Major financial results were released last week by the BRW which shed light on the status of Australian companies following the purportedly dire economic times. Those results also gave a snapshot of how major Australian corporate firms are tracking.

pack up your belongings

Our suspicion that major Australian law firms were not suffering from GFC-induced revisions on the balance sheet appears very well founded. Call us socialists (as some of you have!), but we here at the Firm Spy consider annualised growth in revenue to be objectionable on the back of wide-spread redundancies, pay freezes and other cut-backs.

Corporate partners across the nation have happily adorned the heavy cloak of the ‘GFC’ to act with utter impunity, thereby engendering in employees anxiety and mistrust. All for a few dollars more!

Thanks to BRW for the following statistics:

09 Rank          08 Rank          Entity          Revenue          Change %          Employees         Change %

73                          78                    Mallesons           $552m             +1.5%                  1,842                 -5.1%

86                          99                    Minter Ellison      $493m              +4.7%                1,838                 -4.5%

86                          84                    Freehills               $493m              +0.2%                 1,754                -2.1%

89                          97                     Clayton Utz           $490m                +5%                    1,704               -1.2%

105                      111                     AAR                        $436m               +3.8%                n/a                     n/a

131                       135                    Blake Dawson       $370m              -0.3%                1,382                 -5.1%

Almost across the board, revenue is up and employee numbers are down.  Firms have cut overheads too. We have seen firms re-negotiate rental contracts or relocate into different premises, presumably under much more favorable terms. Remember the Mallesons Slop-Out? The Allens contract kerfuffle?

So with revenue up, overheads considerably lower and employee numbers down, partnership profit is up.

Yes, up on the boom times of 2008!

We intend to dissect these figures in greater detail later in the week. Stay tuned also for the Big4 and mid-tier report.

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We reported in April the allegation that a Keddies lawyer, since convicted of assaulting a female, unnecessarily incurred costs so that he could enjoy a client-paid junket to Hong Kong.

does not lead to Keddies Lawyers

Last week, more troubling news was reported about Keddies, this time in relation to its alleged over-charging of former client Mohammed Tariq:

For more than a year Mohammed Tariq has been staging a one-man protest about the legal fees the law firm Keddies charged him after a motor vehicle accident left him with head injuries in 2007… the firm charged him $60 for a letter welcoming him to the firm and $49 for reading a thank you email. Now it appears that Tariq has finally had a victory. A cost assessor appointed by the Supreme Court has … taken a dim view of Keddies’s conduct, which included charging the Tariq family $600 for a two-kilometre taxi ride.

The assessor found that:

”Keddies in each case has practised systematic duplication and overcharging, which, in my opinion, is deliberate and has in many cases led to the charging of costs that are grossly excessive”.

The assessor recommended Keddies refund Tariq $37,000.

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With a voluntary redundancy programme presently afoot, it seems that Mallesons partners are looking for quicker ways to cut costs and technology is the clear victim.

and 5 year old computers

Earlier this month, Mallesons executive director Gerard Neiditsch is reported to have said:

Our budget has not suffered but we have retargeted it … from there it is a natural progression for cloud computing.

Progressing … into cloud computing? Isn’t that just techno-nerd speak for ‘ascension into heaven’? We hope this biblical garbage isn’t a sign that Mallesons is suffering a terminal illness. But if it were, now might be an opportune time to atone for all that witchcraft and sorcery nonsense.

Of course, one would imagine that if a law firm were serious about ‘progression for cloud computing’, a vow of poverty might help. With that in mind, the technological cutbacks revealed later in the article suggest that Mallesons is consciously impoverishing itself to reach cloud computing nirvana:

Also keeping costs in check has been [the extension of] the lives of Mallesons personal computer fleet from its usual three years to five years… Neiditsch … says he struck a good bargain for the machines. Having stretched the usual refresh period to five years, Neiditsch said that, “The unit cost was less than half what we paid five years ago. There is significant saving when you amortise that.”

Mallesons has also slowed the refresh rate on lawyers’ favourite gizmos, BlackBerries. “We have exhausted the benefits from that. We are not increasing the number and there has not been much innovation so we will just maintain the fleet”.

Computing heaven or techonological hell? Send the Firm Spy your news and views!

Baker & McKenzie yesterday appointed Bruce Hambrett to its national chair.

As reported in June 2004:

only floss the teeth you want to keep!

