Freehills Says ‘Trend is Up’; Mallesons Says ‘Recovery Not Likely’

When you’ve implemented a redundancy scheme that has given rise to a 25% constriction in the number of senior associates populating the office, it is time to speak out in media, ramp up the PR machine, and sell to staff/the public the rationale of such action.

Accordingly, we saw Mallesons Chief Executive partner Robert Milliner quoted in yesterday’s AFR as follows:

‘Milliner said the size of the firm had been adjusted to reflect falling work volumes and a recovery was not likely in the medium term… “most of our clients here and overseas have gone through cost constraints, or because of the disruption of the debt markets have not been able to raise leverage to do the [M&A] activity they have done before”.

This comes just a few days after Mallesons spokeswoman Kate Rimer was reported to be:

cautious about the recruitment market’s likely rate of recovery, particularly given prevailing conditions in former recruitment hot spots overseas. “I think overall we will see a gradual pick-up in recruitment activity, but nothing significant until at least the middle of next year,” she said. “Historically we have lagged much of the economy going into and coming out of downturns. We are seeing a similar pattern with the GFC, where law firms are lagging many of the economic indicators by six-plus months.

Err… ‘Busta’

The Australian economy added near 100,000 jobs between September and November

Putting Milliner & Rimer’s comments in the context of justifying major staff departures is one thing, but putting them beside the comments, made in today’s AFR by Freehills Chief Gavin Bell, makes them look like something of a piss-take:

“[Freehills] took the view that we were going to retain people, that we were not going to lay off people, that that was a last resort. And we kept recruiting. It will probable take a while for full activity to return but I think the trend is up, rather than down. It is a trend up from a plateau that was nowhere near as deep as we thought it would be.”

And while the Mallesons workforce has been reduced considerably, Freehills has increased non-lawyer staff by 8.5% this year. Mallesons, a firm that posted revenue that exceeded Freehills by $58million in 2008/2009, despite having less partners and apparently less staff, is forshadowing no recovery in the medium term, while Freehills thinks the trend is up.

Is Milliner ‘buying time’ to keep the pay freeze in place? Is a Freehills pay thaw on the way?

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