is not available, the only option is to go to the equity capital markets to sraise them.”
►► The year’s first IPO
Treyo Leisure and Entertainment Limited was the first Australian IPO for 2009 and one of only four listed this year. Treyo Leisure and Entertainment Limited (ASX:TYO) commenced trading on the ASX on 7 January 2009, with a market capitalisation of A$75m. Treyo’s wholly owned subsidiary Matsuoka Mechatronics, an entirely foreign-owned company in the People’s Republic of China, manufactures and markets automatic mahjong tables under the trademark Treyo, and is an industry leader. In 2007, the company had a market share of around 65% of the premium end of the market for automatic mahjong tables and received revenues in excess of A$66m. Proceeds of the offer will be used to progress Treyo’s business goals over the next three years. The transaction was led by Deacons partner Michael Wilton, with partner Ian McCubbin, and lawyers Neil McCann, Steven Yu and Chris Mitchell making significant contributions.
As a result, capital market practice groups are expecting the flurry of capital raisings to continue through the first half of 2009. Blake Dawson capital market partner Bill Koeck is among a long list of capital market lawyers who is staying abreast of the affairs of his largely blue-chip clients. “Recapitalisation across all corporate sectors will continue in the first half of 2009. As credit markets remain challenging, placements and rights issues will dominate,” Koeck declares.
Lawyers playing critical role
In addition to the increased workload, the unstable market conditions have placed even greater importance on the role of legal advisors entrusted to guide companies through the complex regulatory framework involved in conducting a successful rights issue 15
25/02/2009 12:15:08 PM
NEWS | analysis >>
news in brief >> Worried lawyers hit Google to research redundancies Recent statistics from Google have shown a near fourfold increase in the number of users searching the term ‘law firm lay-offs’. Not surprisingly, the spike started in September 2008 with the global economic meltdown. The number of ‘law firm lay-off’ queries reached a plateau during Christmas but started again on a steady climb in January this year. Most of them are coming from the US and Canada. There were 431 reported redundancies globally in November, declining to 388 in December and then rising rapidly to 783 in January. In the face of firm official denials to the contrary, there has been persistent speculation that Asia will be the next region to feel the heat. Blake Dawson retrenches property lawyers Blake Dawson has retrenched four property lawyers in what the firm describes as “changes in the work flow” at the Sydney office. This is just one example of a line of casualties that has seen similar lay-offs at other firms. Deacons let go 15 property and finance lawyers, while DLA Phillips Fox recently retrenched 12 lawyers. Blake offered them all counselling and career transition advice as part of its employee assistance program. Blake is not ruling out the possibility of further redundancies, although its busy insolvency and restructuring practice should put it in a relatively stronger position compared to other firms more reliant on ‘boom-time’ practice areas. Baker & McKenzie to cut jobs in London Baker & McKenzie is one in a long list of international firms to announce redundancies. The firm recently confirmed lay-offs in 20 legal positions in London, including both associates and paralegals. According to published reports, these cuts have affected a number of practice areas, including corporate. Over the last six months, managing partner Gary Senior has seen the drop in the firm’s business that prompted it to review its legal and support services. The cuts mean that Bakers has become one of a growing number of US firms to formally reduce staff numbers in London. White & Case, Reed Smith, Cadwalader, Wickersham & Taft, Dechert and Orrick, Herrington & Sutcliffe have all announced lay-offs, with Chadbourne & Parke recently confirming that up to six support positions could go.
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►► Top 10 capital Raisings this year – Value (A$) Westfield Wesfarmers Suncorp Newcrest Mining Qantas Macquarie Office Tabcorp ING Office Fund Lend Lease Commonwealth Office
2.90bn 2.80bn 0.90bn 0.75bn 0.50bn 0.48bn 0.45bn 0.41bn 0.30bn 0.19bn
Source: Dealogic, UBS
during what has amounted to a very distressing period for clients. “We are certainly playing a critical role in assisting the issuers to ensure that there are no surprises. One of our main priorities is to make sure the company has undertaken a proper process, so that there isn’t a profit downgrade shortly after the shares Bill Koeck, are issued, or an adverse Blake Dawson event which should have been foreseen and disclosed to the market,” he said. The sharp rise in class action suits reported since the financial crisis began has contributed to the increased levels of pressure put on company boards, and this has highlighted the need for extra diligence on the part of capital markets lawyers. “The boards are nervous about their own liability and they are looking to us to satisfy them that the proper inquiries have been made and the proper work done … otherwise there will be a class action. If you get it wrong and there is a lot of money lost, you must assume that the directors will be held accountable,” Koeck states.
Discounts unprecedented
Notwithstanding rising concerns about the dilution of share values for existing shareholders resulting from these rights issues, Clayton Utz partner Brendan Groves says the enormous discounts have generally made it a mutually beneficial proposition for both the company conducting the equity raising and the shareholders who choose to participate in them, which explains why many large cap issues have been oversubscribed. “The best thing for companies to do is to go
back to the shareholders. This is why we are seeing rights issues emerge as the preferred method of undertaking capital raisings to repay debt. It makes sense to go back to the shareholders who already have an investment in businesses they think are quality companies, and who would be prepared to put more money in to repay debt and assist them to strengthen balance sheets. Reinvesting at discounted share prices also enables investors to average down their investment,” Groves adds. According to Koeck, the extent of the discounts resulting from the current spate of rights issues has yet to be determined. “How big those discounts are will depend on the results the companies announce on two critical dates – one in February and the other in August. Whether they are still looking good in light of the impairments that companies will have to disclose – which will hit their profit and loss statement – remains to be seen,” he said. In any event, current market conditions have certainly forced investors, both institutional and retail, to become more selective about where they put their money, which may well prove challenging for them in light of the numerous opportunities available. However, according to Koeck, there is quite a significant amount of cash in search of a home. “There is a lot of cash available, and even if you just focus on one aspect, such as the monthly superannuation – that just keeps rolling in to the institutions and the super funds – they’ve got to park it somewhere. These funds have very tight restrictions on what they can invest in, but many of them are not so constrained if they are investing in things in which they already hold shares,” he explains. Koeck has also noticed an unusually high level of retail participation during the current frenzy. “Both the retail investors and institutions are very much attracted to the substantial discounts offered during these rights issues. If you take retail for example, they are talking about some levels of participation at between 40–60% which are very high – and almost unheard of,” he adds.
IPOs suspended
While rights issues are thriving, the Australasian Legal Business ISSUE 7.2
25/02/2009 12:15:10 PM
NEWS | analysis >>
increased competition for equity funds coupled with the severe devaluation of assets has resulted in another traditionally strong area of work for capital market practices slowing to a halt – namely IPOs. Deacons partner Tim Flahvin is not expecting IPO activity to pick up any time soon. “We aren’t expecting a good year at all,” he says. “I think it’s going to be a difficult one for IPOs… one problem for companies looking to raise new capital is they are competing with blue-chip stocks, which are at an all-time low.” Groves is in agreement: “At the moment, either investors already have an investment in a company that’s struggling and they need to help it pay its debt and strengthen its balance sheet, or they are looking for companies in a strong position that can take advantage of current market conditions. Both these are far better investment propositions than supporting a new company coming to market for the first time,” he adds. For this reason, many private companies planning to list in recent months have chosen to put it on hold. “Unless there is stability in the market, we are not going to see a material number of IPOs because there will be severe pricing problems. We have had some major IPO instructions, and we have worked on them, brought them to a certain stage and they have then been suspended. Now is not a good time to be listing unless you have some pressing need to do so, otherwise boards will just say we are leaving too much value on the table,” says Koeck. The year has begun with an unprecedented flurry of rights issues, but the outlook for capital market practices is still cautiously optimistic at best. In addition to the IPO market all but drying up, the torrent of rights issues seen thus far this year appears to be unsustainable and raises concerns about market saturation. Also, with the arrival of reporting season, the revelation of the true value of many of the reported discounts on offer may well subdue the public’s investment appetite going forward, as business conditions continue to deteriorate. Nevertheless, for the time being, there is plenty of work to be had by firms advising large cap companies as rights issues continue to soar. ALB www.legalbusinessonline.com
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uk report Linklaters sheds London staff In a bid to boost productivity and profit in the current financial climate, Linklaters recently decided to slash between 100 and 120 of its City lawyers and 130 to 150 members of its business services staff. The restructure by the Magic Circle firm, titled the ‘New World’ strategy, will see 4.8% of the firm’s total workforce slashed and a reduction of 4.2% in lawyer headcount. Whether the cuts will continue through the firm’s international network remains to be seen. Clifford Chance slashes staff count Clifford Chance recently initiated a redundancy consultation involving 880 staff members in their London offices. The Magic Circle firm reportedly appointed 13 employee representatives to assist in the process, and will have two representatives allocated for each of the firm’s six main practice areas, with an additional representative for paralegals. The final cuts are expected to be confirmed by the end of February/early March. The firm stated changes in both the quality and quantity of work coming into the office in many areas as the reason for the lay-offs. Cadwalader loses London partners to Paul Hastings Cadwalader Wickersham & Taft has lost seven of its London partners to rival firm Paul Hastings. The walkout has left the firm with only four partners in London, and is accompanied by the news that the firm has also suffered a 30% profit plunge, with profit per equity partner (PEP) dropping to US$1.88m from US$2.72m.
CMS looking to merge CMS Cameron McKenna is on the prowl for a merger partner. The firm has reportedly set up a taskforce specifically geared to finding a suitable firm to merge with it in the UK. Combining with a similar-size rival in a merger is just one of the viable options the firm is considering. According to recent reports, other strategies such as being swallowed by a larger firm or taking on a small specialist practice have also been discussed. Denton joins in the cutting Denton Wilde Sapte has joined the growing number of UK firms making redundancies in 2009. The firm recently launched a redundancy consultation and says 80 members of staff are at risk of losing their jobs. While the marketing, accounts, facilities and compliance sectors are not affected, all fee-earning departments except competition, tax and TMT, across London and Milton Keynes, will be under review. The firm’s international offices are also not included in this specific consultation, and the reconstruction & insolvency team may also escape the cuts due to recent increases in work. Addleshaw axes partners Addleshaw Goddard has cut 19 partners from its team, after deciding that there were too many and not enough demand in business. Turnover for the first six months of the 2008/09 financial year was 4% below budget for the firm, which had 177 partners.
ROUNDUP • Hammonds recently slashed 77 jobs across its UK offices • Blake Lapthorn has announced a second redundancy consultation, with up to 30 fee-earners and support staff in London and the south east facing lay-off • Clifford Chance Amsterdam managing partner Jan ter Haar recently replaced Spain managing partner Ignacio Ojanguren on the firm’s management committee and takes responsibility for offices in Western Europe • Berwin Leighton Paisner officially opened its Moscow office in January with the addition of a 70-lawyer team from local firm Pepeliaev Goltsblat & Partners • Simmons & Simmons has closed its Rotterdam office following a two-month consultation and is moving the Dutch lawyers, 27 partners and 78 fee-earners, to Amsterdam
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news in brief >> Law firms to assist in UN corporate law – human rights study The United Nations has selected four law firms in the Asia-Pacific region to investigate the relationship between human rights and corporate law across 40 countries. The India-based firm, Amarchand & Mangaldas, Allens Arthur Robinson, Magic Circle firm Clifford Chance and Malaysiabased Mah Kamariyah & Philip Koh will work with 11 other firms to identify the relationship between national corporate laws and human rights, examining existing corporate laws and their application by courts and regulators, and whether they comply with human rights principles. The project seeks to address the lack of knowledge on how corporate law and human rights affect each other. Professor John Ruggie, special representative of the UN Secretary-General on business and human rights, said that the pro-bono participation by the firms in question demonstrated their appreciation for how human rights were relevant to their clients’ needs. The Allens Arthur Robinson team will be led by partner Craig Phillips and senior associate Rachel Nicolson, the Clifford Chance team will be headed by London-based partner Michael Smyth, while a Bombay-based team from Amarchand & Mangaldas will cover the Indian jurisdiction. Calling ‘attractive’ Aussie lawyers: Cleo on the hunt Australian women’s fashion magazine Cleo has been on the lookout for a ‘suitable’ male lawyer for its Bachelor of the Year competition, according to an e-mail sent out by the magazine’s editor. As part of its search for Australia’s 50 Most Eligible Bachelors, the magazine is looking for a lawyer who is ‘straight, single, charismatic and good-looking’. Cleo editor Sarah Oakes said she would like to have a variety of occupations represented and this year the magazine has “struggled” to find someone from the legal profession. DLA partner firms eye Swedish-Australia connection DLA Phillips Fox is working with its Swedish counterpart DLA Nordic to capitalise on what it describes as a “growing demand” for SwedishAustralian cross-border legal expertise. The move is spearheaded by partner Adrian Smith and senior associate Mathias Berggren. According to the Swedish Trade Council, Australia’s total exports to Sweden increased by more than 27% to around A$445m in 2008 while Australia’s imports from Sweden increased by more than 7.5% to about A$2.5bn. More than 150 Swedish companies have an Australian subsidiary.
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Credit: Tourism Australia
NEWS | news >>
SYDNEY/ADELAIDE
Thomson Playford Cutlers, Dibbs Abbott Stillman in Melbourne merger
L
ast year when Thomson Playford was busy joining forces with Cutler Hughes & Harris in Sydney, Dibbs Abbott Stillman was in retreat following the breakaway of its Sydney partnership. Now, as the end looms for the Dibbs Abbott Stillman national federation, the Melbourne arm of the firm has merged with Thomson Playford Cutlers. The resulting firm, to operate under the Thomson Playford Cutlers name, will have 49 partners across Sydney, Melbourne and Adelaide. “Thomson Playford Cutlers has been servicing Victorian clients for some
time on a fly-in, fly-out basis, but this merger with Dibbs Abbott Stillman Melbourne gives us a permanent presence in what is obviously a key market Brett Goodridge, for corporate legal TPC services,” said chief executive Brett Goodridge. The merger comes into effect on 1 March 2009. Thomson Playford Cutlers was named Adelaide Firm of the Year at the ALB Australasian Law Awards in 2008. ALB
Australia
Middletons WA: the one that got away
N
ot all partners at Salter Power followed the firm into its threeway merger between Middletons and Franklyn Legal. Salter Power’s ex-managing partner Stephen Power, ex-senior associate Cathy Donaldson and LionOre Mining general counsel Mark Rodda have formed a new full-service boutique firm called Napier Legal. The group did not join Middletons because they believe a mid-tier firm has none of the advantages of either large national or boutique firms.
The boutique model will offer Napier's clients direct service with relatively low overhead costs, however, it is not going to be an easy transition to make, as more firms are now competing for a dwindling supply of resources work. Despite this, the firm is optimistic enough to consider hiring up to three more lawyers with resources, M&A and capital-raising experience. The firm is currently acting for Russian resources company Norilsk Nickel and expects to service other clients operating in the oil, gas or hard rock area. ALB Australasian Legal Business ISSUE 7.2
25/02/2009 2:16:09 PM
Credit: Tourism Australia
NEWS | news >>
PERTH, CHINA
Deacons: AnsteelGindalbie placement just the beginning
D
eacons recently acted for Chinese state-owned Ansteel’s successful equity placement with Gindalbie Metals in Western Australia ($A162m). But one of the lead partners, Shaun McRobert, believes this is only the beginning of more in-bound capital markets and M&A activity to come. According to McRobert, the placement provides a “strong model” for corporate in-bound investment. Despite considerable M&A activity “behind the scenes” currently, he said this could develop into a strong announced deal flow within three to six months. “In the current economic climate, restructuring and ensuring general project longevity is required, creating the need for finance and equity via capital markets. There is strong demand offshore and we are seeing a wide range of parties interested in cross-border activity in the Australian market,” he said. ALB
SYDNEY
Corrs Chambers Westgarth did not bill A$4m, says partner
us report Staffcuts at Nixon The US Department of Labor Statistics reports that 1,300 jobs have been lost from the legal service sector so far, and Nixon Peabody has recently joined the ranks of firms downsizing when it laid off 20 attorneys and 36 staffers across its US offices. Nixon Peabody has locations in 15 US cities, as well as four international offices. Bakers lays off in NYC Baker & McKenzie has joined the tally of US firms announcing staff cuts in the wake of the credit crunch. The firm recently confirmed that six associates in the New York office have been made redundant. The laid-off lawyers were given a two months’ severance pay package. Orrick salaries capped Orrick Herrington & Sutcliffe has followed in the footsteps of fellow US firm Latham & Watkins by recently announcing a firm-wide salary freeze for 2009, with pay packets for associates, counsel and senior consultants at the firm set to remain at 2008 levels. The firm claimed economic conditions were the motive behind the salary freeze and has confirmed that year-end associate bonuses will remain at 2008 levels, from US$25,000 for junior associates up to US$50,000 for the most senior associates. Sonnenschein recruits from Thacher Sonnenschein Nath & Rosenthal recently hired a group of lawyers from Thacher Proffitt & Wood after the latter’s dissolution following the collapse of its four-month merger talks with King & Spalding. The US firm acquired 100 lawyers, more than half Thacher Proffitt’s 195 – including 40 partners – and
its managing partner, Paul Tvetenstrand. This has brought Sonnenschein’s total headcount to 800. Chadbourne initiates survival strategies Following a firm-wide hiring freeze on legal and non-legal staff, Chadbourne & Parke recently launched a global review of staffing levels in an attempt to ease pressure in the worsening economic conditions. The review aims to decrease support staff across the global network and become an additional strategy for coping with the economic crisis. Rather than hiring laterally, the firm will move lawyers from less busy practice groups to areas that require additional legal personnel. MoFo cuts staff Buckling under the economic pressure, Morrison & Foerster recently joined the list of firms laying off when it announced it will make 53 lawyers and 148 staff across its US offices redundant. The US firm, which also eliminated jobs across its European network, reported a 2% rise in revenue from US$894m in 2007 to US$911m last year, but its average profit dropped by 13%, from US$1.27m in 2007 to US$1.1m, in 2008. McDermott joins the lay-off line McDermott Will & Emery has cut 60 associates and 89 support staff from its US offices after recently reporting a 1.2% drop in 2008 revenues from US$978m in 2007 to US$966m last year. McDermott has initiated a fund to assist staff who may face economic hardship and provided affected associates with severance benefits and career counselling services.
