In a bizarre move, Mallesons Chief Executive Partner Robert Milliner has today given the most candid account yet of the financial state of his firm. And it beggars belief!

Whereas the spectrum of law firms are wracked with financial strife, variously turning to cost-cutting and GFC point-scoring, Milliner revealed that Mallesons looks set to achieve

record revenue results this year similar to 2007-2008.

Record results, in the middle of the GFC!

Yet in a blow to Mallesons lawyers, who are likely wondering whether the firm will also announce a pay-freeze, Milliner went one step further in refusing to rule out staff redundancies. Milliner also noted that a merger with Clifford Chance is still on the agenda.

Worse still, Milliner acknowledged that the firm’s incredible financial results can be attributed to a strong performance in the latter half of 2008 — the precise period in which several Mallesons partners considered whether the time was right to:

chop the spare lawyers

If Mallesons partners were considering ‘chopping spare lawyers’ in the midst of very strong results, what do you think they are considering now? Do you think Mallesons should be crying poor at the same time it is recording such impressive financial results? Do you think a multi-millionaire retiring Mallesons partner should have accepted a lucrative scholarship to Harvard?

It started with Australia’s first firm-wide pay-freeze.

It continued with remarks from top dog Gaivn Bell that the pay-freeze would continue until further notice.

Then, last week, Freehills announced a veiled ‘Australian legal first’, which in reality appears a calculated attempt to ‘hedge’ the number of graduates which the firm will be required to commit to in the future.

And now, another Australian first!

Freehills has announced that it is establishing a new role within the firm; executive counsel.

The role - which is salaried - is designed to provide an alternative promotion opportunity for senior associates who do not wish to become equity partners.

Managing Partner Peter Butler declared:

We lose these very senior lawyers because, while they don’t aspire to be partners, they regard a role less than that - senior associate for instance - as being sub-optimal … We want this executive counsel role to be positioned so that it carries very considerable status internally and externally. That it’s regarded - as it ought to be - as a partner-quality role. It offers a real alternative to partnership to those who don’t necessarily aspire to be partners.

But the question remains, is this just another attempt to save the partnership money in these troubled times? At a time when less lawyers are being made up to senior associateship and partnership on average than at any time in the last two decades, is Freehills flagging that it will make even less lawyers partners in the future?

Send us your comments! Let the Firm Spy know first!

In the aftermath of a pay-freeze which the Freehills partnership has confirmed will last well into the future, and following Corrs’ ‘innovative’ measures to avoid paying excess dollars to underutilised graduates, the two firms have

today announced an new method by which they can offload unwanted graduates: make them teach in schools. The two firms have joined forces to partner with Teach For Australia, a scheme reportedly designed to bolster the ranks of Australia’s education system:

Teach for Australia takes graduates and gives them accelerated training to teach in public secondary schools for two years.

The scheme is supported by both Freehills and Corrs, as well as Boston Consulting Group, and while the finer points of the partnership are unclear, it appears that graduates in these three firms will be able to participate in the scheme without fear of losing their graduate position once the two-year term concludes.

Not taken in by this apparently charitable act, a Freehills spy suggests that this is nothing more than:

a veiled attempt by the partnership to hedge their bets going forward… A couple in each intake of graduates will no doubt volunteer to teach and the partners will retain a discretion to permit them to do so, giving them an ability to hedge their bets at a time when no one knows what the future holds.

Do you think that Corrs, Freehills and BCG’s ‘partnership’ with Teach For Australia is simply a ruse to hedge their bets for graduate numbers into the future?

Send us your comments and news!

Whereas top-ties firms Freehills, Allens Arthur Robinson and Minter Ellison have each now enforced a firm-wide pay

freeze, it has emerged today that international heavyweight Baker & McKenzie is moving to distance itself from the international strife affecting the firm.

Baker & McKenzie Australia has confirmed that unlike its North American offices, there will be no staff or wage reductions. Of course, this does not indicate that staff will receive wage increases, but it has presumably engendered a measure of confidence in staff who might otherwise have been fearful for their futures in light of international developments.

In an official statement last week announcing further redundancies, it was noted

‘Our management in North America and Global Services today has informed 38 attorneys and 86 paralegals and professional staff that their positions are being eliminated due to the economic downturn. These changes involve various practices, offices and Global Services departments in North America.’

This is the third round of redundancies for the firm, following January’s initial cut of eight associates in New York, and March’s slashing of about 85 jobs in London.

Is your firm cutting more staff? Let the Firm Spy know first!

With doubts lingering as to whether game-show host Andrew O’Keefe would move the lawyer admissions of a group of Allens Arthur Robinson articled clerks, the Firm Spy can today reveal that, at the behest of the Allens partnership, the proposal was withdrawn!

The Firm Spy is informed that the relevant Melbourne orffice articled clerks were provided with details of the terms under which O’Keefe was prepared to appear, which they were considering, when they were reportedly notified by the Allens partnership that this was a resoumding ‘no deal’.

O’Keefe was thus absent from the admissions ceremony earlier in the week.

Do you think the Articled Clerks should have been free to choose who moved their admission? Do you think Andrew O’Keefe made the right decision quitting his post as an AAR lawyer to become one of Australia’s most famous TV personalities? Do you think people should take videos of drunk people?

