Here at the Firm Spy, we tend to take delight in the misfortune of greedy partnerships, especially those who we consider mistreat junior staff when times are tough. During the GFC, for example, we thought Clayton Utz consistently exemplified the brand of corporate behaviour that warranted our reproach. By way of example, the firm reportedly found it necessary to make many staff redundant in a year financial year where revenue skyrocketed by an incredible 4.9%. After long hours in the office (yes, we work too!), we therefore enjoyed spending our spare time methodically publishing the revilement of Clutz juniors in an attempt to mete out a measure of justice against a partnership that scarcely receives censure.
But set against this ideological bedrock of finding pleasure in corporate partner pain, and notwithstanding the thoroughly reprehensible corporate conduct of the firm over the last couple of years, even we are struggling to find enjoyment in the current plight of national top tier law firm Clayton Utz.
Yes folks, it gets worse. Much worse. [And this is despite the fact that the Clutz tech team were able to update their sorely out-of-date website "ranking" information yesterday afternoon. Well done team!]
It has emerged that Clayton Utz is currently faced with more legal action. Moreover, The Australian reported yesterday that global advertising group WPP is considering court action against Clayton Utz based on the firm’s conduct in a prior court action. As reported by The Australian:
[the newspaper] understands that Deacons, which acted for WPP in the first case, last week served Clayton Utz with an application about the hearing that may signal the group’s intention to issue new proceedings… it is understood the new proceedings will relate to the decision by Clayton Utz… to act for Pacific Equity Partners against TCG in the ensuing litigation over secret payments.
The emergence of these alleged proceedings comes after The Australian reported last week that Clayton Utz is the subject of another proceeding in which a lawyer is seeking to enjoin the firm from operating in India:
Indian lawyer A.K. Balaji has filed proceedings in the High Court at Madras arguing that 30 international firms [including Clayton Utz] are practising illegally in the country…Clayton Utz declined to comment on the Balaji litigation.
By our count, that’s a total of FOUR court proceedings either currently afoot, or in contemplation, involving Clayton Utz. There’s Trench, WPP, some Indian dude called Balaji, and, the most explosive of the lot, the proceedings involving mastermind defector Grant Fuzi. On the subject of the Fuz Ball, rumours keep trickling in. We received the following comments from an anonymous Clutz spy last night about how Mr Fuzi intends to defend allegations of a breach of fiduciary duties:
My understanding from various people at Clayton Utz is that Fuzi does not need to run with anything like the technical argument you gave as an example. There was no restraint, indeed the firm expressly released him in writing! Clayton Utz is only arguing that someone relied on something not included in the agreement that it drafted. As we all know that might work for a “mum and dad” consumer signing a form bank guarantee, but it looks like a massive and embarrassing stretch for one of the country’s most sophisticated national law firms drafting its own agreement. Also nice of them to suggest they are doing it to address the problem of lateral partner movement, particularly as Clayton Utz has probably hired more lateral partners from its competitors over recent years than any other firm. Seems they can dish it out but cannot take it. Looks like an extraordinary example of sour grapes to me!
We agree, and we didn’t even need the following comments, also received last night from an anonymous spy, to convince us (but boy, they do help!):
I thought I recalled seeing David Fagan the CU managing partner recently quoted in the ALB as saying that he “wished the departing partners well”. Gee, if this is how he treats partners he wishes well then I would hate to see how he treats partners he is upset with. Good to see that at least one national law firm doesn’t believe that anonymous leaks that undermine a competitor is a practice that is beneath them!
Yes, we recall seeing comments to that effect too. If we’re right, the equitable proceedings would amount to a curious about-face from CEP David Fagan, a man we’ve always regarded as speaking his mind. For example, when Clutz made up a handful of new partners in the wake of the A&O defections, he said:
Clayton Utz is committed to providing our clients with first-class legal services, which means ensuring we have the best legal talent on board … Our new partner appointments reflect our commitment to clients.
Hmmm… all of that looks watertight when read in light of the following comments sent to us from an anonymous Clutz spy yesterday:
Dear Firmspy I have heard a particularly disturbing rumour of late that in response to A&O‘s shameless ambitions to create a second tier finance firm in Australia through poaching Clutz lawyers (Clutz isn’t, after all, a Mallesons or Allens), that in response, Clutz have actually promoted to Senior Associate in one of its depleted groups (namely, securitisation) a lawyer admitted in December ’08. Could such a rumor possibly be true? Surely not! This would absolutely be a newsworthy item if it was, since it must represent the fastest rise to fame of any Australian lawyer. Wouldn’t you want to interview such a superstar lawyer? He would be an Australian idol for us all. Perhaps best to get him now, before Clutz make him a partner next year and he has even less time for interviews!
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As of 1 April 2010 a lawyer who was admitted in NSW on 10 October 2008 was promoted to Senior Associate at Clutz just because the remainder of his team (securitisation – structured capital markets) left to A&O (what a knuckle head, no pun intended!). With only 1 ½ years post admission experience and no prior law firm experience this lawyer has definitely done well for himself by remaining with Clutz.
However, for the remaining Clutz Lawyers who in the recent promotions did not get promoted who have been with the firm for more than 4-5 years this is definitely unfair. Clutz did not reward this lawyer for his hard work, but rather are desperately trying to hold onto anything they can since the firms departures in that team to A&O.
Its been awhile. However, some of us are far too busy to worry about the downturn. I must make this simple observation to Upset – “Who says loyalty is not rewarded?” Well down to be admitted to Senior Associate with only 1.5 years PAE. Perhaps those with 4 and 5 years still lack the basic skill set. I assume that this is the new benchmark for all recruiters, including A&O, in the future, especially when the majority of partners nationwide will be leaving the profession. I’m waiting to pick up an entire firm.