C
orrs Chambers Westgarth has rebutted recent reports claiming that the federal government paid the firm A$4m for its advisory role in the government-backed National Broadband Network (NBN) project. Lead partner acting on the NBN Andrew Messenger said the firm has billed the federal government but not for the amount reported. “We have not billed or been paid A$4m – I can confirm that. The figure may be an amalgamation of various consultants’ fees,” he said. The firm is positive that overall telecommunication industry work flows will remain stable despite uncertain global economic conditions. “No matter what the economic circumstances, people will still be consumers of telecommunications,” said Messenger. ALB www.legalbusinessonline.com
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ROUNDUP • Associates at Texas firms Haynes and Boone and Fulbright & Jaworski will not be receiving raises any time soon. The 508-lawyer Dallas-based and 437-lawyer Houston-based firms (respectively) reportedly initiated firm-wide salary freezes recently. • Freshfields recently launched a US litigation practice, following the hire of Aaron Marcu and Adam Siegel from Covington & Burling and Benito Romano from Willkie Farr & Gallagher • US firm Nixon Peabody has set up an Israel practice group to be based in the US. It will be led by Washington DC partners Samuel Feigin and Mark Kass, and will advise on Israeli transactions both inbound and outbound • Dewey & LeBoeuf recently closed its San Francisco office and combined its Bay Area legal and support staff
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Firm Profile NEWS | news >>
Buddle Findlay
NZ COMMENTARY
New Zealand’s capital markets update – some healthy signs?
T
he announcement last week that Fonterra, New Zealand’s largest company, had found its bond offer 267% oversubscribed signals the current strength of the retail bond market in New Zealand. At $800m in accepted applications, with indications that demand may have been much higher, the offer will be the largest corporate bond offer in New Zealand and follows successful debt offers from significant corporates such as Auckland International Airport, Genesis Energy, Wellington International Airport and others. What does this mean, then, for the current health of New Zealand’s capital markets? There have been few options for investors rocked initially by the collapse of the local finance company sector and then the impact of the international financial crisis. The equity markets, in particular, have seen little in the way of new activity with only three new equity issuers coming to market in 2008 and only eight in 2007.
Introduction of Capital Markets Development Taskforce In July 2008, the government announced the formation of the Capital Markets Development Taskforce. The purpose of the taskforce is to “develop and launch a blueprint and action plan to improve New Zealand’s financial system for the benefit of the New Zealand economy and its business”. Releasing an interim report in November, the Taskforce’s early proposals for change include building on the continuous disclosure requirements for listed companies to make it easier for them to raise capital without the burden of further, comprehensive disclosure documents. For private companies, the recommendations are likely to involve simplifying the process for raising smaller amounts of capital. For example, exemptions to the prospectus requirements along similar lines to the Australian regime which permits the offer to up to 20 people of up to A$2m over 12 months without a prospectus. Following the introduction of the trans-Tasman mutual recognition scheme
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for the offers of securities in 2008, we have seen a number of Australian issuers consider the use of the scheme to register Australian-compliant documents rather than face the burden of complying with the New Zealand regime. To date, this has provided increased flexibility in particular for Australian companies wishing to issue New Zealand employees with shares as part of remuneration plans. However, the new regime is yet to have any significant impact on capital markets activity in New Zealand.
Debt securities proving popular Debt securities from blue chip companies, on the other hand, are proving to be extremely popular with New Zealand investors facing plummeting interest rates for deposits with their local bank. With an official cash rate now at 3.5% and likely to go lower, a fixed rate bond offering in the range of 8% for three to five years has proved very attractive to investors looking for a new home for their funds in a market with a contracting array of investment options. Similarly for the corporates offering bonds, turning to the debt capital markets opens up an ability to borrow when the banks are increasing margins or choosing not to lend at all. This holds true for the public sector, with stateowned enterprise Genesis Energy’s $225m bond offer ($120 million of 5 year bonds carrying an interest rate of 7.25%, and $105 million of 7 year bonds carrying an interest rate of 7.65%) closing fully subscribed. Changes to the Securities Act exemptions for local authorities have encouraged councils to consider the debt capital markets for their infrastructure funding requirements. Tauranga City Council raised NZ$50m, including $20m of oversubscriptions, in November 2008 (carrying an interest rate of 7.05%). Auckland City Council has announced plans to raise NZ$200m to refinance debt and apply to capital projects. A number of other councils are expected to follow suit.
But for how long? However, it remains to be seen how long this flurry of debt activity will continue.
Sacha Judd, Buddle Findlay
Quality corporate issuers are attracting very high levels of demand, but it is likely that it will be a long time before the New Zealand market develops an appetite for the kinds of debt securities that were offered by the finance company sector 18 months ago. The interest found in the retail investment market could also indicate further opportunities for the equity capital markets in the year ahead, particularly as private equity owners of New Zealand businesses face difficult questions about the financial position of their portfolio assets and likely exit strategies. These ‘unnatural’ long-term owners of corporate assets may find, if the recommendations of the Taskforce are implemented, a more streamlined and accessible New Zealand capital market waiting for them.
This article was written by Sacha Judd a partner in the Auckland office of Buddle Findlay, one of New Zealand’s leading law firms. Sacha specialises in mergers and acquisitions, public offerings, takeovers and securities law, and corporate governance advice. Sacha can be contacted by phone: +64-9-363 0632 or email: sacha.judd@buddlefindlay.com.
Australasian Legal Business ISSUE 7.2
25/02/2009 2:16:13 PM
NEWS | news >>
010 0 010 0111010 01101010 0101010 0101011 01010111010111010 0 01011010 0110101010 1001 0100010011101001101010010101001 IT report 0101101010111010111010 0 01011010 01101 Interwoven sold to Autonomy The big news for legal technology is the announcement that Autonomy will purchase Interwoven. The motivation for the buyout would appear to be the acquisition of Interwoven’s Worksite product and its associated large law firm user base. The purchase will provide Autonomy with an entry into the legal market for its search technology, an area where it has been trailing behind Recommind and Vivisimo by a significant margin. For law firms, the biggest impact will be felt by those that have invested heavily in Interwoven’s Vivisimo powered search, either in the standard Worksite implementation or in the more powerful Universal Search tool. Autonomy has indicated that it will be replacing the Vivisimo engine with its own ‘IDOL’ (Intelligent Data Operating Layer) system. This change also has an impact on the WorkSite product’s release schedule with a likely slip in the 8.5 release to allow for the integration of IDOL instead of Vivisimo. All up, the move is likely to make Autonomy investors happy, as Interwoven was targeted by a number of companies – and Vivisimo investors were very upset as they stood to lose a valuable OEM supplier. Open Text will also be overjoyed that law firms considering implementing Worksite may now think twice until some of the uncertainty surrounding the takeover has passed – something that may take a number of years. The full press release can be found here: http://www.interwoven.com/components/ pagenext.jsp?topic=NEWS::RELEASES&dcr=temp latedata/announcement/press-release/data/2009/ dcr-autonomy.xml Windows 7 February sees the end of Microsoft’s public beta testing of its upcoming Windows 7 operating system. With almost zero corporate adoption of Vista, Microsoft is keen to garner feedback on its new product. Although the product is based on the Vista code base, the focus has been to reduce the performance requirements (Vista is renowned as a resource hog) and simplify the interface and navigation. Although no release date has been set for Windows 7, it is rumoured to be in late 2009. It is also likely that most law firms will wait until the release of Service Pack 1 before upgrading from Windows XP.
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BigHand and Maurice Blackburn join forces Maurice Blackburn has announced the rollout of the BigHand dictation system across its 17 Australian offices. The benefits of such a move seem relatively straightforward for the firm as it allows many of the very small offices to leverage the WP pools in larger sites. As Maurice Blackburn’s Jane Bennett commented, the move allows “Smaller regional offices like Rockhampton (to) be supported (on the secretarial side) out of Melbourne, which has greater in-house resources.” On the IT side, the winning factors were BigHand’s ability to set up a virtual channel over Citrix.
Chris McLean is a specialist in legal technology having worked for numerous law firms both as a lawyer and support services director. E-mail chris. mclean@auslegal.com
news in brief >> US firms driving hard bargain have “right attitude”, says general counsel Lowering fees may still be a no-go zone for many Australian firms, but tighter economic conditions in the US legal market have made this strategy more appealing for full-service firms. Butler Snow is one of those that has scrapped the hourly billing system in favour of a lump sum to win mandates and build on client relationships. The firm recently negotiated an employment law matter – which would earn US$5m in better times – for a mere US$3.5m. The US-based Association of Corporate Counsel’s general counsel, Susan Hackett, believes this is the “right attitude”, as in-house counsel are increasingly hoping alternative fee arrangements will be made after they send requests for proposals. Some US clients noted that those with 100300 lawyers were the most willing to negotiate.
DLA Phillips Fox lawyer gets ‘green’ thumbs-up DLA Phillips Fox’s Ana-Mari Martinez has become one of the few Australian lawyers to be certified as a Green Star Accredited Professional. Green Star is an environmental rating scheme, developed by the Green Building Council of Australia (GBCA), to evaluate the environmental design and achievements of buildings. Few lawyers are listed, however, on the GBCA’s accredited professional directory, but Martinez believes more construction lawyers should seek accreditation, because demand is growing for Green Star projects and Green Star principles are becoming increasingly relevant in construction projects. Freehills farewells Peter Hollingdale The ‘Hollingdale & Page’ long ago disappeared from the Freehills brand and the firm recently paid its respects to former partner Peter Hollingdale, who passed away on the 22nd of December 2008. Hollingdale, who retired from the Freehills partnership in 1994, is credited with playing a significant role in the transformation of the firm into a national player. During the 1980s the Sydney partnership grew from around 25 partners to 80, and the firm built a national presence by adding offices in Perth, Canberra, Melbourne and Brisbane. Hollingdale was particularly noted for the quality of his leadership as well as the introduction of innovative office administration systems that facilitated the firm’s modernisation.
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NEWS | news >>
news in brief >> Foreign law firms in Vietnam: beggars rather than choosers? Foreign law firms may be the first to feel the full force of the global economic slowdown, according to the managing partner at one Vietnamese domestic firm. Dang The Duc, the managing partner of Indochine Counsel, believes that the downturn in staple projects and infrastructure work that is expected to result from economic contraction in the country could see them running scared. “International law firms will be the first affected, since larger projects and cross-border work will be reduced,” he said. “In the last three to four months, foreign law firms have seen a decrease in the volume of work and new inquiries. Korean outbound investment in Vietnam has decreased noticeably and substantially affected the volume of work for some Korean law firms.” The result, according to Dang, is that some foreign firms may have to become beggars rather than choosers. “The downturn will up the ante between law firms for work. Many firms will find that they cannot be as selective [in terms of the work they take on] as they had been in the past.” Troutman Sanders finalises merger with Ross Dixon Bell The new year brought a new era for Troutman Sanders, with the firm completing a previously announced merger with Ross, Dixon & Bell on 2 January. The result is the creation of a 785-attorney firm which continues to operate under the Troutman Sanders name from its Atlanta headquarters. In the meantime, it will be interesting to see how the merger affects the firm’s long-established Hong Kong and Shanghai offices. With Ross, Dixon & Bell previously well known for its insurance, professional liability and commercial litigation practices, Troutman Sanders may well look to beef up its Asia expertise in these areas in coming months. Hill Dickinson sails into Singapore, while Walkers strides in While most firms are battening down the hatches, UK firm Hill Dickinson has taken the unexpected step of opening a new office in Singapore. The firm is hoping that the move will capitalise particularly on its reputation for marine work. Meanwhile offshore law firm Walkers has announced that it will also set up shop in Singapore in February this year, making it the third offshore law firm in the lion nation behind Cains and Conyers Dill & Pearman. John Rogers, co-managing partner of the firm’s Singapore office and head of its finance team, said: “Singapore’s position as a key Southeast Asian hub for many international law firms and financial institutions will provide an excellent platform for growth in Singapore, India and all the members of the ASEAN.”
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VICTORIA
Lawyers asked to help bushfire victims
I
n the midst of the most devastating bushfires in Australian history, the Victorian Bar Legal Assistance Scheme (VBLAS) has acted swiftly to canvass interest from legal professionals who are willing to offer victims pro bono advice. The scheme was established to offer support for casualties of the recent Victorian fires and so far, the scheme has mostly attracted Victorian barristers according to VBLAS solicitor Michael McKiterick. “We have had over 40 expressions of interest since notifying the Bar last night and expect this to continue, given the Bar’s long history of support for pro bono legal assistance,” he said. The Bar previously offered assistance during the aftermath of the 1983 Ash Wednesday bushfires and some of the barristers who advised Ash Wednesday victims, including Phil Kennon QC and John Digby QC, will once again offer their support. Phil Kennon QC is the Bar’s
pro bono committee chair, and he and Alexandra Richards QC will oversee the Bushfire Assistance Scheme. Barristers are expected to begin assisting victims within a few weeks on a range of matters including welfare, insurance, property, town planning and personal injury. It is unclear, however, how long their services will be required. “I can’t even imagine how long it will take,” said McKiterick. “I’m just in shock in relation to what happened and we would welcome any offer of assistance. We are also open to discussions with lawyers from other states.” ALB For further information please call: (03) 9225 7111 or visit www.vicbar.com.au
SYDNEY
Baker & McKenzie acts on first AQUA listing
B
aker & McKenzie has acted on the first successful listing on the new ASX platform, AQUA. The move comes after the Australian securities platform was launched recently. It includes four new structured metal products owned by ETF Metal Securities Australia. An additional fifth security, called ETFS Physical Bill Fuggle, Gold, was moved to AQUA Baker & McKenzie from the ASX’s main list. “The process was quite different because AQUA provides a more flexible framework for the listing of funds and structured products on the ASX markets,” said Bill Fuggle, Bakers’ lead partner on the listing. “We didn’t need to get any waivers from the AQUA rules and an interesting aspect of it was the very close involvement of ASIC, as it wanted to ensure all regulatory issues associated with AQUA were fully considered.”
AQUA provides tools to track stock indices, real property prices, interest rates, performances and debt, among others. However, its main selling point is its platform, enabling traders to exchange commodities such as silver, gold or platinum that traditionally required opening a client account with an investment bank or trading exorbitant amounts. There is still high demand for such commodities according to Fuggle. “Share prices have gone down, but gold moves counter-cyclically and has gone up over the past few years. If people had traded in gold a year ago, they would have been much better off now than those who traded with shares,” he said. Baker & McKenzie has seen considerable client interest for structured products since plans to launch AQUA were made public two years ago. Most of these clients operate in the fund and index-tracking spaces, Fuggle said. ALB Australasian Legal Business ISSUE 7.2
25/02/2009 2:16:17 PM
NEWS | news >>
mergermarket M&A deals update
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NEWS | appointments >>
appointments
Clayton Utz
►► LATERAL HIRES Name
Area of law
Organisation coming from
Organisation going to
Carl Della Bosca
Finance, M&A
Slaughter & May
Blake Dawson
Andreas Hartmann
IP
University of New South Wales
Griffith Hack
Craig Higginbotham
Litigation, insolvency, environment
Thomson Playford Cutlers
Lander & Rogers
Jennifer Huppert
Property
Maddocks
Victorian Parliament
Luci Mumme
Employment
Clayton Utz
Herbert Geer
Peter Royston
Family
Wilsons Lawyers
Lander & Rogers
Genevieve Staff
Litigation, construction
Thomson Playford Cutlers
Lander & Rogers
Shirley Jane Vine
Property, family, M&A
Mitchell Solicitors
Eagle Boys Pizza
Stephen Fall
Niro Ananda
Maurice Baroni
Zac Chami
Nikki Robinson
Kathy Santikos
►► Promotions Name
Area of law
Organisation
Niro Ananda
M&A
Clayton Utz
Maurice Baroni
Employment
Clayton Utz
Zac Chami
Litigation
Clayton Utz
Sherridan Cook
Dispute resolution
Buddle Findlay
Stuart Cosgriff
Construction, projects
Clayton Utz
Charlotte von Dadelszen
Property
Buddle Findlay
Stephen Fall
Construction, projects, energy & resources
Clayton Utz
Paul Farrugia
Banking & finance
Buddle Findlay
Susie Kilty
Competition
Buddle Findlay
Dominic Lundon
Property
Buddle Findlay
Paul McGinness
Government, health, IP
Minter Ellison
Nikki Robinson
Property
Clayton Utz
David Ryan
M&A, capital markets, securitisation
Blake Dawson
Kathy Santikos
Finance
Clayton Utz
Robyn Schofield
Tax
Clayton Utz
Gene Turner
Finance
Buddle Findlay
Minter Ellison
New managing partner for Minter Ellison Minter Ellison has appointed Paul McGinness as the firm’s new managing partner in Canberra. The move comes after former managing partner Paul McGinness John Weber was recently appointed to his new role of chief executive partner. McGinness will continue to practise law in his new role, advising private and public sector clients.