Send the Firm Spy your news and views!

David Marocchi, about whom we have previously reported, has emerged as a national pariah as new allegations threaten to blacken the integrity of the wider legal profession, both domestically and abroad.

The same man who once yelled to arresting police officers ‘Im a lawyer… I dont have to do anything’, before allegedly assaulting the female officer with a violent kick to her left breast, is now embroiled in new scandal. In the latest allegation, Marocchi is alleged to have needlessly incurred costs for a disfigured, injured client so that he could enjoy a junket to Hong Kong.  A senior counsel has argued that:

The irresistible inference is that they [Keddies Lawyers] have gone over [to Hong Kong] but in doing so have cost this particular client $20,000… they have run up unnecessary costs by refusing to accept the offer in Sydney but settling [after two days of hearing] for $60,000 in her hand.

The client, Ms Yuan has since lodged a complaint with the Office of the Legal Services Commissioner, having learned that Keddies charged in excess of $260,000 in legal fees and disbursements. The client’s compensation amounted to just over one-fifth of the $320,000 paid by the an insurer in the case which arose from permanent injuries sustained in a fall on a tour bus travelling on the Pacific Highway.

Compared with other top-tier law firms, Allens Arthur Robinson has taken a relatively hard-ball response to the GFC.

First, Allens terminated the office tea-ladies. Second, the partners decided to cancel the Christmas party. Then, to compound firm disillusionment even further, the Melbourne office decided to shelve plans to relocate offices to the opulent development at 567 Collins Street in preference for the lousy offices vacated by Blake Dawson at 101 Collins.

But it appears that all of these cost-cutting measures have not been enough.  Managing partner Michael Rose has today annouced a raft of new measures attempting to cut costs further. These measures include offering voluntary redundancies, widening flexible working arrangements and enforcing a now-familiar pay-freeze.

Incredibly, in explaining the move to freeze pay, Rose commented:

We have had a very strong year. We think we have outperformed the market… [and] there has been a flight to quality… in areas like insolvency and litigation, we anticipate there will be more activity …

These comments aroused several critical responses forwarded yesterday to the Firm Spy, including the following from an AAR spy:

The fact that the firm has had a strong year suggests to me that the partners are taking an irresponsibly conservative view to the financial climate. People, myself included, have calculated a pay-rise into their personal budget… In my view, the partners should actually wait to see a drop in their personal revenue before taking such drastic measures which affect the lives of all staff.

Do you believe partners should ‘wait and see’? Or should partners cut back first and ask questions later? Do you believe Allens staff are being short-changed, given the predictions for increased work-flows and the ‘strong year’ it has just achieved?

Country & Western music great Kenny Rogers isn’t the only one professing expertise on knowing when to hold and knowing when to fold. In a Firm Spy exclusive, we can reveal today that at least one Articled Clerk from Holding Redlich has been made redundant as part of the firm’s response to the GFC.

The firm’s effort to cut ‘frills and fripperies’ was not enough, it would seem.

The relevant Articled Clerk from the Melbourne office was informed at the culmination of her Articles of Clerkship that she would not be offered a first-year position at the firm. However, in contrast to Deacons, Holding Redlich has agreed to permit her to stay on until her admission ceremony in mid-April.

Will Holding Redlich stop at one? Have more already been ‘folded’?  Let the Firm Spy know first!

After announcing a firm-wide pay freeze, it appears that Freehills managing partner Gavin Bell has been besieged with questions from aggrieved staff, having been forced to respond to questions about the length of the freeze. In an internal email sent to staff, Bell noted:

After considering our forecast for next year and conducting a review, we have decided to place a freeze on all salaries, effective immediately, including this year’s 30 June review.

Although yet to announce any redundancies, this internal email noted that the partners have chosen to cancel the national partnership conference in an effort to save on costs. The email also made specific reference to the fact that if things don’t improve, the partners may take further action.

What do you think is next for Freehills?  What is next for your firm? Let the Firm Spy know first. Send us your news and views!

It is with a sense of regret that the Firm Spy, cap-in-hand, confirms a prediction we made off-handedly in February this year.

Hundreds of workers gone. Firm Spy saddened.

On 14 February, we wrote a short post updating readers about the phenomenal sacking of over one hundred staff at Big4 accounting firm KPMG. You’ll recall that in that article, we commented that PwC had made many dozens of workers redundant in two rounds of redundancies, one before and one after the Christmas break. We then offhandedly remarked that:

No doubt KPMG staff are wondering if there is 99 redundancies yet to be made.

And so, it is with regret and a sense of disbelief that we today confirm that 99 redundancies were announced by KPMG, taking the total to 200 after a second wave of redundancies.

A KPMG spy from the Corporate Finance division sent his reaction to the news:

No one from our division has gone in either of the redundancies, but if the axe is swung again, we’ll go too. Everyone thought the first round would be enough but now, after this second one, there is more concern than before that there will be third and fourth rounds… Everyone is now at fever pitch trying to show their value to the partners so that if more sackings come they will be favorably placed.

Will the axe be swung a second and third time at your office? Let the Firm Spy know first!