Australasian Legal Business (OzLB) Issue 9.01

ISSUE 9.01

ALB Watchlist 10 firms set for big growth in 2011

ALB Special Report: Brisbane 2011 And now back to business….

Capital markets Will IPOs return with a vengeance?

David Cohen, Commonwealth Bank Making uncommon sense of law firm panels MARKET-LEADING ANALYSIS

COMPREHENSIVE DEALS COVERAGE

DEBT & EQUITY MARKET INTELLIGENCE

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ISSUE 9.01

EDITORIAL >>

ALB Watchlist 10 firms set for big growth in 2011

ALB Special Report: Brisbane 2011 And now back to business….

Capital markets Will IPOs return with a vengeance?

Finders and minders

David Cohen, Commonwealth Bank Making uncommon sense of law firm panels MARKET-LEADING ANALYSIS

COMPREHENSIVE DEALS COVERAGE

DEBT & EQUITY MARKET INTELLIGENCE

www.legalbusinessonline.com

IN THE FIRST PERSON

A

great lawyer, or a great marketer? These terms are not necessarily mutually exclusive, but they do raise the question of the extent to which one’s success in commercial legal practice is dependent on marketing efforts rather than excellence in legal advice.

As in many other professions there is the question of the self-justifying proposition: the lawyer who is acknowledged as an expert in his or her field simply because that is what they have always been held out to be. Whether or not that reputation is deserved tends to be a separate question. There is an old joke that one needs to retire or die in order to be deleted from certain industry directories of leading lawyers, some of which are compiled by junior researchers from the northern hemisphere.

Unlike many facets of consumer business, consumers of legal services are sophisticated users of those services. Pure marketing hype alone will only get you so far and lawyers who give ill-conceived advice will ultimately be held to account for their actions. However, at the other end of the scale, one must pose the question as to what extent one lawyer may have a higher reputation than another, simply as a result of his or her marketing and practice-building activities.

Marketing is an accepted part of being a modern lawyer. But the price of this heightened commercial awareness must be an acknowledgment of the downside: this may no longer be a profession where one is judged upon one’s performance alone.

“This infrastructure is critical to our iron ore and other commodity producers to enable them to get 100% of their product to port and to access export markets – in particular, the PRC” Alen Pazin, Norton Rose (p8)

“Recruiters will tell you that there are many stars in the large firms who are looking for a different environment – it’s no longer about simply being big” Dunstan de Souza, Colin Biggers Paisley (p26)

“Employers in the workplace have become more attuned, more sensitive and more prepared to raise harassment issues because of the press and because of induction and training that says to employees that [certain] behavior is not acceptable” Stephen Trew, Holding Redlich (p50)

One must pose the question as to what extent one lawyer may have a higher reputation than another, simply as a result of his or her marketing and practice-building activities

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Australasian Legal Business ISSUE 9.01

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contents >>

contents

ALB ISSUE 9.01

32

42

2011

COVER STORY 22 ALB Watchlist

Which firms are primed for a particularly prosperous 2011?

ANALYSIS

PROFILES

10 Newcastle Long overdue for infrastructure investment, Newcastle is attracting increasing attention from big-name law firms

42 ALB LexisNexis Managing Partner Series: Chris Lovell, Holding Redlich Holding Redlich managing partner Chris Lovell thinks that equity partnerships which run on “eat what you kill” models should learn some table manners

12 In-house teams: from cost centre to profit centre US in-house legal departments are operating corporate ‘recovery’ programs that are bringing some within sight of actually making a profit.

Can Australian and NZ teams follow suit?

14 IPOs Will the QR float have any bearing on the prognosis for IPOs in 2011?

FEATURES 32 ALB Special Report: Brisbane 2011 Law firms were awash with work in 2010 and this year they’re simply awash – but that’s no reason to change the resource-driven optimism 46 Employment law One of the highest profile sexual harassment cases in Australian history has put the spotlight firmly on employment law. ALB investigates 56 Marketing and new media I-phones, Linked In, Facebook – what role should they play in a law firm?

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56 • Employment lawyers in highest demand for pro bono • Country firm develops online conveyancing practice 20 Appointments

COLUMNS

52 ALB-Kensington Swan In-house Perspective: David Cohen, Commonwealth Bank As head of the CBA Group legal department, David Cohen makes light work of billion-dollar mergers and class actions. Here’s how

11 UK Report

REGULARS

COMMENTARY

6 DEALS

9

13

16 NEWS • New executive structure at Chapman Tripp • M+K enters Queensland market with BCI merger

15 US Report 19 In-house Q&A 62 M&A deals data 63 Capital markets deals data

New Zealand Buddle Findlay Employment law Sparke Helmore

• Integrated Legal Holdings expands again • Bakers, Clutz and Mallesons act on NSW energy sale • Lawyer prosecuted for providing real estate agency services

Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as Australasian Legal Business can accept no responsibility for loss.

australasian legal business ISSUE 9.01

NEWS | deals >>

• NSW Government sold electricity and gas retail businesses Country Energy, EnergyAustralia Emma Covacevich and Integral Clayton Utz Energy; gentrader rights for Delta Electricity and Eraring Energy; and various development sites for A$5.3bn

deals in brief

• Clayton Utz also advised Origin Energy on its 2009 acquisition of Woodside Energy Ltd’s 51.55% interest in the Otway gas project in Victoria, valued at A$700m • Mallesons also advised TRUenergy on its A$417m power station swap with AGL Energy in 2007. The swap was for Australia’s largest gas-fired power station, the Torrens Island power station in South Australia

| JOINT VENTURE | | EQUITY | ►► QR IPO A$6.7bn Firm: Allens Arthur Robinson Lead lawyers: John Greig, Erin Feros Client: Qld Government Firm: Clayton Utz Lead lawyers: Stuart Byrne, Tim Reid Client: JLMs including Credit Suisse, Goldman Sachs Merrill Lynch and UBS

• Minter Ellison has been the key advisor to QR for more than 15 years, assisting on a range of both corporate and competition matters over that time

| ENERGY & INFRASTRUCTURE | Erin Feros Allens Arthur Robinson

Firm: Mallesons Stephen Jaques Lead lawyers: John Humphrey, David Friedlander Client: QR National Firm: Minter Ellison Lead lawyers: Khory McCormick, Bruce Cowley, Bronwyn Fursey Client: QR National • Will be the largest IPO in Australia seen in over a decade • Allens has acted for the Queensland Government since the first sale

6

in its asset privatisation program (Forestry Plantations Queensland), in May 2010

►► NSW ELECTRICITY REFORM PROJECT $5.3bn Firm: Baker & McKenzie Lead lawyers: Chris Saxon, David Ryan, David Egan, Michael Kunstler, Chris Hughes, Ken Gray, Andrew Christopher Client: NSW Government Firm: Clayton Utz Lead lawyers: Graham Taylor, Emma Covacevich, Graeme Dennis Client: Origin Energy Firm: Mallesons Stephen Jaques Lead lawyers: Louis Chiam, Vishal Ahuj Client: TRUenergy

►► VIRGIN BLUE/AIR NEW ZEALAND/ETIHAD AIRWAYS ALLIANCE

| M&A | ►► CEPHALON, INC JOINT VENTURE WITH MESOBLAST A$1.7bn Firm: Johnson Winter & Slattery Lead lawyers: Damian Reichel, Tim Bowley Client: Cephalon, Inc Firm: Middletons Lead lawyers: Peter Howard, Andrew Gaffney Client: Mesoblast • Largest Australian biotech deal of 2010; biggest so far in the adult stem-cell industry • Cephalon and Mesoblast will develop and sell adult stem-cell therapeutics for degenerative conditions of the central and nervous systems • Middletons also acted for Mesoblast on its 2005 listing on the ASX • JWS considers Cephalon a relationship client, having also advised the company on its 2009 takeover of Arana Therapeutics

Undiscl.

Firm: Gilbert+Tobin Lead lawyer: Luke Woodward Client: Virgin Blue, Air New Zealand Firm: Bell Gully Lead lawyer: Torrin Crowther Client: Virgin Blue, Air New Zealand • JV was announced as the ACCC proposed to authorise a 5 year alliance between Virgin Blue and Etihad • ACCC recognised that alliance will promote competition, resulting in benefits for Australian customers as new international services commence • Bell Gully worked with Gilbert+Tobin and advised on the New Zealand competition regulation aspects of transaction for both Virgin Blue and Air New Luke Woodward Zealand Gilbert + Tobin • G+T have been competition advisors to Virgin Blue since its inception in 2000

| DEBT | ►► WOODSIDE PETROLEUM DEBT RE-FINANCING A$1.1bn Firm: Corrs Chambers Westgarth Lead lawyer: Philip Wilson Client: Woodside Petroleum Philip Wilson Corrs Chambers Firm: Allen & Westgarth Overy Lead lawyer: Chris Robertson Client: Joint mandated lead arrangers ANZ and BTMU

• Allen & Overy provided sign-off on both the English and Australian law components of this deal • Deal represents continued interest in the Australian corporates by the Asian debt markets and Woodside operates in an attractive sector for the Asian debt markets • Corrs has acted for Woodside petroleum in most of its debt raising Australasian Legal Business ISSUE 9.01

NEWS | deals >>

activity over the past 2 years

| BANKING & FINANCE |

►► YOUR MONTH AT A GLANCE Firm

Jurisdiction

Deal name

Allens Arthur Robinson

Aus Aus Aus Aus/China Aus/ Mongolia Aus Aus/Can Aus Aus Aus Aus

Tomago joint venture QR IPO Rio Tinto Channar JV Rio Tinto MoU with Chinalco Rio Tinto Oyu Tolgoi mining agreement

Undiscl.

6,700 Undiscl.

Undiscl.

Undiscl.

Energy & resources Equity Energy & resources Energy & resources Energy & resources

Freightlink sale Cargill strategic acquisition from Agrium Inc Nufarm refinancing Woodside Petroleum loan facility refinancing Nufarm refinancing Guinness Peat Group Sale of Maryborough Sugar Factory (MSF) NSW Electricity reform project Easternwell Group sale to Transfield services Mindoro Resources Australian capital raising/IPO Aston Resources sale of stake in Maules Creek project Cargill strategic acquisition from Agrium Inc (advice Agrium) Mangakahia Forest acquisition Rio Tinto Sinosteel Channar JV

332 Undiscl.

900 1,100 900 43

Infrastructure M&A Banking & finance Debt markets Banking & finance M&A

5,300 575 47 345 Undiscl.

Undiscl.

Undiscl.

Energy & infrastructure Infrastructure Equity Debt M&A M&A Energy & resources

Mangakahia Forest acquisition NSW Electricity reform project Tomago joint venture QR IPO Cargill strategic acquisition from Agrium Inc (advice Agrium/ AWB) Lend Lease purchase of Valemus Woodside Petroleum loan facility refinancing Sale of Healthcare Australia to Healthcare Locums PLC CNOOC acquisition of Exoma Plantic Technologies cross-border scheme of arrangement with Gordon Merchant CNOOC acquisition of Exoma KWAP acquisition of 737 Bourke St, Docklands Aston Resources sale of stake in Maules Creek project Lend Lease purchase of Valemus FKP Property Group bonds issue Virgin Blue/Air New Zealand/Etihad Airways alliance Sale of WSN Environmental Solitions to SITA Environmental Solutions Cephalon, Inc JV with Mesoblast

Undiscl.

5,300 Undiscl.

6,700 Undiscl.

M&A Energy & infrastructure Energy & resources IPO M&A

1,000 1,100 122 78 Undiscl.

M&A Debt M&A M&A M&A

78 113 345 1,000 125 Undiscl.

235

M&A Property Debt M&A Debt Joint venture M&A

1,700

M&A

NSW Electricity reform project QR IPO Freightlink (deal closed) Sale of Healthcare Australia to Healthcare Locums PLC FKP Property Group bonds issue KWAP acquisition of 737 Bourke St, Docklands (advice to Equiset) Merlin Entertainments purchase of Village Roadshow aquarium and attractions Rio Tinto Oyu Tolgoi mining agreement

5,300 6,700 332 122 125 113 115

Energy & infrastructure IPO Infrastructure M&A Debt Property M&A

►► NUFARM REFINANCING A$900m

Firm: Arnold Bloch Leibler Lead lawyer: Jonathan Wenig Client: Nufarm Firm: Allens Arthur Robinson Lead lawyers: Stephen Spargo, James Darcy Client: Financiers • Arrangement was a bank-led syndicated loan facility consisting of Rabobank, ANZ Banking Group, National Australia Bank and HSBC • Arnold Bloch Leibler has a longstanding relationship with Nufarm. This deal was conducted across multiple jurisdictions and was considered a milestone transaction for Nufarm • Allens Arthur Robinson has a history of advising the large banks, including advising ANZ on its 2009 A$2.5bn institutional share placement. Stephen Spargo is the firm’s principal NAB relationship advisor

Allen & Overy Arnold Bloch Leibler Baker & McKenzie

Blake Dawson Bell Gully Chambers & Company Chapman Tripp Clayton Utz

Corrs Chambers Westgarth

Freehills

| ENERGY & RESOURCES | ►► RIO-CHINALCO JV MOU Undiscl.

Firm: Allens Arthur Robinson Lead lawyer: Scott Langford Client: Rio Tinto

Gilbert + Tobin

• Under the arrangement Chinalco will hold a 51% interest, Rio Tinto will hold remaining 49% and exploration will take place on mainland China • Allens has also advised Rio Tinto on Channar joint venture, Mongolian Oyu Tolgoi venture and a host of other transactions such as the sale of buy-back shares by Tinto Holdings Australia to Rio Tinto www.legalbusinessonline.com

NZ/Can/HK Aus Aus Aus Aus/Can Aus/Ger Aus Aus Aus/China Aus/UK Aus/China Aus Aus/Japan Aus/Ger Aus Aus/NZ Aus

Johnson Winter & Slattery Mallesons

Aus

McCarthy Tétrault Middletons Minter Ellison

Aus/ Mongolia Aus Aus Aus/UK Aus/Can Aus

Norton Rose

Aus

Firm: Clifford Chance (Beijing) Client: Chinalco • Rio Tinto and Chinalco formed another JV earlier in 2010 on the Chinese Simandou project. The current agreement is expected to commence in the first half of 011

Aus Aus Aus/Can Aus/Japan Aus/Can NZ/Can/HK Aus

Aus Aus Aus Aus Aus Aus Aus

A$m

Cephalon, Inc JV with Mesoblast QR IPO Plantic Technologies cross-border SOA with Gordon Merchant Mineral Deposits de-merger and listing on ASX Merlin Entertainments purchase of Village Roadshow aquarium and attractions WestNet Rail Mid-West track upgrade

Practice

Undiscl.

Energy & resources

1,700 6,700 Undiscl.

320 115

M&A Equity M&A M&A M&A

500

Project finance

Does your firm’s deal information appear in this table?

Please contact

alb@keymedia.com.au

61 2 8437 4700

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NEWS | deals >>

| ENERGY & RESOURCES | ►► RIO TINTO SINOSTEEL CHANNAR JV Undiscl.

Firm: Allens Arthur Robinson Lead lawyers: Nic Tolè, Michael Perez, Client: Rio Tinto Firm: Chambers & Company Lead lawyers: Robin Chambers, Angus Macdonald Client: Sinosteel Corporation

Nic Tole Allens Arthur Robinson

• Latest expansion will see the existing JV arrangement in place since 1984 extended and modernised • Chambers & Company and Allens Arthur Robinson have advised their respective clients on the JV since 1987. Allens also advised Rio Tinto on the development of the Simandou iron-ore project in Guinea in March 2010 • Under the arrangement Rio Tinto has a 60% stake on the Channar mine and Sinosteel receives 100% take-off rights for the Pilbara blend products

| PROJECT FINANCE | ►► WESTNET RAIL MID-WEST TRACK UPGRADE A$500m Firm: Norton Rose Lead lawyer: Alen Pazin Client: WestNet Rail • Upgrade will take place between Morawa and Geraldton, areas vital to iron-ore producers in the Alen Pazin region including Norton Rose Gindalbie/ AnSteel’s Karara Iron Ore Project and Mt Gibson’s Extension Hill Project • deal will also service the proposed Oakajee port and rail development • Norton Rose was the only firm engaged as the banks are still assembling a team of underwriters

8

“This infrastructure is critical to our iron ore and other commodity producers to enable them to get 100% of their product to port and to access export markets – in particular, the PRC” Alen Pazin, Norton Rose

| PROPERTY | ►► KWAP ACQUISITION OF 737 BOURKE ST, DOCKLANDS A$113m Firm: Freehills Lead lawyers: Matthew Stutsel, David Sinn Client: Kumpulan Wang Persaraan (Diperbadankan) (KWAP) Firm: Mallesons Lead lawyers: Andrew Erikson, Emily Collin • Acquisition follows the recent sale of three Melbourne CBD buildings by the Grocon company to the Commonwealth Property Office fund • First Australian acquisition for KWAP, a Malaysian company responsible for managing pension contributions from the Malaysian Federal Government

| M&A | ►► MANGAKAHIA FOREST ACQUISITION Undisc.