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The firm will also keep an eye out for opportunities in infrastructure, in light of the Rudd government’s recent stimulus packages. McGinness became a partner at Deacons in 1997 initially, before joining Minter Ellison and later leading the firm’s health and ageing industry group and Innovation Committee, as well as the Canberra intellectual property team. He said he is excited about his appointment. Minter Ellison’s chair of Canberra partners, Elizabeth Whitelaw, supported McGinness’s promotion, praising him as an “astute” lawyer who delivers “real value”.
Robyn Schofield
Stuart Cosgriff
Eight new partners for Clayton Utz Partner ranks have swelled at Clayton Utz with the addition of eight new partners. The new additions are M&A partner Niro Ananda, employment partner Maurice Baroni, litigation partner Zac Chami, property partner Nikki Robinson, debt finance partner Kathy Santikos, tax partner Robyn Schofield and construction and project partners, Stuart Cosgriff and Stephen Fall. Previously a special counsel at the firm, Fall believes his appointment to partnership recognises his 16 years of accumulated knowledge and client contacts – particularly in the construction and energy sectors. He has previously acted on the A$700m Callide power station project, the Siemens power station project and the Oyutolgoi power station in Mongolia. While the outlook is not positive for construction work, Fall believes Clayton Utz will benefit from counter-cyclical government and infrastructure work. He expects infrastructure projects valued at over A$1bn, but smaller projects are expected for construction, valued in the “tens- to hundreds-ofmillions” range. Buddle Findlay
Buddle Findlay defies market with six new partnership appointments While many of the region’s leading law firms are scaling down operations to meet reduced demand brought on by the financial crisis, Buddle Findlay is ramping up with the announcement of the promotion of six new partners to its Auckland and Wellington Australasian Legal Business ISSUE 7.2
25/02/2009 3:05:33 PM
NEWS | appointments >>
In spite of widespread reports of the property sector scaling down, the firm has also appointed two partners in this area – Dominic Lundon and Charlotte von Dadelszen.
Sherridan Cook
Dominic Lundon
Gene Turner
Susie Kilty
Paul Farrugia
Charlotte von Dadelszen
offices. In spite of adverse market conditions, national chairman Peter Chemis is taking a medium- to longterm view. The appointments are Sherridan Cook (dispute resolution), Paul Farrugia (banking & finance), Dominic Lundon (property), Susie Kilty (competition & fair trading), Charlotte von Dadelszen (property) and Gene Turner (corporate finance).
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Chapman Tripp
Bulk promotions: Chapman Tripp appoints four new partners Chapman Tripp recently announced the promotion of four new partners to the firm’s litigation, competition, intellectual property (IP), environment and corporate and commercial practices. Among the new faces is IP specialist Matthew Sumpter, who is known among Kiwi and Australian in-house counsel for his “good business acumen”, “instinct” and ability to delegate work to his team. He recently acted in Microsoft’s anti-piracy proceedings, trademark litigation for the Billabong Group and border protection matters for Procter & Gamble. Partner Victoria Heine is a member of the firm’s regulatory prosecutions team and specialises in competition, regulatory and public law litigation.
Matt Sumpter
Victoria Heine
Bradley Kidd
Catherine Somerville
Partner Bradley Kidd has advised on corporate and commercial matters such as investment, funds and savings products, among others. And, last but not least, partner Catherine Somerville has experience in environment, planning, resource management, infrastructure and project management.
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NEWS | appointments >>
Lander & Rogers
TPC
Craig Higginbotham
Genevieve Staff
Peter Royston
Lander & Rogers launches litigation practice in Sydney Lander & Rogers has launched a new commercial litigation practice in Sydney, following the recruitment of ex-Thomson Playford Cutlers senior litigators Craig Higginbotham and Genevieve Staff to the partnership. The pair approached the firm because they were keen to set up a litigation practice from scratch. Higginbotham has done insolvency work relating to HIH and Spedley Securities, while Staff advised on the OneTel liquidation, environmental matters and shareholder disputes. The appointment came as part of the firm’s strategy to target a recent surge in commercial litigation work which, until recently, was handled only by its Melbourne-based litigation practice. Despite the economic downturn, there is still interest from clients in the construction industry, said Staff. Lander & Rogers is still looking to appoint new partners and also recently appointed family lawyer Peter Royston, formerly of Wilsons Lawyers, as a partner.
Maddocks
Victorian Parliament
Maddocks lawyer swaps property law for politics Maddocks special counsel Jennifer Huppert has left the firm to begin a new life of politics in the Victorian State Parliament. She will represent the upper Jennifer Huppert house electorate of Southern Metropolitan Region. Huppert replaces Evan Thornley MP, who recently resigned from politics to head the Australian office of the global electric car company, Better Place. Clayton Utz
Herbert Geer
Mumme’s the word at Herbert Geer Coinciding with the recent introduction of the federal government’s Forward with Fairness Bill, Herbert Geer has appointed ex-Clayton Utz partner Luci Mumme to the firm’s employment and workplace relations team in Melbourne. Mumme has acted for clients such as the Country Fire Authority Luci Mumme on matters like industrial disputes, discrimination and equal opportunity. Some of her staff have moved with her, including senior associates
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Bella Stagoll and Michael McIver. Andrew CardellRee, currently at Clayton Utz, is also expected to move to Herbert Geer. It is an exciting time for employment law, says partner Kathy Dalton, adding that the appointees will help build the practice to meet employer needs resulting from the new regulatory system. This is the fourth partner to join the firm’s employment and workplace relations team in the past year. Chris Hartigan and Louise Russell are two other partners who have moved from Clayton Utz. Slaughter & May
Blake Dawson
Blake’s returns sacking serve with appointment attack In the wake of its recent property practice retrenchments, Blake Dawson has expanded its corporate team by appointing two new partners. After five years working in the UK at Slaughter & May, Carl Della Bosca is back in Australia, bringing Carl Della-Bosca new international and domestic experience in corporate finance and M&A law. He acted on the Cinven-BUPA hospitals acquisition (£1.44bn) s UK aspects of the BHP Billiton-Rio Tinto takeover bid (A$165bn). Della Bosca had decided to David Ryan move back prior to the real impact of the credit crunch, seeing it as an opportunity to grow the M&A team at Blake’s. Blake’s former senior associate David Ryan has also entered partnership, after working at the firm for almost 10 years. The firm said he has built a strong reputation with clients with his experience in M&A, capital markets and corporate and securities law. Gadens Lawyers
‘Polite’ director firmly takes Gadens partner role After working for Gadens Lawyers for almost four years, John-Anthony Hodgens has climbed quickly from senior associate to director – the equivalent of special counsel – and most recently, to partnership. Known by colleagues as “firm John-Anthony but fair”, Hodgens credits his hard Hodgens work and the building of a healthy culture at the firm’s workplace relations and safety practice for his promotion. Hodgens has acted on employment aspects of the APA Group’s acquisition of Origin Energy assets, as well as for the Queensland Resources Council in a recent coronial inquest, examining the alleged link between fatigue and a number of deaths related to road accidents in the mining sector. The Rudd government’s new ‘Fair Work Bill’ is expected to bring Gadens some agreement-making and unfair-dismissal work in 2009, said Hodgens.
Hesketh Henry
Hesketh Henry promotes ‘understanding’ litigation lawyer After a three-year tenure, recently as senior associate, Hesketh Henry‘s Patrick McPherson has been promoted to partnership. He has experience in contract Patrick McPherson and company law, injunctions and emergency orders, regulatory law, gambling law, property disputes and negligence actions. He has acted for EDL on the successful litigation of AllFast Solutions, Jones Publishing on a copyright dispute against Maxim Group and Cavisham Foundation on a licensing dispute with the New Zealand government’s Department of Internal Affairs. He believes his skill set and ability to bring a client following have contributed to the firm and said his success is also partly due to his ability to understand clients not just from a legal perspective. University Of NSW
Griffith Hack
Ex-uni researcher takes on principal role at Griffith Hack Griffith Hack has promoted patent attorney Andreas Hartmann to principal level at its Perth office. Hartmann specialises in patent work in physical sciences such as nanotechnology, clean energy and optics. His expertise and ability to bring new clients through Andreas Hartmann his existing networks have contributed to the firm’s national electrical, IT and physics practice. He has acted for research institutions and companies in Australia, Europe and the US, including solar technology company Ausra and major IT companies. Before joining the firm he worked as researcher at the University of New South Wales.
Mitchell Solicitors
Eagle Boys Pizza
Lawyer grabs slice of Eagle Boys Pizza action After working for Brisbane boutique firms Martinez Quadrio Lawyers and Mitchell Solicitors, Shirley Jane Vine decided it was time for a change – as Eagle Boys Pizza’s new legal counsel. Unsure whether she wanted to keep working as a lawyer, a Shirley Jane Vine recruitment consultant helped Vine “design” her dream role and choose franchising as her practice area. So, when she saw Eagle Boys advertising non-legal roles, she phoned them about any legal positions. They turned her down – then called her back with a job offer. Vine believes her new role is a “perfect fit” for her to use her strength as a transactional lawyer. Australasian Legal Business ISSUE 7.2
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NEWS | appointments >>
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‘
in-house perspective
Embracing globalisation After earning himself a seat at the leadership table, Proctor & Gamble’s corporate counsel and director, Nimalan Rutnam, has his sights set on helping to shape trade policy 28
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‘T
hink globally – act locally’. The catchphrase encapsulates the ever-increasing interdependence of the world’s economies. The emergence of globalisation has also created the need for a different type of corporate leadership, especially for multinationals. And in particular, the type of leadership required is capable of transcending cultural, linguistic and geographical boundaries as competition for emerging markets tightens. This is one reason why American multinational Proctor & Gamble appointed Nimalan Rutnam as its Asian corporate counsel – he is more than just a lawyer. “P&G was very keen to have someone with an Asian ‘flavour’ – someone who looks Asian, who ‘lives, works and breathes’ Asia – and speaks local languages, but at the same time someone with a western mind-set. I am in a better position to understand their ideals and translate it to a growing region,” he explains. The Sri Lankan-born Rutnam was raised in Singapore and completed his undergraduate degree in India, before eventually being called to the bar at London’s prestigious Lincoln’s Inn. After a short stint in Singapore, Australia was to be his next destination and there, he was forced to choose between partnership and inhouse counsel. The choice, he says, was an easy one.
Going in-house
“As an equity partner you could very easily earn a lot more money,” he admits, but Rutnam’s aspirations are not entirely motivated by monetary considerations. “I wanted to position myself to be more than a lawyer,” he states. “Working for Proctor & Gamble in a leadership capacity, I have acquired the skills that no business school could ever teach. So, you earn a seat at the leadership table and seek to influence as an influencer,” he explains. “You’re breaking down the barriers of trade and harmonising trade rules. In my role, I am required to canvass government – state and federal – and industry associations in order to reconcile rules so that we can directly import product, because product is www.legalbusinessonline.com
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moving outside Australia into Asia and elsewhere. So, you want to import it directly and make sure your legislation is in line with global standards.”
The first moment of trust
According to the Nielsen Company, in 2007 Proctor & Gamble spent more on US advertising than any other company. The US$2.62bn it spent was almost twice as much as General Motors, the next company down the Nielsen list. Although advertising cutbacks are currently afoot in light of current economic conditions, it appears that a similar approach to advertising has been taken by its Australian subsidiary. “We buy media in television programs and we place our brand on it, For example, So You Think You Can Dance is sponsored by Metamucil; Australian Idol will be sponsored by Head and Shoulders; the AFL rugby is sponsored by Gillette; Indy car racing is sponsored by Duracell – another of our products – and Roger Federer is an endorser of our Gillette shaving product. So we as lawyers have to make sure that the right equity is placed before an event or an endorser for the right brand – which goes into endorsement contracts and sponsorship deals. “Your contract has to be thorough,” he declares. “You have to make sure that the person you’re getting to sponsor your products doesn’t end up in a scandal and destroys your brand.” Another critical point in the process of developing a rapport with end users is what Rutnam refers to as ‘the first moment of trust’. “Advising on advertising can be very tricky in this fiscal environment,” he says. “For example, is putting an Asian face on an advertisement going to be better received than a European face? Is the Australian consumer willing to accept it, because it’s the first moment of trust? As Asian advertisements are a lot cheaper to create, I might have to convince the leadership team that this is my belief, based on the external environment,” he says.
The moment of truth
In addition to television advertising, the company is always keen to get
►► Billion-dollar brands
Twenty four of Proctor & Gamble’s brands have more than a billion dollars in net annual sales – and another 18 have sales between US$500m and US$1bn. • Always is a brand of feminine hygiene products, including maxi pads, pantyliners (sometimes called Alldays) and feminine wipes • Ariel is a brand of washing powder/liquid, available in numerous forms and scents • Actonel is a brand of the osteoporosis drug Risedronate co-marketed by Sanofi-Aventis • Bounty is a brand of paper towel sold in the US, Canada and the UK • Braun is a small-appliances manufacturer specialising in electric razors, coffee makers, toasters and blenders • Crest is a brand of toothpaste • Dawn is a brand of dishwashing detergent • Downy/Lenor is a brand of fabric softener • Duracell is a brand of batteries and flashlights • Fusion is a brand of men’s wet-shave razors – and the quickest P&G brand to have reached US$1bn in annual sales • Gain is a brand of laundry detergent and fabric softeners • Gillette is a safety razor manufacturer • Head & Shoulders is a brand of shampoo • High Endurance is a deodorant by Old Spice • Ivory is a soap • Nice ‘n Easy is a hair-colour product • Olay is a brand of women’s skin care products • Oral-B is a brand of toothbrush • Pampers is a brand of disposable diaper/nappy • Pantene is a brand of hair care products • Prilosec OTC is a brand of heartburn medicine co-marketed by AstraZeneca • Pringles is a famous brand of potato chips • Puffs is a type of facial tissue • Secret is a deodorant • Tide is a brand of laundry detergent • Vicks is a brand of over-the-counter medicines • Wella is a brand of hair care (shampoo, conditioner, styling, hair colour) • Whisper is a brand of pantyliners
direct feedback from their retail customers. According to Rutnam, this gives the leadership team the opportunity to arrive at what he describes as the moment of truth. “In fact, there are two moments of truth,” he declares. “The first one is ‘when an individual walks down the retail aisles, are they choosing my product first? ’ and the second one is: 29
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FEATURE | interview >>
“There are a lot of in-house counsels who don’t earn a seat at the table … it depends on your business acumen and leadership qualities…”
30
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‘if they are choosing my product first, are they enjoying it? – and will that encourage them to come back and do it again? ’.” Rutnam acknowledges, however, that the current economic downturn has made achieving these objectives notably more challenging. “Given the present climate in which you have a downturn in the economy and currently, in the sort of industry I work in – that is, fast-moving consumer goods – we depend on the disposable income of consumers to upgrade their product purchases … the challenge is to reduce your own cost, while maintaining your profits and ensuring that consumers get the best value for their money. If this happens, I am successful,” he concludes. But Rutnam is not the type to rest on his laurels: “No, I don’t rest on my laurels … I constantly have to better myself, because if I don’t – the competition notices. Also, I have to make sure I honour the promises I’ve made – and the onus is on me there too, because marketing people always try to push the boundaries. If you are dealing with beauty-care products, you can’t make therapeutic claims without first having the product registered … it’s a huge challenge for us because we are constantly competing with products that are either cosmetic or therapies – and some of them are crossing the line,” he adds. With a wide diversity of products operating in all facets of the market, Proctor & Gamble appears to be in a strong position to withstand the current economic downturn. In Australia, Rutnam will be at the forefront of guiding it through the various regulatory challenges, while also assisting the Board with growth strategies. This begs the question: Does legal practice help prepare candidates for corporate leadership? According to Rutnam, not necessarily. “It’s not a natural progression for lawyers to become directors. There are a lot of in-house counsels who don’t earn a seat at the table,” he states. “It depends on your business acumen and leadership qualities – and how well you are able to convince the business that you understand its needs, and that it should have you as its best friend.” ALB Australasian Legal Business ISSUE 7.2
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FEATURE | in-house issues >>
In-house case study: What corporate counsel looks for in an external law firm...
After completing a banner year which included a A$9.6bn deal with ConocoPhillips, Origin Energy’s corporate counsel Suzanne Reintals shares what she really values in a law firm with ALB’s Cabral Douglas
T
he year 2008 was a demanding but extremely fulfilling one for the legal team at Origin Energy. After all, it was the year that corporate counsel Suzanne Reintals and her team presided over the biggest single deal in the company’s history, the A$9.6bn joint venture entered into with American giant ConocoPhillips for the development of a four-train CSG to LNG project using Origin’s worldclass CSG reserves and resources in Queensland. Australian Pacific LNG intends to develop Australia’s largest CSG reserves base into a 14 million tonne/year CSG to LNG project, which will amount to the biggest project of its type in Australia. This ‘extremely exciting’ experience gave Reintals an opportunity to reflect on what it is exactly she really values in her external legal advisors – in this case, Clayton Utz.
External law firms
When faced with a transaction of such magnitude, Reintals takes comfort in Origin’s longstanding relationship with Clayton Utz, its indepth understanding of her company’s business and – most importantly – its track record for delivering strong results in a timely manner. However, she does not go as far as referring to them as part of her ‘panel of law firms’ – because Reintals does not like the connotations associated with the phrase. She prefers to view them as part of her team. “It’s not that we have developed a panel of law firms – we have legal professional advisors who come from certain firms,” she states. “I have come to know and respect them, and regard them as pre-eminent in their field – we’ve been working with some of them for over 15 years.”
