Over the next couple of months we reported concerns amongst junior staffers that they might be next on the Leading Practices Review chopping block. We reported that partner lunches “are not the same” with the pall of Leading Practices hanging over the firm and staffers wondering “who’s next?“. We then revealed that in a “totally unrelated” move, Freehills lost its entire Melbourne Superannuation group to Lander & Rogers. Apparently a waxing, followed by a Lander & Rogering made sound business sense for the defecting female quartet (we certainly agreed).
So where are we now?
Well, AFR statistics released in its excellent partnership survey last week reveal that the Freehills LPR is certainly having its desired effect. Yes, despite the appointment of 6 new partners in the last six months, the firms entire partnership has reduced by 2.5%. The AFR surveyed 36 law firms, only 10 of which reported a reduced partnership size. Freehills came 29th out of all firms surveyed. But it gets worse.
We received the following comments from an anonymous Freehills spy earllier today:
Did you hear that Philipa Stone’s protege Tony Sparks has walked out of Freehills? His details removed from their website already…
We typed “Tony Sparks Freehills” into Google and clicked on the top link - revealing that Mr Sparks’ profile is indeed no longer on the Freehills website. We stepped back in time via Google cache and found the following on Tony’s former partnership profile:
Tony advises on a range of corporate and commercial transactions including equity capital raisings, mergers and acquisitions, privatisations and also general Corporations Act and securities law matters.
The following directories all list Tony as a leading lawyer in capital markets:
- Chambers & Partners Clients Guide,
- IFLR 1000,
- The International Who’s Who of Capital Markets Lawyers,
- Asia Pacific Legal 500, and
- PLC Which Lawyer?
Whoops… he sounds like a huge loss. His erstwhile mentor, Philippa Stone, is one of the giants of Australian corporate law. She is one of Freehills’ top-billing partners and also one of the names we have heard behind the push for higher equity-distributions to top-billers. The departure of Tony Sparks therefore raises questions about the effectiveness of LPR in retaining the firm’s talent from what the AFR terms a partnership signing “signing spree”.
Send the Firm Spy your news and views!
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UPDATE:
Lots of emails through in relation to this post:
First this:
Interesting news about Philippa’s protege. Of greater interest is whether Philippa sticks around much longer.
Good point. We emailed her to ascertain her movements, but received no reply. We wrote to her because we have received a few rumours suggesting she might soon leave too. This from an anonymous spy:
The bigger story here guys is that P Stone is having discussions with A&O. Cant say I blame her for wanting to move – she’s worth more than what Freehills can pay her.
Later this:
I hear Phillipa Stone will join Tony Sparks in a few months.
Finally, we received the following comment:
[Tony Sparks has] gone to A&O….not surprising really…
More updates as they come to hand.
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Quite a loss. Will be interesting to see where he pops up.
Freehills are suffering media scrutiny because they are first. All the big firms will soon be having their own version of LPR, at which point Freehills will look prescient. (No I am not Freehills/Freehills alumni.) Narrower firms are the future. Big firms will end up with a core of corporate and finance (including project finance/development) with a little bit of tax and competition law, low leverage and tight (very tight) equity. Real estate, environment, employment, benefits – all of these will be outsourced boutiques. The best of these boutiques will develop relationships with clients who appreciate their specialist skills and then the boutiques will become the kingmakers when it comes to choosing a firm to act on the big corporate/finance deals. The worst of these boutiques will do commoditised, high leverage work. In the dark. Underground. For not very much money. This is kind of like offshoring of manufacturing.
Profile death need not be the end. Tony Sparks might seek some consultancy advice from Michael Robinson on how to get his deleted profile resurrected.
Phil @ 9:47
“The worst of these boutiques will do commoditised, high leverage work. In the dark. Underground. For not very much money. This is kind of like offshoring of manufacturing.”
Sounds a bit like what Sean Dignam said about the Feds: “feed them shit, and keep them in the dark”.
Tony Sparks worked at Linklaters as a solicitor. Where’s he gone? My money’s on back to a magic circle in Sydney.
Freehills no. 29/36 for partner profit. Pretty sad for a firm which was ranked no. 3 for revenue last year. A few more high billing partners leave and they’ll make no. 36 without too much more effort next year.
Wow, Tony is a massive loss to Freehills. As far as I am aware he was very successful in his own right. He also behaved like a human being and cared about his staff…. what a shame.
@Emma Frost:
The Survey relates to the rate of growth of partnerships by numbers. This is not profits. Freehills would still rank as one of the most profitable firms in the country.
@Rob B – Nice if it were true. Looks like they promoted 6 partners but since 2008 thats still -9.6%. 2010: 206 partners. 2011: 197 partners. (Fin Review 1/7/2011)
Hell, maybe a LPR, top billing partners, associates and practices groups moving and negative partner growth indicates profitability there.
@Emma
As said, the Survey is not about profits. They haven’t topped the M&A rankings for the last 8 or so years by being the 26th most profitable firm. Yes indeed – negative partner growth (-9.6% as you say since 2008) at Freehills does equate to increase profits per partner. All other things being equal, increases in partner numbers is not a proxy for increased profits. They have lost a few good partners from time to time (eg Sparkes) like all firms do. However, the overwhelming majority of partners/practice who have left or could be in the firing line are being managed out as they do not hit the firm’s targets (Superannuation, parts of corporate group etc). Partner numbers are reducing because the senior partners want to increase profits.
I have heard Sparks is going to A&O and Stone is going nowhere.
Any more updates on Philippa Stone? What would happen to the ECM staff if they both left?
Nothing better to see this morally bankrupt firm endure a bit of pain of it’s own. Let’s hope it continues.