Fuz Ruse; Clayton Utz Alleges Fiduciary Breaches By A&O Defector Grant Fuzi

It has been a couple of months since the Legal Affairs team at the AFR have had a decent scoop, so we took our collective hats off on Friday at the massive revelation that Clayton Utz is pursuing mastermind defector Grant Fuzi for a breach of fiduciary duties arising from his move to competitor Allen & Overy.

If you missed the AFR article, the following summary was sent to us by an anonymous spy (thanks very much!):

A&O Branding

Read on infoXpress this morning… Clayton Utz – Allen & Overy – Grant Fuzi – Case – Clayton Utz is set to prepare a case against former partner Grant Fuzi alleging that he lied about his intent to join Allen & Overy before leaving Clayton Utz, and breached his fiduciary duty. Mr Fuzi allegedly accepted a $700,000 payout on the condition that he would not go to a competitor. – AFR 45

Then another anonymous spy sent us the following request:

Please write about Clayton Utz‘s upcoming suit against the Australian A&O partners, including Grant Fuzi, for breach of fiduciary duty. Would love to hear more goss in this regard.

So what do we know? Well, the following very insightful comments were sent to us last night by an anonymous Clayton Utz spy (this is a truly excellent update, so thanks) which help inform the Clutz motivation to pursue the Fuz Ball:

CU is not just bleeding it is haemorrhaging with its lawyers following their partners to A&O in unprecedented numbers. That’s the real story behind CU’s action against Grant Fuzi, as reported in the AFR on Friday -a desperate attempt to stem a tide which started well before Mr Fuzi departed and an attempt to prevent other groups suffering the fate of its Workplace Relations and Banking and Finance groups. In Banking and Finance the blood started with the departures of securitisation guru Brain Salter and his partners Trevor Robinson and Leah Chic in 2008 (as reported in the IFLR). In Workplace Relations it started with Chris Hartigan and his client John Holland, who moved to Herbert Greer in 2008, followed by Louise Russell, Luci Mumme and her team.  Next to depart were John Oakes and his team in Sydney, followed by Luke Connolly in Melbourne and most recently Bruce Heddle in Sydney. As a result, although embarrassingly, the Clayton Utz website still proclaims that its Workplace Relations group is ranked Tier 1 by the Asia Pacific Legal 500, but that’s incorrect. A quick click reveals that the firm is now ranked Tier 2, as it is in Banking and Finance. The exodus doesn’t stop there either. While the Legal 500 reports that Peter Knight retired, Chambers Global reports that he has moved across to Banki Haddock Fiora and then there was Richard Morrison in Canberra.. That’s another 11 partners. CU hasn’t replaced any of these people it has just promoted a few people… I’m sure you can find a few more.

Forget about finding more, what about the potentially misleading and deceptive proclamations on the Clayton Utz website?! Perhaps Mr Fuzi might find something useful there for the purposes of defending the forthcoming equitable proceedings…

Which brings us to another very interesting rumour sent to us over the weekend regarding this explosive story:

I thought the Firm Spy might like to know how Grant Fuzi intends to defend against the action being brought against him by his former employer Clayton Utz. I’m told that he intends to rely on the very tenuous argument that he did not technically leave Clayton Utz to work for a “competitor” – and was thus entitled to the $700,000 payout – because A&O wasn’t competing with Clayton Utz for work at the time of his defection. Mind you, if the retarded manner in which the firm is currently handling its PR affairs is an indication of its legal competence, I wouldn’t be surprised if the restraint of trade clause was so narrowly drafted as to permit him to defect and pocket the money!

We wouldn’t be surprised either. And it would make another dark chapter in a forgettable year for the firm in which:

• 14 very profitable, well respected partners defected from the firm to build two Australian offices of Magic Circle firm Allen & Overy;
• the firm sacked over 30% of its Melbourne graduates;
• a former employee has been given leave to pursue further claims against the firm for alleged sexual harassment and bullying;
• the firm was stripped of its credentials as an employer of choice for women by the Equal Opportunity for Women in the Workplace Agency; and
• a librarian has created considerable controversy by hording an inordinate amount of firm fruit.

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