Firm: Chapman Tripp Lead lawyers: John Strowger, Graeme Olding

| DEBT |

Client: Sino-Forest Corporation Firm: Bell Gully Lead lawyers: Clive Taylor, Rebecca Caird Client: Global Timber Investors

►► ASTON RESOURCES SALE OF STAKE IN MAULES CREEK PROJECT A$345m Graeme Olding Chapman Tripp

• Sino-Forest Corporation, a company listed on the TSX, acquired 100% of shares in GFP Mangakahia Forest Venture • Chapman Tripp also advised the NZ subsidiaries of the Ontario Teachers’ Pension Plan on the sale of Central North Island forestry assets of Tenon for NZ$725m

| M&A | ►► MERLIN ENTERTAINMENT PURCHASE OF VILLAGE ROADSHOW AQUARIUM AND ATTRACTIONS A$115m Firm: Mallesons Lead lawyers: Ros Anderson, YuenYee Cho Client: Merlin Entertainment Group Firm: Minter Ellison Lead lawyer: Ben Liu Client: Village Roadshow • Deal is expected to close in the first quarter of 2011, will see Merlin Ben Liu Minter Ellison Entertainments acquire Sydney Aquarium, Sydney Wildlife World, Sydney Tower Observation Deck and Sky Walk, and Hamilton Island Wildlife Park • Deal value of A$115m represents net cash proceeds after repayment of debts • Mallesons has also acted on the sale of Queensland’s FKB property group’s A$125m convertible bonds issue, as well as A$2.3bn sale of Port of Brisbane • Minter Ellison also acted for Roadshow Films in its high-profile IP litigation against iinet, the thirdlargest ISP in Australia

Firm: Freehills Lead lawyer: Matthew FitzGerald Client: Aston Resources Firm: Baker & McKenzie Client: Itochu Corp • Sale of a 15% stake in this project, located in the Gunnedah Basin, is Aston Resources’ first major transaction since listing on ASX in 2010; brings them closer to development of the project, which is its major asset • Other highlights from 2010 for Freehills include advising on the Seven Network merger by SOA with Wes Trac, Prime Infrastructure on its merger with Brookfield Infrastructure partners and Orica on its demerger and the subsequent listing of the Dulux Group

| INFRASTRUCTURE | ►► EASTERNWELL GROUP SALE TO TRANSFIELD SERVICES A$575m Firm: Baker & McKenzie Lead lawyer: Brendan Wykes Client: Easternwell Group Firm: Minter Ellison Client: Transfield Services • Easternwell Group is a service provider to the mining, oil & gas and infrastructure sectors, had been preparing for dual-track sale before electing to sell to Transfield Services • Sale remains conditional on funding requirements, including an accelerated non-renounceable entitlement offer announced on 13 December 2010 • Minter Ellison also acted for Transfield Services on its 2006 entitlement offer to raise nearly A$280m using RAPID’s fourstep offer structure • Baker & McKenzie advised ADS on its merger with Easternwell Group in January 2010 Australasian Legal Business ISSUE 9.01

Firm Profile | deals >> NEWS

NZ Commentary

NZ TAKES LEAD-STEER POSITION IN EMISSIONS TRADING Maintaining a close working relationship with Australia underpins the work of the Emissions Trading Scheme Review Panel, the makeup of which was recently announced by New Zealand’s Climate Change Issues Minister Nick Smith.

His announcement confirms that the New Zealand Emissions Trading Scheme (NZ ETS), which is in advance of similar moves in Australia and the United States, is likely to remain a permanent fixture in New Zealand’s economic landscape and as such may be something of a lab test for Australia’s moves to put a price on carbon.

Of particular interest in the latest announcement has been the ruling National Government’s decision not to politicise the membership of the review panel, with its newly appointed chairman being former Labour Minister of Finance, David Caygill.

Other members of the committee appear to have been selected for their technical expertise, rather than any political affiliation and include PricewaterhouseCoopers specialist in carbon markets, Julia Hoare, the Chancellor of Lincoln University and farmer, Tom Lambie and the former chief executive of the Consumers Institute, David Russell.

Further emphasising the government’s desire to progress the issue has been the requirement that the review panel have its final report back to the minister by June 30 this year after filing its draft report with him

by June 3. This will ensure that the report is in the public domain prior to the next general election expected to take place in November.

Announcing the review Nick Smith said that he had consulted with Australian Climate Change Minister Greg Combet on interactions between Australia’s Multi Party Committee on Climate Change and the NZ ETS Review Panel and that: “We remain of the view that a close relationship between New Zealand and Australia on climate change policy continues to make sense for both countries.”

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The aim of the review is to assess the operation and effectiveness of the NZ ETS and how it should evolve beyond 2012 when the current transitionary arrangements are due to expire. These arrangements provide for emitters in the transport, stationary energy and industrial sectors to take responsibility for only 50% of their emissions, capped at NZ $25 per tonne. From 2013, this rises to 100% without any price cap.

Another key focus of the review will be the “assistance” arrangements to protect the international competiveness of certain energy-intensive firms. Many saw the assistance available as generous due to its intensity or production-based nature.

The review panel may not go as far as to suggest changing the intensity basis of the arrangements, but is likely to address the phase-out rate for assistance, currently set at 1.3% per year from 2013.

It may recommend speeding up the phase-out rate if an international agreement is reached and New Zealand’s key trading partners take steps to put a price on carbon. As neither of these things will have occurred by the time the review panel is required to report, it may instead present a range of possible scenarios with different recommendations attached.

The new review group’s mandate is to: • Look at design changes to the scheme that might be required in the light of international ETS framework changes post 2012

But probably a more telling part of its role and a signal of the Government’s determination to press ahead with its ETS programme are its instructions as to what the group should not focus on, namely: • Whether an ETS is the most appropriate response to climate change in New Zealand • Whether New Zealand should be taking action on climate change • Any climate change measures outside of the NZ ETS. For many Australian firms also operating in New Zealand the NZ ETS is now an established cost of doing business, one benefit of which is that it provides an early insight into the skills necessary to become part of and to work within a structure where emissions have a direct financial cost, as a prelude to the situation they are likely to face in Australia in the not too distant future.

The ongoing New Zealand experience may also be a source of invaluable insights that the private sector can utilise to ensure that Australia’s carbon pricing legislation when it arrives delivers a framework that is both workable and effective.

Alastair Cameron is a Senior Associate in the Wellington office of law firm Buddle Findlay, one of New Zealand’s leading law firms. Alastair practices both public and commercial law and specialises in climate change law and emissions trading. He can be contacted by phone: +64 4 498 7340 or email alastair.cameron@buddlefindlay.com

• Advise whether the NZ ETS should scale up from 50% to a full obligation post 2012 and whether it should embrace further sectors of the economy (most notably agriculture) after taking into account issues of economic competitiveness • Review the inclusion of synthetic greenhouse gas emissions within the NZ ETS after taking into account other ways of reducing these.

ALASTAIR CAMERON Buddle Findlay

9

NEWS | analysis >>

ANALYSIS >>

Gateway to the Hunter heating up Long overdue for infrastructure investment, Newcastle is attracting the attention of commercial law firms.

H

unt & Hunt may have closed down its Newcastle office in October 2010, but the remaining commercial firms in the Hunter are standing firm: as far as they are concerned, the best is yet to come. While Queensland and Western Australia are more commonly associated with the resources boom, Newcastle also looms large: booming coal export activity has producers seeking a 35% increase in port capacity over the next 3 years. Operator Port Waratah Coal Services is already proceeding with an A$670m expansion due for completion by the end of 2011.

Further projects to increase capacity are planned for the following years.

As with the large resources projects in Queensland, much of this work is going to top-tier firms. For example, the recent A$3.2bn financing/refinancing of port infrastructure for the Newcastle Coal Infrastructure Group (NCIG) was facilitated by lawyers from Allens Arthur Robinson, Blake Dawson and Freehills. NCIG has been a client of Blakes since 2007, Port Waratah has commonly used Mallesons Stephens Jaques and Gilbert+Tobin has been representing the Newcastle Ports Corporation in the complicated negotiations over access.

Competition matters are also coming to the fore and corporate boutique Chang, Pistilli & Simmons has also been active in this market, representing 10

►► QUICK FACTS: LAW FIRMS IN NEWCASTLE Firm Gillis Delaney Lawyers McCullough Robertson Moray & Agnew Sparke Helmore

Partners

Lawyers

Total staff

1

5

9

3

3

10

9 10

11 48

25 143

the interests of independent coal producers.

All of this may seem to suggest that the big work up Newcastle way is being facilitated from Sydney, a view which perhaps would be supported by Hunt & Hunt, which is hoping to retain the relationships it has built in the Hunter.

However, commercial firms with a local presence – notably McCullough Robertson, Moray & Agnew and Sparke Helmore – are also reaping the benefits.

Moray & Agnew, for example, has shared in the work associated with Port Waratah’s expansion plans. “We have been very involved with the development of the framework for the coal loader and associated coal handling services. It involved large amounts of legal work and involved negotiations with a number of large mining companies,” said Newcastle partner Grant Sefton Grant Sefton. The firm has also been involved in Moray & Agnew

an A$500m tender for the manufacture and servicing of immigration patrol boats by Forgacs Engineering.

Queensland firm McCullough Robertson has also followed the resources trail to the Steel City.

The firm opened a one-man office in Newcastle at the start of 2009, and now maintains a 10-person office.

Founding partner, Michael Rochester, said the office was highly targeted in the areas of law it was pursuing, and had grown on the back of clients’ needs. “We opened the office with a focus on resources and infrastructure clients. In the past year we added two new practice areas – property and workplace relations – to meet the needs of our existing clients,” he said.

Rochester added that he expected these four key areas to continue growing in the next 12 months.

But there is more to Newcastle than resources. While a major development

“It’s a promising market.

There is a lot more that could be done here, but it depends on industry, government and the overall growth of the city” MARCUS MCCARTHY, GILLIS DELANEY Australasian Legal Business ISSUE 9.01

NEWS | analysis >>

in the heart of the Newcastle CBD was pulled late last year by shopping centre operator GPT, there are hopes that property and construction activity is experiencing a revival. “It’s a relatively buoyant market, although banks are still prudent in where and what they lend, so some projects that previously would have gone ahead easily are not.

There is still quite a lot happening, just not as much as pre-GFC,” said Sefton.

Gillis Delaney partner Marcus McCarthy says that more infrastructure investment and PPPs could be the key: “the region is struggling to get infrastructure funding for major projects, but there is the potential over the next 2 years for a lot of property-related work, once the city and government finalise their plans,” he said. The regional infrastructure committee is pushing for a number of projects, but funding is hindering them going ahead, according to McCarthy. “We need to get PPPs off the ground. There are a lot of private institutions willing to go into PPP’s, but the government is not yet ready,” he said. “It’s a promising market. There is a lot more that could be done here, but it depends on industry, government and the overall growth of the city.”

Partner at Sparke Helmore’s Newcastle practice, Jann Gardner, said the region is still growing strongly.

“There is still a lot of growth for the Newcastle and the Hunter region to come,” she said. In the last 6 months the firm has seen a rebound in the two main practice areas – property and M&A Jann Gardner –and has added staff Sparke Helmore as a result. Except for those two practice areas Gardner said business in the Hunter was relatively shielded from the full-force of the GFC because of the ongoing mining and infrastructure work. “There are a lot of new industrial areas on the edges of Newcastle and the mines are going gang-busters,” she added.

Sparke Helmore is one of the few firms in the region that works actively in the M&A market. In the past 12 months the firm worked on major deals, such as the sale of Schneider Electric’s acquisition of SCADAgroup for A$200m. ALB www.legalbusinessonline.com

uk report Sign of times for trans-Atlantic ‘megafirm’?

The UK arm of the newly-merged SNR Denton reported a 9% drop in revenue during the first half of the 2010/2011 financial year. This is against a backdrop of a 20% rise in profits per equity partner at the global firm. London based co-chairman Martin Kitchen said “It is fair to say that the first part of the financial year was slow.

Domestically in the UK new money lending was slow. We also have a large insolvency practice which did not see as many restructurings as expected.” Kitchen remained optimistic that SNR Denton UK will see a stronger second half.

Linklaters moves to quash concerns over pay disparity The missing link to happiness appears to be pay disparity at Linklaters’ German offices, but the firm is doing something about it to avoid further disputes from overseas-based partners and associates. As it moves closer to integrating its

international partnership, the firm will move its German partners onto the same remuneration package as their UK counterparts following next year’s pay review. Under the current system, the German partners’ remuneration has been held at 90% of that of the UK partners.

BP initiates post-Deepwater panel review Following the disastrous Gulf of Mexico oil spill, BP’s group general counsel Rupert Bondy is overseeing a formal legal panel review process, expected to result in a new line-up of firms for Spring 2011.

Those firms already on the roster have already been informed, but formal proposal requests have not yet been sent. The last time BP changed its legal panel was in 2008, when Linklaters, Freshfields, Herbert Smith, CMS Cameron McKenna, McGrigors, Field Fisher Waterhouse and Wragge & Co were selected.

Although Linklaters has been BP’s long-term adviser, the company has extended its relationship with a number of other firms lately, including Simmons & Simmons and Baker & McKenzie.

 ROUNDUP

• Clifford Chance has announced plans to enter the Turkish legal market by opening an office in Istanbul.

London-based finance partner Simon Williams will lead the practice, which will operate in conjunction with local firm Yegin Legal Consultancy (YLC) • City of London law society members including Clifford Chance, Norton Rose and Slaughter and May have issued a joint letter warning the Department of Business that the proposed merger of the Office of Fair Trading with the Competition Commission could dilute the benefits of the current two-tiered system • Norton Rose has added ex-DLA Piper partner Marc d’Haultfoeuille as part of its French corporate finance team, along with senior associate Nadège Martin • Watson Farley & Williams has hired two new asset finance partners, Rex Rosales and Siva Subramanian, both from Reed Smith. The two will aim to strengthen the firm’s aviation finance team • Freshfields has named London-based partner Colin Hargreaves as its new global head of tax, after tax chief Stephan Eilers became executive partner in the firm’s new three-man management team • Berwin Leighton Paisner and Clifford Chance have both won lead roles on the sale of Allen & Overy’s city headquarters to investment bank JP Morgan. A&O currently rents 71,900sqm of the Bishops Square office space, which was valued at £557m • Mayer Brown’s London office has lost three partners, two to White & Case and one to Vinson & Elkins.

Jacqueline Evans and Lee Cullinane were both finance partners; Nick Henchie will head Vinson & Elkins’ construction practice • Freshfields has upped the ante on diversity in city law firms by announcing that a quarter of its new trainees are black, or of an ethnic minority. The statistic puts Freshfields in line with Magic Circle rivals Allen & Overy and Clifford Chance, but Linklaters are identified as the most ethnically diverse firm • Follwing a year-long break, Freshfields corporate partner David Crook has joined White & Case at its city office. Crook was partner at Freshfields for ten years and specialised in domestic and cross-border M&A deals

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NEWS | analysis >>

that turns a profit.”

The idea proposed by Karimi, and seconded by her fellow panellists, is not new. For much of the last decade DuPont– a company perennially at the forefront of in-house legal innovation – and Tyco both have developed legal ‘recovery’ programs. Structured around identifying and pursuing legitimate claims that otherwise may be missed, DuPont has generated more than US$1bn in total recoveries over the last 4 years, while Tyco has migrated to a system where it is now in a position to record similar levels in the years ahead.

But are such initiatives a luxury that only companies with resources as deep as DuPont and Tyco can afford?

ANALYSIS >>

Recovering legal rights

DuPont: a world leader on the corporate recovery front

The ‘profitable’ legal department US in-house legal departments are already operating corporate ‘recovery’ programs that are bringing some within sight of actually making a profit. Could this be the next trend to hit the Australian and New Zealand in-house market?

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he US has been in many respects at the vanguard of the in-house legal profession.

It was in American companies, and to a lesser extent their UK and European counterparts, where the modern general counsel role was born and autonomous in-house legal teams began to develop. This is a transition which is still occurring today, as many Australian and NZ lawyers will attest.

All the more reason, then, for lawyers in the Asia-Pacific to keep an eye on the latest trends emerging from the US. This proved to be a major theme at ALB’s recent In-house Legal Summit held in Hong Kong, where in addition to the usual themes of independence and commercialised advice, a new topic emerged: how to change an in-house legal department from a cost centre to a profit centre.

Jasmine Karimi, chair of the Hong Kong Corporate Counsel Association (HKCCA) and a senior counsel at

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Braiform (The Spotless Group), described it as “critical” to the survival of the inhouse profession in the aftermath of the GFC. “We have all experienced Jasmine Karimi cost pressures and HKCCA shrinking budgets and been forced to do more with less over the last 18 months,” she said. “These changes, despite the improvement in the economy, may well be here to stay… but what we can do is to move the legal function from something that just sucks up revenue to a business unit that generates revenue … perhaps even one

A recent report (The Profitable Legal Department, Lexis Nexis MartindaleHubbell) indicates that legal recovery programs need not be the sole domain of the world’s largest companies. The report outlines three steps that inhouse departments can take to kick off their initiatives: first, identify pre-existing and legitimate claims; second assert legitimate claims to recover damages rightfully due; and third, track and analyse recoveries to identify improvements or adjustments in business practices that mitigate future losses.

While a number of companies already do this on an ad-hoc basis, DuPont is a pertinent example of the benefits that come with formalising this process. “We had recoveries going on, but it was very much an ad-hoc procedure, so we asked our auditors to do a study of our experiences over the years in this area,” said Thomas Sager, the company’s vice president and general counsel. “The results showed that we had been relatively successful. But more importantly, it signalled to me that if we had a more disciplined approach we would be more successful,” he said. The results certainly speak for themselves. Since formalising their recovery mechanisms

“Not pursuing recoveries could prove foolhardy for corporations. According to our research, claims in IP areas alone could amount to billions of dollars” PAUL SMITH, EVERSHEDS Australasian Legal Business ISSUE 9.01

NEWS | analysis >>

DuPont recovered in excess of US$1bn from 2007-2009. The company claimed damages against contractors who failed to meet construction milestones and deliverables; claimed damages from a freight carrier for lost cargo; took action against a vendor who failed to deliver goods; and even successfully recovered US$51m from the US government for commandeering 15 of its factories for production during World Wars I and II. Last year the company made a total of 169 recoveries.

Cultural change

Implementing such a program involves making not only procedural changes to company policy but effecting attitudinal and cultural shifts as well – often throughout the company as a whole and not just its legal department.

In DuPont's case it meant moving the company on from a “conservative and benign” outlook to being more aggressive and proactive when things go wrong.

This of course, is easier said than done. Even where the commercial rationale is clear, in-house legal departments may face a degree of inertia because of the risk to stakeholder relationships that such initiatives may entail.

But Sager contends that if structured properly and managed correctly, legal recovery programs can actually enhance and strengthen relationships with external stakeholders. “You have brought violations to their attention and this allows them to impose better practices on the people they control.”