Historical context
Reintals herself has been advising 32
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FEATURE | in-house issues >>
Origin Energy on its legal affairs for more than 16 years, and has come to appreciate the benefits of her external counsel understanding not only the energy industry, but also the company and its history. “I don’t believe in tendering,” she says, “as, if we were to adopt that approach, every two or three years I would have to spend too much time bringing the new law firm up to speed.” One of the attributes on which Reintals places a high premium is the commercial applicability of the advice she obtains. “Perhaps you get an opinion that has to be broad and cover all the options, but the board may not want to see all 10 pages of it. So, I’m required to reduce it to one page that speaks directly to the board and the company’s commercial objectives,” she explains. “For example, if I were to receive advice that wasn’t commercial enough, I’ve either picked the wrong lawyer or I may not have communicated properly exactly what it is we want,” she states. “However, this is not a problem that arises with my team because they necessarily have to be commercial in their outlook, as they are at the coalface in dealing with the commercial people at our company.” Evidentially, in the high-stakes game of charting the Energy giant’s corporate agenda, time is always of the essence, and the signing of this extraordinary deal was no different. “From the day we were looking to commercialise to the day we signed the agreement was 100 days – so we didn’t have the luxury of time,” she says. “We pulled the data room together with 10,000 documents in two weeks.” ►►Lawyers who acted for Origin Energy on the ConocoPhillips deal Internal Suzanne Reintals – lead corporate counsel Ian Alfredson – senior legal advisor upstream Leeanne Klan – corporate lawyer CSG External Andrew Smith – Clayton Utz partner Emma Covacevich – Clayton Utz partner Graham Taylor – Clayton Utz partner Rod Halstead – Clayton Utz partner Other external advisors: Bell Gully, Baker & McKenzie, Johnson Winter Slattery, Herbert Geer and Russell McVeagh www.legalbusinessonline.com
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“If I were to receive advice that wasn’t commercial enough, I’ve either picked the wrong lawyer or I may not have communicated properly exactly what it is we want” As Reintals sees it, the size of the legal team one chooses to maintain should be determined along industry lines. “We, for example, are operating in a very highly regulated energy market and the consequences of not getting it right can be significant,” she says. “And, as I am responsible for the work of both the internal and external teams, my view is it’s best to have a smaller, more specialised internal one able to respond properly – then a strong relationship with external firms.” The deal emerged following the company’s rejection of a takeover offer from British Gas (BG) which, like ConocoPhillips, had a keen interest in gaining access to Origin’s large coalseam gas resources on the Queensland coalfields for exporting as liquefied natural gas. The key drivers for Origin at the time were to properly assess the best options that would ultimately maximise shareholder value. “It was really the commercialisation of our CSG that gave our shareholders the opportunity to form a view as to what was the best way to go,” she says, “and it became evident that, once we’d gone through the transaction process, the CP deal was the best option.”
It’s not about the money
According to Reintals, regardless of whether she is conducting a A$10bn deal or a A$10,000 transaction, she expects her legal team to take the same approach. “A lot of the time, the deals are very similar, but the bigger one may be magnified by its value, and in that case you may have greater sign-off procedures, so you are required to pay greater attention to detail.” One thing appears to be certain, however – having what she describes as ‘trusted advisors’ who understand the internal processes saves the company time and by extension, money. “You may be dealing with a very small matter but you still need to give the details the same attention – and go through very similar processes
whether you are buying something or selling it. You still have to make sure you have ticked off all the items on your check list, like pulling the data room together, drafting the sale and purchase agreements, the Q&A process and all the relevant documentation that’s traditional for any transaction – those principles are the same.” She adds that, working with the same external lawyers for so many years, she can work through them extremely efficiently. “When we start our due diligence – on a small acquisition, for example – because they know how we do it and the approach we take on documentation, we’d only need a short preliminary meeting – and they could interface with the business directly.”
Challenges
So, what was Reintals’ biggest challenge in overseeing the largest deal of it kind in Australian history? “It certainly drew on all my team’s resources and those of the greater commercial management team at the company,” she admits, “but the biggest challenge was to keep running the company as if it was ‘business as usual’. Not only did we have the transaction, we had a significant enterprise trying to run as normally as possible.” To a large extent, internal lawyers Neil Tracey, Irina Shainsky and Megan Gallagher shared this responsibility. As with any major transaction, Reintals says, there was always going to be stress, but this was minimised with the help of trusted, efficient and effective legal advisors – all of whom, she states, stepped up to the plate during this historic transaction. “From junior lawyers through to partners, people rose to occasion. It really speaks to the work ethnic of my entire team,” she says. Not unexpectedly, the conclusion of the deal had a somewhat anticlimactic effect on her in-house team. “I have to say, after the signing, a lot of us found it very hard to get that enthused about anything for a while,” she says. ALB 33
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FEATURE | in-house issues >>
Panel discussion: In-house counsel speaks With corporations cutting back on costs, ALB asked some of the leading in-house counsel in Australia and New Zealand what the biggest challenges will be for 2009
What are some of the unique challenges presented by the global financial crisis for in-house counsel?
With companies downsizing, is it possible we might see more in-house counsel moving back into private practice?
A.“The obvious challenge is greater
A.“I think it depends on the company
efficiency – getting more value for money – but that is always present to some degree. What may be unique is that the need for greater efficiency is intensified, and occurring in an environment of changing problem sets, and novel and complex factual scenarios. So, in-house counsel may face cost-reduction imperatives and significant changes in the profile and volume of work. In this environment, there can also be greater need for lawyers who are particularly adept at investigating and distilling complex factual issues expeditiously. That is because strategy and outcomes may be driven less by purely legal issues and more by resolution of ‘novel and complex facts’.” – Eric Braun, former litigation counsel – Telstra Corporation, currently sole practitioner
otiate heir an able
and the industry as to how affected they are by the present economic conditions. In some cases, it may be more cost-efficient for a company to have in-house counsel than pay external legal fees. Although the advantage of a company using external lawyers is that it is a cost that is easier to turn on and off. Obviously in an economic downturn no-one is spared from redundancy, and in-house counsel is just as vulnerable as those in HR, marketing, etc. But at the same time, jobs are scarcer in private practice so I would not expect there to be a significant movement back into it.” – Rebecca Davidson, Senior Counsel, Beca
“
What problems have you commonly encountered when dealing with external law firms? A.“A common challenge is to get
a case evaluation early on in a litigious matter, based on a focused investigation of the key factual issues, so that the initial advice and strategy are not seen as unduly tentative or conditional. This is an area where specialist in-house litigation expertise can enhance the effectiveness of the external lawyers. Litigation is also sometimes seen as too much of a fixed ‘process’ with few genuine options to innovate, or to achieve early resolution of all parts of a matter. There is also the challenge of devising strategies, tailored to the client’s business and systems that reduce the burden, time and expense of discovery and evidence preparation.” – Eric Braun, former litigation counsel – Telstra Corporation, currently sole practitioner
”
“Obviously in an economic downturn no one is spared from redundancy and in-house counsel is just as vulnerable as those in HR, marketing etc … but at the same time, jobs are scarcer in private practice so I would not expect there to be significant movement back to it” Rebecca Davidson, Beca Senior Legal Counsel
unsel)
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Do you maintain an official panel? A.“It’s not that we have developed a panel of law firms – we have legal professional advisors who come from certain firms … I have come to know and respect them, and regard them as pre-eminent in their field – some of whom we have been working with for over 15 years.” – Suzanne Reintals, General Counsel, Origin Energy. How has the global financial crisis affected your relationship with panel law firms and your selection criteria? A.“Value, for one – the ability to add
value and demonstrate familiarity with our business is always important, and has become even more of a focus in a more cost-conscious environment.” – Rebecca Davidson, Senior Legal Counsel, Beca
Is there more pressure on you now to reduce legal spend going forward in 2009? A.No, I haven’t been asked to reduce
our legal spend. Our costs depend on how many challenges we have with our competitors either in defending or prosecuting. A lot of the work gets done in-house and I only outsource if there is no skill available to deal with it.” – Nimalan Rutnam, General Counsel & Director, Proctor & Gamble
A.“We always seek to be cost-conscious
about our legal spend. For good advice and where matters are of significant importance to Beca, spending money on legal advice is justified, but the bottom line is that we must be conscious as to all cost in this environment.” – Rebecca Davidson, Senior Legal Counsel, Beca
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Is it time to begin to reassess the viability of time-based billing? A.“I don’t think this will occur generally in the marketplace, but you may see some types of work for which options such as fixed fees become more prominent. There is little attraction to clients in fixed-fee arrangements unless those arrangements usually (or invariably) result in lower fees. For that reason, there will always be some resistance from service providers. Nontime-based billing will generally put more emphasis on the potential longterm client relationship, and less on the fee outcome for a particular project. Alternative fee arrangements are also not just about ‘working back’ to a reference point based on hourly billing. It’s important to try and find ways to define the work, perform it and charge for it so that its cost corresponds more closely to the commercial utility – from the clients perspective – of the work performed. All this involved some risktaking by the provider. It can be easier for smaller providers who have greater flexibility – and lower overheads.” – Eric Braun, former litigation counsel – Telstra Corporation, currently sole practitioner Is there more scope to use mid-tier and boutique firms as opposed to sticking with the top tier, to reduce costs?
“
“A solo practice has more flexibility in terms of fee arrangements, including fixed fees. For the right type of work, therefore, it should be lower cost and higher value, than using a firm with comparable expertise” Eric Braun, former litigation counsel – Telstra Corporation, currently sole practitioner.
”
A.“We don’t go to the law firm we go to the individual” – Nimalan Rutnam, General Counsel & Director, Proctor & Gamble
A.“Our experience is that it is ‘horses
for courses’ and some matters are dealt with more appropriately and cost effectively by top-tier firm, and others by a specialist or a mid-tier firm. So we never limit ourselves to any single tier, we work the whole field.” – Rebecca Davidson, Senior Counsel, Beca
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alb guide: intellectual property 2009
intellectual property state of the market
INTRODUCTION ALB Guide: Intellectual Property Law 2009 is the latest in an exciting series of detailed insights into specific practice areas and the leading firms and lawyers operating within them. By combining specific new research (among client companies, peers and barristers) with the ALB Deals Centre and third-party market information, ALB Guides arrive at lists of ‘leading firms’ and ‘recommended firms’ as well as ‘leading lawyers’ in each practice area covered.
METHODOLOGY In the preparation of this report, ALB conducted telephone interviews with Australian and New Zealand companies and law firms. Australian and New Zealand companies were primarily those listed in the ALB Deals Centre and on submissions received by firms. In addition, ALB sought opinions from Australian and New Zealand partners. Please note that in the ‘state of the market’ section, local firms are listed first followed by national firms, arranged according to feedback received. Interviews were conducted mainly in the two-week period from 22 January to 9 February 2009.
CONTENTS 36.
State of the market
37.
Leading and recommended firms
38.
Leading lawyers
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Despite the slump caused by the credit crunch, demand for intellectual property (IP) legal services has remained strong and resilient in Australian and New Zealand markets. Although some Australian firms have noted fewer due diligence exercises, IP work flows have remained steady for the past few years. One of the factors behind this is an overall upsurge in counterfeiting and infringement, typically caused when companies cut funding for research and development in favour of replicating successful products from competitors. Companies are under pressure to cut costs suggests Baker & McKenzie partner Robert Arnold, and some market players are capitalising on this by selling counterfeit products such as computer hardware, fashion accessories and cigarettes. Resolving these matters has become the ‘bread and butter’ of lawyers, who find they get better results by adopting a strategic approach in identifying counterfeiting networks, from their sources to distribution channels. The pharmaceutical and medical device industries have provided crossborder work for firms, particularly multi-jurisdictional patent invalidity cases and the unauthorised sale of pharmaceutical products via unregulated online traders. Baker & McKenzie partner Elisabeth Coffey has seen a “spate of cases” in which blockbuster pharmaceutical product patents nearing the end of their life are copied by generic brands before expiry. Given the above, it is not surprising that there has been a flurry of IP litigation work and some of the most well-known examples include legal action between: several motion picture companies and iiNet over illegal file sharing over the iiNet network; Telstra
and Fox Sports over rights in relation to NRL highlights packages; and Nine Network and IceTV over the ongoing dispute over electronic TV guides. On another note, climate change work flows are expected to provide a good line of business for IP lawyers as well. Mallesons Stephen Jaques expects the federal government’s proposed Renewable Energy Bill and Carbon Pollution Reduction Scheme to bring up to five years’ worth of climate change research & development (R&D) work. “There will be huge opportunities for commercial and venture capital IP lawyers in projects from the Clean Coal Fund (A$900m), Low Emissions Technology Development Fund (A$500m) and National Low Emissions Coal Fund CCS (A$100m),” says partner Scott Bouvier. This is not to say that there are no areas of slowing growth. The venture capital side of IP is expected to be weak for the next six months, with equity only likely to flow in about one to two years when R&D products results and markets recover. Mallesons expects significant patent and trademark litigation work as companies try to protect their innovations and brands in the credit crunch in positioning themselves for recovery. Similarly filing of patents may face a short-term setback as companies review low-priority portfolios and tighten them. “I spoke to a research institute that had trimmed a couple of hundred thousand dollars off its patent budget,” says Bouvier. “There will be a general rationalisation to focus on what’s important, so that will take some fat work away from the IP legal sector.” The area that could perhaps change would be clients growing more concerned about getting value for money. “The downturn is putting
pressure on how much clients can pay, so we are moving away from the timesheet and charging in new ways. For example, a lot of registration work is on a fixed-fee basis, so clients ask if we can do more fixed-fee work,” says Arnold. Quick dispute resolution is increasingly required of Kiwi IP lawyers and this is particularly the case in the consumer products area, suggests Kensington Swan partner Sheana Wheeldon, where high-end clients are keen to protect sales by taking action against counterfeit or infringing products. “These clients seem to be reasonably keen on protecting their IP. They have generally looked for a quick resolution, even if it’s not perfect – most cases settle before they get to litigation,” she says. In the past, many IP disputes have involved a lot of written correspondence and ‘bickering’ before reaching a resolution; however, nowadays there is less written correspondence and more parties are in favour of a quick compromise to settle disputes. “This is how more clients think now, so we focus on giving them value for money. We have fixed-fee arrangements for routine trademark filing, but don’t see demand for them in other areas. Fixed fees often have to be at the high end because they need to accommodate contingencies, and clients know this,” she states. Despite the changing market, lawyers remain optimistic that work flows will remain steady. Bouvier expects to be very busy with IP matters for the rest of his career and most firms would welcome this concept.
