We reported a few days ago that Allen & Overy had scored a major coup in convincing high profile lawyer David Poddar to take a hop, a step and a jump from Mallesons Stephen Jaques. It emerged late last week that Poddar would receive some performance enhancing assistance with the addition of another very highly regarded partner from a competitor firn – Allens Arthur Robinson‘s Angus Jones.
The AFR reported (9/7):
Allen & Overy added … Angus Jones… Along with the partners originally poached from Clayton Utz and Freehills, Allen & Overy Australia now has a partnership of 19.
But that figure of 19 looks set to jump even higher, given what The Australian has termed “a CV rush” from solicitors wishing to join the firm. According to The Australian:
Allen & Overy‘s Australian partners have been inundated with CVs from individual solicitors and whole teams of lawyers looking for work… “In three cases whole teams have been offered up”… Allen & Overy‘s Grant Fuzi, said overall the Australian practice was on track to have a staff of 50 lawyers by the end of the year and in three to four years planned to have [approximately] 40 partners in Australia.
And the remaining 21 partners that will take the Allen & Overy partnership from its current number at 19 to the forecast top of 40 will come directly from the partnership of Australia’s best corporate law firms. They will be the youngest and the most athletic brightest. Why, you ask?
Because they will be paid considerably more working for Allen & Overy than they will for any other firm in Australia.
According to the AFR:
It is understodd that Allen & Overy‘s Australian partners will share in the firm’s single global equity pool.
The size of that equity pool was helpfully and willingly exposed by Allen & Overy last week in what we consider an intentional effort to attract Australian partners to the firm. According to The Australian:
The first year’s income for Allen & Overy‘s new partners is “predominantly a fixed prior share of profits”… But after that first year… most new partners become “full” partners with profit shares that start at pound stg. 661,000 ($1.18 million). This is in line with the income of top partners at Australia’s best-performing firms. But at Allen & Overy, it is relatively modest. Last financial year, the top partners at this firm took home pre-tax profit shares of pound stg. 1,652,000, or $2.9m, the firm’s documents show.
$2.9million is roughly DOUBLE what top equity partners reportedly earn at Australia’s most profitable firms. But most importantly, the second-year Allen & Overy partners who earn $1.18million will be receive approximately THREE TIMES what they would expect at any of the top domestic firms. For cash-starved corporate partners, the mathematics of this equation is plain to see. And for ageing partners at the top of the equity ladder at domestic firms who rely on dynamic junior partners, this news poses a big risk of some triple jumping.
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