Recovery programs and Australasia

While a number of corporate in the US and Europe have established dedicated legal recovery programs, very few companies in Australasia have taken these steps. Sager believes it is only a matter of time until these take off in legal departments world-wide, particularly in Asia where, he says, companies could potentially be foregoing millions of dollars in claims.

Where there is ample will but perhaps not a commensurate level of resources to implement a recovery program, Sager believes in-house legal departments should look to use their external counsel. DuPont, for instance, relied heavily on a number of its law firms, especially Eversheds, to help it set up its initiative and continues to turn to them to keep it running at an optimal level. The firm has been instrumental in carrying out contract reviews and examining post-merger agreements to ascertain whether the company has been subjected to breaches of warranties and indemnities.

The firm’s work with DuPont was so successful that it has since established a specialised consultancy for in-house legal departments, a major part of which is establishing recovery programs. Partner-in-charge of this practice group, Paul Smith, believes that companies looking to kick-start their own recovery programs should begin with basic contract review. “Instead of just stowing away documents in filing cabinets, an internal procedure to re-examine on a systematic basis [should] be implemented,” he says, adding that for companies in Asia, IP is the perfect starting point given that many local players already have relatively well developed portfolios.

“Not pursuing recoveries could prove foolhardy for corporations,” he says. “According to our research, claims in IP areas alone could amount to billions of dollars.” ALB www.legalbusinessonline.com

UPDATE >>

Employment Law Asking the right questions: the do’s and dont’s when interviewing recruits

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avigating your way through the interview process can be a minefield for employers, especially when it comes to asking the right – or wrong – questions.

Goldpath Pty Ltd recently found itself the subject of an unlawful discrimination complaint after interviewing a prospective employee. Goldpath was ordered to apologise to an unsuccessful job applicant over questions asked during the job interview, relating to the applicant’s age and parental status.

The complaint was brought under the Anti-Discrimination Act 1991 (Cth) (the Act) against Goldpath and Rebecca Callinan, an employee who conducted the interview.

Background

Bair, who was interviewed for a position, complained that during the interview Goldpath unlawfully requested information from him and treated him less favourably on the basis of his age.

During the proceedings before the Queensland Civil and Administrative Tribunal, Goldpath admitted that it had asked Bair questions about his parental status, date of birth and health, but argued that they were asked for specific reasons, including: • as part of an informal discussion; • for administration reasons so they were known if Bair was eventually employed; and • to make the Bair fully aware of the manual labour involved in the role.

What the legislation says

Under the Act, it is prohibited to ask a person to supply certain information which may lead to unlawful discrimination. This applies except where: • the request is specifically authorised by a provision of another act; or • the respondent is able to prove that the information was reasonably required for a specific purpose, which did not involve discrimination.

Findings

The Tribunal found no evidence establishing that Bair was treated less favourably during the recruitment process. However, it did find Callinan and Goldpath had breached the Act in relation to their questions concerning age and parental status.

Callinan and Goldpath were ordered to make an apology to Bair for the perceived hurt caused by their actions.

No order as made to pay Bair any monetary compensation.

However in different circumstances the amount awarded could have been quite substantial.

Lessons for Employers

Employers should be careful not to request information from candidates that may lead to an unlawful discrimination complaint.

Those conducting interviews should be conscious that they only ask questions relevant to the position, and which address the candidate’s ability to undertake the inherent requirements of the role. Employers should also review their anti-discrimination policies and procedures, particularly those focused on the recruitment process, to make sure they reflect current legislative requirements.

Author: Clayton Payne, senior associate, Sparke Helmore Lawyers clayton.payne@sparke.com.au Clayton Payne

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ANALYSIS >>

And now for the long haul...

The recent float of QR National was the second-largest IPO ever conducted in Australia. Will this float have any bearing on the prognosis for IPOs in 2011?

“We’re anticipating that more people will consider the dual-track path this year, which does raise some challenges for getting an IPO away” SHANNON FINCH, MALLESONS

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he early success of the QR IPO may have been a political lifeline for the beleaguered Queensland State Government, but there was also another group with more than a casual interest in the progress of Australia’s largest float since Telstra. Equity markets lawyers have been tracking the patchy Australian IPO market and reading the tea leaves on what 2011 has in store – and they are encouraged by what they have seen with QR. The optimism is highlighted by speculation that private equity-owned Nine Entertainment is planning an A$5bn float in the first half of 2011.

But with optimism inevitably comes caution. “I think we’ll see a reasonably steady stream of IPOs – but I don’t think we’ll see a huge rush,” said Mallesons partner Shannon Finch.

“But at the same time I don’t think it will be the drought of IPOs that 2009 was. I’m expecting it to be a good year; investors will take some encouragement from QR but I don’t think anyone is going to lose their head and pile into IPOs.” Finch says the dual-track process is likely to come to the fore in 2011.

“At the end of the day, it will probably come down to the assessment of value and where sponsors are likely to get the best value. I suspect it will be a close run thing with trade sales,” she said. “So we’re anticipating that more people will consider the dual-track path this year, which does raise some challenges for getting an IPO away.

"Having a trade sale there adds a certain amount of competitive tension to a point and then it can actually remove some of that momentum from Australasian Legal Business ISSUE 9.01

NEWS | analysis >>

an IPO as you get close to launch date,” she added.

Mid-market activity

It remains to be seen whether the QR float will stimulate IPO activity in the mid-market. Cooper Grace Ward managing partner Chris Ward says that comparing the two is rather like comparing “an elephant with an ant”, but he believes there is a connection. “The QR float did create in Queensland a huge amount of activity and publicity – it seems that it was probably a catalyst for people to think they might be able to get something away here. I think there’s a bit more appetite for that now,” he said. Ward says that the business community “held its breath” during the QR float and a different result with that IPO may well have had quite a different impact on equity markets activity.

Resource-driven Queensland and Western Australia remain the focal point for a good deal of activity.

McCullough Robertson concluded 2010 with three IPOs in December: chairman Brett Heading says there are a “number Brett Heading of potential jobs” in the McCullough pipeline. “The equity Robertson capital markets are opening up – there’s no question about that for companies that have decent boards, good prospects, reasonable track record and sensibly priced. They’re going to get away, whereas if you’d asked me [last] January, it would have been different,” he said. Bruce Humphrys of HopgoodGanim has a similar observation: “The guys here are doing a lot of mid-cap IPOs,” he said. “The companies that have a strong mining presence are obviously able to attract capital from the public.”

Again, optimism is qualified by caution. Paul Venus of Holding Redlich says that he is unable to draw any conclusions from the success of the QR float: “QR was always going to be successful,” he said. “It was a great set of assets, a growth story, well run, not a high risk investment – so it doesn’t come as a great surprise. I suspect the real IPO activity will be more than 6 months away.” ALB www.legalbusinessonline.com

us report Clifford Chance to ‘show me the money’ in US In an attempt to join the ranks of the ‘biglaw’ firms, Clifford Chance will pay associates in its US offices bonuses of between US$7,500 and US$35,000. The firm told media individual bonuses would be based on assessments of overall performance, including quality of work, contribution, teamwork and volunteer efforts. But apparently Clifford Chance isn’t as generous as some others: Cahill Gordon & Reindel and Susman Godfrey, for example, both announced bonuses of US$25,000-US$100,000.

Baker & McKenzie hires Madoff prosecutor Marc Litt, lead prosecutor in the case against Ponzi-scheme banker extraordinaire Bernie Madoff, joined Baker & McKenzie’s global compliance practice this month. “With new regulations and increased enforcement in several jurisdictions, compliance has become a top priority today for multinational companies,” Eduardo Leite, chairman of Baker & McKenzie’s executive committee, told the AmLaw Daily.

Litt, who started looking for private practice opportunities in May after stepping down, was named as prosecutor on the Madoff case in midDecember 2008, just weeks after winning a trial against Alberto Vilar, another businessman accused of defrauding investors. Litt’s focus as a prosecutor has been on securities litigation, including securities fraud, money laundering, and other white-collar crimes. He is based in the New York office of Baker & McKenzie.

Jones Day’s coup d’Boston One month after announcing a new office in Sao Paolo, Jones Day announced it opened in Boston, in January. Litigation partner Traci Lovitt has moved from New York to take up the position as partner in charge. She will be joined by IP partner Eileen Falvey and healthcare partner Lyn Coe. Trial practice head Tom Cullen will split his time between Boston and Washington.

The firm has hired five existing partners from Boston firm Hanify & King, including co-founder John Hanify, to gain a local presence.

ROUNDUP

• ION Media Networks has named Joseph Titlebaum as general counsel. Titlebaum will be based in New York. With 20 years' experience in the media industry, Titlebaum will advise on all of ION’s legal and compliance matters, including public and regulatory reporting activities • Sullivan & Cromwell and Davis Polk & Wardwell have both taken lead roles in advising BG group on its inaugural debt offering in the US, issuing a US$1bn notes offer. Sullivan & Cromwell advised BG Capital in the firm’s first mandate for the company, advising on both UK and US aspects • Discovery communications – the company responsible for the TV shows The Crocodile Hunter and Jon & Kate plus 8 – have announced the appointment of Bruce Campbell, 42, as general counsel.

Campbell has also collaborated with Oprah Winfrey on the development of her cable television network, OWN • Jones Day announced the promotion of 36 lawyers to partner on 17 December. The appointments include a capital markets lawyer, two private equity lawyers, three restructuring lawyers, three banking & finance lawyers and five M&A lawyers • Jones Day will be paid US$11.6m plus US$370,000 in expenses by Lehman Brothers for litigation between June 1 and September 30. Robert Gaffey reportedly charged US$825 per hour for 798 hours in that period. Jones Day has so far received total payments of US$43.4m • Baker & McKenzie has advised on the second Egyptian IPO for 2010, which is also the second since the beginning of the global financial crisis in 2008. A team from London and Cairo advised Amer Group Holding on its US$200m IPO and listing on the Egyptian stock exchange • White & Case, Baker & McKenzie and Shearman & Sterling were among a host of US firms to keep a 90% retention rate for newly-qualified trainees in their London offices. Hogan Lovells expects its retention rate to drop to around 66%, leaving 20 trainees competing for eight available jobs

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news in brief >> COMPLAINTS ARM OF QLD LAW SOCIETY MOVES TO LEGAL SERVICES COMMISSION The Queensland Law Society will no longer take complaints from the public relating to legal professionals. Instead, the arm of the Law Society which previously handled these matters, the Law Society’s Client Relations Centre, has been transferred to the Legal Services Commission (LSC).

When the LSC opened in 2004, it took responsibility for the receipt, investigation and prosecution of complaints. However, this meant both the Queensland Law Society and the LSC received calls from consumers who had a concern about their solicitor's services. Queensland Law Society will continue to provide legal practitioners with guidance regarding ethical issues, conduct investigations as requested by the LSC and provide the public with referrals for solicitors’ services and information regarding the legal profession.

MALLESONS CALLS IT QUITS ON NORTH SYDNEY COUNCIL After 20 years of representing North Sydney Council in legal matters, Mallesons Stephens Jaques has declined to tender for the council’s new legal panel.

Head of property, construction and environment and partner at Mallesons, Peter Pether, said the firm and the council had parted on good terms. It was the firm's decision not to tender for council’s work again.

Mallesons has assisted the council with litigation and advice for planning, environmental law and local government law matters since 1988. According to Mallesons, none of the ten largest Sydney firms submitted applications to be on the legal panel, which has since been awarded to HWL Ebsworth and Sparke Helmore. As of November 15 2010 the council had spent A$71,568 on legal fees during the year from a budgeted amount of A$650,000.

NEW LAW COUNCIL PRESIDENT SETS AGENDA The Law Council of Australia’s new president, Alexander Ward, has outlined his agenda for the coming year and the ongoing role of the council in the reform of the national legal profession. Ward, an Adelaide-based barrister and former president of the Law Society of South Australia, replaces Glenn Ferguson, who led the council for the past 12 months.

Ward has indicated the Law Council will continue to fully support the initiative of the Council of Australian Governments (COAG) to reform the legislation governing the regulation of the legal profession and said that the other priority for the council would be to ensure greater coordination of the work being undertaken in the Pacific, through the development of a masterclass program.

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WESTERN AUSTRALIA >>

Integrated Legal Holdings expands again

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ntegrated Legal Holdings (ILH) has made another acquisition, having achieved an in-principal agreement to purchase the legal business of Perth firm Wojtowicz Kelly (WK) Legal. The acquisition will happen through a merger arrangement with existing ILH member firm Brett Davies Lawyers (BDL), which also owns Law Central.

The newly merged entity will have four principals, approximately 54 staff and annual fee income of more than A$7.5m.

The merged business will trade as Civic Legal while Law Central will retain its own name. The four principals – Anthony Quahe, Gavan Kelly, and John Wojtowicz from WK, and Brett Davies from BDL – will act as senior management for the business. Under the merger plans, the BDL business will be relocated and integrated into the nearby offices of WK Legal.

NEW ZEALAND >>

New executive structure at Chapman Tripp

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he CEO role at Chapman Tripp will be discontinued following the departure of Alastair Carruthers, with those responsibilities to be split between managing Andrew Poole Chapman Tripp partners Andrew Poole and Mark Reese.

Andrew Poole will be responsible for the Auckland and Christchurch offices and Mark Reese responsible for the Wellington office.

Poole will take ultimate responsibility for the firm’s operations nationally and will devote 90% of his time to managing partner functions, while Reese will devote 10% of his time to managing partner functions and the remainder to client work. “Mark and I have exactly the same job description for our roles, albeit that we have different office accountabilities and percentage commitments to the role,” Poole said.

The senior management team in its final form will feature a COO, a CIO

and a director of marketing/BD. Most of the roles, such as that of COO Tim Jones, are already in existence but the firm is expecting to announce a new appointment.

Poole also took the opportunity to reflect on the progress the firm had made under the stewardship of Alastair Carruthers. “Alastair has had a defining role in the firm’s growth and progress over the last 16 years, with over thirteen of those as chief executive,” he said. “That period has seen significant growth in partner numbers, clients and market share in Auckland, the continuing pre-eminent position of our Wellington office and the opening of a very successful Christchurch office.”

Poole noted that some of Carruthers’ achievements included overseeing the creation of New Zealand’s first online due diligence room (Dataspace); the adoption of a new brand and his commitment to the firm’s participation in the debate of issues critical to New Zealand business. ALB Australasian Legal Business ISSUE 9.01

NEWS >>

news in brief >> Perth-based commercial law firm WK Legal was established in 1994 and incorporates Civic Legal, the Simpson Kelly Group, Gibson Tovey & Associates, All Property Conveyancing and Jan Simpson Settlements. The firm consists of three partners – Kelly, Quahe and Wojtowicz – and 40 staff and generates annual fee income of approximately A$5.3m. Along with its Perth CBD office, it has an office in Rockingham (south of Perth), and a representative office in Singapore.

and lawyers. BDL incorporates an internet-based business called Law Central. This service was established 10 years ago and assists clients with the preparation and publishing of documents, as well as providing an information service, predominantly for do-it-yourself users.

Consideration for the transaction is a combination of the issue of approximately 5.7m IHL shares at A$0.11 per share and cash.

The acquisition is structured with

The newly merged entity will have four principals, approximately 54 staff and annual fee income of A$7.5m BDL has operated in the Perth CBD for more than 15 years, providing services in tax, succession planning, estate planning and superannuation, for a national client base focusing on accountants, financial planners

significant employment constraints and conditions, consistent with ILH’s acquisition model and strict criteria.

The transaction should be effective from 1 February 2011 but is subject to completion of legal documentation. ALB

TONY ELLIS NOMINATED FOR AMNESTY INTERNATIONAL HUMAN RIGHTS DEFENDER AWARD One of New Zealand’s leading human rights lawyers, Tony Ellis, has been nominated for Amnesty International Aotearoa New Zealand’s annual Human Rights Defender Award.

An outspoken Wellington-based barrister, Ellis has not been afraid to represent unpopular cases, some on a pro bono basis. His cases have covered the spectrum of criminal appeals, judicial review, prisoner’s rights, intellectual disability and mental health, habeas corpus, extradition, immigration, refugees, and other breaches of human rights.

Now in its second year running, the Human Rights Defender Award celebrates the achievement of one person who has made an outstanding contribution to the defence, promotion, and/or advancement of human rights in the Asia-Pacific region.

Sixteen nominations have been received for the award, spanning a diverse selection of grassroots to global activists from around Asia, the Pacific and New Zealand. Ellis is one of three lawyers put forward for the award.

QUEENSLAND >>

M+K enters Queensland market with BCI merger

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LB Fast 10 firm Macpherson+Kelley Lawyers (M+K) has merged with Queensland firm BCI Lawyers, meaning M+K will now have the capacity Damian Paul to service clients right M+K along Australia’s eastern seaboard, including Tasmania. “Our merger with BCI is an exciting step in the evolution of M+K into a national commercial law firm,” said national MD, Damian Paul.

“It means we have a strong foothold in each East Coast capital city, including Hobart, and can service our clients nationally in all key areas of expertise.” Earlier last year the firm added boutique Melbourne workplace and legal training firm Douglas LPT to the group. Tasmanian firm Dobson Mitchell & Allport was also acquired although that firm is yet to adopt the M+K brand.

As a result of the BCI integration, M+K will have a team of almost 140 lawyers, more than 260 staff and www.legalbusinessonline.com

offices in Melbourne, Dandenong, Sydney, Hobart and Brisbane, with satellite operations in Bundaberg and Longreach. Les Hancock, BCI’s managing partner, said that there was a clear cultural fit between the two firms, and a common strategy in terms of meeting the legal needs of middlemarket businesses and asset owners.

He said BCI, which was established in 2005 to serve the Queensland middlemarket, had watched the rise of M+K with great interest, and was impressed by the dynamism and determination of the firm to set a fresh standard for middle-market legal services.

Hancock said the combination of the firms would deliver increased value to existing and future clients, and provide BCI’s Queensland-based clients with access to additional legal expertise, especially where it involves interstate transactions and disputes.

