How Much Do They Earn? Minter Ellison Partner Salaries Exposed

Many of you will have read the AFR Profit Survey, published by the AFR in September this year (10/09). Over the next couple of weeks, we intend to reproduce the insightful report on this site, primarily to contextualise claims we will make moving forward.

Congratulations to the AFR Legal Affairs team for their fantastic work.

a warm culture

We will dedicate a post to each firm surveyed, moving through each firm based on revenue. This means that we will start today with Minter Ellison; Australia’s largest law firm by revenue. Minter Ellison posted revenue growth in FY 2009/2010 of 2% – a huge feat given that its two nearest competitors in terms of revenue (Mallesons and Freehills) posted significant revenue declines over the same period.

Last year, you’ll recall, Minter Ellison partners took home up to $1.45million – a figure which cast significant doubt over the truthfulness of the following claim made by Chief Executive Partner John Weber in April 2009:

.. we are not generally proposing salary increases this year… Limiting salary increases was not an easy decision, but it was one that we felt was appropriate, given the prevailing market conditions and to preserve jobs. Partners will also be lowering their earnings next financial year.

At the time, Mr Weber unsurprisingly declined to elaborate on the quantum by which partner earnings were lowered, but given that:

• revenue increased by 4.7% for the financial year;
• lawyer salaries were frozen;
• headcount reduced by 4.5%; and
  
• not to mention the estimate that partners ultimately took home up to $1.45million (!!!)

…we thought he was telling pork pies.

Onto the stats as published by this year’s AFR Profit Survey:

Minter Ellison

• Estimated profit margin: 41%.
• Estimated profit: $206.2million.
• Profit per non-partner fee-earner: $210,000.
• Profit per equity partner: $920,000.
• Revenue: $503million.
• Revenue per partner: $1.74million.
• Revenue per equity partner: $2.25million

• Partnership remuneration system: performance-based, with a bonus.
• Partner pay for 2009/2010: Top equity partners (comprising about 47 per cent of the partnership) drew $1.2million. About 15 east coast partners took home $1.62million after bonuses were paid.
• The verdict: Chief executive partner John Weber said investments in relationships in China had paid dividends with 35 deals flowing from North Asia in the past 12 months. Almost one quarter of the record $503million revenue emanates from offshore, much of it linked to energy and resources, major projects and construction.
• Comment: The sleeping giant awakened this year, with its focus on inbound investment work catapulting Minter to the top of the revenue stakes. An exeptional management team has fostered a warm culture. Its challenge will be to generate higher profits for the 224 equity partners.

We think the AFR largely got the facts and figures right on this one, however we took issue with the claim that “an exceptional management team has fostered a warm culture”. We thought the following cultural insight offered by an anonymous Minters spy earlier in the year better sums up the situation:

Dear Firmspy,

It may interest you to know that so far this year a whopping 26 lawyers have resigned from Minter Ellisons Sydney office, and there are definitely more resignations in the offing. Of the 26 who have resigned so far, 7 have been senior associates and a staggering 19 have been young lawyers, mainly in the coveted 2 -4 year post admission experience range.

Why the sudden exodus? Is it:

a) the unending pay freeze young lawyers have been subjected to while the partners prepare to celebrate yet another budget busting year;

b) the appalling treatment numerous young lawyers have been forced to suffer at the hands of their power mad superiors;

c) the frustrating impotence of a farcically inept HR team; or

d) all of the above?

Even though the construction and finance groups have been left particularly short staffed and are scrambling to find replacements for the recent departures, the partnership shows no sign of making any serious changes to the financial/working/living conditions of its young lawyers, but is instead attempting to buoy the spirits of its disenchanted workforce with such scintillating initiatives as national hard hat day (unfortunately I’m not joking). Adding to this the fact that the firm has only 9 new graduates starting in the Sydney office in the next 12 months, the question has to be asked – how many rats have to desert the ship before it is officially declared a disaster?

Although we’re not sure of the exact figure, we’re quite certain that the current state of Minter Ellison’s revenue would suggest that things are not “disastrous” in the manner described byy our anonymous spy. But they’re not great either. We think Minters espouses an unmerciful, cut-throat performance culture where lawyers must bill and bill very hard or face an immediate and uncompromising end. We can immediately think of two examples from the GFC that tend to support this claim:

The first involves a senior associate. According to BRW:

Minter Ellison retrenched a senior lawyer months after the firm’s management had singled him out as a rising star. A senior associate in Construction, Ronan MacSweeney was one of only 11 lawyers made redundant in the firm’s restructure… management asked MacSweeney to appear in a video being shown at the firm’s biannual address to staff…MacSweeney was selected to front the video campaign because his six-month secondment… was considered so successful that it was identified as a highlight of the firm’s performance…insiders say the decision to let MacSweeney go – in a restructure that affected only 1 per cent of staff – surprised many employees.

The second example involves the redundancy of a mother of five. Also according to BRW:

Word also leaked out that the retrenchment of a [Minter Ellison] property lawyer three months after the mother of five children was promoted to senior associate and six months after she was recruited to the firm from a state government position.

So perhaps we should liken the “warmth” of the Minter Ellison culture to, say, the fiery gates of hell? Bill or BURN!

And while you burn, spare a thought for your old partner who (presuming he/she was a top-performer) took home about $3million dollars over the last two financial years. That is, over the same period that Minter Ellison partners had us believe that the GFC greatly disturbed the firm’s bottom line.

Send the Firm Spy your news and views!