SYDNEY As usual Sydney lawyers have received the overwhelming majority of IP work Australasian Legal Business ISSUE 7.2
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20 09 and, not too surprisingly, partner fees were some of the highest. One client commented that most national top-tier firms charge between A$600-800 per hour, which is “out of control”. The general view was that firms should charge according to how much work was done, with a top price for highlevel strategic advice and a lower one for process-based work. Gilbert + Tobin was considered “commercially realistic” and more affordable than any of the national firms; it was strategic in delivering patent litigation services, thorough in its analysis and impressed clients with its general legal knowledge. Its service turnaround was “excellent” and it “never dropped the ball” when it came to delivering the end product. Anthony Muratore offered a global perspective; he was thorough, professional and competent, and clearly understood specialised issues and the technologies his clients were involved in. Rachel Launders was proactive in her trademark work and commercial, and understood her clients’ business. Lisa Taliadoros had the right combination of aggression and commerciality, while Lisa Lennon was very thorough in handling IP portfolios, attentive to detail and “knew her job”. Siabon Seet was very organised and coped well with the pressures of major litigation. Banki Haddock Fiora was personable and proactive, and experienced in trademark IP matters. Clients could not fault the firm’s legal expertise and mentioned that its client service was one of the best they had ever seen. Margaret Shearer was intelligent, client-focused practical and commercial, experienced in dealing with international companies and “more pragmatic than any other IP www.legalbusinessonline.com
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lawyer”. She was also considered to be a “warm and friendly person to deal with” with a good grasp of IP law, but never “wimped out”. Kate Haddock regularly visited her clients and had deep client knowledge. Peter Banki was personable and an experienced copyright litigator, and able to simplify matters in a calm way. FB Rice & Co was one of the more cost-effective patent and trademark firms, notably for its general IP advice. Chris O’Sullivan was very technical and experienced in the patent drafting space, and known for his knowledge of business method and computerimplemented inventions. Paul Whenman was both practical and “strong”, and had extensive experience in industrial chemistry. Charles Berman was experienced at advising US clients and known for his start-up work for medical manufacturers. Gail Hill was mentioned for her trademark opposition and removal work, with a good knowledge of cross-cultural branding issues and the wine industry. Baker & McKenzie had a high level of copyright advice, and very close client relationships to the point where clients considered them part of their team. Ross Maclean was down-to-earth, approachable, realistic and conservative, and able to “step outside the box” to help clients gain “optimum protection”. Richard Gough was a successful litigator, even in difficult, “hard-core” or even “highrisk” disputes. He provided clients with excellent input and had a “proactive eye” for trademark registration. Robert Arnold was also singled out for praise. Often chosen for its “good size, fit and culture” and ability to tend to matters “well in advance”, Henry Davis York was a favourite for everything at the “right price”. Donna Short was
leading firms
f l
NB: Firms are listed alphabetically under each subheading
sydney
ADELAIDE
• Baker & McKenzie
• Finlaysons
• Banki Haddock Fiora
• Piper Alderman
• FB Rice & Co
• Thomson Playford Cutlers
• Gilbert + Tobin • Henry Davis York
NATIONAL TOP-TIER FIRMS
• Herbert Geer
• Allens Arthur Robinson
MELBOURNE
• Blake Dawson
• Davies Collison Cave
• Clayton Utz
• Deacons
• Mallesons Stephen Jaques
• FB Rice & Co
• Minter Ellison
• Mason Sier Turnbull
NEW ZEALAND
• Phillips Ormonde Fitzpatrick
• AJ Park
• Piper Alderman
BRISBANE
• Chapman Tripp • Hudson Gavin Martin
• Cullen & Co
• Kensington Swan
• Griffith Hack
• Minter Ellison Rudd Watts
• McCullough Robertson
• Simpson Grierson
PERTH • Jackson McDonald
other recommended firms
NB: Firms are listed alphabetically under each subheading
f r
SYDNEY
ADELAIDE
• Collins Biggers & Paisley
• Madderns
• Corrs Chambers Westgarth
• Phillips Ormonde Fitzpatrick
• Harris & Company Solicitors • Phillips Ormonde Fitzpatrick
NATIONAL TOP-TIER FIRMS
• Simpsons Solicitors
• Freehills
MELBOURNE
NEW ZEALAND
• Arnold Bloch Liebler
• Bell Gully
• Baker & McKenzie
• Ellis Verboeket Terry
• Corrs Chambers Westgarth
• Henry Hughes
• Deacons
• Russell McVeagh
• Dibbs Abbott Stillman • Herbert Geer • Madgwicks
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alb guide: intellectual property 2009
leading lawyers NB: Lawyers are listed alphabetically by surname
Charles Alexander Firm: Minter Ellison Location: Sydney • Practice areas: IP, privacy, copyright, dispute resolution, competition, media, pharmaceutical, bioscience, sport, TMT • Advised subscription TV broadcasters, newspapers, magazine publishers and entertainment industry associations on copyright • Memberships: Copyright Society, IP Committee and Privacy Working Party of the Law Council of Australia
Rodney De Boos Firm: Davies Collison Cave Location: Melbourne • Practice areas: commercial exploitation of IP rights, negotiation and preparation of commercial agreements, trade practices advice • Clients: inventors, academic and research institutions, large multinational companies
Dan Brush Firm: Herbert Geer Location: Sydney • Practice areas: IP, TMT, M&A, IT • Acted on formation of e-commerce initiatives, strategic product development and internet media and subscription television JVs, and advised on implementation of IP asset protection regimes • US (Silicon Valley) and Australian legal experience
John Collins Firm: Clayton Utz Location: Sydney • National coordinator of IP and IT teams • One of Australia’s most experienced litigators, involved in most major IP disputes and advising prominent domestic and international clients • Memberships: IP Committee of the Law Council of Australia
Marianne Dunham Firm: Mason Sier Turnbull Location: Melbourne • Practice areas: IP, trademark, branding • Advised sports, TMT, manufacturers, food & beverage clients • Author of Lexis Nexis’ Intellectual Property Precedents (chapter one)
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hardworking and proactive, quick to respond and a good communicator, who was consistently able to bring in the right expertise and come up with good ideas. She was also good at providing regular feedback and reminding clients of important dates. Herbert Geer’s Dan Brush was friendly and considered “outstanding” in his service. He also had a good client focus to help them achieve their goals and they were “delighted” with his new technology work. Special counsel Diane Beer could identify problems and also ways to execute them. Corrs Chambers Westgarth had a “personal touch” that made it stand out from its competitors. Odette Gourley was professional, accessible and costeffective, which made a big difference in the currently economic climate. Simpsons Solicitors was a well-regarded specialist IP firm. Adam Simpson has built long-term client relationships with government departments, had a good work ethic, and gave “trusted” practical advice. Gules Munro was a “young gun” with a focus on the entertainment industry. Shane Simpson was a “veteran of the IP world”. Harris & Company Solicitors had also undertaken its share of IP work. Grant Hansen showed strength across commercial aspects of IP and took a pragmatic approach; he was also costeffective, innovative and a self-starter. Phillips Ormonde Fitzpatrick’s Ken Hamilton was praised for his “fundamental” trademark and opposition work, which was timely, cost-effective and quick. Collins Biggers & Paisley was noted for its border-protection work and to this end, Antony Riordan was quick and provided excellent advice. Shelston IP’s Jack Redfern managed IP matters well, and was commercial, realistic and “good value for money”. Thomson Playford Cutlers was also mentioned for its service, which met client needs satisfactorily. Peter Le Guay was mentioned for his trademark work. Griffith Hack’s John Lee was mentioned for his litigation work.
Guild Lawyers was very good for general IP. Paul Baker was thorough, knowledgeable and professional. Piper Alderman’s Robert Postema was an astute, “personable” and corporate lawyer. Gadens Lawyers’ Wendy Blacker was mentioned. Mallesons Stephen Jaques was very cost-effective, responsive and commercial and fast to produce “one or two pager deals”. Katrina Rathie handled ongoing and rather complex matters with ease. She was praised as helpful, responsive, highly clientfocused and good with licensing work, could handle “tricky” issues and capable of finding solutions for both sides that ensured good IP protection. Maurice Gonsalves was “extremely dynamic” and practical, and knew his subject matter. He was able to understand his client’s business objectives and find innovative solutions to help them achieve them. Scott Bouvier was always available, prepared to give his own opinion and also prepared to “go litigious” when required. One client had no hesitation in recommending him. Kim O’Connell was mentioned for patents litigation. Clients often turned to Allens Arthur Robinson for its size and considered it to be “one of the top firms” for general IP matters and developments in law. Ian McGill was commercial, accessible and proactive in training staff, and had a complete and thorough knowledge of law. Jim Dwyer was a “strategic IP thinker”, well supported by his capable staff – particularly in his trademark prosecution and registration work – and had a keen eye for IP issues. David Yates was clear, articulate and willing to learn, and also knew how to work well with clients, rather than trying to dictate. Philip Kerr was knowledgable and courteous, and put his clients’ interests first. Trevor Davies was “technically exceptional”, “very strong strategically” and easy to work with. Minter Ellison was a top pick for its good knowledge of copyright matters and peacemaker approach to resolving disputes without lengthy litigation. Charles Alexander was very Australasian Legal Business ISSUE 7.2
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highly regarded by clients because he focused on outcomes, maintained good client relationships, had good contacts and provided a commercial perspective, while being mindful of client requirements. He demonstrated a “masterful command” of IP issues and was able to work in a highly adversarial environment without “resorting to fighting or litigation”, which one client considered to be rare. Lynne Peach was client-focused, innovative and highly regarded in trademarks and patents, and large-scale litigation was one of her strengths. Anthony Lloyd and Keith Robinson were mentioned for their extensive practices in IT-related IP issues. Clayton Utz was one of the sizable firms with enough resources to provide more than adequate manpower. John Collins could understand technology quickly, had a “depth of experience” and an “inclusive” style of leadership, but didn’t take himself “overly seriously”. Mary Still was “tough”, well-organised and a strategic thinker, while John Fairbairn was a young “technically savvy” partner with a deep understanding of copyright law. Jim FitzSimons and Robert Cutler were also mentioned for their IT-related IP work. Blake Dawson was known to be strong on IP aspects of acquisitions. Lisa Ritson was very knowledgable and capable, and made clients feel comfortable – and safe. Emma Rodigare was one of the few junior lawyers praised for her excellent and responsive service. Melinda Upton was capable in trademark matters, while Ben Miller was mentioned for his patent and litigation work. Freehills was mentioned for its strength in the trade practices area. Sue Gilchrist was practical, creative, commercial, responsive and always available, and able to understand both commercial and legal issues.
MELBOURNE One important observation that clients made was the need for large top-tier firms to ensure quotes were done accurately and that accumulating legal fees were more closely monitored. One www.legalbusinessonline.com
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client said that previously large firms have been lacking in their provision of quotes across various lawyers, so it was difficult to work out how much standard IP services may cost. There was also concern from one client who discovered that his legal adviser often operated outside the scope of his instructions. Davies Collison Cave was mentioned for its registration work and being “above average” in its follow-up, involvement in client businesses and taking the “extra step”. Richard Jarvis went to great lengths to explain IP matters from a commercial perspective. Joy Atacador was considered to be a very good, commercial and practical senior associate. Associate Helen Mutimer was proactive, friendly and sensible. Rodney De Boos, Ian Pascarl and Marion Heathcote were mentioned. Mason Sier Turnbull was one of the Melbourne firms that won praise. Special counsel Marianne Dunham had longstanding client relationships, and was known for her pragmatic and practical approach and “specialty” in IP, and understanding of issues of ownership. Special counsel Darren Sommers had a depth of knowledge in franchising matters. Noelene Treloar was an “expert” in science or IT-related IP matters. Phillips Ormonde Fitzpatrick’s Greg Chambers specialised in patent and trademark litigation, Ray Evans and David Tagell were mentioned for their chemistry IP work, and Ross McFarlane was mentioned for his technology expertise. Piper Alderman was praised for its effective multi-party agreements in both the private and public sectors. George Raitt was mentioned for his exceptional risk management, practical approach and “long experience”. Tim Clarke was enthusiastic about start-up IPs. Deacons had a good track record for Australia-based and offshore matters. Bernard O’Shea was talented at licensing, collaboration agreements and working with overseas clients operating in the pharmaceutical or biotechnology space.
leading lawyers Mark Gavin Firm: Hudson Gavin Martin Location: Auckland • Practice areas: IP, copyright, trademark, anti-counterfeiting, brand protection and development • Advised FMCG, liquor, fashion, advertising, manufacturers, pharmaceutical clients • More than 30 years’ experience in the New Zealand market
Earl Gray Firm: Simpson Grierson Location: Auckland • Head of Simpson Grierson IP group • Practice areas: IP, biotechnology, life sciences, franchising • Acted for Bunnings on copyright, moral rights and trademark infringement proceedings by Mitre 10, IP aspects of The Lord of the Rings trilogy for New Line Cinema and Mars Group’s NZ IP strategy • Memberships: Non-Traditional Trademarks committee – INTA,
Richard Gough Firm: Baker & McKenzie Location: Sydney • Practice areas: anti-piracy, anti-counterfeiting, copyright, IP litigation, patent litigation, trademark and trade dress litigation • Acted for proprietors on Federal Court trademark and copyright protection litigation; Australian universities about copyright licensing • Memberships: International Anti-Counterfeiting Coalition, IP Society of Australia & New Zealand, Australian Copyright Society
Marion Heathcote Firm: Davies Collison Cave Location: Sydney • Practice areas: IP matters, trademark protection & enforcement, associated trade practices • Extensive experience in international trademark portfolio management and protection, particularly in the Asia Pacific region • Memberships: Intellectual Property Society, International Trade mark Association (INTA) as Indigenous Peoples Rights
Richard Jarvis Firm: Davies Collison Cave Location: Melbourne • Practice areas: Pharmaceutical, biotechnological and chemical patent litigation • Has 29 years’ experience in IP litigation and associated advice matters, conducted leading cases • Memberships: American IP Law Association, International Association for the Protection of IP, Licensing Executives Society
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leading lawyers Sarah Matheson Firm: Allens Arthur Robinson Location: Melbourne • Practice areas: IP, TMT, patents, trademarks, biotechnology, health, dispute resolution • Acted on patent infringement and validity litigation for GlaxoSmithKline pharmaceutical group and IP advisory for GSK, licensing agreements for Cadbury, IP, regulatory and pricing advisory for CSL Limited
Anthony Muratore Firm: Gilbert + Tobin Location: Sydney • Practice areas: IP, biotechnology, pharmaceutical, mechanical, chemical, high technology • Established reputation in acting on complex Australian and multijurisdictional patent proceedings
Brendan Nugent Firm: Griffith Hack Location: Brisbane • Practice areas: patents, pharmaceutical, chemistry, food science, immunology, biology, biochemistry, agribiotech • Has over 20 years’ experience and advises start-up, biotechnology, university pharmaceutical and overseas clients • Memberships: Institute of Patent and Trade Mark Attorneys, Intellectual Property Society, Australian Society for Biochemistry
Ian Pascarl Firm: Davies Collison Cave Location: Melbourne • Practice areas: Major patent litigation in Biomedical, Pharmaceutical, Biotechnology, Agricultural, Chemical and Electronic sectors, and the conduct of Copyright and Trade Mark litigation • Memberships: Chairman of the Intellectual Property Committee, Law Council of Australia, Law Institute of Victoria
Katrina Rathie Firm: Mallesons Stephen Jaques Location: Sydney • Practice areas: IP, dispute resolution, food, TMT, product liability, trademarks, corporate, advertising, marketing • Advised on protection and enforcement of IP rights with focus on brands, trademarks, mastheads, designs, copyright, misleading and deceptive conduct under the Trade Practices Act, media and celebrity rights
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FB Rice & Co was also singled out for praise. Jenny Petering was praised for her “active” approach to IP management and strategic commercial advice. Associate Marcus Caulfield only left clients with good experiences. Arnold Bloch Liebler’s Michael Dodge was astute, commerciallyfocused and a lateral thinker. Jane Sheridan was efficient, straightforward and commercial, while Zaven Mardirossian was innovative, strategic and comprehensive. Corrs Chambers Westgarth’s Philip Catania was praised for his IP knowledge, commercial nous and an excellent team, with whom he enjoyed working. Stephen Stern continues to be recognised as a prominent IP and litigation expert. Dibbs Abbott Stillman was mentioned for its IP litigation expertise. Special counsel Bronwyn Francis Martin managed to satisfy all her client requests. Herbert Geer’s Graeme Hodgkinson was mentioned for traditional trademark and branding work. Madgwicks’ Rick Goldberg was thorough, results-orientated and commercially and risk-managementfocused. Baker & McKenzie was mentioned for its global presence and plentiful resources. Griffith Hack’s Wayne Condon was praised for his patent litigation, Russell Berry was commended for being commercial in his advice, Andrew Goatcher was good with copyright litigation, and both Greg Munt and Chris Sgourakis were mentioned. Allens provided “five-star service”, was thorough and enthusiastic, and very good at complex litigation that demanded a high-level of resources. Andrew Butler was easygoing, responsive and strategic, and good at drafting documents. Sarah Matheson was detail-orientated, good at clientrelationship management, knew the progress of the litigation and had a good idea of how to achieve outcomes. Tim Golder had “great industry experience” and always tried to go the extra mile with his client service. Richard Hamer was
technical, open-minded and a clear communicator. Freehills brought a high-degree of technical, commercial and litigation expertise. Campbell Thompson and Ken Adams did a “first-class job” in client-relationship management and were committed, proactive and hardworking – and also capable of “synthesising” complex facts into a very commercial and sophisticated strategy. Minters provided a competent, broad and strong skillset when it came to IP work. Paul Zawa was precise, determined and prompt to respond, helpful, strategic and thorough. Ron Pila, Paul Kallenbach and Oliver Barrett were also mentioned. Clayton Utz’s Kate Marshall had a good understanding of scientific concepts and was hardworking, clear – a “direct thinker” and agood communicator. Chris McLeod was commercial; “user-friendly” from a client’s perspective and cool under pressure. Clients believed they “could not go wrong” with Mallesons, especially Mark Weber, who brought a “huge amount of experience” in diverse IP contracts and solutions. Clients commented that he was creative, diligent and reliable, and seen as one of the “veterans”. Wayne McMaster was mentioned for his patents work, and Natalie Hickey was a high-profile copyright and trademark litigator. Robert Cooper was mentioned for his patents and copyright litigation, and Cheng Lim had a high-profile copyright client base. Blake Dawson’s Peter Chalk was “one of the best generalist IP lawyers in Australia” and a “master of IP law”. Mary Padbury was an IP pioneer and noted for her copyright and patent work. Belinda Findlay was known for her trademark and copyright work in the food industry, while Grant Fisher was knowledgeable in chemistry, pharmaceuticals and biotechnology, and also known for his trademark and patent work.
BRISBANE McCullough Robertson was professional, timely, helpful, friendly Australasian Legal Business ISSUE 7.2
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and facilitated “well-presented” meetings. David Downie provided sound technical advice and demonstrated negotiation and problem-solving skills that were of “great benefit” during long contract negotiations. He was patient and helpful even in frustrating circumstances and reached solutions that all parties were happy with. Cullen & Co had longstanding client relationships and was known for its trademark and filing work. Gary Nock provided “excellent” and “sound” advice. One of Griffith Hack’s strength was advising on patent matters. Brendan Nugent understood technical aspects of patent work and was “timely”. Minters left its clients with a pleasant experience, with its prompt, open and understanding approach. Consultant Margaret Brown was “outstanding”, “absolutely professional” and pointed clients in the right direction, while being efficient, honest and “genuine” in how she kept her clients’ best interests at heart. Special counsel Suzanne Sheridan was able to work within “heavy time pressures”, met deadlines and was “thorough”. Clayton Utz’s Jeremy Charlston was a “first-choice lawyer” for government and had a good grasp of IT-related aspects of IP. Mallesons’ John Swinston was mentioned for his patent litigation. Blake’s David Wenck was also mentioned.