BCI employs a team of 32, including 13 lawyers, all of whom will join M+K from 1 January 2011. Six BCI lawyers will become M+K principals, taking total principals to 50 nationally. ALB

CHAPMAN TRIPP LEADS NZ$2.2BN HEARTLAND BANK CREATION New Zealand firm Chapman Tripp has spearheaded the merger of MARAC Finance, CBS Canterbury and Southern Cross Building Society to form a listed financial services group, Heartland Bank.

The group is expected to become New Zealand’s only listed, locally controlled, registered bank after the merger was completed on January 7. The shares are expected to be listed on New Zealand’s premier equities market NZSX by the end of January.

The merger involved amalgamating three businesses with more than NZ$2bn of assets, an IPO of 300 million shares; the transfer of approximately NZ$1.7bn of debt securities from three different issuers; the transfer of engagements from the merging building societies to the new operating vehicle; the conversion of two building societies into companies; and the implementation of a court approved scheme of arrangement.

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INDUSTRY >>

Bakers, Clutz and Mallesons act on NSW energy sale

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aker & McKenzie has advised the NSW Government on its controversial sale of energy assets.

The Government sold electricity and gas retail businesses Country Energy, EnergyAustralia and Integral Energy; gentrader rights for Delta Electricity and Eraring Energy; and various development sites for A$5.3bn.

However, it sparked the resignation of eight of the 11 board members of stateowned companies Eraring and Delta Electricity.

Origin Energy purchased the retail arms of Integral Energy and Country Energy for A$2.3bn. Origin paid a further A$950m for the output of Eraring Energy, which operates

power stations on Lake Macquarie and in the Shoalhaven.

TRUenergy has acquired EnergyAustralia’s retail business, the electricity trading rights for Mount Chris Saxon Piper and Wallerawang Baker & McKenzie coal-fired power stations, and three power station development sites for A$2.035bn.

Baker & McKenzie partner Chris Saxon led the extensive Baker & McKenzie team, together with energy & resources partners David Ryan, David Egan, Michael Kunstler and Chris Hughes, banking & finance partner Ken Gray, and competition partner Andrew Christopher.

Mallesons Stephen Jaques acted for TRUenergy, led by partners Louis Chiam and Vishal Ahuj, while Clayton Utz acted for Origin Energy, led by partners Graham Taylor (M&A), Emma Covacevich (due diligence) and Graeme Dennis(contracts and regulatory). ALB

NEW SOUTH WALES >>

Country firm develops online conveyancying practice

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regional boutique law firm has developed a new IT system, allowing it and others to do more work with less people. Lawlab, based in Nyngan and Cobar, has developed a system called Launch in-house, which allows clients to access and monitor the progress of their project while allowing Lawlab to do more with less.

CEO Ian Perkins said the firm was required to establish Launch because of the staffing pressures a regional practice faces. “When we first moved to [the] country to establish the practice, we found that there were some very skilled professionals in the areas where we were working, but there was a limitation on the number of staff we could find with those skills,” he said.

After investigating the market, Perkins decided online legal advice was the best solution to facilitate growth. He set about finding a suitable IT system 18

to aid their main area of business – land and water conveyancing. After extensive analysis of the processes involved, the firm introduced Launch and is now looking to extend its reach.

“We wanted to create a platform that would allow all parties involved in a deal to come together... so that everyone knows what the others are doing and where the deal is up to,” he said.

“Launch allows our clients to manage the process and set parameters.”

Phase two of Launch will be applicable to any legal process, added Perkins. “We can tailor the system to an individual client’s requirements.”

Perkins said he often had to dispel myths surrounding the capabilities of regional practices, and was regularly required to ‘think outside the square’.

“For us to get work our tender has to be even better and promise to do more,” he said, “because it’s very easy for a

client to drop you for one of the more well-known national law firms.”

Lawlab is one of the major advisors on the Federal Government’s Murray Darling Basin Ian Perkins plan and has been at Lawlab the forefront of water trading for the past 10 years. Perkins has been involved in cross-jurisdictional water resources law practice, since his time at Corrs Chambers Westgarth.

After acquiring two local firms in Nyngan and Cobar, he established Lawlab as a specialty water and land conveyancing practice, with former Blake Dawson clerk Richard Bootle. The firm now has more than 20 staff across Nyngan, Cobar and Canberra, including seven dedicated IT professionals in Melbourne. ALB Australasian Legal Business ISSUE 9.01

NEWS >>

PRO BONO >>

Employment lawyers in highest demand for pro bono

A

ccording to the Final Report on the National Law Firm Pro Bono Survey 2010, the most common area of practice to complete pro bono work in was employment law. Twelve of the 29 firms to participate in the report worked on at least one pro bono employment law matter during FY09-10.

John Corker, director of the National Pro Bono Resource Centre – which compiled the report – cited a lack of government support in the employment area as one reason for the result. “Legal Aid funding for employment law matters is in many states limited, if not non-existent,” he said. However, while employment law was the most common area for probono assistance, it was also the second-most common practice area to have applications turned away by firms, with 41% of requests turned down.

Commercial agreements, such as leases, and Deductible Gift Recipient (DGR) applications ranked second and third amongst the firms in terms of the most common pro bono.

“Obtaining DGR status from the ATO is a John Corker complex process that can be vital for not-forNational Pro Bono profit organisations to be able to receive tax Resource Centre deductible gifts and donations. Many do not have the resources or the expertise to prepare an application without expert legal assistance,” Corker said.

“Law reform is required to make the DGR application process much simpler so that limited pro bono resources can be better deployed in other areas of unmet need,” he added.

Demand for DGR applications remains high despite the amount of cases being undertaken by firms, with 34% of DGR applications turned down. Human rights, government tenders and construction law were the cases least likely to be turned away by firms. According to the survey’s findings the main constraints to undertaking pro bono work applications were a firm’s capacity, followed by conflict of interest with fee-paying clients and insufficient expertise in relevant areas of the law.

Three firms, or 10% of respondents, indicated there were no constraints to doing pro bono work. ALB ►► KEY PRACTICE AREAS FOR PRO BONO WORK* Employment law

83%

Deductible Gift Recipient applications Administrative/constitutional law Debt

72% 72%

69%

Consumer law Incorporations

69% 66%

>>

IN-HOUSE Q&A integrity legal

KATE ROBERTSON Director of Legal Services (Australia & NZ)

Accenture Australia

have in-house lawyers become an increasingly 1Why indispensable part of an organisation?

Aside from the obvious cost benefit of having an in-house legal team, I believe that in-house lawyers are uniquely positioned to offer holistic support to a company – that is, they understand the company’s strategic goals and priorities, and can focus their advice in a way that is aligned with those objectives. The ability to provide sound legal advice in a way that avoids being perceived as obstructionist is often heavily dependent on there being strong relationships between the legal advisor and the client. In-house lawyers have the advantage of being able to work side-by-side with their commercial counterparts on a daily basis, which provides an unparalleled opportunity to develop a true “trusted advisor” relationship.

recent times, the role of the general counsel has 2Indiversified into a multi-faceted role, (where the general counsel can wear the ‘hat’ of lawyer, legal manager, compliance manager, and company secretary).

Do you believe this has increased your risk profile?

I am fortunate to work for a company that takes compliance issues extremely seriously, and accordingly I am supported in my role by a strong team of subject matter experts. My view is that regardless of the legal role you play in an organisation, whether it be GC or transactional lawyer, you need to “know what you don’t know” and understand who makes up your support network. Ultimately it is about being able to easily identify who to go to for subject matter expertise (whether it be within the organisation, or through external sources) to help you make informed decisions, give sound advice, and manage risk effectively.

do you consider to be the main challenges you 3What and your team will face in 2011?

I am privileged to lead a team of exceptionally talented lawyers here in Australia. The perennial challenge for our team, and no doubt many in-house legal teams, is to continue to find new ways in which we can improve the delivery of legal services to our company, add greater value, and help the company to further its strategic priorities and objectives.

One advantage of working for a company like Accenture is that you find yourself regularly working at the cutting edge of technology on complex transactions. This brings with it challenges every day – challenges that enable us to continually stretch ourselves and develop our skills.

(*Areas of legal practice in which the highest number of firms surveyed provided pro bono services) www.legalbusinessonline.com

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NEWS >>

APPOINTMENTS ►► LATERAL HIRES

Mallesons

Name

Practice areas

Organisation coming from

Organisation going to

Ed Browne

Commercial Property

Frenkel Partners Maddocks

Madgwicks TressCox Lawyers

Property, planning and environment Finance, derivatives and insolvency Property Insolvency and commercial litigation Property M&A Planning & environment

McCullough Robertson

Cooper Grace Ward

Practical Law Company

Corporate, commercial and projects M&A Tax Property M&A Projects and finance

Chapman Tripp

Minter Ellison Rudd Watts Middletons McInnes Wilson Lawyers Middletons Minter Ellison HK McInnes Wilson Lawyers GRC

Jones Day HK Corrs Chambers Westgarth Maddocks Jones Day HK DLA Piper

Minter Ellison HK Minter Ellison TressCox Lawyers Minter Ellison HK DLA Phillips Fox

Christopher Conolly Tarnya Fitzgibbon Chris Forrest

Michael Hain Alicia Hill Julian Hill Anne Ko Stephen Keliher Brigid McArthur Barbara Mok David Pratley Martyn Tier Katherine U Stephen Webb

Corrs Chambers Westgarth DibbsBarker Minter Ellison Jones Day HK Bar

►► PARTNER PROMOTIONS Firm

Name

Practice area

Office

Clayton Utz

Brad Allen Rebecca Carroll Karen Ingram

Banking Energy & resources Litigation & dispute resolution Corporate /M&A Environment & planning Environment & planning Construction and major projects Corporate practice Banking Property Dispute resolution Dispute resolution Tax Energy & resources/M&A Competition/M&A Banking & finance Banking & finance M&A Banking & finance Energy & resources/M&A Dispute resolution Dispute resolution Employment relations group

Sydney Brisbane Sydney

Tony Lalor Kathryn Pacey Claire Smith Nick Tsirogiannis Freehills Madgwicks Mallesons

Piper Alderman

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Julian Lincoln Phillip McMahon Sue Harris Beth Cubitt Domenic Gatto Scott Heezen Dan Kirk Wayne Leach Kate Jackson-Maynes Paul McBride Joseph Muraca Anne-Marie Neagle Craig Rogers Larissa Strk-Lingard Edmund Wan Erin McCarthy

Brisbane Brisbane Sydney Melbourne Melbourne Brisbane Melbourne Melbourne Melbourne Sydney Perth Sydney Melbourne Hong Kong Melbourne Melbourne Brisbane Perth Hong Kong Adelaide

Mallesons announces ‘Baker’s dozen’ Mallesons Stephen Jaques has announced a string of partner promotions beginning 1 January, with 12 staff promoted to partnership and one recruited from Clifford Chance in Beijing.

Mallesons has already appointed three partners in the past six months, taking the firm’s total to 16.

Middletons

Various

Middletons adds property partners Middletons has added a new partner to its property team in Perth. Michael Hain has joined the firm from Corrs Chambers Westgarth, with more than 18 years’ legal experience. He regularly acts on major property acquisitions and subdivisions, strata and residential developments, property leasing and sales. Hain also advises on development strategy, as well as assisting clients on their strategic property portfolios.

The firm has also added a new partner in Sydney, appointing Julian Hill, who joins from Minter Ellison where he was a partner.

Hill has 20 years of experience of advising in front-end and back-end Michael Hain construction matters in Australia, Hong Kong and the UK. Corrs Chambers Westgarth

Minter Ellison

Minters secures Corrs tax partner Minter Ellison has appointed former Corrs Chambers Westgarth partner David Pratley as a partner in the firm’s taxation practice. As an income and capital gains tax specialist, Pratley’s focus is corporate and international tax, advising clients involved in M&As, corporate reorganisations, debt and equity capital raisings and cross-border investment.

Pratley has more than 16 years’ tax experience, including 7 years with Ernst & Young’s international tax division in Sydney and New York. In addition to his legal qualifications, he is also a qualified chartered accountant.

DLA Piper

DLA Phillips Fox

DLA Piper managing partner returns to Australia Managing partner of DLA Piper’s Abu Dhabi office, Stephen Webb, has returned to Australia as partner at DLA Phillips Fox Brisbane. Webb, a projects and finance partner, launched the firm’s Abu Dhabi office in 2008, Stephen Webb after leaving his role as a consultant at Mallesons Stephen Jaques in Brisbane.

Australasian Legal Business ISSUE 9.01

NEWS >>

Jones Day

Minter Ellison

Three Jones Day partners shift to Minters HK Minter Ellison has made a swoop on three Jones Day partners in Hong Kong. Capital markets and M&A lawyers Barbara Mok, Anne Ko and Katherine U will join the Hong Kong practice as partners.

Ko, Mok and U are recognised leaders in the areas of capital Barbara Mok markets and M&A with a long track record of working on deals in the Hong Kong and China markets. Mok is a member of the Law Society of Hong Kong and the Law Society of England and Wales (non-practicing). She is also a China-appointed attesting officer appointed by the PRC Ministry of Justice. U is a frequent speaker on regulatory compliance and corporate governance for Hong Kong-listed companies.

Senior associate to partner

Clutz announces string of new partners Clayton Utz has promoted seven new partners to the partnership ranks. New partners in Sydney include Brad Allen, Karen Ingram and Claire Smith; while in Brisbane Rebecca Carroll, Tony Lalor and Kathryn Pacey have joined the fold.

Nick Tsirogiannis was the sole promotion from the Melbourne office.

Senior associate to partner

Freehills appoints New Year partners Freehills has promoted two of its senior associates, Julian Lincoln from the corporate practice and Phillip McMahon from banking, to the partnership. The firm said that the start-of-the-year appointments were the result of demand from clients for the skill and expertise the two associates have.

Lincoln’s practice is focused on technology, outsourcing and intellectual property, working out of Freehills’ Melbourne office, while McMahon is a leading banking and finance lawyer who will be working from Brisbane, servicing the growing Queensland banking market.

Chapman Tripp

GRC

Long time Chapman Tripp partner joins GRC Chapman Tripp partner Brigid McArthur has left the firm after more than 20 years, including 14 years spent as a partner, to join Greenwood Roche Chisnall (GRC).

GRC was formed approximately 5 years ago by a group of Chapman Tripp and Bell Gully partners, and has carved out a reputation for work in the commercial, banking and finance, energy and resources, commercial Brigid McArthur property, public advisory and tax fields. www.legalbusinessonline.com

McArthur has more than 25 years’ experience as a corporate, commercial and projects lawyer, and now focuses on all parts of the energy, resources and heavy industrial sectors as well as infrastructure.

Maddocks

TressCox Lawyers

TressCox announces two new partners TressCox Lawyers has appointed two new partners to its national property team with the arrival of Christopher Conolly and Martyn Tier, previously with Maddocks in Sydney.

Conolly’s practice includes development projects for government authorities, retirement villages, planning agreements, commercial sales, acquisitions and leasing and infrastructure projects such as marinas, regional airports, pipelines and windfarms.

Tier has more than 19 years experience with a specialisation in commercial property, mixeduse strata developments, broadacre residential developments, acquisition and sale of rural properties, hotels and trusts.

Their combined team comprises of two senior associates, a paralegal and a secretary.

Frenkel Partners

Madgwicks

Madgwicks announces new partners Melbourne-based law firm Madgwicks has strengthened its commercial group with the appointment of Ed Browne, from Frenkel Partners, as a partner. Browne brings to Madgwicks commercial, intellectual property and franchising expertise which he has gained first in South Africa and now in Australia.

The firm has also promoted Sue Harris to the partnership, in the property group. Harris has played a major role over the past 4 years in growing the firm’s presence in the retirement village and aged care and complex property development sectors.

McCullough Robertson Cooper Grace Ward

Cooper Grace Ward adds new partner Queensland law firm Cooper Grace Ward Lawyers has added a new partner to its team. Tarnya Fitzgibbon joins the property, planning and environment group as a specialist planning and environment partner.

She joins from McCullough Robertson where she was a senior associate. Fitzgibbon has experience in the property, resources, agribusiness, infrastructure and public sectors, and has defended directors and companies involved in environmental offences disputes. In addition to her legal qualifications, Fitzgibbon has a Bachelor of Science in Environmental Science and recently completed her masters in urban and regional planning.

DibbsBarker

McInnes Wilson Lawyers

of the insolvency and commercial litigation division.

Hill brings with her experience in company, contract, trade practices, insolvency, regulatory and property law disputes.

She has also acted for joint venture parties and assisted a franchisor to overcome alleged trade practices act contraventions brought by the ACCC. At the same time, prominent Brisbane barrister Stephen Keliher has joined the firm as special counsel to the planning and environment team.

Piper Alderman

Piper Alderman adds partner in Adelaide Piper Alderman has promoted Erin McCarthy to the partnership, within the firm’s employment relations group. McCarthy originally joined the firm as a summer clerk and has progressed over the years to her current role.

She provides advice to employers in relation to all aspects of IR and employment law, including occupational health and safety and discrimination, and has significant experience planning workplace agreements and supporting clients through the Erin McCarthy negotiation process.

Various

Carter Newell

Burgeoning Carter Newell appoints SCs Brisbane-based Carter Newell has appointed former senior associate at Minter Ellison, Andrew Shute, as a special counsel, in addition to Stephen Hughes, a former partner at Workplace law Queensland. The two special counsel appointments take the firm’s new total number of new appointments since July 2010 to 13.

Shute brings with him more than 14 years experience and has in his career advised on a wide variety of public and private sector clients on complex commercial and property disputes. Hughes Stephen Hughes has 19 years experience as a workplace relations specialist having provided high level policy and strategic advice to public, private and not-forprofit organisation.

HopgoodGanim

HopgoodGanim announces four promotions Brisbane-based HopgoodGanim has announced four new promotions at the firm.

Energy & resources lawyer Claudia Bozonji has been promoted to senior associate, while corporate advisory lawyer Emily Ackland, family law specialist Leeann Murphy and litigation lawyer Julia O’Connor have all been promoted to associate roles.

