Premature Evacuation; DLA Phillips Fox Decimated By Mass Defections Pre-Merger

Both the DLA Piper and DLA Phillips Fox partnerships confirmed last week that the vote to merge had been successful and that DLA Piper would officially arrive on 1 May 2011.  This means that 75% of both partnerships voted in favour of the merger. However, of the remaining 25% of the partnership vote, apparently deep divisions exist. So much so a large group of partners have prematurely evacuated… just moments before the two firms were to be joined in union.

DLAPH partners yesterday

We received the following intel last night from several anonymous DLA Phillips Fox spies:

Spy 1

10 Partners in the Brisbane DLA Phillips Fox office today (Thursday 10 March) tendered their resignations. I can only believe this is due to the upcoming merger.

They are going to be leaving to open a new Thompsons Lawyers office in Brisbane. They are mostly Corporate partners. About the only team to not lose partners was insurance. There is now only one partner in Corporate and one partner in IPT.

Can only assume that most secretaries and solicitors that work close with them will go as well. Even though they were very careful to say that they expect everyone to honour their contracts and they in no way would or could give the staff advice on what to do (ie they would not be head hunting or poaching). They were very adamant about that. They are doing it respectfully and it was indeed, very shocking when we found out (at around 3.50pm our time this afternoon).

They expect to be gone before the merger in 1 May.

… from a Fox in the henhouse …

Geez – 10 partners out of a national partnership of 160 is a LOT.

Spy 2

Very, very, very big news… DLA Phillips Fox (soon to be DLA Piper)’s Brisbane office has today lost almost its entire corporate, commercial and IPT team – Managing Partner Tony Conaghan, together with IPT partners Ben Coogan and Andrew Forbes, and Corporate partners Philip Byrnes, Eugene Fung, James Daniel and Philip Dowling have resigned today. Perhaps watch this space to see which firm they are joining, or starting for that matter…

Corporate and commercial? Whoops, thats one of the “transactional” teams the Tony Holland wanted to bolster in order to facilitate the merger. Remember when he orchestrated a carefully calibrated plan to “cut the DLA Phillips Fat“?

Spy 3

Confirmed: 10 partners will be leaving dla Brisbane and starting their own firm on level 16 of waterfront place, buying out Thompson legal at the same time.

We received the first of these three tips at about 7pm last night, so, consistent with our new approach to reportage, we tried to get a comment/confirmation from DLA Phillips Fox. We called the media representative, who had left for the day, but managed to get hold of a random Brisbane partner who we wont name. The partner in question confirmed orally over the phone to us that there had been a number of defections yesterday but declined to say how many and who.

The loss of 10 DLA Phillips Fox partners closely follows the defection of a group of Sydney DLAPH partners last week. Former DLAPH partner Peter Tredinnick and special counsel Belinda Marshall, both insurance specialists, defected to Moray & Agnew, according to Law.com. According to Tredinnick, five associates from both DLA Phillips Fox and DLA Piper would soon be joining him and Ms Marshall at Moray & Agnew. Tredinnick stated:

It was my personal decision to not accept being part of the merger…The merged firm will be a full-service firm, and I don’t see it as being consistent with my practice areas. Partners will have to carry the liabilities of other partners, and there are too many risks to international partnerships at this level.

As well as the broader operating risks that DLA Phillips Fox partners will now face under the merged international entity, we also think there is less financial upside for many of the Australian-based partners. Moreover, according to the AFR in early March, some 98 DLA Phillips Fox partners were denied access to the firm’s joint Euro/Asian equity pool. If you’re one of those partners, it makes little sense to expose yourself to greater risk without a coextensive enlargement of profit potential.

Thanks to DLAPH spies for your updates – keep them coming!

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