The Delusional Duo: Details Emerge on Defection Trendsetter Clayton Utz

We had a laugh last week when we saw Clayton Utz CEP Darryl McDonough’s delusional comments that his firm was “bucking a bit of a trend” in relation to the defection of its partners to smaller firms. Well, now we’ve got a bit of context as to how deluded the Clutz CEP really is.

Clutz trendsetters yesterday

We received the following excellent comments from an anonymous Clutz spy on Friday:

If Clutz is “bucking” rather than leading the trend I’m not quite sure how they explain the recent loss of the following 12 partners to mid tier firms (which are on top of the 15 partners sho jumped ship to A&O) and another 1 to Blakes:

• Susan O’Rourke (former Head of China Practice) – Dibbs Barker
• John Oakes – Dibbs Barker
• Kate Marshall – Middletons
• Joanne Daniels – Middletons
• Peter Knight – Banki Haddock Fiora
• Bruce Heddle – Maddocks
• Louise Russell – Herbert Geer
• Luci Mumme – Herbert Geer
• Chris Hartigan – Herbert Geer
• Richard Morrison – Sparke Helmore
• Michael Palfrey – Sparke Helmore
• James Stellios – Sparke Helmore
• Simon Irvine – Blake Dawson

All significant losses in their own right – O’Rourke, Marshall, Russell, Oakes, Heddle and Knight are all Chambers ranked partners with dedicated followings.

Oops. That’s 13 big names right there.

We took a step back in time to check how highly Clayton Utz rated each of these partners before they decided to part ways with the hollow shell firm. We did some googling of historical versions of the Clayton Utz website and here is what we came up with:

• Susan O’Rourke is referred to as the Clayton Utz Head of China Practice here and an “Energy and Resources specialist” here;
• John Oaks is listed as a partner in Workplace Relations here;
• Kate Marshall is listed as an IP partner here and the firm boasted here that she is also a member of the Victorian Women Lawyers Association;
• Joanne Daniels is listed as a Clutz partner by our friends at The New Lawyer here;
• Partner Simon Irving was regarded by The Australian as “a key adviser on the Victorian desalination project”;
• John Stellios was a consultant to Clutz;
• Partner Richard Morrison was part of the Clutz team involved in the Federal government’s national electronic health records network, HealthConnect;
• Partner Peter Knight was regarded by the firm as a “senior IT lawyer” way back in 2004.
• Bruce Heddle, another Clayton Utz partner, offered his name to the firms “Workplace Relations Insights” newsletter, as did partners Louise Russell, Chris Hartigan and Luci Mumme (we prefer the Firm Spy version of the same newsletter, available here).

This leaves Special Counsel Michael Palfrey, whose Clayton Utz profile still pops up in the Google cache:

Michael regularly advises Australian Government departments and agencies on administrative law and statutory interpretation issues, as well as assisting with the development of legal policy and legislation, including the preparation of regulatory impact statements and drafting instructions. Michael also has significant experience in drafting decisions for public sector clients and advising on the operation of regulatory schemes, including conducting investigations into, and reporting on, agencies’ compliance with their regulatory responsibilities.

Ouch. He sounds like a big loss too. By our count, thats 13 big names that have recently departed, on top of the 15 A&O defectors – being 28 heavyweights in total. Let’s say 25 of those were equity partners, this means that the firm has nearly 15% less of the same 180 partners now who brought in the firm’s revenue of $491m in FY 2008/2009. And this statistic doesn’t even contemplate the retirements and other defections that haven’t been reported by the firm. In our view, this means that the Clayton Utz of FY 2010/2011 is a vastly different business proposition to what the firm was in FY 2008/2009 – probably a relevant consideration if you’re an inhouse counsel wondering where to throw your legal spend. A bit like, shall we say, a naturally sun-kissed 2009 look vs a horrible 2011 fake-tan fiasco?

However, the Clutz top-brass certainly don’t seem concerned. In June last year, immediate-past CEP of Clayton Utz David Fagan was asked:

Question: How will your firm look in 2015?

Answer: I’m very certain that we are going to be a very successful and strong firm.

But will any of the same people be there? Are David and Darryl a Delusional Duo?