Two new faces for McInnes Wilson Lawyers Former DibbsBarker partner Alicia Hill has joined Queensland firm McInnes Wilson Lawyers as principal

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FEATURE | watchlist >>

2011 promises to be another year of intrigue and transformation for many of Australia and New Zealand’s best-known firms. ALB starts the year by nominating ten firms for whom 2011 will be a particularly critical year. Whether they are law firms primed for growth or ones that are looking to recover from a setback, here are the firms that have a point to prove to the market

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2011

Australasian Legal Business ISSUE 9.01

FEATURE | watchlist >>

LANDER & ROGERS

W

ith nearly 50 partners, Lander & Rogers is among the 30 largest Australasian law firms by lawyer numbers but has a growth trajectory which resembles that of a much smaller firm – 20% revenue growth and 31% fee-earner growth in FY2010, which makes it the sixth-fastest growing firm in Australasia. Landers will be looking for particular growth in the Sydney market in 2011, setting ambitious targets of growing feeearners by 20% in this market and revenues by 25%. Corporate advisory and property, projects & infrastructure are among the areas tipped to grow.

Andrew Willder

HARMERS WORKPLACE LAWYERS

H

armers has been a leader in the employment law field for many years, but now there’s a new competitor on the scene.

Add the fact that this new competitor is headed up by exHarmers partner Joydeep Hor, and there’s a fairly compelling reason to keep watching the Harmers v People & Culture Strategies rivalry unfold in 2011. Who will take out the ALB award for ‘Employment Firm of the Year’?

Shana Schreier-Joffe www.legalbusinessonline.com

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FEATURE | watchlist >>

MACPHERSON+KELLEY

L

ast year, ALB drew attention to the trio of M+K, Integrated Legal Holdings and Slater & Gordon – three very different firms which shared in common an aim to fundamentally transform legal practice at the midmarket and private client level. Managing director Damian Paul’s plans to build M+K into a national practice have progressed rapidly over the past year, which raises the interesting question: what’s next on the agenda at M+K?

DLA PHILLIPS FOX Damian Paul

M

agic Circle antics and the enviable Norton Rose publicity machine meant that the manoeuvres at DLA Phillips Fox didn’t receive as much attention as they normally would have in 2010. However, things have been quietly fermenting in the background.

The Adelaide office, now rebranded with the somewhat unfortunate name of Fox Tucker, has parted company with the firm and the New Zealand arm was quietly de-integrated from the financial group last July. All of this is leading DLA Phillips Fox rapidly towards one inevitable outcome: full financial integration with associate firm DLA Piper. Interesting times lie ahead for the Australia-Pacific pecking order.

Tony Holland

CLAYTON UTZ

A

fter the fabled annus horribilis of 2010, Clayton Utz will be looking to return to the front foot with some smart promotions and lateral hires – a journey upon which the firm has already embarked – and a new CEP in corporate/ M&A partner Darryl McDonough. This is a formidable firm which rivals will underestimate at their own peril – but will the strategic decisions made following last year’s raid pay off? Only time will tell.

Darryl McDonough 24

Australasian Legal Business ISSUE 9.01

FEATURE | watchlist >>

Angus Henderson

WEBB HENDERSON

Could this fledgling trans-Tasman telecommunications firm be the next Gilbert+Tobin?

B

ack in 1988, an ambitious young lawyer named Danny Gilbert opened what was to become one of Australia’s premium law firms – a journey which was facilitated in part by the new opportunities created by the blossoming telecommunications sector.

20 years later, there are certain parallels between this story and that of Webb Henderson, which ironically derives its name from ex Gilbert+Tobin partner Angus Henderson.

www.legalbusinessonline.com

Again it’s a new technology which is driving clients to this firm – a surge in demand for advice on broadband has seen this firm grow from 4 to 6 partners and from 9 to 18 lawyers during 2010, bringing in A$6.4m for the year. 30% revenue growth is expected for FY2011.

NBN Co, which receives advice on accessrelated work and regulatory undertakings to the ACCC, is the firm’s biggest client – but the firm also boasts a remarkably diverse range of blue-chip clients ranging

from SingTel Group and the Qtel Group to Vodafone. 40% of the firm’s revenue is derived from outside Australia and New Zealand and, remarkably for a firm so early in its development, it has already established.

Henderson says that the firm’s priorities for 2011 will be to recruit more quality staff and expand on current opportunities, particularly in Singapore. “We would like to build up our Singapore office with more staff, more business development so our Asian client base can be hosted out of our Singapore office,” he said. However, the firm’s ambitions extend beyond the AsiaPacific. Henderson says that the plan for the next 2-3 years is to seek out other office location opportunities, with the Middle East or Europe being potential targets. “We call it a global boutique strategy – we are trying to take our specialist premium services into these markets – we think it’s an opportunity for a unique offering where you’re offering a very specialised service,” he says.

“But we wouldn’t go up there and say ‘build it and they will come.’ We’d definitely want a base profit level – I think we would have a baseline revenue which would support the office and then build from there. We’ve already done that in Singapore.”

Equally ambitiously, the firm is eyeing expansion into other practice areas. “Our NZ firm office does infrastructure, energy, aviation and other regulated sectors such as media – so we would look to replicate the same strategy in Australia and offshore by building those practices,” said Henderson.

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FEATURE | watchlist >>

COLIN BIGGERS & PAISLEY Stories of the rising mid-tier may be something of an industry cliché, but there’s no smoke without fire

C

Dunstan de Souza

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olin Biggers & Paisley appears in the Watchlist as a representative of the rising mid-size firm category. It is difficult to single out one firm for this category because there are many firms which match the criteria: to cite but three examples, Maddocks, Mills Oakley and Hall & Wilcox are all law firms which have performed strongly throughout the GFC and continue to challenge the notion that only national firms are capable of performing top-tier work.

Like CBP, the noteworthiness of these firms is not necessarily radical growth in FY2011 – although they may well achieve this – but rather a continuation of what has been achieved over the past 5 years: consistent revenue growth, intelligent recruitment and a development of top-tier expertise. CBP itself has grown revenues by nearly 40% over the past 4 years and is budgeting for another 10% growth in FY2011. The firm is expecting to add another two to three partners to its ranks, depending on the availability of talent. “Recruiters will tell you that there are many stars in the large firms who are looking for a different environment – it’s no longer about simply being big,” says managing partner Dunstan de Souza. “It’s no longer about size – it’s about how good you are.”

CBP is also notable because of its investment in an equity partnership with Dubaibased Lutfi & Co, an operation which is not financially integrated with CBP in Australia. That joint venture has grown from 6 lawyers to 14 over the past 3 years and is said to be producing “steady, but not enormous, growth.”

Australasian Legal Business ISSUE 9.01

FEATURE | watchlist >>

ALLEN & OVERY Allen & Overy celebrated its Australian inauguration with a dream publicity run and plenty of intrigue – but now managing partner Grant Fuzi says it’s time to return to basics

W

hen Allen & Overy first opened its Sydney office in February 2010, the firm took a lease over a single floor of Circular Quay’s Gold Fields House and assumed that would suffice. That single floor has since become two floors, then three floors and now the firm is expecting to move to new premises altogether. These kinds of prosaic details give credence to managing partner Grant Fuzi’s claim that the firm’s first year in Australia has “exceeded all expectations.” However, Fuzi prefers not to disclose any revenue targets for FY2011, pointing out that budgeting for 2010 had already proved to be overwhelmingly conservative and far below actual performance.

Fuzi had previously set a target size of 30 Australian partners by 2013, a goal which he says the firm is likely to meet a year or so early. “We currently have 20 partners and there will be a small, select number of laterals this year,” he says. “There are areas where we are actively pursuing [recruitment], others we are just sitting back and watching.”

But this is peripheral to what Fuzi says will be the real focus of 2011: organic growth and bringing in the next generation of lawyers, something which he says is almost an “exclusive focus” for himself. The firm’s ten Australian graduates will be flown to London for two weeks to learn about banking & corporate practice.

Allen & Overy is widely known for its finance and capital markets capabilities, but Fuzi says the firm’s Australian corporate and M&A practice has also been strong. “What’s been very interesting is that the market’s initial reaction was to focus on us as a banking & finance firm, but what actually is transpiring is that the corporate practice is absolutely going gangbusters,” he says. “I think the problem we face is that because A&O is regarded as the leading finance and capital markets firm, our top corporate practice often gets lost in the PR. But if you look at Australia, of the 20 partners we have, 13 of those are corporate – it shows the size of the corporate practice.”

Fuzi says that A&O will continue to target “significant, complex” deals both of a domestic and cross-border nature. “We are not after clients to give us all of their work – there are other firms out there better set up to do the routine work and volume work,” he says. “We’re very clear in our focus – we are there to do the work where we can add value to the client.” It is a similar strategy to that employed by Mallesons in its pursuit of market-transforming deals, although Fuzi says that the matter is not always clear-cut: “If you’re a strategic purist, in a perfect world we only would act on those big market-transforming deals, but it is not black and white,” he says.

“We’d look at it on a case-by-case basis – we might have a very important client who has given us a big strategic deal but also has a smaller routine deal – we might do that for example, because of the relationship.”

www.legalbusinessonline.com

Grant Fuzi

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FEATURE | watchlist >>

MALLESONS Widely regarded as the incumbent market leader, Mallesons is the firm which has the most to lose from any shake-up of the top tier caused by new international entrants and an increasingly aggressive mid-tier. Add a tough operating environment into the mix, and it’s going to be a highly challenging year

W

hile the Australian economy has a buoyant feel to it, the market for premium legal services is likely to remain tight and Mallesons has budgeted for only “small” revenue growth for FY2011. “Because the broader economy is doing well relative to other economies, there’s an automatic assumption that flows through to the legal services sector,” observes managing partner Tony O’Malley. “But there is a bit of a disconnect – so even if energy & resources and infrastructure is booming, and that’s a result of great terms of trade with China and other importers and so on – that does not always translate into the sort of work we do. There are going to be peaks and troughs in market activity, but in terms of overall levels, there’s not going to be substantial growth. So we really need to be focussed on the opportunities – resources, regulation of banks and corporates, funding issues, consumer protection.

There are three or four others where we’re trying to position quite aggressively,” he said.

One strategy which Mallesons will not be pursuing is to shore up revenues with “volume” work, which means that the firm will be more exposed than most to fluctuations in the market. “Because the market’s tightened up so much, you have to make a call,” says O’Malley. “You can chase the volume if you want – a couple of firms have done that, they’ve moved their price point. Now our view is that ultimately the clients are the best people to determine where you as a firm can add value. What our clients are saying to us is that on the more strategic, market-transformational deals, that plays to our strength. So that’s where we’re focussing – but in terms of not having as much of that general day-to-day commercial operational work, it does expose us a bit more to peaks and troughs.”

Ultimately, that means being more aggressive in the pursuit of the top deals. “You can’t just wait for the growth to come – you’ve got to go find the growth these days,” says managing partner Stuart Fuller. “In the new reality you have to position for deals a lot harder and we are quite aggressive around alignments and positioning ourselves for deals that make a difference. Bankers will pitch ten deals; of those three might go into execution and one might actually close. So getting the right alignment around the right deal in the sector is incredibly important.”

There is also the possibility of further poaching of Mallesons talent, either by new market entrants or by firms such as Gilbert+Tobin. While Mallesons has the depth to sustain a certain level of poaching, the deeper question is whether the firm needs to investigate taking certain steps, such as reviewing its adherence to a lockstep partnership structure, to compete for talent.

It’s a question which is already being pondered by the management team. “We certainly don’t ignore the threat and it’s certainly something we’ve turned our mind to as a management team and as a firm,” says O’Malley. “While there’s clearly fundamental support for the lockstep structure, I think that part of our dialogue over the next couple of years will be about whether the system that we have in place will maintain and attract the top talent in the market. And I don’t think that’s a discussion that’s fully complete yet. Given how wedded the firm is to lockstep, it’s not a short journey. It’s not an easy conversation, but we will make sure that dialogue happens within the business. ”

Tony O’Malley 28

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FEATURE | watchlist >>

www.legalbusinessonline.com

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FEATURE | watchlist >>

CLIFFORD CHANCE ALB’s top pick for a firm to watch in 2011 is a firm which is not yet even in the Australian market – but for how long will it stay away?

T

he most famous story of 2010 was the story which never eventuated: the putative arrival of a second Magic Circle firm in the footsteps of Allen & Overy. According to the market rumourmill, Clifford Chance and Linklaters were the most likely suspects but silver circle firms were also reliably rumoured to be investigating their options. All of this innuendo may have been signs of a market overstimulated by the sensational circumstances of Allen & Overy’s Australian entry, but the rumours appear to have germinated from one fundamental seed of truth: international firms are expressing an interest in the Australian market and have made several approaches to local firms to pursue that interest.

That is a situation which has given rise to a seemingly endless string of rumours: Gilbert+Tobin, Chang, Pistilli & Simmons and Cochrane Lishman are among many firms which have been named as potential Magic Circle partners, while a partner raid on Mallesons, Freehills and Blake Dawson was said to be imminent. It would take a brave commentator to untangle this skein and make an unambiguous prediction, but the present market mood can be summed up thus: a second international firm will arrive this year, and it is more likely than not to be Clifford Chance. Don’t be surprised if a US firm decides to plant the flag ‘Down Under’ either.

David Childs

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www.legalbusinessonline.com

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ALB SPECIAL REPORT | Brisbane 2011 >>

Resourceful Queenslanders

Rain-sodden Brisbane is still shaping up as one of the hottest markets for the legal industry in 2011– but local firms are wary of the ever-increasing competition

T

o ascertain which markets law firms regard as “hot”, try following the trail of activity: the opening of new offices, law firms acquiring smaller firms, starting greenfields operations or poaching partners from rivals. It is true that the biggest fish of them all, Magic Circle firm Allen & Overy, has not apparently felt the need for a Brisbane presence, but many others have: new arrivals Johnson Winter & Slattery and Macpherson + Kelley and consolidation on the part of Cooper Grace Ward and Gadens via local mergers.

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This is a market with a tradition of competition from new entrants: firms which have arrived through acquisition, such as Herbert Geer and greenfields operations Dickens such as Mills Oakley, both Stephen Mills Oakley of which have plans to grow in Brisbane. “We’re not full-service yet – we accept that there are gaps and we are dedicated to filling those,” says Mills Oakley partner Stephen Dickens.

Other Brisbane firms are also looking to grow. Carter Newell, for example,

was recently in the market for eight new lawyers and Thynne & Macartney is planning some “bolt-on” practices and lateral hires. Managing partner John Moore won’t disclose the details of these plans, but he says that they reflect his optimism about the direction of the market in 2011.

Outwardly, the Queensland market has had more than its fair share of activity: the multi-billion dollar QR float, some of Australia’s most ambitious resource-related plans in the LNG sector and plenty of M&A intrigue in the coal sector. However, Queensland Australasian Legal Business ISSUE 9.01

ALB SPECIAL REPORT | Brisbane 2011 >>

►►Brisbane floods As ALB was going to print, the city of Brisbane was hit by devastating floodwaters which closed the CBD and cut off access to major towers such as Waterfront Place and Riverside Centre, home to many law firms. Nearly all firms operating in the Brisbane CBD were forced to close their offices and send staff to other cities, open temporary offices locally or operate on a “work from home” basis.

The CBD exodus occurred ahead of the area going under water on Tuesday January 11, with many buildings having their electricity supply cut off in anticipation of the rising waters. Some buildings which were less damaged by the flood were able to reopen within a few days, meaning that some firms such as Freehills and TressCox were able to resume their normal tenancies during the week commencing January 17. However, most law firms face a significantly longer wait to return to their premises. At the time of writing most were hoping to resume their tenancies by January 24 or by the end of the month.

One high-profile lawyer who has been directly and personally impacted by the flood is Norton Rose Australia managing partner Don Boyd, who was stranded at his farm north of Brisbane. Boyd told media that the floods had “decimated” Queensland and compared the situation to a war zone.

A number of law firms have started making donations to relevant charities and are offering financial and non-financial support to staff and clients affected by the floods. While it is too early to make solid predictions about the impact of this disaster on the demand for legal services, it is very clear that insurance and construction practices in particular will be in high demand as the clean-up progresses.

While the Queensland mining industry has suffered a significant set-back as a result of these floods, there remains a clear demand for their product which is unaffected by local factors. Lawyers interviewed

by ALB have reported that larger projects and M&A deals are being put on the backburner in favour of more immediate concerns, such as force majeure and securing environmental permits to rehabilitate sites. However, the consensus is that the pipeline of resources projects will resume once the more urgent problems are resolved.

Brisbane flood office closures: January 11-14, 2011 This table summarises office disruptions at the height of the Brisbane floods and is provided to illustrate the extent of disruptions to Brisbane law firms at that time. However, the table should not be taken as a summary of the current state of affairs, as many firms have since returned home and resumed normal operations.

firms report that many of their clients remain cautious and are not predicting a spectacular year. “There’s an increasing amount of confidence, but it’s still a case of hasten slowly,” says Dickens. “A number of businesses could do with some more working capital but I suspect they’re concentrating more on consolidation rather than aggressive Brett Heading growth. That might McCullough change in the second half Robertson of the year.” www.legalbusinessonline.com

Building

Firms

Situation

Central Plaza I

Freehills, TressCox

Central Plaza II

McCullough Robertson, Moray & Agnew

Riverside Centre

Allens Arthur Robinson, Blake Dawson

Riparian Plaza Waterfront Place

Clayton Utz Corrs Chambers Westgarth, DLA Phillips Fox, HopgoodGanim, Mallesons, Minter Ellison Thynne & Macartney Carter Newell Cooper Grace Ward

Office closed; Central Plaza I was one of the first buildings to reopen on 17 January Office closed. McCullough Robertson temporary office at ANZ Tower, Queen St and Musgrave Rd, Red Hill Office closed. Allens temporary office at Sofitel and Dockside; Blake Dawson temporary office at Ann St, Brisbane Office closed, staff working from home Office closed. Corrs temporary office at Brisbane Grammar School, Spring Hill. HopgoodGanim temporary office at Regus Northbank Plaza, Brisbane. Temporary offices also established by Mallesons and Minter Ellison Office closed, staff working from home Office closed, staff working from home Office operational on reduced scale from 14 January

12 Creek St 215 Adelaide St 400 George St

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ALB SPECIAL REPORT | Brisbane 2011 >>

BRISBANE MARKET: MERGERS AND NEW ENTRANTS July 2008

December 2009

Herbert Geer

Cooper Grace Ward

Merged with Nicol Robinson Halletts

Merged with Bain Gasteen

August 2008

January 2010

Thynne & Macartney

Barry & Nilsson

Merged with Biggs & Biggs

Merged with Stubbs Barbeler

June 2010 Johnson Winter & Slattery Opened new office

November 2010 Gadens Merged with Maunsell Pennington

December 2010 M+K Lawyers Merged with BCI Lawyers

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McCullough Robertson’s Brett Heading, who is hoping his firm will record 5% revenue growth this year, says the theme of cautious optimism will continue: “I’m optimistic that we’re going to have a reasonable calendar year in 2011 but I don’t think it’s going to be fantastic,” he says. That caution may be a contrast to the billion-dollar deals and projects which are being freely discussed in the media, but much of this work is flowing to national toptier firms.

