Picture yourself on a boat in a river sitting at the DLA Phillips Fox partnership table. It’s mid 2008 and although you’re prematurely greying and fat, although your third decennary was spent in a suit behind a desk, life is good; you made partner in 2005.
The disaffection from friends and family and the clogged arteries were definitely worth it; you’re starting on $400,000 and the only way is up. Slowly, but surely, you’re filling the vacancy left by the erstwhile partnership stalwart who brought a mountain of Federal Government work into the firm’s Canberra office. The work is there and you’ve earned it. The riches that were promised by formalising the “alliance” with DLA are slowly, but surely, starting to trickle through. Sure, there’s a GFC in the offing, but these marshmellow pies are delicious!
Meanwhile, across town, in between the tangerine trees and marmalade skies, a different story is unfolding. Damian McNair, a Melbourne-based construction partner at Mallesons, is meeting with former Mallesons partner-in-charge Tony Holland to discuss the merits of opening a satellite office in Dubai. It would be a lean and mean project finance and front-end construction outfit, capitalising on the Emirate boom of the day. Holland thinks about it, looks at the cellophane flowers of yellow and green, and goes over the financials in detail. The proposition is eventually backed strongly by Messers Holland and McNair and ultimately put to the Mallesons board, who reject it.
Now picture yourself, on a train in a station, with a $1.6million pay-packet and a hunger for more. Suddenly an Arab is there at the turnstile, and they’re gone. McNair and Holland walk, with Kaleidoscope eyes, to head up an office of DLA Piper in Dubai – establishing a UAE presence that the Mallesons board refused to endorse. In so doing, McNair and Holland set in motion a catastrophic sequence of events that would eventually lead to an Australian DLA partnership prospect vastly different from what our friend, the partner made up in 2005, sacrificed his thirties for.
The Emirate buildings stretch for as far as the eye can see and grow so incredibly high. Somebody calls McNair and Holland and they answer quite slowly. It’s Nakheel Corp, towering over their heads with the sun in its eyes. McNair and Holland follow Nakheel down to a bridge by a fountain. Everyone smiles as they drift past the flowers. And it’s gone. Nakheel Corp – a state-owned entity – falls victim to the same financial woes that so beset the UAE in 2009.
Our 3rd year DLAPH partner waits as newspaper taxis appear on the shore, waiting to take him away. The tax-free UAE riches that enticed Mr Holland never materialised and all of a sudden, the prospect of a $1.4million – a generous amount in the eyes of our 3rd year DLAPH partner – is unsatisfactory for the Mallesons defector. Plasticine porters with looking glass ties are waiting to take our DLAPH partner away, when all of a sudden there is a knock at his Canberra office door …
IT’S TONY IN THE SKY WITH DIAMONDS!!!!!!
Mr Holland arrived back in Australia and assumed the role of Chief Executive Partner of DLA Australia in November 2009. This is how the firm’s partnership has constricted since that point:
- July 2008: 166
- July 2009: 161
- July 2010: 156
- March 2011: 126
- April 2011: 116
- May 2011: 110
Following the pre-merger defections from the DLAPH Brisbane office, revealed by FirmSpy on 11 March, DLA’s partnership has now sunk even further – a staggering 35% drop in three years. Given that the firm is now a place where rocking horse people eat marshmellow pies, it is easy to see why.
Thanks to all of the DLA spies who sent us updates over the weekend, spelling out the extraordinary news that the firm’s Canberra office is all but closed for business thanks to another massive DLA defection. Here is a sample of what we received:
DLA Spy 1
six partners resigned in Canberra DLA Piper
DLA Spy 2
DLA Canberra has had a massive walk out – all partners in Govt practice (except for 2 (with one undecided)) have walked out.
DLA Spy 3
I hear that all the DLA Piper Canberra partners bar Anthony Willis and Caroline Atkins have resigned this morning to set up a Canberra office for HWL Ebsworths.
DLA Spy 4
DLA Piper Aust just about to lose the entire CBR office. RUmour is all but 1 partner is leaving to open a new CBR office of another national law firm. Future of DLA Phillips Fox / Piper Australia in canberra is limited, or non existent
With 16 DLAPH partners now gone in just 2 months, will the remaining 110 simply climb in the back with their head in the clouds? Or will somebody take them awayyy?
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Very well written firm spy. One of your best.