ADELAIDE Thomson Playford Cutlers was knowledgeable, effective at helping start-ups “create their own success stories” and had a “high level” of competence. Adrian Tembel was a license-agreement “architect”, intelligent and strategic, and “happy to work at any hour of the day or night”. Competent and able to liaise with overseas contacts, he was also dubbed an “extrovert” and “charismatic” – which European clients responded well to. Associate Andrew Ross was also praised. Finlaysons provided “excellent” client service, and sound and accurate www.legalbusinessonline.com
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advice. Clients simply “could not speak more highly” of the firm. John MacPhail was knowledgeable and helpful “right from the start”, and gave good, practical but not overly technical advice. He had great availability, was responsive and astute, and willing to go the “extra mile” in his work – for a reasonable price. The late John Maciel from Piper Alderman received a special mention as an “IP specialist” who was tenacious and commercially astute, and interpreted client requirements from a practical perspective. Tim O’Callaghan was laid-back and straightforward in his brand protection and litigation work, while Tony Abbott was “likeable” and “highly astute”. Phillips Ormonde Fitzpatrick offered good scientific knowledge and a strong understanding of patents. Greg Bartlett had great relationships with clients interested in filing overseas, Karen Spark was known for her mechanical expertise. Associates Jeff Holman and Justin Coombs were singled out for praise. Madderns was a “strong player” in patent and generalist IP, and “technically strong”. Martin Pannall was technically sound and had longstanding relationships. Mark O’Donnell was competent and “entrepreneurial”. Minters left clients with a very positive experience, mainly due to the firm’s “high level of service”. Josh Simons was commercially astute, with a helpful competition background. Richard Pash was experienced in joint-development contracts, and his seniority and experience were highly valued.
OTHERS In Perth Jackson McDonald had a reputation for being accessible and knowledgeable, and also easy to work with. Stephanie Faulkner was recognised as a “copyright expert” with “extensive” experience in IP litigation. She was focused, provided commercially sound advice and had “excellent leadership skills”. Darren Pratt was a skilled litigator, direct and a good communicator.
leading lawyers Lisa Ritson Firm: Blake Dawson Location: Sydney • National IP practice leader • Practices in a range of contentious and non-contentious intellectual property and e-commerce work including in the areas of trademarks, copyright, merchandising, marketing and advertising, sponsorship and endorsement, franchising, IP licensing, passing off, confidential information and consumer protection
Donna Short Firm: Henry Davis York Location: Sydney • Practice areas: corporate, IP, TMT • Acted for IT companies, banks, financial institutions and health insurance companies • Memberships: Licensing Executive’s Society, Australian Corporate Lawyers Association, Australian Information Industry Association, Copyright Society
Adrian Tembel Firm: Thomson Playford Cutlers Location: Adelaide • Practice areas: IP, biotechnology, pharmaceutical, corporate, TMT, M&A, PE • Advised public and private companies, state and commonwealth government entities, biotechnology, medical, climate change, IT, TMT
Mark Weber Firm: Mallesons Stephen Jaques Location: Melbourne • Practice areas: IP, defence, IT, telecommunications, international trade, dispute resolution • Memberships: Victorian Society for Computers and the Law, Defence Representatives Association, Defence Industry Contracting Consultative Forum
Sheana Wheeldon Firm: Kensington Swan Location: Auckland • Practice areas: IP, trademark, branding, copyright, border protection, patent litigation, domain name disputes, confidentiality • Regularly appears at Intellectual Property Office hearings, courts and mediations. Maintains commercial practice in IP, focusing on trademarks, including oppositions • Memberships: New Zealand Institute of Patent Attorneys
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alb guide: intellectual property 2009
Intellectual property matters filed in 2007 and 2008 12 10 8
2007
6
2008
4 2 0 s e th IP on av ue ar us on C tg cq rg st n a l e es o J e F s W r Sh & ns lin rs G ol he on C be p s e s m ru St vie ha Sp C ns Da o rr s s o le C al M th iffi
k ac
H
n tz ck on U so tri ns n aw bi pa to z o D y t R e la Fi C ur ak de th Bl n r o A rm ns O le s Al p i ill Ph lls hi ee Fr
Source: Commonwealth Courts Portal – All Federal Court Registries
Also in Perth, Griffith Hack’s Stuart Boyer was knowledgeable in biotechnology. In Canberra, Minters left clients with a good experience, mainly due to the firm’s ability to liaise with multiple parties and assist them with drafting and negotiation. Paul McGinness was pragmatic, businessorientated and technically strong in “legalese”. Clayton Utz was mentioned in both Canberra and Perth, where Scott Crabb and Paul Fitzpatrick were singled out for praise.
NEW ZEALAND Simpson Grierson was most highly praised in New Zealand for providing a legal perspective from a practical business point of view, and understanding its clients and products. Some of the firm’s key strengths were in copyright and its ability to service foreign clients who need a range of services in addition to IP. Earl Gray was professional, approachable, responsive and friendly, consistently able to keep in touch with clients and appreciated for numbering his paragraphs, which made them “easy to read”. Clients could not fault Shelly Caves or Peter Hinton for their work, while Richard Watts
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was a “solid IP generalist”, who was “always accessible”. Hudson Gavin Martin was “excellent” at defence and “noused itself” as a specialist IP firm that was considerably cheaper than large Kiwi firms. The firm offered an “impressive bunch” of associates, which one client considered rare due to the country’s debt and market size that often led to overseas defections. Mark Gavin was commercial, client-focused and results-orientated, and an “absolute IP expert”. Simon Martin was “highly experienced” and provided advice with few “overhead” costs that was often “quicker than some of the larger firms”. Wayne Hudson was quick, and an expert in copyright and online commercial matters. Chapman Tripp had managed to keep some longstanding clients due to the firm’s responsive, hardworking, positive and proactive approach. Clients appreciated how the firm was easy to work with, kept clients informed and provided prompt, quality trademark submissions. Matt Sumpter was confident, and a clear communicator and delegator, with good business acumen and instincts. Robert Bycroft always took the time to
visit clients and answer questions they had. He was appreciated for being cost-effective by allowing paralegals to carry out the work. AJ Park was very knowledgeable in patents and provided trademark information that “larger firms wouldn’t be privy to”. Alan Potter and Mark Hargreaves were commercial, practical and offered academic solutions that were businessoriented. Kin Moon was knowledgable in copyright, understood her clients’ businesses and good at finding international contacts. Kim McLeod had a good grasp of IP issues, Allan Bowie was commercial, smart and efficient. Bryan Thompson was knowledgeable, Greg Arthur was a technical expert and eloquent, Keith Thompson and Peter Luxford had a wealth of experience, while Logan Callahand was also mentioned. Kensington Swan was favoured for its successful IP litigation and “refreshing” commercial perspective, particularly among in-house lawyers. The firm was timely, thorough and commercially savvy, and did not simply judge client instructions at “face value”. Sheana Wheeldon was an “excellent operator”, diligent,
commercial, proactive and timely, able to “stick to fee estimates”, “excellent” at advising on international trademark and protection strategies, and favoured for her “down-to-earth” – not “overly lawyerly” – approach. Minter Ellison Rudd Watts provided “great service”, anticipated client needs, identified solutions proactively and gave pragmatic advice that achieved the desired outcomes. Christopher Young was “exceptionally” commercial, built up a “great deal of trust” and was easy to communicate with. His understanding of the level of risk that clients were prepared to take proved “invaluable” on many occasions. John McKay offered “excellent advice” and the formal support required for trademark work. Bell Gully was thorough and pragmatic, and did an “excellent job” of handling IP matters. Ellis Verboeket Terry continued to receive praise. John Terry was considered to be an “acknowledged leader” in IP strategy, Peter Verboeket combined “excellent” patent attorney and IP litigation skills with a “solid practical commercial approach”, while Jonty Ellis was recognised as a creative and lateral thinking brand strategist. Alan Ringwood was practical and had a “good choice of senior counsel”. James Gibson and Anna Buchly were quick, highly responsive, proactive, commercial and easy to deal with, and did not try to “grandstand” with the other party. Kevin Glover was a pleasure to deal with Henry Hughes was considered to be a good trademark firm. Barbara Sullivan was “lovely”, willing to help and always on the lookout for ‘look-alike’ products that could classify as counterfeits or patent breaches. Russell McVeigh’s Garth Sinclair and Graeme Quigley were commercial, highly responsive and focused on achieving results. Australasian Legal Business ISSUE 7.2
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featured firm
featured firm
Duncan Cotterill
Truman Hoyle
Our dedicated team of experts undertakes a wide range of intellectual property work and provides advice for clients in both New Zealand and Australia to ensure their intellectual property is identified, protected and commercialised.
Truman Hoyle is a multi-award winning specialist law firm serving the new economy industries across the Asia Pacific region.
We were recently awarded the specialist award for Intellectual Property in the 2008 New Zealand Law Awards.
Key Specialists Scott Moran Scott assists clients to identify and commercialise their intellectual property including advising on branding strategies and significant trademark portfolios. Scott often works with clients from the inception of technological innovation and product design through to taking their products to market and the ultimate licensing or divestment. Scott is a member of the Intellectual Property Society of Australia and New Zealand, the International Trademark Association and the Licensing Executive Society. e: s.moran@DuncanCotterill.com Ruvini Rendle Ruvini practices in many areas from trade mark and copyrights to securing registration, and enforcement of rights, including overseas jurisdictions. e: r.rendle@DuncanCotterill.com Neil Scott Neil, in our Sydney office, has particularly experience in relation to the development and licensing of computer software and associated IT issues. e: n.scott@DuncanCotterill.com Chris Bradley Chris is a leading practitioner in franchising and licensing, including trademarks; ownership of intellectual property in relation to business systems, confidential information and restraint of trade. e: c.bradley@DuncanCotterill.com Richard Raymond Richard conducts litigation on intellectual property matters and acts for Patent Attorneys on copyright infringements on behalf of their clients. e: r.raymond@DuncanCotterill.com
A key practice of the firm is intellectual property law. Principally serving an A list of clients in the media, technology, communications, bio-technology, fashion, advertising and e-commerce industries, the firm also advises many household name corporations in other sectors. Services provided by the firm’s intellectual property law practice include: • advising on the identification, management and commercialisation of intellectual property rights; • conducting litigation and alternate dispute resolution in relation to breaches of rights, including patent infringement cases; • advising on issues such as passing off, misuse of confidential information, misleading and deceptive conduct and breach of intellectual property rights; • securing registration of trademarks, designs and, in consultation with patent attorneys, patents; • advising on corporate IP strategy, patent validity, infringement and oppositions as well as licence and distribution arrangements.
Key Specialists Mark Vincent, Lead Partner, IP Transactions, Strategy and Enforcement e: mvincent@trumanhoyle.com.au Shawn Skyring, Partner, Industrial and IP Enforcement e: sskyring@trumanhoyle.com.au Kathryn Edghill, Partner, Competition and IP Enforcement e: kedghill@trumanhoyle.com.au Graham Maher, Partner, Competition and IP Enforcement e: gmaher@trumanhoyle.com.au Nick Hart, Senior Consultant, IP Transactions and Strategy e: nhart@trumanhoyle.com.au Lisa Vanderwal, Senior Lawyer, IP Transactions e: lvanderwal@trumanhoyle.com.au Bridget Edghill, Senior Lawyer, IP Transactions e: bedghill@trumanhoyle.com.au Megan Edwards, Lawyer, IP Registration, Strategy and Enforcement e: medwards@trumanhoyle.com.au
Duncan Cotterill www.duncancotterill.com www.legalbusinessonline.com
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Truman Hoyle Level 11, 68 Pitt Street Sydney NSW 2000 T: +612 9226 9888 F: +612 9226 9899 E: th@trumanhoyle.com.au www.trumanhoyle.com.au
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alb guide: intellectual property 2009
featured firm Davies Collison Cave Solicitors Davies Collison Cave Solicitors is unequalled in its ability to combine leading intellectual property law services with Australia’s largest and most respected patent and trade mark attorney firm.
Key Leaders Rodney De Boos Rodney’s major area of practice is the commercial exploitation of intellectual property rights. He is a former President of the Licensing Executives Society International; recognised in the International Who’s Who of Patent Lawyers in 2007 and a recommended lawyer in the Cross Border Intellectual Property Handbook 2007-2008. Des Ryan Des joined the firm in 1954 and has received many accolades in his career including the Order of Australia (AM) 2002, WIPO Gold Medal (1995) and a LES International Gold Medal (1992). Richard Jarvis Richard is the firm’s senior litigation partner. He has 25 years’ experience in IP litigation and associated advice. In 2000 he was ranked in the “Top 20 Best of the Best” patent lawyers in the world by “Euromoney Legal Media Group”. Ian Pascarl Ian is ranked as one of Australia’s leading IP experts by Asia Pacific Legal 500, Legal Media Group Expert Guide and Chambers Global 2007; as a leading individual by PLC – Cross Border Handbook 2008 for IP Litigation and Euromoney’s Guide to the World’s leading Patent Law Practitioners 2007 and recognised in the 2008 AFR survey of Australia’s 100 Best Lawyers. John Hannebery John has a Bachelor of Science (Pharmacology & Organic Chemistry) and primarily runs complex patent litigation as well as litigation in relation to other intellectual property rights. Chris Jordan Chris’ major area of practice is IP litigation. He has more than 20 years’ experience in patent, trade mark, designs, copyright, trade practices and confidential information litigation. Joy Atacador Joy advises clients on ownership, protection and enforcement of intellectual property rights, with a key focus on anti-counterfeiting strategies and border protection measures. Darron Saltzman Darron has a Bachelor of Science (Maths) and specialises in intellectual property litigation and licensing. His licensing practice has a particular focus on computer software and technology licensing. Davies Collison Cave Solicitors T: 03 9254 2777 www.davies.com.au
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COMING UP ALB Issue 7.3 (March) Environment law ALB Issue 7.4 (April) Insurance Law
Australasian Legal Business ISSUE 7.2
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25/02/2009 6:06:07 PM
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profile | managing partner >>
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Australasian Legal Business ISSUE 7.2
25/02/2009 10:30:24 AM
profile | managing partner >>
alb/LEXISNEXIS 2009 managing partnerS series
John Carrington, Blake Dawson:
The evolution continues John Carrington’s first-ever job was driving a tractor. These days he’s in the driver’s seat at Blake Dawson and reflects with ALB on the journey so far – and the road ahead
G
iven his background as an insolvency practitioner, it’s a fitting time for John Carrington to be settling into the managing partner role at Blake Dawson. As a firm that is known particularly for its insolvency and restructuring expertise, Blake Dawson is perhaps better placed than most to weather the present storm. It’s the latest chapter in what might perhaps be called the ‘Blake Dawson grand narrative’ – the story of a firm that has managed to revive its fortunes and is now looking to consolidate its position.
Transformation
There should be a strong level of continuity between Carrington’s leadership and that of his predecessor, John Atkin – the two men worked together for many years and Carrington was part of the team which, under Atkin, turned the firm’s fortunes around from a state of sliding revenue to healthy double-digit growth. Among the many transitions the firm underwent in this era, Carrington notes as particularly important the one from being primarily a transactionbased firm to being relationship-based.
►► Blake Dawson – revenues (A$m)
400 350 300 250 200
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2007–2008
2006–2007
2005–2006
2004–2005
2003–2004
2002–2003
0
2001–2002
50
2000–2001
100
1999–2000
150
This did not mean that the firm ceased to do transactional work, but it would demonstrate its commitment to key clients by declining to undertake work that was contrary to those clients’ commercial interests. “So it’s not just in instances of clear legal conflict that we’d turn work away, but we’d also take into account how the particular transaction would impact on our clients’ business,” says Carrington. Another important transformation was the shedding of what was perhaps a legacy of the firm’s origins from a series of mergers in key states – inter alia, the 1988 merger of Sydney’s Dawson Waldron with Melbourne’s Blake & Riggall. The firm was restructured to present a cohesive national practice – reporting began to take place on practice group lines rather than geographical ones and national practice groups formed. “The challenge was to optimise the opportunities associated with the original set of mergers and to make it seamless,” Carrington says. “Of course, offices have always worked together, but it perhaps wasn’t as seamless as it is today. Now it’s part of the culture and the daily practice of the firm.” 47
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profile | managing partner >>
To cap off the transition, the firm updated its brand by dropping ‘Waldron’ from its name and adopting a more modern image complete with bright colours – including a shade of aquamarine few firms would dare adopt. The firm also brought personality into the equation by adding cartoons by Charles Barsotti – of The New Yorker fame – to its website and literature.
Expansion
“We are unquestionably top-tier when you look at the calibre of our client base and the number of partners who are recognised as leaders in their field of specialisation” 48
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Carrington laughs wryly when the subject of appropriately timed expansion comes up – the firm launched two new offices in Adelaide and Singapore not long before the economic chaos of September 2008 took the world by storm. “We didn’t expect the crisis to have the impact that it did, he states. “But that being said I have no doubt that both offices will prove to be successful.” The Adelaide office will have a resources industry focus and Carrington tips the SA resources industry to develop significantly in the medium to long term – depending, of course, on the speed of economic recovery. Meanwhile, the Singapore office launch was predominantly driven by the firm’s desire to expand its international hotels and tourism practice group that was established more than 15 years ago to become a market-leading practice in Australia. The Singapore government has only recently relaxed its prohibition on foreign firms practising local law by granting a limited number of licenses late last year. Carrington says that while Blake Dawson did not apply for such a license, it did apply for a foreign law license. “Given that our clients are international, we didn’t really have the need to get into local law,” he says. And, given the very recent commencement of the Singapore operation, Carrington says it is too early to talk about alliances with local Singaporean firms – although Blake Dawson is keeping an open mind about such possibilities. “We work with a number of local Singaporean law firms and we have also co-located our offices with Zaid Ibraham, a leading Malaysian law firm, and with Dua & Associates, a
leading Indian firm,” he says. At present the firm has no plans to open other Asia offices, which raises the perennial question of characterisation – many top-tier firms prefer to see themselves as ‘regional’ in terms of the Asia-Pacific rather than simply ‘Australian’. Carrington says that in recent years, Blake Dawson has concentrated on building a strong base in Australia and is now in a position to take a regional perspective. “We are predominantly Australia-based, but we act for clients throughout the region,” he explains, “so we need that strong Australian base.” Blake Dawson also has an office in Port Moresby, started by a predecessor firm acquired by Dawson Waldron in the 1980s. “It’s not a huge part of the business, but it’s an important part,” Carrington says. “Without it, some of the client relationships we have at the moment would not have been possible.”
