Over the last 12 months we have at various times reported on rumours, received by us from anonymous sources, that 2010 would see a stunning exodus of lawyers from major Australian law firms. In particular, we reported that the firms who have stiffed junior lawyers over pay and threats of redundancy would see a considerably higher than normal rate of attrition.

We were not surprised to see those rumours refuted last week by AAR P&D director Susan Ferrier and Freehills HR director Gareth Bennett in an article published by our friends at Lawyers Weekly. There is nothing quite like planting a seed of doubt as to the prevalence of jobs in the market to allay employee motivation to depart. Astute media-watchers will note, of course, that economists were quoted confidently asserting in a Business Spectator article penned a mere 4 days prior to the Lawyers Weekly article that the “peak in unemployment has passed”.

So where will the exodus of lawyers go? Obviously, we cannot answer that question in every instance, but in the case of Mallesons, a firm we consider leader of the pack in terms of exodus potential (very low pay, apparently highest working hours), things just became a little clearer.

This from an anoymous Mallesons spy recently:

Mallesons partners must reconsider their current, stringent view on remuneration, the reported 44% profit margin, and they must do so quickly. I am presently considering a far more generous offer from Gilbert + Tobin to join its new Melbourne office and right now I see no compelling reason to stay at the firm. By market rates, my remuneration is appalling and a Red Balloon voucher, purchased en masse for a discount, does nothing fix the situation. Partners should be advised that things need to change, and quickly, or G+T might just land the entirety of Telstra’s work along with dozens of Mallesons lawyers.

As reported by AFR (11/12/09):

G+T managing partner Danny Gilbert snared a large chunk of Mallesons’ work from Telstra earlier this year after offering to provide unlimited advice for a fixed fee… G+T has appointed 5 new partners in the past 6 months, & its partnership has grown by 7.4%. G+T is also growing in geographic terms. It will open its first office in Melbourne soon. The move is client led - Telstra’s [general counsel] Will Irving is based there… Gilbert says … “Telstra was looking for a broader engagement with the firm across all of activites the firm has expertise in and we were looking for a fee arrangement that had the best prospect of expanding our connections across what is a very large corporation”.

The article goes on to mention more bad news for Mallesons:

G+T also announced last week it had convinced highly regarded private equity specialist [and former Mallesons partner] Peter Cook to join the firm.

Are you considering changing firms? If so, why?

Tell the Firm Spy first!

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