There has been some recent speculation that the GFC has precipitated the emergence of mid-tier law firms in Australia. It is thought that shrinking client budgets are not only increasing the competition for major firms to hold their clientele, but also forcing reconsideration of the traditional billable units model.
It was recently reported, for example, that Clayton Utz and Blake Dawson had offered valued clients discounted rates, while Allens Arthur Robinson reportedly said some clients were being offered a “risk/reward” billing model.
Blake Dawson deputy managing partner Helen McKenzie, meanwhile, reportedly said that while the firm had not seen clients move to mid-tier practices, rates for some clients had been discounted and the firm’s hourly rate for lawyers had been frozen. Clayton Utz chief executive partner David Fagan also reportedly said the firm had offered big clients discounts, and other rates had been frozen, even though the firm’s costs had increased.
Yet despite all this alarm of a mid-tier emergence and consequent cost-cutting, Allens Arthur Robinson partner Paul Nicols reportedly said he was sceptical about claims that mid-size firms were squeezing into the territory of the major firms.
As the following statistics show, perhaps top-tier alarm at the perceived ‘emergence’ of mid-tiers is misplaced.
09 Rank 08 Rank Entity Revenue Change % Employees Change %
210 202 Corrs $235m -3.0% 893 -1.5%
226 228 DLAPH $223m +2.7 1,232 -13.9
235 207 Deacons $215m -8.1% 1,000 -3.0
313 294 Bakers $155m -8.7% 526 -9.8%
328 316 Gadens $147m -7.0% 880 -10.5%
405 425 Gilbert + Tobin $114m +1.2% 400 0%
425 n/a HWL Ebsworth $105 +130% 330 0%
429 471 Sparke Helmore $104 +2.9 551 -10.3%
447 476 Kennedy Strang $98m +13.2% 486 +8.5%
482 n/a Middletons 482 +11.3% 288 n/a
Other than HWL Ebsworth, Kennedy Strang and Middletons, all other mid-tier law firms reported either modest gains or losses, some of them significant. Are we really seeing a mid-tier renaissance?
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