Market perspective
The thought has been a consistent in the market that the ‘big six’ can be divided further into the ‘big three’ with AAR, Mallesons and Freehills taking the honours as Australia’s premier firms. Clearly it’s not an analysis that does Blake Dawson, Clayton Utz or Minter Ellison any favours. “There is a top tier, but it’s not limited to three,” Carrington says firmly. “We are unquestionably toptier when you look at the calibre of our client base and the number of partners who are recognised as leaders in their field of specialisation.” As an example, he cites a recent ‘Best Lawyers Australia’ peer review survey which had Blake Dawson ranked top, sharing the leadership position with Freehills. “The number of our partners who were recognised as leaders in their field reflects the overall strength of our practice,” Carrington declares. It is interesting to note, however, that while Blake Dawson’s appearances in ‘recommended lawyer’ directories have increased, the firm’s partnership has not grown substantially in the same period – an achievement which Carrington attributes equally to good recruitment and good expertise development. ALB Australasian Legal Business ISSUE 7.2
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25/02/2009 10:30:30 AM
FEATURE | m&a >>
M&A in 2009
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Australasian Legal Business ISSUE 7.2
25/02/2009 3:29:02 PM
FEATURE | m&a >>
This time last year, firms could still take refuge in the ‘two-speed economy’ and M&A pipeline, but now – in the austere new landscape of 2009 – there’s nowhere to hide
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hen BHP finally abandoned its ambitious bid for Rio Tinto, it was the end of an era for more than just the weary legions of M&A lawyers who had devoted countless hours to the cause. It also signalled the end of any fancy that Australia was immune to the global economic downturn or any notion that the resource boom would continue to cushion the local economy. But although the glory days of M&A may be over for now, the lights still burn late in M&A practices. The game has changed – but the wheels are still turning.
Rough ride
Firms are occasionally guilty of ‘talking up’ big-ticket activity during tough times and 2008 was no exception. However, figures collated by industry benchmarks such as mergermarket and Thomson-Reuters tell a different story. Thomson-Reuters found that the legal industry in Australia and NZ had advised on US$121bn of announced deals in 2008, down by nearly 35% on 2007. Completed deals were also down by a similar margin. Closer analysis provides even less reason for cheer. All but three of mergermarket’s top 10 M&A deals of 2008 were announced in the first six months of the year. Two of those three second-half deals were in the resources
sector and were announced prior to the collapse in commodity prices. Those keeping an eye on the NZ market would have noted an interesting trend in the final quarter of last year that saw M&A activity more than quadruple the third quarter volume with US$1.8bn of deals, particularly on the back of foreign investors attracted by a lower NZ dollar. This upsurge was, however, in the context of a very poor year which saw M&A activity nearly halve on 2007 levels. Is this a sign of things to come for Australia-NZ market activity, or will M&A levels continue to decline? Freehills partner Rebecca MaslenStannage says that while the days of the “mega deals” are over, M&A activity will continue to be steady. “It’s a good time to be a buyer and – particularly with the fall in the Australian dollar – good buying opportunities are emerging for offshore investors,” she adds. Last year the Rudd government created some unease by flagging changes to foreign investment rules. The implications of the changes were never completely understood and the issue was quickly overtaken by the remarkable events of September. “The application of the government’s principles on investment by foreign state-owned enterprises and sovereign wealth funds has yet to play out,” says Mallesons partner Jason Watts. He
►► Australia/NZ Top M&A firms 2008 – Announced deal value Rank/Firm
Deal value (US$bn)
% change
1. Freehills
56.9
-39
2. AAR
54.9
30
3. Mallesons
49.9
14
4. Gilbert + Tobin
27.5
25
5. Clayton Utz
25.6
-14
6. Skadden Arps
19.9
90
7. Blake Dawson
12.3
-43
8. Linklaters
10.3
-45
9. Dewey & LeBoeuf
10.2
272
10. Minter Ellison
9.5
-7
► •
Source: Thomson-Reuters
also says that with the possibility of more investment from such agencies, the principles announced early last year are likely to be put to the test.
M&A – distressed and ‘classic’
The prevalence of M&A associated with the sale of distressed assets is a by-product of the economic downturn. “These deals are highly structured and require a lot of negotiation as you’re working with a number of counterparties,” says Baker & McKenzie partner Steven Glanz. “The assets have to be lifted out of a messy situation and there’s complicated due diligence – and creditor issues too.” 51
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25/02/2009 3:29:04 PM
FEATURE | m&a >>
“Banks are offering portfolios of assets – for example, aviation assets or port facilities – and these might tempt buyers who can see a strategic gain in such acquisitions … it might accelerate the buying timetable” Steven Glanz Baker & McKenzie
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Jason Watts says that speed to execution is also an issue: “The timetables for distressed asset sales are often set by banks as a condition to restructuring of debt.” Not surprisingly, the consensus is that distressed M&A activity will increase this year. “Banks are offering portfolios of assets – for example, aviation assets or port facilities – and these Jason Watts, might tempt buyers who Mallesons can see a strategic gain in such acquisitions,” says Steven Glanz. “It might accelerate the buying timetable.” Like many others, Glanz also expects to see further consolidation of the troubled resources and second-tier finance industries. But, he says, the buying will be measured. “Buyers are cautious because asset values are uncertain. We’re not going
to see a bonanza of buying or anything approaching the M&A levels of the boom years.” Glanz says that non-distressed or ‘classic’ M&A will remain active for some sectors. He’s particularly interested in the beverage sector as he advised on Asahi Breweries’ recent acquisition of Schweppes from Cadburys. “I think we’ll see more developments in this industry – for example, the Lion Nathan/ Kirin bid for Coca-Cola Steven Glanz, [Amatil] is yet to be fully Baker & McKenzie played out. The weaker Australian dollar is also going to be a factor.” He says that M&A activity is most likely to come from strategic buyers already in the particular industry of the target company. “Certainly the financial sponsors and private equity houses will be less conspicuous this year.”
Australasian Legal Business ISSUE 7.2
25/02/2009 3:29:06 PM
Firm Profile
DibbsBarker.
DibbsBarker
M&A Law Specialists Ranked as a ‘leading firm’ - ALB M&A Guide 2008
T
he most important issue for businesses committed to growth is their ability to get the deal done. The DibbsBarker M&A Group consists of advisers with the commercial knowledge, experience and legal expertise to deliver successful outcomes on time and on budget. Our dedicated M&A Group are specialists in mid market transactions. With the expertise and resources of a national firm, we provide exceptional value in mid market deals compared to our competitors. The group focuses on M&A transactions in the $10 million to $200 million range.
Our services We provide timely and coordinated legal services in all aspects of an M&A transaction. Our services include: • due diligence • navigating the foreign ownership regulatory regime • advising on deal terms and transaction structure • preparation and negotiation of transaction documents
• public and private company acquisitions and divestments • ASX Listing Rules, NSX Listing Rules and Corporations Act advice • support in related fields of competition, employment, environmental and taxation law • advising on capital transactions of all types, including IPOs, other issues, reductions, buy backs and reconstructions
Our approach At DibbsBarker we provide decisive and pragmatic solutions which add value and improve the cost effectiveness of legal services. We are not afraid to challenge our clients in order to give the highest quality advice and service. We adopt a disciplined approach to ensure that all transactions are appropriately resourced. Our partners are hands-on and readily accessible to clients.
DibbsBarker T: 61 2 8233 9500 F: 61 2 8233 9555 www.dibbsbarker.com
Senior team member’s Geoff Cairns Partner T: 61 2 8233 9570 E: geoff.cairns@dibbsbarker.com
John Reen Partner T: 61 2 8233 9572 E: john.reen@dibbsbarker.com
Paul Schmidt-Uili Partner, Practice Group Leader T: 61 2 8233 9543 E: paul.schmidtuili@dibbsbarker.com
Peter Surgeon Partner T: 61 2 8233 9544 E:peter.surgeon@dibbsbarker.com
David Barnett General Counsel T: 61 2 8233 9553 E: david.barnett@dibbsbarker.com
Anne Keaney Special Counsel T: 61 2 8233 9658 E: anne.keaney@dibbsbarker.com
Rob Sauer Consultant T: 61 2 8233 9565 E: rob.sauer@dibbsbarker.com
www.legalbusinessonline.com
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FEATURE | m&a >>
“… investment banks don’t seem to have the same level of deals in the pipeline as previously and while there will be some private equity work, it won’t be the large transactions we saw 18 months ago – when it was peaking” Jason Watts Mallesons
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Jason Watts agrees. “Certainly investment banks don’t seem to have the same level of deals in the pipeline as previously and while there will be some private equity work, it won’t be the large transactions we saw 18 months ago – when it was peaking.”
Battle of the big names
“Don’t pay too much attention to the figures” is the standard warning from experienced partners on M&A Rebecca Maslen ranking tables. And Stannage, Freehills rightly so – M&A figures can often be skewed by the inclusion of one or two very large deals which can give an entirely misleading picture of activity in a given year. That said, there is no doubt that firms do covet the top spot in the legal adviser rankings which are painstaking constructed from the total value of deals each firm advised on, with separate rankings for deals announced and completed. Freehills took out top billing for 2008 – as it had also done in prior years – but the gap between Freehills and rivals has narrowed. Thomson-Reuters calculated that the value of Freehills’ announced deals had declined by nearly 40% over 2008, while both AAR and Mallesons improved the value of their announced deals to the tune of 30% and 14% respectively. It is an example of how the M&A downturn
has not hit all firms to the same degree – the overall decline of 35% in deal value across the legal industry has clearly not been shared equally. Deal count is another key benchmark – an important indicator of which firms are considered to be the ones preferred by the market for M&A work. Freehills was on a firmer footing here, as it was some distance ahead of its nearest rival, Mallesons, on the score: 142 v 100 announced, 132 v 101 completed – and there was no narrowing of the gap in 2008.
Flight to quality?
Mallesons’ M&A practice managed to maintain a steady flow of work in 2008, recording an increase of 14% in announced deal value despite a 35% slump across the legal industry as a whole. Jason Watts attributes this in part to what is known as the ‘flight to quality’ syndrome. “This is important strategic work and boards are aware of their liabilities [as directors],” he says, “We’ve picked up quite a lot of it as a result.” This may also explain why AAR and Gilbert + Tobin are also bucking the industry trend, although this is not a pattern shared by all top-tier firms. “Different firms have been hit in different ways by the health of their clients,” Watts observes. “It’s also the luck of the draw. We’ve managed to maintain a solid stable of bluechip clients.” ALB
Australasian Legal Business ISSUE 7.2
25/02/2009 3:29:11 PM
FEATURE | m&a >>
M&A 2009 – An opportunity for SMEs? The economic downturn can provide significant opportunities for investment. DibbsBarker examines the creation of new opportunities in the SME space.
T
he 2009 economic outlook is one of the most challenging for M&A and private equity for many years. History, however, shows that from major economic downturns come significant opportunities for investors. As the dust begins to settle from 2008’s financial crisis, entities in the SME space have more reasons for cautious optimism in 2009 than their larger counterparts.
SME opportunities We are seeing investment and acquisition opportunities continuing early in 2009 for SMEs and mid market private equity ($20 to $250 million) where there is a willingness to take on risk and brave market turbulence. But why are there opportunities? A few key reasons: 1. Declining asset values – The Australian stock market has lost nearly half of its value since November 2007 and asset values continue to decline across most industry sectors. But as the market comes closer to bottomingout, investment targets will become increasingly attractive to cashed up investors and those having access to alternative debt sources. 2. Debt stress – Debt laden corporates suffering reduced product demand and lower cash flow are having greater difficulty in managing their strained balance sheets. One solution - in this market - is the sale of assets albeit at bargain prices or discounted capital raisings. 3. Vendor expectations – Over the last few years, acquisitive corporates have found www.legalbusinessonline.com
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opportunities at reasonable valuations hard to find. Over the second half of 2008 vendor expectations have dropped and are likely to continue to stay lower during 2009. 4. Survival of the fittest – Corporates with stronger balance sheets will increasingly look to cement their market position not only through increased market share but growth through acquisition. 5. $AUD – If the weaker Australian dollar continues, investment in Australia will continue to be attractive for foreign investors. 6. Alternative investments needed – With interest rates at 1960s levels and superannuation suffering significant losses in 2008, investors are searching for alternative forms of investment offering higher rates of return.
SMEs are better placed SMEs are often in a better position to take advantage of current opportunities. The SME business model and general deal sizes give these entities and funds the capability to respond now under current conditions and not at the end of 2009/2010. Whilst larger deals (with the exception of scrip offers) and top-end private equity cannot generally attract debt at acceptable rates of return for investors, SMEs generally rely on less debt and more cash. Primarily we perceive distressed or troubled asset funds, mid market private equity, cash rich corporates (or those corporates prepared to consider scrip deals) and foreign investors (including
sovereign funds) are those best placed to take action in the short term. A number of distressed asset funds are actively marketing and raising funds that are attracting renewed investor interest. For example, Helmsman Capital recently raised funds to invest in restructuring, turn around and under-managed assets. These funds are now increasingly active across a number of industries. We are also seeing increasing activity in mid market private equity with new funds such as Pinnacle Private Equity (Sydney) and Banksia Capital (Perth) going to market. But only time will tell how successfully SMEs are able to navigate the choppy waters of 2009 – but for those ready to venture into the market the opportunities, and rewards, are likely to be significant. Contact DibbsBarker This article was written by Paul Schmidt- Uili, Geoff Cairns and Anthony McFarlane. For more information please see contact details below: Paul Schmidt-Uili Partner, M&A, Practice Group Leader T: 61 2 8233 9543 E: paul.schmidtuili@dibbsbarker.com Geoff Cairns Partner, M&A T: 61 2 8233 9570 E: geoff.cairns@dibbsbarker.com Anthony McFarlane Lawyer, M&A T: 61 2 8233 8580 E: anthony.mcfarlane@dibbsbarker.com
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FEATURE | ediscovery >>
Not unlike explorers, lawyers also experience challenges in making their discoveries and within a decade, firms have increasingly shunned paper-based discovery methods in favour of electronic aids. ALB finds that ediscovery systems are capable of a lot more than just searching through documents 56
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Australasian Legal Business ISSUE 7.2
25/02/2009 11:55:03 AM
FEATURE | ediscovery >>
D
iscovery can arguably represent a significant part of a legal matter and only 10 years ago, a large discovery was considered to involve tens of thousands of documents. Nowadays, however, a major one is considered to amount in the hundreds of thousands. According to Elaw founder and executive director Allison Stanfield, ediscovery is changing rapidly and these days, an enormous amount of electronic data is created – in e-mails particularly. “There are a lot more electronic documents in their native format that are required to be discovered and presented at trial, and this is what is causing a lot of issues for lawyers and their clients,” she says. In fact, the federal court just released a practice note which essentially mandates the use of electronic discovery, and this will create a greater need for firms to enlist the services of experts in the field. According to Stanfield – whose company provided services for the HIH and Building and Construction Industries Royal Commissions – the team at elaw has some of the most indepth experience in ediscovery solutions in Australia. Traditionally, firms would undertake paper-based discovery and this would involve allocating staff to search filing cabinets. These days, however, firms are often dealing directly with client in-house counsel and IT departments to collect documents from their computer systems. “On one hand it’s making life easier, but on the other, there’s a lot more evidence to go through when a party is involved in litigation because 100% of all documents are created in electronic format,” she adds. Allens Arthur Robinson director of applied legal technology Beth Patterson agrees. “We helped our clients prepare for ediscovery proactively by utilising technology that searches out and collects data on their IT systems. We use data maps, which allow them to know quickly where documents are, in the event of litigation,” she says.
Popular ediscovery software
Allens uses Ringtail’s Legal 2005, among others, for ediscovery, processing electronic data and reviewing. Patterson says that more efficient document review by lawyers is one of its benefits. Apparently the software has saved www.legalbusinessonline.com
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the firm countless hours that would otherwise be spent sifting through client e-mails and other documents received over a period of many years, by filtering out irrelevant data. It also uses a concept search process, that involves looking for relevancy rather than just keywords. Lee Trevena of Synetek Systems says the average managing partner spends 90 minutes per week just managing e-mail. However, firms can reduce this by using Synetek’s Mailrevive, which automatically indexes e-mails both sent and received, without requiring a lawyer to use folders. Lee Trevena, Synetek Systems “You simply look through e-mails with the search and discovery tool and, if security is enabled, it eliminates SPAM. With Mailrevive, all e-mails are centralised and, no matter how many there are, you can recover them from one location – it just takes a few minutes,” he says. Hesketh Henry partner Christina Bryant agrees that concept search processes can save a significant amount of time. She points out that a search would typically take only a few seconds on the firm’s iManage system, while searching through shelves could take several minutes. Bryant says the concept search process works by linking documents with certain search criteria, such as date, document type, topics, sender or recipient. Related documents can also be linked. “The ability to file and manage documents electronically reduces the time and resources required for large litigation files, enabling relatively smaller firms to handle bigger litigation cases,” she said. Guidance Software assistant general counsel Albert Barsocchini believes the keyword search is still the most effective and transparent process for discovery and culling – while advanced
►► Save countless hours with Synetek’s Mailrevive Most managing partners spend about 90 minutes per week just reading and managing e-mails, but firms can reduce this by using Synetek’s Mailrevive. It automatically indexes e-mails – sent and received – without requiring a lawyer to use folders. One simply searches with the program’s discovery tool, which is capable of collecting messages from multiple workstations from a centralised location. It also eliminates SPAM Using Mailrevive can bring significant savings when compared to outsourced e-mail discovery, which can cost firms up to A$50,000 per gigabyte. Mailrevive, however, is considerably cheaper and can be leased for monthly fee starting at A$5 per user, which – for most large firms – would cost about A$500 per month.
search methods may create more hits, they are most helpful when dealing with large document populations and very broad terms or clauses. “In litigation Christina Bryant, or other matters where Hesketh Henry there are broad terms, advanced search technology should be considered. But usually, you do as much culling as possible using keywords and then use the advanced search,” he says.
