When we saw that Mallesons appointed 11 partners at the start of the year, there could be no doubt that the Clifford Chance/Mallesons merger was officially off the agenda. But it made sense too. A&O offered a textbook insight into the way that a Magic Circle firm should enter the Australian market – young, dynamic partners, very low leverage, a Perth/Sydney presence and the capacity to handle high-end transactional work where the stakes are high. It should come as little surprise, then, that Clifford Chance announced today that it too will enter the Australian market lean and mean in our two most important economic regions.
After years of speculation, it has finally been revealed that Clifford Chance will officially enter the Australian market, merging with two boutique local firms: Chang Pistilli & Simmons in Sydney; and Cochrane Lishman Carson Luscombe in Perth. Like the mooted DLA Piper merger (about which we will write more soon), the Clifford Chance arrival will commence on 1 May 2011. Clifford Chance managing partner David Childs told our friends at Lawyers Weekly that the firm would:
“not compete head on with the big national firms … What we will concentrate on is high end M&A work, offering a combination of very, very good local talent, and of course our international network, and at the moment, I don’t think anyone else can offer that… The reason [the merger] took so long, is that they had quite an extensive machinery, with alot of partners, so on that side, it took some time for Clifford Chance to see that we would be the right cultural fit for them … On our side, we spent a lot of time travelling to different offices, particularly in Asia and also Europe, to make sure they were the kind of people that would be a good fit for our people, and that all takes time.”
Cochrane Lishman was formed in 2006 by former Mallesons Michael Lishman and Ian Cochrane. Chang Pistilli was formed by Mark Pistill, a former partner at AAR, and former Freehills lawyer Diana Chang. These partners can look forward to a share in the Clifford Chance single global partnership profit pool that paid partners pound stg. 933,000 last financial year.
Let’s hope Chang Pistill & Simmons dont have a change of heart in the way that they did with the ill-fated (correction) partnership with Atanaskovic Hartnell. That partnership ended in a bitter NSW Supreme Court spat involving the division of a horse-breeding partnership. It was reportedly resolved with the seven partners shaing in $7 million in cash and proceeds from the sale of its “collection of brood mares”.
Clifford Chance will commence operations with a toal of 14 partners. At this stage there will be no horses.
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Huh? There was no CP&S/AH merger… CP&S is a breakaway of former AH partners. An ill-fated partnership, perhaps.
God this is awesome. I am developing a crack like addiction to FS.
Clifford Chance sure dodged a bullet by not going ahead with the Mallesons merger – talk about a sinking ship, Mallesons is losing experienced staff like crazy.
What Hans Bliz said.
Subject: Clifford Chance Merger
Dear Members of the Clayton Utz Team
Many of you will have read or heard of the announcement by Clifford Chance that it will merge with two smaller Australian legal firms – Chang, Pistilli & Simmons (Sydney) and Cochrane Lishman Carson Luscombe (Perth); the merger will take effect in May 2011.
No doubt many commentators in the press and elsewhere will see the arrival of Clifford Chance as further competition in the Australian legal market. Clayton Utz will meet that competition with energy and enthusiasm. Our efforts as always will continue to be directed towards our clients and in delivering to them the excellent legal services which they expect of us.
We have experienced first hand the impact of foreign law firms entering the Australian market. Many of us remember it as having a short term impact – in reality it was a minor bump. This Firm has demonstrated its resilience time and again. We are committed to continue building on our market position as one of the regions leading commercial law firms; that leading position is constantly reinforced by client feedback and market acknowledgement.
I am currently in Hong Kong attending a global law firm conference and I am proud to say that our firm continues to receive plaudits from our peers for our strengths and capabilities as a leader in the region. This is a great acknowledgement to all of you for your efforts on behalf of the Firm in the delivery of excellent legal services.
Clayton Utz will continue to deliver on its strategy to grow its domestic market share in the legal services sector. We will also continue to grow our international footprint through the work done and relationships we have with clients and affiliates internationally. Our Hong Kong office will shortly be celebrating its 1st anniversary.
There will no doubt be ongoing interest and attention by the media on this matter and the general issue of the entry of foreign players into the Australian legal market. Its an exciting time in the global legal services market. There is significant opportunity for all of us in Clayton Utz to take advantage of what lies ahead so that each of us might achieve the very best we can. I look forward to working with each of you as you are all a very important part of our future.
If you have any questions speak with your partners or give me a call.
All the best.
Regards
Darryl D McDonough | Chief Executive Partner
Clayton Utz
Da Man says it’s hard to see how the foreign entry makes economic sense. If Aussie top tier firms firms could sustain the level of equity that is doing the rounds in A&O and CC – they would. The simple fact is – the Australian partners of A&O and CC will be be subsidised by other parts of their global network. The only way around that is to tap into the Asian market – but if you are A&O or CC, you are already in Asia, so why do you need Sydney and Perth? These outposts are simply unsustainable in the mid term if they are part of the global equity pool simply doing work in Oz. If you’re a baby boomer – it’s gold. But if you’re not and you want to live and work in Oz – this is smoke and mirrors. The partners in their 40′s and 50s at top tier national law firms don’t know what to do. They have a crisis of identity right now. Interesting times.
Mallesons must be stinging right now. Cochrane, Lishman and Luscombe are all ex Mallesons partners. First they created a hole in Mallesons’ Perth M&A team by leaving to set up on their own, and now they have managed to do what Mallesons could not by merging with Clifford Chance.
I love that type of Firmspeak. Change the pronouns around and what it really says is:
“[You] will meet that competition with energy and enthusiasm. [Your] efforts as always will continue to be directed towards our clients and in delivering to them the excellent legal services which they expect of [you] …
[You] are committed to continue building on our market position as one of the regions leading commercial law firms … [You] will continue to deliver on [our] strategy to grow [our] domestic market share in the legal services sector. [You] will also continue to grow our international footprint through the work done and relationships we have with clients and affiliates internationally. ”
Not that there’s anything wrong with that.
Darryl, don’t leave your day job – ie, playing Harold on Neighbours
mallesons perth is dying the death of a thousand cuts because of cochrane lishman (now clifford chance). Freehills, Blakes, AAR & the boutiques are outpacing them on the M&A front.
The problem in Perth is most firms cannot afford any more than about 15-20 partners. Therefore, there are very limited partnership prospects. As a result, the spurned senior associates (who are ‘managed’) often go off and start their own boutique firm or join a smaller firm. This means when the old partners retire, the practice implodes because there is no proper succession plan. The Perth market is much more personalised and intimate.
This doesn’t bode well for the Aust top tier firms. They have tried to break into the Asian market and failed and now the magic circle are moving into their homeground.
I think some of the posters above are kidding themselves. Magic circle firms will not survive in Oz simply doing domestic Oz work. Just like US firms can’t survive in London only doing domestic UK work. Their rate structure and global equity model simply don’t permit it. The challenge the top tier Oz firms face is NOT from the Magic Circle. The challenges they face are a lot closer to home.
Anon said “mallesons perth is dying the death of a thousand cuts”
mallesons perth is definitely struggling. many M&A lawyers have left, virtually the whole employment group is gone and the entire tax team is gone too. it’s worrying when even vac clerks say how they can’t believe how small the firm is.
re mallies perth…. the biggest deal in Perth involved the BHP move to take over and then ally with Riotinto. The firms involved were Blakes for BHPB and AAR for rio. Fifteen years ago, it would have been Mallies all the way. Times change. Their litigation capability has also taken a hit (far behind Freehills as top dog in that area).
re mallies perth – maybe the partners will be toppled by their greed…