Baker & McKenzie has recruited Bruce Hambrett as a partner to its litigation and insolvency practice in Sydney. He will start 28 June. Hambrett comes to Bakers from Minter Ellison.

In five years, Bruce has ascended to the senior-most position at Baker & McKenzie. However, Bruce takes the reigns at a turbulent time for Bakers, with the firm:

1. rumoured to be feverishly chasing a free office fit-out in Sydney;
2. counting the cost of damage to goodwill that an ex-partner is embroiled in ‘fugitive’ allegations;
3. apparently having drastically cut its graduate intake and allegedly having made several redundancies; and
4. managing the office fallout following a rumoured pay freeze.

But Bruce is a terribly optimistic fellow. In September last year, it was reported:

At Baker & McKenzie, Mr Hambrett heads a practice that has been riding a wave of company failures … Mr Hambrett predicts even stronger growth… “We’re positioning Bakers in the cross-border insolvency space, particularly in Asia,” he said. “We will be well placed.”

Perhaps not that well placed Bruce… a bit like ‘food’ between your teeth!

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The Firm Spy has been understandably scathing of PwC’s response to the GFC. We thought two waves of redundancies, a veiled pay reduction, and rumours causing general employee angst warranted our condemnation.

But PwC PR foot-soldier Sharon Bell, the National Manager of Human Capital, has answered the call, in the process taking out the inaugural Firm Spy PR Award.

Foot-Soldier Bravery Award

We’re looking at managing people’s needs, so encouraging to take people to, you know, use their leave balances… And then, you know, the initiative that you’ve just mentioned, which is around asking people to consider taking some leave without pay prior to January 2010.

…people are exploring what it means for them, obviously, as individuals, but looking at, you know, how they could make good use of that time. So, whether it be around spending more time with family or, you know, doing some community work, studying or pursuing other, you know, hobbies, sporting interests. So, you know, we are getting a lot of interest amongst the staff to do that.

So, you know, give us a fair go!

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The following advertisement was recently placed on the UTS Law Students’ Society website:

MARQUE LAWYERS - SEEKING A SUMMER CLERK

Hello second-last-year law student,

Marque Lawyers here.  If you haven’t heard of us, your life probably feels a little empty of meaning but

WANKER

we can fix that. The equation is simple enough.  You want a summer clerkship (partly as a first step in your legal career but mostly for bragging rights on campus) and we want some entertainment over summer.

We only want one summer clerk.  Avoids all that pathetic adolescent angst-driven rivalry between clerks, and we can focus our practical jokes on one target for a couple of months.  And yet we are a proper law firm and the Marque Clerk will be doing proper legal work while recovering from our Christmas party.  The dilemma for us is how to select the Marque Clerk, after all with only one clerk we don’t want a dud.

So, unbound as we here at Marque are by convention and good taste, we have decided to launch a competition and you’re invited to have a go.  It’s quite simple – all you need to do is write something really exceptionally good, submit it then sit back and wait.

The rules:

1. You must submit by email a piece of your own (not your mother’s, and we have software that can tell the difference) original writing on the topic “Humanity in the nth degree”.  Choose a subject like Kyle, Kim Jong Il, Dick Cheney or some other exemplar(s) of human behaviour taken to a logical extreme, and discuss whatever you like about it.

2. You must stop writing at 500 words because that’s when we’ll stop reading.

3. If you include the word “jazzy” in your piece without being too obvious about it, you get bonus points.

4. Send your email to hireme@marquelawyers.com.au by 7 September 2009.

5. We will read all entries unless there are too many in which case we won’t, but that seems unlikely.

6. We will select the 15 or so entries we liked the most, which will probably be because they were entertaining and well written and not because they were accompanied by promises of home-cooked food.

7. We will interview whoever wrote those pieces and, from that group, select our summer clerk.

Easy, really.  Your one chance to use your creative talents to jump the queue of university medallists and score the most coveted legal role in Christendom, at the only law firm in the world brave enough to use the term “Spice Girls” on its website.

Bring it on.

Michael Bradley

Managing Partner

Stay tuned for the Firm Spy’s application for the coveted clerkship position.

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With an investigation into investments made by Clayton Utz partners into an elaborate tax scheme apparently still afoot, it has emerged today that an ex-Clayton Utz partner is presently facing charges of fraud and obtaining a financial advantage by deception.

