Last Friday, the AFR reported in an excellent article profiling the Clayton Utz/A&O partnership defections that Clutz would, as part of its response to the shocking departures, open an office in Hong Kong. Although it was reported that the decision to open the office was made months prior to the A&O defections, the Clutz partnership is understood to be hopeful that the international office will alleviate what the AFR considered disenchantment within the Clutz partnership that the firm had no exposure to Asia.
But it will come at a major cost. It is a major risk for the firm, especially when several other local firms (Mallesons is an excellent example) have entrenched ties with clients in Hong Kong, not to mention a multitude of international firms.
But the costliness of the Clayton Utz response to its flailing fortunes of late does not stop there. In an apparent win for the long suffering lawyers/support staff at Clutz (some of whom have apparently been repeatedly dodged on pay), it was reported yesterday that the firm has unfrozen wages. As noted by ALB:
Clayton Utz has brought forward its remuneration review… Now all staff will have a salary remuneration review at the beginning of April [from July 1]. “Remuneration will be set in an accelerated fashion”.
The announcement made it very clear however, that staff will be “eligible” for a raise in wages, signalling that the partners, with a rumoured history of pay-dodginess, will retain the discretion to say “no, we’re not concerned about losing your services, so your wage can remain steady”. As for the staff it hopes to keep, it is unclear whether the “accelerated fashion” with which pay will be set means that lawyers will effectively have their wages set two years in advance of its current level to offset the year of frozen wages.
As you can therefore see, the announcement is opaque and the freezer hasn’t quite defrosted yet.
In other news, the Firm Spy received the following comments last night about new Clayton Utz partnership announcements:
Clayton Utz has made up 6 partners. A decision was made over the weekend by the Clutz partnership, in yet another ‘emergency meeting’ that 6 new partners would be required to fill the void left in the Sydney offices by the A&O defections…
Given that it cannot be expected that these new partners will initially generate the same revenue as their defecting brethren, and in light of the massive cost of opening an office in Hong Kong, can junior lawyers really expect that partners will approach the April 1 remuneration review with bona fides?
We think not.
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