A whole lot more than pure discovery Bryant believes that ediscovery software should not only be capable of searching for documents, it should also be able to manage them for lawyers, clients or witnesses, and prevent duplication. “One problem is the frequent copies in e-mail communications, when chains of correspondence increase the volume of documents requiring discovery,” she adds. To this end, EnCase ediscovery developed by Guidance Software offers an entire package for searching, identifying, preserving, collecting and processing data. Barsocchini says
“The ability to file and manage documents electronically reduces the time and resources required for large litigation files, enabling relatively smaller firms to handle bigger litigation cases” Christina Bryant, Hesketh Henry 57
25/02/2009 11:55:06 AM
FEATURE | ediscovery >>
the program is useful for searching desktops, file shares and e-mail servers in different locations, minimising travel time, business disruption and manpower. “From a central location on the network you can automatically search the enterprise and collect responsive documents with just one person. Depending on the keywords used and network traffic, we can collect e-mails from up to 50 workstations and process them in a matter of days,” he states. Patterson agrees that electronic deduplication is generally accepted in the market and Allens utilises the MD#5 method to cull duplicates quickly and cost-effectively. A relatively new area that firms are exploring is near-de-duplication technology that affords grouping of similar documents – such as different versions Beth Patterson, AAR of contracts – for lawyer review. Mailrevive is also capable of deduplication and can encrypt and archive e-mails automatically. It uses a relational search process called Deeplink, which allows for search by keyword, date, body text, attachments and file type. “Once you have found a particular record, you can do a search for similar or a related search in the repository. You can package them up and export them into a file format ready for case-management software such as Ringtail and a range of ediscovery software,” says Trevena. It also provides backup and access to the mail server, even if the network is down. The lawyer simply logs in to ►► Did you know? • Ten years ago, a large discovery involved tens of thousands of documents, but now a major discovery is in the hundreds of thousands • The average managing partner spends 90 minutes per week just managing e-mail • More than 80% of ediscovery documents are never printed • Between 90–98% of discoveries are moving to electronic format • A four-gigabyte USB flash drive is capable of storing 100,000 e-mails • The Sasha Geltman survey estimates the global ediscovery market is currently worth US$2.5bn, but could reach US$4.6bn by 2020
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“We helped our clients prepare for ediscovery proactively by utilising technology that searches out and collects data on their IT systems. We use data maps, which allow them to know quickly where documents are in the event of litigation” Beth Patterson, Allens Arthur Robinson ►► Discover, collect and process with EnCase ediscovery
Firms are realising the need for ediscovery software to be versatile and Guidance Software has developed a complete investigative infrastructure. EnCase eDiscovery offers a complete package for data collection, processing, internal investigation, data audit and security or regulatory inquiries. Albert Barsocchini says one of the program’s strengths is how it can manage internal investigations and ediscovery centrally in the large corporate environment with multiple locations, minimising travel time, business disruption and manpower. The automated process allows large-scale collections to be executed from workstations, file shares and e-mail servers in days instead of weeks. Depending on the keywords used and network traffic, Guidance staff can collect e-mails from up to 50 workstations and process them in a matter of days. Most outsourced ediscovery collections and processing can cost firms at least A$8,000 per custodian. For typical cases involving 50 custodians this can cost as much as A$400,000. However, with EnCase, it would be up to 80% cheaper costing about A$1,500 per custodian or A$75,000 for a 50-custodian collection and processing. Firms that do not want to buy the software can opt for the ‘pay-per-use’ option, which tracks usage and allows firms to charge costs back to clients.
Mailrevive to read and send e-mails. The messages are then delivered once the server is back online.
Improving efficiency, addressing chain of custody
An area in which Allens has improved efficiency is providing courts with documents related to a discovery by electronic means. In other words, instead of filling a room with printed documents and inviting parties to review them, lawyers simply exchange discoveries on DVD. This is particular useful following the Australian Federal Court’s new practice note 17, Patterson says, which allows courts to take a more active role in discovery. “The proposal is that parties need to complete a pre-discovery checklist and agree on it upfront. It’s a balance of flexibility; the courts will prescribe more around this area, to reduce costs,” she adds. However, issues can arise from receipt of documents in digital format. She gave an example of correspondence received from another party in which macros in the documents had automatically updated the original dates to the date of download. Patterson says electronic documents are open to the possibility of change, depending on how they are copied.
Nevertheless, there are methods to prove custody in a forensic way, some of which involve Acrobat pdfs or singlepaged tif images. Bryant says the digital format alone involves a range of new issues such as metadata, which was not a concern in paper-based discovery. This is because electronic documents also include metadata, such as creation dates, edit dates and versions, which may be very important in the context of a particular dispute but increase the overall volume of discovery. Matching electronic documents to the document number in a party’s list is another difficulty as, unlike paper documents, the files are not manually stamped with the document number. So a new method of identification must be devised instead. For some of these reasons, many New Zealand lawyers still prefer to do paperbased discovery, says Bryant. There is often a reluctance to store them electronically and read them on-screen. However, this should gradually change because programs are becoming more user-friendly and search functions are improving.
What firms can gain from ediscovery software
Ediscovery can reduce the amount of Australasian Legal Business ISSUE 7.2
25/02/2009 11:55:08 AM
FEATURE | ediscovery >>
www.legalbusinessonline.com
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FEATURE | ediscovery >>
►► How to make the most of ediscovery • Some ediscovery software is not only capable of searching for documents, but also managing them and preventing duplication • Keyword searches are still the most effective discovery method, while advanced search methods are most helpful when dealing with large document populations and very broad terms or clauses • Firms can save countless hours spent sifting through e-mails by using e-mailmanagement software
storage space required. For example, a four gigabyte USB flash drive is capable of storing 100,000 e-mails. It can also minimise the number of staff required for routine work, such as searching for files. Bryant agrees that electronic storage can reduce the amount of space required in an office, adding that it also enables lawyers to work remotely, which gives them greater flexibility. “I can go home or overseas and access the database. I don’t have to carry big
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folders or bags – and that’s important to me,” she says. Ediscovery systems can bring a firm significant long-term savings, as multiple types can be leased rather than bought outright, affording limitation of initial setup costs. To this end, Allens has leased multiple ediscovery programs. “It’s not like one size fits all,” says Patterson. “That’s why many of our lawyers opt for a pay-per-case charge, whereby they pay for the life of the case and the system is continuously updated and upgraded at no extra charge.” Barsocchini says most outsourced discovery collections and processing could cost upwards of A$8,000 per custodian. Cases typically involving 50 custodians could cost as much as A$400,000. However, by purchasing EnCase, the software usually pays for itself within one or two cases depending on the size, he adds. “It offers an 80% saving on collection and processing costs. For firms that don’t want to buy, we now offer a payper-use option, which tracks usage and
allows firms to charge costs back to clients. Generally speaking, a pay-per-use, staffed search for customers would cost about A$1,500 per custodian Albert Barsocchini, or A$75,000 for 50 Guidance Software custodians,” he states. Trevena, on the other hand, says outsourcing e-mail discovery can cost firms up to A$50,000 per gigabyte, if collection and processing are included. But Mailrevive is considerably cheaper and can be leased for a monthly fee starting at A$5 per user – about A$500 per month for large firms. Stanfield says Elaw has adopted a case-by-case approach. “Every job is different because the requirements for every case are too, so we offer solutions best-suited for that particular case with the most up-to-date technology” Patterson believes that, in the long run, it is more cost-effective to buy the software, adding that ediscovery vendors will consolidate and so this trend is likely to continue. ALB
Australasian Legal Business ISSUE 7.2
25/02/2009 11:55:12 AM
FEATURE | ediscovery >>
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FEATURE | dictation & transcription >>
Going beyond digital dictation In today’s tough economic market, firms are constantly under pressure to improve their bottom line while still delivering outstanding client care. Reducing document turnaround time, minimising lost productivity and offering staff members flexibility while on the move or working remotely are just some of the day-today challenges they face. WinScribe’s Nicole Williams reports
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igital dictation has been in the marketplace for a number of years and it is likely that most firms have heard of the technology – or even considered it. More often than not, it can help overcome some of the aforementioned challenges along with an immediate, positive impact on a firm’s bottom line. Today’s digital dictation systems have developed into more comprehensive workflow systems, streamlining voiceto-document process, and they and are now seen as a core application for law firms worldwide. In essence, standard digital dictation is a method of recording and editing the spoken word in real time utilising a digital audio format through a number of different methods such as a PC, a portable device or a mobile phone. There has been a number of innovations in recent times that have enhanced the way firms dictate and transcribe, even above and beyond what standard digital dictation systems are perceived to be. Some basic systems often lack the tools to enable managers and users to identify clearly uncompleted work backlogs, find out who is doing what, see instant information on support staff efficiency, provide the promotion of priority projects or enable users to reroute work as needed. As a result, firms who use these systems often do not realise all the benefits that more sophisticated systems offer. Nowadays, digital dictation encompasses the idea of work-flow management that enhances the 62
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benefits of collecting voice digitally while also managing the flow of information after capturing it. Digital dictation work-flow management systems are designed with a powerful array of functions to ease your workload. They are easily administered and afford the coordination, control and communication of activities automatically. The emergence of dictation applications for mobile devices has enabled lawyers to dictate remotely and send their jobs back to the office for immediate transcription. This is in stark contrast to the analogue tapebased systems that can be costly to maintain and require them to hand their secretaries the tapes physically. Mobile dictation allows firms greater flexibility and as a result, increased productivity and efficiency, as well as dramatically improved document turnaround time. Sydney-based law firm, Collin Biggers Paisley, has seen significant benefits since implementing a digital dictation system, according to IT manager Julian McEvoy. “Our lawyers spend a lot of time out on clients’ sites,” he says, “and the WinScribe solution allows them to dictate anywhere without having to go back to the office to drop off a tape for transcription. It is a big time-saver, and means more time spent out in the field working with clients.” WinScribe is a world-leading provider of digital dictation workflow management solutions offering a wide range of dictation via mobile
devices. As part of WinScribe’s mobility suite, WinScribe for the Blackberry Smartphone was launched in Autumn 2007, an innovation and industry first at the time. WinScribe’s application is said to be ‘extremely easy’ to use and intuitive. It can be used in conjunction with the Blackberry Enterprise server (BES) located on a firm’s network. For those concerned that confidential documents may be compromised by sending dictations captured via mobile devices electronically, all dictations are encrypted using 168 bit or 256 bit AES. For implementations without a BES, dictation can be sent using a secure web connection (HTTPS), that protects the dictation using a 128 bit Secure Sockets Layer (SSL) Security. The device itself provides added security, offering dictation file encryption on both the device’s internal memory and the SD card. In addition to the Blackberry application and keeping with the idea of allowing greater user flexibility, WinScribe continues to build strong relationships with a number of technology and hardware alliances and, as a result, is able to support dictation through a wide range of portable devices to capture the audio component. In conjunction with suppliers such as Philips, WinScribe can often utilise existing firm hardware, reducing the overall investment. The product suite Philips offers represents a range of popular, easy-to-use models, such as Philips digital portable devices, Philips Speech microphones and Digital Pocket Memos. Users can even dictate by the telephone, VoIP or their PDA for maximum flexibility while secretaries can be anywhere – spread across multiple sites or at home – alone or as part of a typing pool. Philips analogue recording technology is known for its ergonomics and reliability as well as functionality, and these are guaranteed in all Philips’ digital devices. The training requirements for basic functionality are low as lawyers and staff are familiarised individually with the new environment on their own workstation. “Philips is proud to be partnering WinScribe and moving towards constantly enhancing the way dictation is captured and processed,” says Graeme Pearson, Asia Pacific Cluster Australasian Legal Business ISSUE 7.2
25/02/2009 11:14:07 AM
FEATURE | dictation & transcription >>
Manager for the company. “We are committed to manufacturing easy-touse devices that produce optimal sound quality.” Another concept that is gaining momentum in the digital dictation space is the Software as a Service (commonly known as Saas) model. So, what is it? It is a platform that allows smaller firms not wanting to make the investment in an internal dictation infrastructure to maximise the benefits that a digital dictation system offers with minimal cost. In 2008 WinScribe launched its Software-as-a-Service (SaaS) version of its product suite: WinScribe OnDemand. Most digital dictation systems operate on traditional software licensing, and applications are installed at customers’ sites on their own servers. The customer is responsible for maintaining the infrastructure the software requires. With the SaaS model, software and servers are managed by the software vendor and in WinScribe’s case, data is housed in an enterprise calibre
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secure data centre ensuring maximum security. All software and server upgrades are carried out by the vendor automatically, thus freeing internal resources to focus on core business activities. SaaS can address many of the IT headaches associated with the traditional on-site software model where firms may lack dedicated IT departments or staff. With no software or servers to buy, install, maintain or upgrade, it takes the stress out of maintaining the system. The immediate use it affords is perhaps the best part and it is fast becoming a more viable option for firms wanting to increase efficiency. A firm considering implementing a digital dictation work-flow management system may be concerned about the impact this type of technology might have on the daily workings of the company. Indeed, the rate of user adoption is an important aspect of any technology purchase, and one of the most important features in the systems of today is that their
configuration and management is straightforward and easy to use, affording greater visibility. Firms who implement these systems find that convincing their staff to adopt them is often fast – and quite painless – and minimal training is required. With the abundance of information in the market today, choosing the solution that best suits your needs and taking the first step in transition from analogue tapes or a more basic digital system to a digital dictation workflow management system may seem a daunting task. Although digital dictation can represent a large upfront investment – and it can be difficult to choose the right one – innovations in recent times have captured the essence of increasing efficiencies. The improved document turnaround time and reduced maintenance costs alone give you a return on that investment fast, and – most importantly – the system can support the unique needs and goals of the individual, and of the firm. ALB
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Sign off >> US GCs get thrifty
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eventy-five per cent of US general counsel surveyed said recently that their legal departments face budget cuts, some of almost 35%. The greatest concerns in legal spending were (in order): outside counsel costs; the unpredictability of legal spending; and litigation risks.
Survey snapshot If facing a budget cut or a smaller increase: • 53.4% would use lower-priced legal counsel for some work • 65.0% would bring more work in-house Greatest concerns in regard to company’s legal spending: • 45.2% – inefficiency of hourly billing system • 80.9% – lack of predictability • 80.9% – outside counsel costs
Another day, another knight
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igel Knowles is the man who has helped take DLA Piper from a small law firm in Leeds to one with about 3,750 lawyers in 27 countries and a blooming practice in both the US and UK.* And now, he’s also a knight. The 52-year-old co-chief executive of DLA Piper recently joined an elite group of private practice solicitors when he received a knighthood in the Queen’s New Year Honours list for services to the legal profession. This is just another notch on Knowles’ already lengthy list of achievements. The keen golfer is also chairman of the Managing Partners Forum and the Legal Sector Alliance, a member of Business in the Community’s environment leadership team – and father of two children.
* Not withstanding the recently announced 140 redundancies in the firm’s UK offices
In the next 12 months, do you plan to increase or decrease your use of outside counsel?
Solicitors in store on the web D
oncaster-based firm Beresfords Solicitors recently launched Britain’s first ‘legal services supermarket’ in the form of a web portal which screens cases submitted by users and distributes the resulting workload among paying subscriber law firms. The website, titled mysolicitor.com, has some competition from similar sites such as Injury Lawyers4U and moneysupermarket.com, and was reportedly backed by a £15.8m television advertising campaign. Firms wanting to get in on the ‘action’ will have to pay a fee of around £43,500 per annum to be on the referral list.
Not sure Increase
Decrease No change
Source: Altman Weil (www.altmanweil.com/dir_docs/ resource/5f6a3b0b-e3f8-4104-b240-fc18db17f5cb_ document.pdf)
Barristers’ brews
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nationwide poll of almost 2,000 Brits conducted on behalf of international development charity ActionAid to promote its ‘24 Hour Tea and Coffee Break’ event has revealed that lawyers are big on… tea. According to the survey, those working in law on average drink more cups of tea per day than those in all other professions: 70% of legal workers drink more than three cups per day while 20% scull more than six a day.
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Royal ex joins A&O C
helsy Davy – aka Prince Harry’s former love – recently snagged a training contract with Magic Circle firm Allen & Overy and is set to join the firm on completion of her legal training. The 23-year-old has an economics degree from the University of Cape Town, and is currently taking a postgraduate law course at the University of Leeds. According to reports, the Zimbabwe-born heiress will receive a starting salary of around £37,000, which is likely to rise to £65,000 or so once she qualifies.
Australasian Legal Business ISSUE 7.2
25/02/2009 2:21:43 PM
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