It has been revealed that ex-Clutz partner George Livanes

say NO to fraud

…is bankrupt and preparing to defend himself against 10 charges of fraud and two charges of obtaining a financial advantage by deception. The charges relate to more than $3 million in deductions he claimed over the Balgowlah home and another property from 1991 to 2002… His debts were close to $6 million when the Tax Office declared him bankrupt in 2006, four years after it began an investigation into his returns.

This negative publicity comes after the recent revelation that Clayton Utz partners allegedly invested millions of dollars into an apparent tax dodge:

…The Crime Commission is asking questions about the Seachange scheme … And then there is Indoexchange, designed to generate tax write-offs for buying rights to exotic travel-related internet sites through South-East Asia, with an expectation of a future stock exchange listing. Partners at Clayton Utz … have sunk millions into Indoexchange and are desperate to avoid publicity. The investments (and potential tax deductions) were magnified by mysterious loans. The Tax Office rejected the deductions and applied steep tax avoidance penalties, while investors say the internet sites never materialised. Crime Commission investigators are asking questions in the context of Operation Wickenby.

On its website, Clayton Utz lists ‘taxation’ as an area of expertise.

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In the current edition of BRW, KPMG national managing partner James Allt-Graham made the following comments:

We’ve gone to great lengths to hoard good staff… one of the realities in the medium term that we all recognised was that there’d continue to be an incredibly intense war for talent.

KPMG is the Great Southern Land

Are the three KPMG audit partners who were banned from auditing last week by the Companies Auditors and Liquidators Disciplinary Board some of the ‘good staff’ that KPMG has ‘gone to great lengths to hoard’?

Are these guys more worthy of being ‘hoarded’ by the firm than the hundreds of employees made redundant by KPMG in the last few months? Clearly the ‘war for talent’ wasn’t a major concern when the axe was swung in April and February.

It is disobliging, to say the least, that Mr Allt-Graham would impliedly characterise those now-redundant workers as not forming part of the ‘good staff’ worthy of being hoarded by KPMG. But to add insult to injury, Allt-Graham found it necessary in the same article to assert that partners (inlcuding, of course, the verboten audit partners) must be reumnerated well:

We need to strike an equitable split between what’s remunerated to partners and to staff… Partners are an important asset to the business and you don’t want to lose them. Corporations are able to use balance sheets to do that. No partnership can.

What else can corporations do, James? Let’s use Westpoint as an example!

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In late July we reported that mid-sized law firm Mills Oakley had hired ex-Baker & McKenzie partner Anthony Brearley. In that post we also reported that Mr Brearley, who until recently worked for Nakheel Corporation in Dubai, allegedly fled the UAE when allegations arose against him.

As reported by the Sydney Morning Herald:

running into chilly water

Australian lawyer, Anthony Brearley, [is] believed to have left Dubai before a police investigation, thus avoiding jail. Well-placed sources last night confirmed that Mr Reed and Mr Brearley have been declared “fugitives” in Dubai and will be tried in their absence.

On the weekend, we received the following comments from an anonymous source:

I notice Anthony Brearley isn’t listed on Mills Oakley’s website. I thought he was previously. I don’t have any inside info, so maybe its just an oversight, but might be worth you checking.

Great idea! We also checked the Mills Oakley website and noted the conspicuous absence of Mr Brearley. Yesterday, we therefore telephoned Mills Oakley media spokesperson Kristie Jordon asking for confirmation that Mr Brearley was still employed by the firm. After demanding first that we give her our phone number, and second that we reveal our identities (nice try!), Jordon responded to our straightforward yes/no question by saying:

I will have a comment for you in the morning.

No comments yet, but we will post any updates we receive tomorrow. Send the Firm Spy your news and views!

It seems the combination of fumbled redundancies, rumoured pay reductions to juniors and general bad publicity has caused a deep rot to develop at DLA Phillips Fox. So much is this the case, it has been reported that DLAPF has trotted off to its international affiliate DLA Piper seeking a formal merger.

i need somebody!

As reported in the AFR (21/08):

DLA Phillips Fox might cease to exist by as early as next year as a source with the firm says partners are keen on a full merger with global firm DLA Piper… A DLA Phillips Fox spokeswoman said partners at both the DLA Phillips Fox and the global firm would vote on full integration by early next year.

There is no indication of whether the firm would continue as a partnership business model or, like the proposed Deacons/Norton Rose merger, seek to incorporate. Other than unfortunate publicity, it is unclear what DLA Piper stands to gain from the deal.

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