It is remarkable that in just a couple years, tony holland has taken phillips fox from a thriving mid-tier firm to a cut throat corporate machine like mallesons. No I don’t feel much sympathy for PH partners, but firm spy is right, holland has taken the firm from a comfortable position to a corporate sheikdom where rocking horse freaks dominate
Brilliantly written article – Oh dear – it’s all going wrong…all that Government work going down the pan! The trouble with DLA is BAD LEADERSHIP! There are some poor Heads of Dept at that firm…it’s sinking and fast!
What is so wrong with anything in excess of $1million per year? What sort of rocking-horse freaks are ws dealing with here?
The great fallacy of Tony Holland’s agenda is that DLA can compete with the likes of Mallesons on non-commoditised transactional work. Every informed commentator on the continent is talking about how mid-tier firms are gorging on the low-level, unsophisticated legal work that was once the bread and butter of Phillips Fox. Many Phillips Fox partners amassed enviable personal wealth on the back of such work. Indeed, with the redirecting of work flows in the market, many mid-tiers partners are watching their practices, and pay packets, grow further. Against this, Tony ‘kaleidoscope eyes’ Holland, is trying in TWO YEARS to turn a bread-and-butter firm into something it ain’t- a transactional powerhouse. Watch DLA fail
Great article firm spy
Great writing FS!
The canberra and brisbane partners aren’t the only ones to jump ship. at least two sydney ones have left the corporate team.
from what i know @sinking ship is right about the bad leadership – an that’s in the non-legal departments too. more than half the marketing team there quit in the past 18 months or so.
DLA was (is?) a major hitter in the Commonwealth govt market – probably gets $15m+ per year from the Commonwealth – its nothing like Sydney or Melb where DLA is well towards the bottom of the top tier, in Canberra its one of the top 3 or 4 private firms (Clutz, Blakes, Minters and DLA get most of the work, along with AGS; with Sparkes and Norton Rose picking up some). Admittedly the market nowdays is very tough and dropping fast, but losing at least 2/3 of that $15m is going to be a major hit to DLA. Surely lawyers are smart enough to realise that lower rates doesnt mean lower profit – get your eyes of the headline rate TH.
Potentially a good move for Ebsworths, although as the market is purely panel driven it will be interesting to see whether any departments appoint Ebsworths to their panels – especially if DLA keep a presence in Canberra and argue against the change; and given that everything is on hold while the ‘whole of government panel’ wends its way through the system before presumably emerging as a useless panel of 54 and leaving the usual firms fighting for a place.
For the DLA insurance team, however, I can’t see any downsides – a firm more aligned with their practice and presumably much more understanding of what insurance involves (ie it doesnt involve $700 per hour for partners).
Good article FS
Well DLA are in DEEP trouble now. Let’s face it – why did DLA Piper want to merge with a mid tier Insurance firm?? Why didn;t just set up on it’s own or take over a Corrs or a Blakes. My understanding from insiders concurs with the issue of poor leadership and even poorer management of departments. I think someone mentioned the Marketing team – I heard for example that the entire team had disintergrated inside 6 months and I understand not all of them quit of their own choice!I think HR have been working overtime there,,,,, I know 2 other Sydney partners left…but this is not mentioned anywhere. Mind you who wants to work for a firm managed by bullies and cowards…no thanks! Say what you want about other firms but DLA is really the brown stuff…will be more to come….
speaking from inside DLA in sydney, everything went quite smoothly during the integration with DLA Piper and work seems to be opening up from the global market. and for the record not everyone is managed by bullies and cowards. there are still some good operators in sydney…
I had the dubious distinction of being employed by PF for a period, back in the days when it was still PF. Hard to imagine a more dysfunctional firm, although there were some genuinely talented partners in certain areas (something I think is often forgotten by those who seek to diss the firm generally).
Attrition was terrible, even by law firm standards, and completely unacceptable behaviour was tolerated from high or even moderate performers. At most firms, partners at least attempt to hide their contempt for their peers.
I agree with Shnorky that DLA Piper’s choice of PF as a merger target was a little odd. However, DLA Piper itself doesn’t really have a reputation for quality in any jurisdiction, from my understanding, and maybe the more well regarded firms in Oz simply didn’t want them. Difficult to see a Corrs or a Blakes even picking up the phone, in my view.
Holland is a war horse, but has no real management experience. McNair brought down DLA’s middle east operations and now is head of PF finance – zero management experience and a construction lawyer. Go figure…
The Canberra team is seeking to rebuild…