For example, the legal advisors on the QR float were Minter Ellison and Mallesons (advising QR), Allens (advising the Queensland government) and Clayton Utz (advising the joint lead managers.) The use of Allens seems to continue a pattern by the Queensland Government of using top-tier national firms for sophisticated work. This preference was also in evidence during the Government’s privatisation of other key assets earlier in 2010, where Freehills, Allens, Minters and Clayton Utz Bruce Humphrys HopgoodGanim again received the green light.

Nonetheless, local Queensland firms continue to maintain that they are ready, willing and able to undertake this work if they are given the chance.

In the meantime, with the government work and resources and infrastructure work alike, there remains plenty of scope for both national and statebased firms to reap the benefits of

Australasian Legal Business ISSUE 9.01

ALB SPECIAL REPORT | Brisbane 2011 >>

the continuing strong investment in Queensland.

M&A activity

Lawyers are observing more activity in the M&A space, although this is mainly at the sub-A$50m level. Nonetheless, there is a new sense of buoyancy which was conspicuously absent last year – and unsurprisingly a key driver of activity is the resources sector.

“What we’re finding is that companies are seeking to take control of their growth by increasing their tenement and resource exposure, which makes a lot of sense,” says HopgoodGanim’s Bruce Humphrys. “That brings with it increased M&A activity and we’ve also seen increased activity with the mid-cap and privately owned companies.”

The critical question is the availability of funding. “All indications are that credit markets will remain tight for some time, which will obviously impact on the level of M&A activity going forward,” says Humphrys. “All of that said, companies that are able to raise funding or have the capital themselves

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are in a strong position and are now looking at opportunities in the market.”

M&A activity at the micro-cap level in particular is attracting a good deal of interest. “The debt markets have hardened and if you’re a small company, it’s harder to raise equity – so it’s a bit of a vicious circle, so that pushes you into trying to make the organisation larger to make it more attractive,” says Heading. “There are a lot of microcap companies that see the only way forward is to do acquisition activity and to either merge or gobble up others. The reality is some of these companies are just too small to get on the radar and they need to get bigger. So I think there will be a fair bit of consolidation in that small-cap space over the next couple of years. We’ve got briefs from a couple of those companies – they haven’t been completed yet though. Certainly there’s been more activity in recent months.”

But the activity is not just limited to the micro-cap: McCullough Robertson is also seeing some activity from larger companies. “We’ve got two schemes of arrangement going at the moment

“Capital raisings have been much easier for junior exploreres and smaller mining companies and the larger companies had a very strong last 18 months and have surplus cash to spend. There’s also a fair bit of international interest ” Brett Heading

McCullough Robertson

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ALB SPECIAL REPORT | Brisbane 2011 >>

“Even great transactions weren’t getting through before, whereas now I’m seeing more going through” Jayne Steele

Herbert Geer

and they’re quite significant jobs and that side of it’s going quite well,” says Heading. Holding Redlich is another firm which has observed an increase in M&A activity. “Our corporate group is way ahead of its projected budget which, if you’d asked me a year ago, I would have been very surprised at because there was so much doom and gloom,” says Brisbane managing partner Paul Venus.

The coal sector in particular is seen to be ripe for activity, with a recent example being New Hope’s hitherto unsuccessful bid for Northern Energy Corporation, a deal on which Blake 36

Dawson and HopgoodGanim were advisors. Overall, there is a consensus that despite some obstacles, M&A activity is improving. “Even great transactions weren’t getting through before, whereas now I’m seeing more going through,” says Herbert Geer’s Jayne Steele. “That might be because people have the confidence to approach the banks or the banks are taking a slightly less rigid view.”

Property, construction and infrastructure

It has been a time of mixed fortunes for Brisbane property teams. Commercial property developments in particular have been rather slow, but some firms claim to have seen the light at the end of the tunnel. Herbert Geer, for example, is eyeing the prospect of hiring more property lawyers. “There isn’t a huge amount of growth in our property team at the moment, but we are very sure the cycle will change and we need to be prepared for that,” says Jayne Steele.

Hebert Geer is perhaps better placed than most to sense the winds of change in this area, providing Paul Venus extensive advice to local Holding Redlich and regional government

bodies on plans for accommodating population growth.

However, it is interesting to note that planning lawyers advising corporate clients have also been busy. “Across Brisbane, you wouldn’t find a single planning lawyer who is not busy,” says Holding Redlich’s Venus. “That suggests that people are getting approvals and getting ready for activity.”

Cooper Grace Ward is another firm to sense a possible change of fortune for property lawyers. “You always worry that you’ll make a call that will make you look a fool later on, but I think that there is a sense that, generally speaking, better times are ahead,” says managing partner Chris Ward. “Some of the larger developers are looking a bit further out now, and asking where they need to be in 12 months time. So we’re seeing some activity in terms of some pre-planning and macro activity.”

Other property and constructions lawyers agreed that Brisbane projects were starting to come out of hibernation, although the Gold Coast continues to be regarded as problematic.

Inevitably, the issue of funding comes to the fore. “Our property team is flat out, but acting for buyers who don’t need finance,” says Venus. “They’re doing some big – A$50m plus – transactions.

Australasian Legal Business ISSUE 9.01

ALB SPECIAL REPORT | Brisbane 2011 >>

www.legalbusinessonline.com

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ALB SPECIAL REPORT | Brisbane 2011 >>

►► ALB LAW AWARDS: BRISBANE FIRM OF THE YEAR

L-R: Brett Heading, McCullough Robertson; Olivia Perkiss, Australian Women’s Lawyers

WINNER: McCullough Robertson McCullough Robertson was named the ‘Brisbane Firm of the Year’ in the 2010 ALB Law Awards, making it the second consecutive year chairman Brett Heading has been able to accept the award on behalf of the firm (Carter Newell was the 2008 winner). As well as being Queensland’s largest independent firm, McCullough Robertson is notable for its commitment to a Newcastle office in NSW and its strong resources practice.

“There’s an increasing amount of confidence, but it’s still a case of hasten slowly. A number of businesses could do with some more working capital but I suspect they’re concentrating more on consolidation rather than aggressive growth. That might change in the second half of the year” Stephen Dickens

Mills Oakley

If you have money you’re in – if you don’t, that’s a different story.”

However, the consensus is that conditions are improving, with the implication that front-end construction may experience a revival – a description which firms would be reluctant to apply to the present market, however.

HopgoodGanim’s Humphrys, for example, says that he has not seen any evidence of a revival in frontend construction and other firms are similarly underwhelmed. However, there is one important exception to this rule: infrastructure. According to firms, a healthy pipeline of infrastructure projects is more than compensating for a sluggish commercial and residential workflow.

“With the amount of infrastructure which needs to be put in place in Queensland to help the growing mining industry, that’s a great opportunity for us and for other law firms,” says Venus. “A lot of construction companies in Queensland have been diversifying their interests, so that whereas once they might have specialised in building a multi-story unit block or skyscraper, they’re now looking at how they can service what has now become a very substantial part of the QLD industry – mining.”

Ward shares this enthusiasm: “Generally speaking, Queensland is a state that needs a lot of infrastructure,” he says. “I’d imagine there’s 2-3 years of fairly heavy construction ahead of us, where we need to address a lack of infrastructure spend for a fairly considerable time, so we need to play catch-up. We believe that there are real opportunities there and we intend to make the best of those two or three years.”

This activity is driving demand for legal services across a range of areas.

For example, law firms such as Carter Newell with a specialist insurance practice are finding themselves in demand for advice on the insurance implications of these projects.

Mining and disputes

Queensland’s booming coal and LNG sector will be familiar territory to many readers. The Federal Government’s approval of two new coal-seam-gas/ LNG projects in Gladstone has been the catalyst for multi-billion dollar 38

investment from BG Group, Santos, Origin Energy and Conoco Phillips. There is a strong likelihood of further “mega-projects” in the pipeline, spinning off Chris Ward legal work not only to the Cooper Grace Ward national firms typically found on these deals, but also local advisors. “Clearly the mega-firms have their presence, but there’s plenty of work up there,” observes Humphrys. “It’s not just simply facilitating development, but other issues such as problems with environment impacts that are keeping legal service providers quite busy.”

But confidence on the part of the large mining companies does not necessarily mean confidence in the mining industry as a whole. “You read about Rio, BHP, BG, Santos – I think there’s certainly activity [from smaller miners] below that, but I just don’t think it mirrors the same growth as the big miners,” says Ward. He believes that the smaller mining companies are still concerned about the Federal Government’s mining tax. “I think they’re still worried about the mining tax – it’s still got to be played out yet,” he says. “My understanding is that it did knock the mid and junior miners around a lot.

Behind the scenes there was a lot of lack of confidence – but it’s slowly coming back.”

Heading also believes that confidence has improved, pointing out that many projects which were on hold have now become active again. New projects are also being mooted and existing clients are looking to expand mines. “Capital raisings have been much easier for junior explorers and smaller mining companies and the larger companies had a very strong last 18 months and have surplus cash to spend. There’s also a fair bit of international interest,” he says.

Carter Newell has enjoyed growth in the resources sector, to the point where the firm has made a new partner appointment in this area.

Work relating to contract mining arrangements, John Moore Thynne & worth up to A$400m each, Macartney has been a particularly busy area for this firm. However, Australasian Legal Business ISSUE 9.01

ALB SPECIAL REPORT | Brisbane 2011 >>

www.legalbusinessonline.com

39

ALB SPECIAL REPORT | Brisbane 2011 >>

Hopkins warns that a certain business environment is likely to be a key factor in the fortunes of mining companies in 2011.

“The key issues impacting growth in the resources area are likely to be the operation of the proposed mineral and petroleum resources rent taxes, as well as the potential introduction by the Federal Government of a price on carbon,” he says.

The resources boom may also have an impact on indirectly-related practices. Thynne & Macartney, for example, is well known for its shipping practice and Paul Hopkins presumably an increase Carter Newell in exports will see work flowing through to that area. The firm has already reported strong growth with bulk shipping volumes up and an increase in commercial disputes, such as cancellations of contracts and payment defaults. That business may seem to have a counter-cyclical flavour to it, but Moore points out that disputes are also the product of positive economic activity. “As activity increases, so does the opportunity for errors, misunderstandings and misrepresentations,” he observes.

This is a critical point which is the subject of some debate among Brisbane lawyers in the disputes area: is the volume of GFC-related disputes beginning to taper away? Some lawyers believe this to be the case, but Mills Oakleys’ Stephen Dickens says that he is continuing to see new disputes referred to his practice. He is expecting this to continue in 2011.

“I see a lot of people hanging on for what they’ve got,” he says. “One of the drivers might be that ‘cash is king’ and they don’t have the cash. That also puts constraints on litigation and leads to mediation or alternative dispute resolution at an earlier point than might otherwise have been the case.” ALB

“All indications are that credit markets will remain tight for some time” Bruce Humphries

HopgoodGanim 40

Australasian Legal Business ISSUE 9.01

Firm Profile ALB SPECIAL REPORT | Brisbane 2011 >>

Mills Oakley Lawyers

Mills Oakley Lawyers – talent factory still growing Why are top-tier clients moving to mid-tier firms?

M

ills Oakley’s rise to challenge its competitors for a position at the top of the mid-tier has not gone unnoticed in the business community. Its growth has been fuelled by several new clients that have left large national firms because they were dissatisfied with cost or service.

John Nerurker, CEO of ALB Melbourne Law Firm of the Year Mills Oakley, points to an emerging trend in the legal profession.

“There are two main factors to consider.

Firstly, there is an increasing tendency following the global financial crisis, for large corporate clients to seek a better value proposition from their legal service providers. They are looking for law firms that are run more like businesses and who offer clients greater value and better service.

“the combination of top-tier talent with mid-tier value creates a natural appeal…”

At the same time there is a steady migration of top-tier lawyers to mediumsized firms. Why are they moving? Partly because their clients are encouraging them to and also as they see a more flexible and even dynamic career path. So the combination of top-tier talent with mid-tier value creates a natural appeal for both lawyers and clients alike.”

Stephen Dickens, Darren Ho and Andrew Johnson are three Brisbane partners whose legal skills Nerurker refers to as “confirmation of the strategic focus to position Mills Oakley as the most successful medium-sized law firm”. Praising his partners for their support, Johnson continues, “The challenge for us now is to focus on brand and to continue attracting the very best lawyers in the profession”.

When asked about the culture at Mills Oakley, Darren Ho explains, “We have a spirit of adventure and everyone has benefited from increasing our market share. We also enjoy a strong sense of camaraderie and a commitment to delivering exceptional value to our clients.” www.legalbusinessonline.com www.legalbusinessonline.com

Without merging or acquiring any other firms, Ho explains that the firm’s strong results have been achieved by maintaining a relentless, yet controlled, growth strategy. Recent growth areas for the Brisbane office include Property, Corporate Advisory, Building & Construction and Workplace Relations.

“Mills Oakley’s new aim is to capitalise on its premium midtier firm status” According to Stephen Dickens, everyone who joins provides a stepping stone that helps the firm reach the next level, “People are attracted to Mills Oakley because they have good practices they wish to grow. He says, “By joining forces we have been able to achieve that goal very quickly.”

While size is no substitute for excellent service, it does increase the breadth and depth of legal talent that a law firm can offer its clients. Having grown so rapidly, Mills Oakley’s new aim is to capitalise on its premium mid-tier firm status.

The expansion plan currently underway could see the firm double its share of the legal market over the next five years.

Nerurker refers to the growth of Mills Oakley’s Brisbane office as, “Probably Brisbane’s fastest growing law firm.” When questioned about his firm’s strategy, he explains, “We have been very successful attracting top quality lawyers that have placed us in an enviable position to compete for work historically transacted within a top-tier firm.”

The overriding feature of the past year for Mills Oakley has been its dramatic growth. Last month, Heinz Lepahe, signed up as a new partner in Mills Oakley’s national workplace relations team. Based in Brisbane, Lepahe joins the firm from Cooper Grace Ward.

Commenting on his appointment he said, “I am delighted to have joined Mills Oakley.

The firm has a reputation for excellence, and its motivation and sense of purpose is inspiring. I am very much looking forward to complementing its practice and contributing to its growth and success.”

John Nerurker… intent on assuming a mantle at the top of the mid-tier

A contemporary partnership model Much of the credit is given to Mills Oakley attracting first-rate talent following an overhaul of its partner remuneration system. The firm now employs a transparent system of meritocracy when determining its partners’ equity levels, thus putting a stop to the Chinese whispers that damage those firms with less even-handed models.

Nerurker believes the traditional partnership model that many firms operate within is outdated, and that young, energetic and ambitious lawyers are seeking a more meritocratic system. “A law firm’s only ‘product’ is talent,” he points out, “so the better the talent we attract, the better our firm becomes.”

With a growing eastern seaboard presence, Mills Oakley is intent on assuming a mantle at the top of the midtier, and on providing a genuine alternative for clients using the mega-firms. With big ambitions and lots of developments promised in the near future, there’s little doubt that Mills Oakley is one law firm on the move.

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PROFILE | managing partner >>

ALB 2011 MANAGING PARTNER SERIES

Chris Lovell, Holding Redlich

Share what you kill Holding Redlich managing partner Chris Lovell thinks that equity partnerships which run on ‘eat what you kill’ models should learn some table manners. He shares his viewpoint with Renu Prasad

A

ustralian law firms may be flirting with “eat what you kill” partnership models in increasing numbers, but Chris Lovell is standing his ground. “Maybe I’m just old-fashioned, but I really hate it,” says the managing partner. “If the sole test of the partner is how much work you bring into the firm, you’re building silos. What incentive is there to actually go out and work as a team?

What incentive is there to do the work and do it well, to manage your junior staff? I know some of those ‘eat what you kill practices’ are very successful.

Good luck to them, but that’s not the way I would want to operate; that’s not the way this firm operates.”

Lovell is one of those managing partners who adds that undefinable spark of energy and personality to a law firm; a visceral and quintessentially Australian quality. “We’re not too up ourselves,” he says cheerfully when asked to describe the firm culture.

“We’re collaborative, pretty friendly, striving to be the best we possibly can.

I’m firmly of the view that if you do

►► QUICK FACTS: HOLDING REDLICH Lawyers: Partners: Offices: FY2010 revenue:

Source: ALB30 survey, July 2010

everything else right, the [financial success] will follow.”

Revenues

After over 10 years of double-digit revenue growth, Holding Redlich hit a lean patch during the GFC; in the most recent financial year it experienced a 6% decline in revenues to A$58m.

However, Lovell points out that the firm was also four or five partners short of its FY2009 contingent, which meant that revenues per partner actually remained steady. Still, he acknowledges that the GFC was a time to refocus the firm’s efforts. “The GFC affected each firm very differently,” he says. “Some firms did well, some did less well.”

“If the sole test of the partner is how much work you bring into the firm, you’re building silos. What incentive is there to actually go out and work as a team? What incentive is there to do the work and do it well, to manage your junior staff?”

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108 48 Brisbane, Melbourne, Sydney A$58m

Chris Lovell

Holding Redlich

“I would say we were a firm that did less well, but we’ve used that opportunity to do a lot of housekeeping.

