For a couple of weeks now we have been closely following events at Freehills where a review, which insiders are referring to as the “Leading Practice Review”, is currently being undertaken. At this stage, we know that the review is being pushed by some of the higher profile, higher billing partners and we understand that the end sought is a higher distribution of profits to these partners.
The idea to excise the firm’s ER practice, you’ll recall, was shelved after it emerged that partners would only earn about an extra $12k “extensive due diligence”. But this doesn’t mean that the Leading Practices Review is over. Far from it.
We’re informed that a Freehills razor gang is methodically scritinising the books and staffers, particularly junior lawyers who might have chosen Freehills over other prestigious firms and are caught in groups that could be cut from the firm, are worried.
We received the following comments from an anonymous Freehills spy earlier in the week:
Partners lunches are not the same these days at Freehills. The number one subject for inter practice group gossip is who is on the Leading Practice review hit list. Last week, there was a table topic with a different angle – who is not on the list and should be? For example. One local partner has been a consistant financial under performer for several years, cannot retain her staff and frequently received poor 360deg feedback from above and below. Yet she has missed the ”cut”. How can this be? One table wagg suggested that since both her sister and a father were high court judges and her Practice group head was a leading Victorian litigator the ”clemency” was understandable! Could it be too far fetched? What have Freehills come to?
Uh oh! Sounds like “good for the firm’s brand” has emerged as a relevant consideration in deliberations over who should and who shouldn’t get chopped. But wasn’t this all about securing higher profits for the Freehills top dogs?
Meanwhile, another anonymous Freehills spy put the following questions to us a few days ago:
Have you asked Gavin Bell which other practice groups are next? Whispers suggest there are at least 3 other small practice groups in the cross hairs. Has any one considered that there could be a fairly large number of un-related individual partners (and presumably their supporting lawyers / staff) that have been singled out to leave the practice in the next 6 months? Of the total number of partners that may leave, is it true that a disproportionate percentage will be women?
Yes, we’ve asked Mr Bell which groups are in the firing line but the firm, in its official response, declined to elaborate. For our own part, we think overt Liberal Party sympathiser Steven Penglis should be on the chop-list. And the person who came up with the “empty chair” gimmick (whoops, that was CEP Mark Rigotti). And the perverted Freehills cleaner who snapped a female lawyer on the toilet.
Who do you think should go?
Send the Firm Spy your news and views!
UPDATE:
Freehills Chief Executive Gavin Bell responded to questions put to him by the AFR (29/04) about the recent review of its business structure.
Gavin Bell said the legal market was “fiercely competitive and constantly changing”, and law firms “have never been able to stand still and thrive”. But “there is no particular plan to reduce size” overall, he said. Freehills’ strategy “includes having the appropriate resources and relationships to service international markets where our clients need them”, he said.
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Bit long on rumour and short on fact. Keep trying, may be a story one day.
Why can’t a firm restructure to increase its profits, what’s the issue with that? I don’t get where the sense of entitlement underlying your article really comes from. A job for life no longer exists, times change, practice areas change, you just have to adapt and keep rolling with it.
What’s the issue with that? Are you kidding?
Where does it end? Why is $2.5 million revenue per partner (or whatever it is) not enough? When will people be happy with what they earn? Why is the push to make these evil places even more evil continuing?
Why should we “keep rolling with it”? It’s sh%t. It really is. This is why our profession sucks and why this website exists – some of us would like to think that commercial law could be something other than dealing with greedy, egotistical arseholes.
Keep fighting the good fight Firmspy.
@….. @ Anonymous
I think the point is that $2.5m per partner is considered acceptable – it is those partners scraping by on less than that where it is a problem. Let’s say there is a partner billing less than $1m per year (and with team costs above that). That partner is losing the firm money.
Anonymous (the first one) is right. Freehills is a business, and like the rest of the Corporate world will manage out (or pay out) those who are not contributing. Hopefully the former!
Or am I wrong? Is Freehills suddenly a recognised charity?
As a footnote, I also believe that partners who make their target for the year, and then basically take the rest of the year off, leaving their team with low utilisation percentages should also be shown the door.
The ‘Freehills cleaner’ of whom you speak would have been engaged by the office building, not by Freehills.
And why should Penglis go? Simply because he acted for the LiberalParty? (or because he represented transsexuals?) Please keep your leftist political bias to yourself in future as it adds nothing of any value to the discussion.
I agree with Anonymous #1.
If particular Partners (or practice groups) are relative underperformers and are dragging down the overall performance of the firm on a per-partner basis, then the high-flying partners have every right to insist on a chamge.
I tend to think, however, that rather than culling practice groups, an adjustment could be made to how profit are distributed. I know that my firm allocates 70% of the profit on a “points” basis, and sets aside the remaining 30% for partner bonuses based on performance. Partnership points are then adjusted on an annual basis to reflect past performance and future prospects.
The full-equity / lock-step model may need adjustment, with a shift closer towards pay for performance. This would enable firms to retain a full service offering whilst rewarding the higher-achieving partners.
Outstanding update.
Clearly, Freehills has sent its disciples to this site.
Yes, billing expectations of $2.3m per year are insufficient. I mean, who can live on the meagre profits you’d get from that? In all seriousness, there seems to be some confusion as to the issue of whether underperforming partners should be removed versus the issue of whether the bar for performance should be raised still higher, however, and people have been using the first to justify the second. I would have thought that decent lawyers would have been able to distinguish between these issues.
As an employee solicitor, I’m not sure I’d want to work at the firm with the highest partner billing expectations. Not exactly conducive to a healthy working environment, in my view.