We’ve shed some partners and then we’ve recruited more partners – brought on some terrific laterals and three or four young partners. In my view we’re much stronger than we were two years ago and we’re now seeing the benefits of that.”

In contrast to Holding Redlich, many rival firms of comparable size managed to grow their revenues in FY2010 – but Lovell notes that the difference comes down to the mix of practice areas.

“20% of our fees come from commercial property, which effectively stopped,” he says. “Another 10 or 15% comes from construction, which went to sleep other than in Brisbane. We do a lot of corporate M&A work and that slowed down also.”

Lovell notes that there have been many significant acquisitions in the retail sector, with particularly interest from superannuation funds. The firm remains committed to its property Australasian Legal Business ISSUE 9.01

Photography by Thilo Pulch

PROFILE | managing partner >>

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PROFILE | managing partner >>

“I don’t know all the secrets of other firms, but it looks to us like those firms that are the most successful are those that have the vast majority of partners with equity. There has to be a reason for that – we think it’s the feeling of involvement and engagement” Chris Lovell

Photography by Thilo Pulch

Holding Redlich

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and construction practices, which he says are now well and truly returning to form. “We expected those sectors to come good and there has been a significant turnaround,” he says.

“Certainly that’s the case in Brisbane and Melbourne. Sydney is a little bit slower but there are good signs.

The serious property groups have all come through and they’re all pretty active. It’s not back to 2007: there are less players and the players are a lot smarter. In 2007 they were throwing money around, which always happens at the top of the market.”

Holding Redlich has an acquisition history of its own in the property market – in the past, it was one of the few commercial law firms to own its premises. The firm owned a building in Melbourne for many years before eventually entering a sale/leaseback arrangement five years ago.

It also owned a floor in a Brisbane tower before selling because of space constraints. “Owning property suited us at the time because you control your own destiny – you can do what you like with the building,” says Lovell. “It’s getting a bit hard to buy now because of our size – we need something pretty big and that would cost a lot of money.”

While Freehills will soon be vacating Sydney’s MLC Centre, Holding Redlich has no plans at present to follow suit. “We have a long-term lease and although it’s no longer a premium-grade building, from our point of view it’s terrific,” says Lovell. Much of the firm’s movement of premises has been related to an ever-increasing workforce, but Lovell says that there are no specific targets for growth. “People ask what size we are going to be in 16 years time – I’ve got no idea,” he says frankly.

“My guess would be to that to keep our collegial spirit, to keep a fairly democratic structure and to keep all partners involved and engaged in the firm rather than just their practice, you would probably be looking at around 75 to 80 partners. You need contact between people within the office and between offices and you probably start losing that around the 80-partner mark. The conundrum is that if you have ‘youngish’ partners, most of them aren’t going anywhere for a while and you have to make career paths for people coming through – so you necessarily have to grow.”

Partnership structure

The Holding Redlich partnership is currently comprised of equity and salaried partners in equal measure, but Lovell says that the firm has resolved to ‘equitise’ the entire partnership in the next two years. “I don’t know all the secrets of other firms, but it looks to us that those firms that are the most successful are those that have the vast majority of partners with equity,” he says. “There has to be a reason for that – we think it’s the feeling of involvement and engagement. Whereas if you’re a salaried partner, you simply get what you get.”

However, he acknowledges that some partners will not want the risks or uncertainties associated with equity and says that no partner will be forced into this model. Lovell is adamant that partner remuneration models should not be based on fee income alone, pointing out that there is more to the business of law than simply marketing and attracting work. “In any firm, you will have a certain number of workgetters and a certain number of workdoers – or finders and minders, if you will,” he says. “Not everybody in a firm is a natural marketer or is going to find you clients or work because marketing is not part of their DNA. That is common to all firms, but they’ll be good at other things – training, managing, contributing to culture or morale.

Everyone has different skills.”

Partner remuneration at Holding Redlich is based on performance against five criteria ranging from financial performance to practice management. Revenue targets are assessed on a practice area/ office basis.

“As far as I’m concerned, if a group gets its budget or preferably exceeds it, then how they have done that is entirely up to them,” he says.

Having been in the Sydney market for over 15 years and the Brisbane market for nearly 10 years, Holding Redlich has experienced the highs and lows of interstate expansion. Lovell warns that after the initial impetus, things get tougher for new entrants to a market.

“It’s easygoing when you’re small but then it gets harder,” he says. “Then you start getting noticed, not just by clients but by your opposition. As the firm gets bigger, there are more mouths to feed and you start to plateau – you’ve got to keep pushing through it.” ALB Australasian Legal Business ISSUE 9.01

FEATURE | employment law >>

Employment law:

work in progress Restraint of trade clauses, new competition in the boutique space and one of the highest profile sexual harassment cases the country has seen – it’s been an eventful period for employment law specialists. ALB investigates

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Australasian Legal Business ISSUE 9.01

FEATURE | employment law >>

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here was no shortage of activity or debate in the mainstream media surrounding employment law matters in 2010. Lawyers see the Fraser-Kirk sexual harassment claim against former David Jones CEO Mark McInnes as having had an impact on corporate culture, bringing the issue of ‘appropriate behaviour’ within the workplace to the fore. “It’s probably increased not so much the number of claims, but certainly the complexity of claims and the amount of compensation being sought,” says Mark Branagan, a partner with Thomsons Lawyers.

Commentators also all agreed that workplaces increasingly invested in precautionary measures to avoid becoming the next recipient of the ‘Fraser-Kirk treatment’, after they realised that board members of the largest corporations in Australia could all be vulnerable to a similar cause of action. “Employers in the workplace have become more attuned, more sensitive and more prepared to raise harassment issues because of the press and because of induction and training that says to employees that [certain] behavior is not acceptable,” says Stephen Trew, a partner with Holding Redlich.

A number of firms also reported an increase in occupational health & safety work, and there is still uncertainty around the proposed nationalisation of workplace health & safety standards. Western Australia and NSW failed to agree to the proposed scheme, and further www.legalbusinessonline.com

developments will emerge when the Regulations and Codes of Conduct are published later in 2011. Tony Vernier, managing director of Australian Business Lawyers – a firm involved in the process and very active in OH&S – is confident that a compromise will be reached and the proposed 1 January 2012 commencement date will go ahead.

A hangover of uncertainty around good faith bargaining provisions and adverse action claims under the Fair Work Act 2009, and interestingly, an increase in restraint of trade claims as well as the impact of social media, capped off the issues that are facing employment lawyers and businesses in Australia moving into 2011.

Lawyers interviewed by ALB were nearly unanimous in their predictions that this year will see a sustained level of activity with respect to enterprise bargaining in general, and the impact that social media will continue to have on the workplace – and workplace relations advice.

Mid-tier and boutique firms – where the action is

The emergence of highly-specialised boutique employment law practices has been well documented, as has the increasingly aggressive activity by some mid-tier firms such as Middletons in building up their employment law practices. Last year Middletons recruited three partners from HWL Ebsworth and also picked up exFreehills recruit Penny Stevens from Hall & Wilcox, after Stevens made the 47

FEATURE | employment law >>

“I think boutiques have a real opportunity because they’re experts and they’re specialists… it’s all they do” Campbell Fisher

FCB

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decision to leave that firm for client conflict reasons.

The biggest story of 2010, however, was the defection of Harmers exmanaging partner Joydeep Hor to set up his own high-profile boutique practice: People, Culture & Strategies (PC&S). Hor has established an eightlawyer firm which he says has some interesting work planned around the M&A activity in the general market over the coming months, capitalising on his reputation for workplace training and development.

Mid-tier and boutique employment law firms are continuing to find their niche and perfecting their client relationships, with the outlook remaining positive for both mid-sized and smaller firms.

“Growth will happen in mid-tier firms and boutique outfits like ours,” says Hor. Lawyers claim that clients are making the shift away from top-tier Joydeep Hor firms. “We have seen a PC & S significant mix of clients from national firms move to a firm like ours, given business can be conducted by e-mail and a fly-in, fly-out approach,” says Derek Humphery-Smith, head of the workplace & safety practice group at Lander & Rogers.

FCB’s Fisher also says one of the biggest trends he has noticed is the tendency for workplace practices to

move from the top-tier to mid-tier firms. “It will be interesting to see how those practices go.

I think boutiques have a real opportunity because they’re experts and they’re specialists…it’s Derek HumpherySmith all they do. You’ll find Lander & Rogers when the work volume decreases the people who have the true expertise will be the ones that will continue to attract the volume,” he explains.

Restraint of trade: surprise of 2010?

PC&S’s Hor, Thomsons’ Branagan, Lander & Rogers’ Smith and FCB partner Campbell Fisher all observed that they had seen a spike in the number of restraint of trade claims being actioned, as well as a significant increase in queries from clients about protecting their interests, in situations where someone is on ‘gardening leave’ or decides to set up their own practice.

Hor notes that there seems to be a lot of activity in the area of restraint of trade, calling it the ‘surprise packet’ of 2010. ABL’s Vernier also mentioned that restraining clauses are definitely a ‘good source of work’.

Shana Schreier-Joffe, the managing partner at Harmers, attributes this to the economic recovery. “People are moving around now. It’s a sign of the economy picking up.” SchreierJoffe also says breach of contract and misrepresentation, areas which can

Australasian Legal Business ISSUE 9.01

FEATURE | employment law >>

be closely related to restraint of trade actions, are both considered growth markets in 2011. Hor was not surprised at the increased activity in the employment market generally given that the financial crisis is past, and he still sees ‘a level of caution’ around recruitment decisions – in particular in finance.

The financial crisis did not appear to have an impact on employers wanting to protect their rights and confidential information against wouldbe deserters. Perhaps more unusually, many were conscious that the courts seem more willing than expected to uphold the interests of companies in restraint of trade actions.

David Davies, a partner with Sparke Helmore, along with Vernier and Branagan, all agreed that the regulatory system around workplace relations has become stronger. Branagan observes that the ombudsman has become less of a ‘toothless tiger’ than in previous times and Davies agrees with this assessment.

Social media

Perhaps due to the level of caution required to prevent incidents such as the Fraser-Kirk case, or because of a heightened awareness of data protection following the interminable rise of David Davies Wikileaks, more firms Sparke Helmore in the employment law space are experiencing demand for advice on the use and control of social media.

“The more employers are seeking to have 24/7 access to their clients, the more they expect their employees to do it. But the responsibilities of both employers and employees need to be objectified and clarified,” says Branagan.

On the employee aspect of using social media and new technology, FCB’s Fisher notes that “it’s amazing what people are prepared to put out in the public domain about themselves, especially young people.”

As a consequence of that willingness to enter the public domain, neither law firms nor businesses can avoid dealing with the impact of social media. There www.legalbusinessonline.com

is an accessibility of information that phenomena such as Facebook, Twitter, Wikileaks – and handheld devices such as BlackBerries, iPhones, iPads and the like – have brought to every area of practice. That is also true with respect to restr aint of trade situations, where lawyers or executives are able to remove semi-trailer loads worth of information from their workplaces with a few button clicks and make that information available to another individual or use it for their own purposes.

Yet Thomsons’ Branagan highlighted the fact that everything done in the electronic sphere leaves a footprint, which will be detected. In fact, he said that the hardest case of leaking information he has dealt with recently involved a client who used the traditional photocopier and reams of paper to remove information from their workplace. “It was actually very hard to prove what they had done and how they had done it,” he said.

Enterprise bargaining

Enterprise bargaining was effectively ‘killed off’ as an issue by both political parties, according to PC&S’s Hor, and certainly other commentators were in agreement that last year’s Federal Election did not focus on collective bargaining issues as much as the previous one. “I think they did so to their detriment,” adds Hor, who says he thought that ongoing political debate about ‘whether we’ve got the right system’ is a good thing.

“I don’t agree with the view some take that what we need is stability with no debate. While I agree that it’s been a bit of a rollercoaster between Work Choices and the Fair Work Act, I think it’s important that we’re constantly trying to get the system right,” he says.

His other prediction was that we are more likely to see an increase in cases surrounding the adverse action provisions than in enterprise bargaining. “There are still a number of issues up in the air, that are likely to be subject to test cases, but there are a number of things being clarified along the way,” says FCB’s Fisher.

Branagan agrees, mentioning that there have been some cases which the unions have settled and not been game 49

FEATURE | employment law >>

“Employers in the workplace have become more attuned, more sensitive and more prepared to raise harassment issues because of the press and because of induction and training that says to employees that [certain] behavior is not acceptable” Stephen Trew

Holding Redlich

50

to take further, but more could be on the way.

“The first few test cases that have been run by the unions have been defeated in the Federal Court. I’ve had a couple of claims that have settled and in each case the unions have not been prepared to take them further. I think they’re waiting for some better cases – the important thing is that unions have been actively taking these on.”

Lander & Rogers’ Smith said a perceived increase in enterprise bargaining activity will probably re-appear in the mainstream media as a number of collective agreements expire in 2011. Branagan notes that most agreements expire within 2-3 years, so there will always be activity around enterprise bargaining in any given year. Vernier did mention that he expected the unions to be increasingly involved in the making of awards. FCB’s Fisher notes in particular that smaller and mediumsized businesses are experiencing a

challenge implementing the modern award system, and dealing with the implications of national standards across areas including industrial relations and workplace health and safety. “It might seem like a simple thing to put in a new set of national standards, but for small businesses it’s actually quite complicated. I think a number of smaller businesses are struggling with the complexity of the detail,” said Campbell.

National harmonisation of safety laws will be a priority for employers and regulators alike, but 2011 will also see movement across the workplace sector, notably actions around adverse action provisions. Across the board, the complexity of claims has increased and that trend will continue over a number of fronts, including on parental leave, bullying and harassment. “People want to know when I come back, will my job change? And they want to work more flexibly. It will be hard for employers to say no,” Davies said. ALB

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FEATURE | employment law >>

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FEATURE | interview >>

IN-HOUSE PERSPECTIVE

David Cohen, Commonwealth Bank

Determined to be David As head of the CBA Group legal department, David Cohen makes light work of billiondollar mergers and class actions. But as Olivia Collings discovers, it’s the success of his colleagues that gives him true satisfaction

H

e’s now considered one of the most influential general counsels in Australia, but to attain that status David Cohen had to walk away from the security of a lucrative partnership at Allens Arthur Robinson, and test the uncharted waters of a career in-house.

“I wanted to see if I was capable of doing something else,” says the CBA Group GC. “I knew I was good at being a partner, and I could have continued doing that, but it was the prospect of doing something new that made me leave.”

Cohen spent 17 years at Allens, including 12 years as a partner and a two-year stint in Japan. As a partner he was head of the funds management, real estate and superannuation group, a practice he was predominantly responsible for creating. It was a role which gave him plenty of exposure to clients, but he admits that was small comfort when he made the momentous decision to move into the general counsel role – first at AMP – in 2003.

“I was completely unprepared,” he says. “However, I just knew intuitively that it was the right thing to do.”

During his first months at AMP Cohen came to realise just how important it was for the legal team to be closely entwined with the business and aware of what it was doing. He also came to realise the importance of communication in an organisation.

“Unlike in private practice where you will mainly be dealing with several people in the firm and in the client’s

52

“I think the growth of class actions will continue to have an impact. The greater clarity around managed investment schemes and litigation funders has cleared the pathway and allowed a number of potential class actions that would have previously been held back to proceed” team, whenever I was involved in an issue in the company I was required to communicate with large numbers of people – and that was a big learning curve initially,” he says.

In June 2008, after five years at AMP, Cohen moved into his current role, only three months before the global financial crisis hit. Cohen also acknowledges the role the financial crisis has played in his management of legal requirements at CBA. “One of the great things about the GFC is that we were really able to use it as our opportunity to get very close to the business and make sure we were doing the things that mattered most to the business,” he says.

As well as dealing with the GFC, Cohen was thrust into the spotlight with CBA’s December 2008 acquisition of BankWest for A$2bn, from British-based HBOS. Cohen calls the acquisition a “once in a lifetime” opportunity and says regardless of the need for competition in the banking sector, you don’t give those opportunities up.

David Cohen

CBA

Panels and firms

Two years on from the acquisition of BankWest, Cohen has successfully completed his first legal panel review, with the aim of consolidating the number of firms used by the former two entities. “When we looked at the number of firms on the CBA panel and the BankWest panel we came to the realisation that a single group did not need that many firms,” he says.

The new panel consists of 18 firms, which is a significant reduction on the 31 firms previously used by the two panels. Of the 18 law firms, six have been engaged as full-service firms, nine have been allocated a number of specific work types, and three will focus on a single work area and/or geographical region.

The second aim of the review was to deepen the company’s relationship with law firms. “We want to be a very important client for each of the firms we have on that panel, so that we avoid the situation where we have some firms getting lots of work and others getting snatches of work,” explains Cohen.

Australasian Legal Business ISSUE 9.01

Photography by Thilo Pulch

FEATURE | interview >>

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FEATURE | interview >>

“95% of our legal spend is in Australia and New Zealand; only a small percentage is offshore. We are still primarily an Australasian-based business and that is reflected in the approach we took with our panel review” When deciding which law firms to consider for the panel, Cohen claims he didn’t have a checklist, but looked at the style and types of work carried out by each. “We look for a combination of things, such as have they got the right skillset for that type of work, do they want to build that relationship, or are they happy to stand by the phone; in other words are they proactive?”

When considering a firm, Cohen says it’s also important for the client to decide if it is to fulfil the functions of a full-service firm, or be a service provider in a set number of practice areas. “I have been doing this since I have been a general counsel and other corporates are also doing it now too. A better categorisation of work types can lead to a better allocation of which firm does what type of work,” says Cohen.

In banking, he says the categorisation becomes even more important. Many full-service firms could easily handle all aspects of the work at a cost, but smaller mid-tier firms could handle the more straightforward aspects of the portfolio at more affordable rates, leaving only the complex work for the top-tiers.“Previously I think many corporates would have simply given it all to the top-tier firms, instead of looking for savings,” adds Cohen.

While the CBA Group is now a truly international company with offices and branches across the world – including Singapore, London and New York – Cohen says a large majority of the legal spend is still Australia-based. “95% of our legal spend is in Australia and New Zealand; only a small percentage is offshore. We are still primarily an Australasia-based business and that is reflected in the approach we took with our panel review. Whilst we did seek international rates from firms overseas, the amount of offshore work we do is limited,” he says.

While the bank is not yet a user of legal service outsourcing (LSO) and legal process outsourcing (LPO), Cohen 54

David Cohen

CBA

has been watching it closely, and has identified some key areas where using such providers would be possible.

"There is a lot of work that we do on a regular basis – such as contract work and processes within litigation – that could be suited to their services,” he says.

The year ahead

Given the highly publicised political debate around the banking industry, from its profits to its executive pay packets, Cohen says there is little doubt that the sector will face a number of changes in the near future. “This climate is going to produce change. It might not be sensible change, but there will certainly be change and we will need to cope with that,” he says.

One of the key areas in which the Gillard Government in particular is pushing for change is in relation to competition in the market. In the past two years mergers between CBA and BankWest and St.George and Westpac have resulted in a consolidation of power amongst the Big Four banks.

However, according to Cohen, the large number of second-tier lenders that dropped out of the market during the financial crisis are also to blame for the current debate around competition.

“Having competition is not a bad thing, but excessive competition is also problematic. You only have to look at some of the commentary from regulators that excessive competition can lead to risk-taking, which can lead to the very issues we had a couple of years ago that sparked the GFC,” he says.

The Australian banking industry is also facing a deluge of class actions, with cases against ANZ, Bendigo and Adelaide Bank, CBA and Macquarie Bank running simultaneously and many more expected in the coming year. “I think the growth of class actions will continue to have an impact,” says Cohen. “The greater

clarity around managed investment schemes and litigation funders has cleared the pathway and allowed a number of potential class actions that would have previously been held back to proceed,” Cohen says. “The best way to avoid them is by running our business better and better.”

Given the significant workload ahead of Cohen and his team, one would expect him to be ramping up numbers after shaving off a few roles during the past 18 months, but he has no intention of adding to the 110 lawyers across the division. “Consistent with our philosophy of keeping a sharp focus on strategically valuable work, new issues will rise to the top, and others will move to the bottom. I don’t see an increase in staff,” he explains.

The making of a GC

While Cohen has, by all industry standards, excelled in his career, he says that being a GC is by no means simply a case of taking one’s privatepractice skills into a new environment.

“I try and emphasise that you do need a different mindset to that which you have in a law firm,” he says. “You need to be able to take a big-picture view and be a sounding board for all your colleagues in the business.”

In fact, much of what Cohen does is not related to legal advice. “For those people who see themselves as highly expert, technical lawyers, there is quite an adjustment to make. If there is any fear of losing your cutting-edge technical knowledge then being a GC is perhaps not for you,” he says.

Much of Cohen’s time is spent talking to other lawyers about more personal issues than professional ones.

“Quite regularly I spend time talking to peers and colleagues about their careers,” he says. “I’m very happy to tell them [about] my experiences. I think the more knowledge you have, the better decision you will make.”

This is perhaps why he places such a high emphasis on his team and the individual success of those in the team. “My greatest goal is to produce a broader, more rewarding role for each and everyone in the team,” he says.

“For me, it’s really about seeing a team grow in expertise and capability. I love seeing people develop their capabilities and giving them the opportunity to succeed.” ALB Australasian Legal Business ISSUE 9.01

FEATURE | interview >>

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FEATURE | web and marketing >>

Web and marketing 2.0:

Pleased to Tweet you Online law firm marketing has now gone beyond the traditional webpage and into the brave new world of social media

56

T

he last 18 months has seen an explosion in new forms of media in the mainstream: the rise of Twitter, LinkedIn and, to a lesser extent Facebook, as ways for law firms and lawyers to enhance the way their brand is portrayed across social media and online.

Given all the excitement, has this new technology delivered any real

difference to the way firms market themselves? A Google search of major law firms on Facebook or Twitter reveals a somewhat conservative approach, with many firms treating these outlets as an extension of the firm’s own website, uploading snippets of information from the firm’s main webpage with no extra information or interaction.

Australasian Legal Business ISSUE 9.01

FEATURE | web and marketing >>

Research provided by Gilbert + Tobin has found that law firms with Twitter accounts typically include the following things: headlines from the firm’s press releases, newsletters or blogs, news that a lawyer at the firm has appeared in a media outlet, or has received an award or designation and news about the firm successfully completing a client engagement. This information is commonly presented in the format of a headline with a link to the text.

What is not commonly found on a law firm Twitter account is any invitation for the audience to engage with the firm, in the same way that consumeroriented businesses have done. Perhaps this is understandable, given that to do so would be to open the proverbial Pandora’s Box. “Once you open the conversation you can’t shut it off. You open yourself up to comment, and you open yourself up to criticism. You can’t backtrack from that,” says Michael Bradley, the managing partner of Marque Lawyers.

And once a Twitter account is in existence, it becomes another proverbial mouth to feed – something which requires constant resourcing.

“Even to run a simple Twitter feed occupies quite a lot of time, because if you’re not doing it consistently and frequently, well then you might as well not be doing it,” says Bradley. He said the same issue arises with blogging, stating that it needs to be ‘topical’ and ‘fresh’.

Yet providing resources to feed a Twitter or Facebook account is not only limited to writing the content, which can Anthea Hancocks be done by relatively Herbert Geer junior lawyers or marketing personnel, but also allocating partner time for the supervision of content to ensure consistency of brand portrayal.

Many law firms have a ‘no Tweet without prior approval’ policy with respect to staff members. “Individuals can’t tweet or update unless the message has been checked with a www.legalbusinessonline.com

partner. It is so staff can think through the ramifications of what they’re doing,” said Anthea Hancocks, chief marketing officer at Herbert Geer.

Ignore new media at your peril

Despite the costs, there is a sound business case for pursuing new media marketing. A 2010 survey by American Lawyer Media, Zeughauser Group and Greentarget of 164 in-house counsel found that 43% identified blogs as one of their leading sources of news and information. Half of in-house counsel agreed that in the future, high-profile blogs authored by law firm lawyers would influence the process by which clients hire firms. This indicates that with the correct understanding of how to use social media, there is good business sense for law firms to be active participants.

Social media is also an important way for a business to build its employment brand with the younger generation of lawyers, for whom the use of online social media is second nature.

Kersten Norlin, Kersten Norlin head of marketing at Gilbert + Tobin Gilbert+Tobin, says that use of social media was an important part of the firm’s commitment to being a leading advisor in the technology sector – a factor which would no doubt also be attractive to prospective applicants.

However, given the relative novelty of the technology, it is understandable that many firms have adopted what appears to be a speculative approach.

While large national firms have generally embraced social media in all its various forms, this is often more out of an entrepreneurial desire to test new waters and to be at the cuttingedge of technology, rather than a desire to attain any clearly-defined marketing objective. Smaller firms such as Marque Lawyers, meanwhile, are waiting to see what develops in larger firms before heavily investing in social media.

“I’m not 100% sure that truly interactive social media is really going to be that useful to professional service firms because there is a big difference between a consumerfacing business, such as retail, and a law firm” Michael Bradley

Marque Lawyers

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FEATURE | web and marketing >>

“It’’s really a watching brief for us. Our strategy is to assess the benefits and look at trends in the next year” Robyn Tolhurst

Henry Davis York

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Henry Davis York’s communications manager Robyn Tolhurst says looking at the US in particular, where firms seem to be grasping onto Facebook and Twitter as business tools with great success, warrants attention. “It’s really a watching brief for us. Our strategy is to assess the benefits and look at trends in the next year,” she says.

Best to stay with ‘tried and tested’?

Social media is clearly an adjunct, rather than a substitute, for a solid core marketing strategy. Those law firms interviewed by ALB continued to nominate good client relationships and industry accolades as the key elements of their marketing strategy. Anthea Hancocks, for example, points out that the simple fact that Herbert Geer won 15 panel appointments in 2010 did more than anything else the firm undertook to raise its profile and gain positive attention. Still, Herbert Geer continues to devote work time to improving its website and electronic newsletters, which can be displayed and delivered in multiple formats depending on client needs.

Marque’s Bradley doesn’t see a huge role for social media in promoting professional service firms: “I’m not 100% sure that truly interactive social media is really going to be that useful to professional service firms because there is a big difference between a consumer-facing business, such as retail, and a law firm,” he says. Bradley intends to remain true to a personal relationship-based approach, noting with typical humour that his firm’s greatest marketing expense is lunch. He also emphasises the fact that keeping clients is, and always has been, the hardest task for marketing, and is only accomplished through delivering on promises. “You need to be high quality… you also need to be delivering services in a manner which is consistent with what you said. Law firms are frequently guilty of saying things in their marketing material which don’t reflect the actual experience,” he said.

It is also interesting to note that the Australian firm with perhaps the biggest marketing budget of all in 2010, Norton Rose, chose to invest in largely traditional methods of promotion. The firm’s billboards at major Australian

airports proclaiming the arrival of the Norton Rose brand were hard to miss.

Tim Shacklock, chief operating officer of Norton Rose Australia, describes the billboards as the standout success story of the overall campaign. The firm has since expanded again with the acquisition of Canadian firm Ogilvy Renault and South African firm Deneys Reitz, but this time brand communication will be focused on-line.

The emphasis will be on using more traditional electronic media: Web 1.0 podcasts, videocasting, RSS feeds and improved functionality for the website, according to Shacklock. “One of the key issues we had to contend with was ensuring the consistency of the Norton Rose brand across all 23 countries.

Our ultimate aim was to achieve a consistent brand across the world so that clients expect to receive a similar level of service no matter which office they are working with,” he says.

Social media as HR

One area where law firms have found a clear use for social media is as a way to introduce the brand to prospective employees and attract and retain the best of Generation Y. Kersten Norlin, head of marketing and business development at Gilbert+Tobin, says that the firm has had volunteers from Gen Y put their hand up to offer support and guidance in implementing the use of social media and technology.

Facebook and LinkedIn are the most popular services, used to advertise jobs, screen candidates, communicate with the appropriate audience about job openings and generally disseminate the firm’s information to prospective employees, according to Norlin.

Herbert Geer also actively encourages lawyers to build LinkedIn profiles and has set up a working group to consider options and act as a ‘sounding board’ for ideas on how to move forward in this area. Henry Davis York’s Tolhurst also notes that social media is a way of ‘natural selection’ for recruitment and was often the firm’s first port of call.

Interestingly, Norton Rose’s Shacklock mentions that his firm views Facebook and Twitter as more important for engaging with clients than potential employees, a clear indication of the business potential of social media in the longer term. ALB Australasian Legal Business ISSUE 9.01

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MARKETDATA DATE| M&A | M&A MARKET >>>>

In association with

M&A TRANSACTIONS AND STATISTICAL ANALYSIS Top 10 Announced Deals - Australasia (20 November, 2010 - 31 December, 2010) Announcement Date

Target Company

Target/Seller Legal Advisor

Bidder Company

Bidder Legal Advisor

23-Dec-10

Riversdale Mining Limited

Gilbert + Tobin

Rio Tinto Limited

Minter Ellison

15-Dec-10

Integral Energy (Retail Business); Advising seller: and Country Energy Baker & McKenzie (Retail Business)

Origin Energy Limited

Clayton Utz

Country Energy; and Integral Energy

2,300

15-Dec-10

EnergyAustralia (Energy Retailing Advising seller: Business, Delta Western Allens Arthur Robinson; GenTrader Bundle and Power Baker & McKenzie Station Development Sites)

TRUenergy Pty Ltd

Mallesons Stephen Jaques

Energy Australia

2,035

22-Dec-10

DP World Australia Limited (75% Stake)

Advising seller: Freehills; Linklaters

Citigroup Alternative Investments LLC

Hogan Lovells; Mallesons Stephen Jaques

DP World Limited

1,363

28-Dec-10

Tower Australia Group Limited (71.04% Stake)

Blake Dawson

The Dai-ichi Life Insurance Company

Freehills

15-Dec-10

AWB Limited (Commodity Management Business)

Advising seller: Blake Dawson; Clayton Utz

Cargill Australia Ltd

Allens Arthur Robinson

AWB Limited

1,110

21-Dec-10

Valemus Australia Pty Ltd

Advising seller: Clayton Utz

Lend Lease Corporation Limited

Freehills

Bilfinger Berger SE

1,024

29-Dec-10

UCI International Inc

Mr Graeme Hart (Private Investor)

Debevoise & Plimpton

The Carlyle Group LLC

1,018

15-Dec-10

Mantra Resources Limited

ARMZ Uranium Holding Co

Blake Dawson; Stikeman Elliott

976

15-Dec-10

Griffin Coal Mining Company Pty Ltd; and Carpenter Mine Management Pty Ltd

LANCO Infratech Limited

Allen & Overy

800

Notes:

Blake, Cassels & Graydon; Hardy Bowen

Seller Company

Deal Value (AUDm) 3,538

1,192

Based on announced deals, including lapsed and withdrawn bids, from 20 November 2010 to 31 December 2010•Based on geography of either target, bidder or seller company being Australasia•Includes all deals valued over USD 5m. Where deal value not disclosed, deal has been entered based on turnover of target exceeding USD 10m•Activities excluded from table include property transactions and restructurings where the ultimate shareholders' interests are not changed•League tables are ranked by value•Q4 10 * = 1 October 2010 to 31 December 2010

League Table of Legal Advisors to Australasian M&A (Jan 01, 2010 - Dec 31, 2010)

League Table of Financial Advisors to Australasian M&A (Jan 01, 2010 - Dec 31, 2010) Value (AUDm)

Deal Count

1

Freehills

66,314

70

1

UBS Investment Bank

48,712

29

2

Mallesons Stephen Jaques

61,010

51

2

Macquarie Group

40,454

32

3

Allens Arthur Robinson

42,136

41

3

Greenhill & Co

24,730

9

4

Clayton Utz

36,208

41

4

Deutsche Bank

24,539

18

5

Minter Ellison

21,068

63

5

Goldman Sachs

23,189

33

6

Norton Rose

20,950

29

6

Credit Suisse

21,088

15

7

Blake Dawson

20,895

37

7

Lazard

20,044

10

8

Gilbert + Tobin

16,315

23

8

Bank of America Merrill Lynch

18,137

11

9

Stikeman Elliott

14,532

6

9

Morgan Stanley

16,767

11

10

Sullivan & Cromwell

13,001

8

10

Grant Samuel

15,011

11

Rank

House

Value (AUDm)

Deal Count

Rank

House

Australasian M&A Activity - Quarterly Trends 200

70,000

180 160

Value (AUDm) Volume

50,000

140 120

40,000

100 30,000

80

20,000

60 40

10,000 0

62

Number of deals

Value (AUDm)

60,000

20

Q1 03

Q2 03

Q3 03

Q4 03

Q1 04

Q2 04

Q3 04

Q4 04

Q1 05

Q2 05

Q3 05

Q4 05

Q1 06

Q2 06

Q3 06

Q4 06

Q1 07

Q2 07

Q3 07

Q4 07

Q1 08

Q2 08

Q3 08

Q4 08

Q1 09

Q2 09

Q3 09

Q4 09

Q1 10

Q2 10

Q3 10

Q4 10*

0

Australasian Legal Business ISSUE Australasian Legal Business ISSUE 9.01 9.1

MARKET DATA | capital markets >>

EQUITY CAPITAL MARKETS TRANSACTIONS LIST Australia, New Zealand Dec 26-Jan 22 NB: Does not include transactions valued at less than than USD10m, best efforts transactions and private placements Issuer

Proceeds (USDm)

Issue date

Currency

Bookrunner(s)

Sector

AUSTRALIA Fortescue Metals Group Ltd

873.928

01/19/11

AUD

Morgan Stanley

Materials

Talison Lithium Ltd

70.308

01/13/11

CAD

Cormark Securities Inc

Materials

Venturex Resources Ltd

17.460

01/20/11

AUD

Argonaut Capital Ltd

Materials

Humanis Group Ltd

15.140

12/29/10

AUD

Gleneagles Property

Consumer Products and Services

Forte Energy NL

14.955

01/19/11

AUD

Stonebridge Securities Ltd Matrix Group Ltd

Materials

Bookrunner(s)

Sector

Source: Thomson Reuters

DEBT CAPITAL MARKETS TRANSACTIONS LIST Australia, New Zealand Dec 26-Jan 22 Issuer

Proceeds (USDm)

Issue date

Currency

AUSTRALIA ANZ Banking Group Ltd

2,997.110

01/05/11

USD

ANZ Banking Group Bank of America Merrill Lynch Citi

Financials

National Australia Bank Ltd

1,245.861

01/19/11

AUD

National Australia Bank

Financials

ANZ Banking Group Ltd

941.652

01/14/11

JPY

Daiwa Sec Capital Markets Mizuho Securities Co Ltd Nomura Securities

Financials

Macquarie Group Ltd

742.058

01/06/11

USD

Barclays Capital Citi Goldman Sachs & Co Macquarie Bank

Financials

Commonwealth Bank of Australia

316.600

01/13/11

GBP

RBS

Financials

Coca-Cola Amatil Ltd

176.033

01/19/11

AUD

BNP Paribas SA Credit Suisse

Consumer Staples

National Australia Bank Ltd

155.882

01/05/11

CHF

Credit Suisse

Financials

Commonwealth Bank of Australia

100.510

01/06/11

AUD

TD Securities Inc

Financials

ANZ Banking Group Ltd

96.456

01/14/11

JPY

Daiwa Sec Capital Markets Mizuho Securities Co Ltd Nomura Securities

Financials

National Australia Bank Ltd

78.069

01/10/11

GBP

Nomura International PLC

Financials

National Australia Bank Ltd

51.454

01/14/11

HKD

Deutsche Bank AG

Financials

National Australia Bank Ltd

10.881

01/04/11

SGD

Credit Suisse

Financials

38.545

01/17/11

NZD

ANZ Banking Group (NZ)

Consumer Products and Services

NEW ZEALAND Dunedin City Treasury Source: Thomson Reuters

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MARKET DATA | M&A >>

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