Thanks to the AFR for the following profile:

Partner Remuneration System

Performance based on objective formula for equity partners. About 55% are equity partners (principals) and 45% “base and bonus” partners (national partners).

keeping their heads above water

Partner Pay 2008-09

Principals earned from $600,000.00 to $900,000.00 though payment in US dollars may have pushed this above $1,000,000.00 at the upper end. Local partners received $300,000.00 to $650,000.00.

Profit

Estimated profit margin = 34%

Estimated profit = $53,000,000.00

Estimated Profit Per Lawyer = $200,000.00

Estimated Profit Per Equity Partner = $1,080,000.00

Revenue

Revenue 2008/09 = $155,000,000.00

Revenue Change 2008/09 = -8.8%

Revenue Per Lawyer = $590,000.00

Revenue Per Partner = $1,730,000.00

Revenue Per Equity Partner = $3,170,000.00

The Verdict

Managing partner Mark Chappie says the year was one of “consolidation and investment” in a volatile market and he is cautious for this year. “Market volatility continues to throw up valuable opportunities to make strategic investments in key practice areas which we are vigorously pursuing, keeping faith with our long-term strategies,” he says. Baker also has the benefit of a global referral network; it advised the firm’s Tokyo client, Asahi Breweries, on its purchase of Schweppes for $1.18 billion from Cadbury.

Comment

Baker went from having the largest revenue growth of the top 10 in the 2008 financial year to the biggest fall, of 8.8%, a year on, although revenue was still at the second-highest level ever. The firm has a leading private equity practice that suffered as transactional demand plunged in the wake of the crisis, while the profit margin slid as the partnership was hit salary and rent rises.

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Baker & McKenzie yesterday appointed Bruce Hambrett to its national chair.

As reported in June 2004:

only floss the teeth you want to keep!

Baker & McKenzie has recruited Bruce Hambrett as a partner to its litigation and insolvency practice in Sydney. He will start 28 June. Hambrett comes to Bakers from Minter Ellison.

In five years, Bruce has ascended to the senior-most position at Baker & McKenzie. However, Bruce takes the reigns at a turbulent time for Bakers, with the firm:

1. rumoured to be feverishly chasing a free office fit-out in Sydney;
2. counting the cost of damage to goodwill that an ex-partner is embroiled in ‘fugitive’ allegations;
3. apparently having drastically cut its graduate intake and allegedly having made several redundancies; and
4. managing the office fallout following a rumoured pay freeze.

But Bruce is a terribly optimistic fellow. In September last year, it was reported:

At Baker & McKenzie, Mr Hambrett heads a practice that has been riding a wave of company failures … Mr Hambrett predicts even stronger growth… “We’re positioning Bakers in the cross-border insolvency space, particularly in Asia,” he said. “We will be well placed.”

Perhaps not that well placed Bruce… a bit like ‘food’ between your teeth!

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Baker & McKenzie is reported as being in the hunt for more office space in Sydney. As noted by the Sydney Morning Herald:

loving the free fit-out

Hopes that Sydney’s office vacancy rate will not reach double-digits are growing with more companies planning to expand and take advantage of the current favourable rental conditions… Incentives, such as free office fit-outs, accounted for about 25 per cent of new rental deals, rental growth remained about 6 per cent, with an overall occupancy of 97 per cent. The law firm Baker & McKenzie … [appointed] CB Richard Ellis to look for new space of up to 9000 sq m in Sydney. It is understood the firm, which occupies levels 24-30 of the AMP Centre at 50 Bridge Street, is looking for a lease term of five to 10 years, but with an arrival date of mid-2011 at the latest.

Sounds like Bakers wants a free office fit-out, but would such a financial coup result in any gain trickling through to ordinary Baker & McKenzie employees? Apparently not; Bakers is rumoured to have subjected all staff to a pay-freeze after allegedly having halved its graduate intake and sacked several workers.

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You do not want to be an alleged fraudster in Dubai. The tribulations of convicted frauster George Atkinson and his

get the hell out of Dubai

‘I am in a cell with four others. There are two double bunk beds just centimetres apart, pushed right up against the cell door. There are only 122 beds in my block to accommodate 246 men. We’ve just heard about an HIV epidemic in here and 70 inmates have been isolated… I was convicted even though the prosecution admitted they had no evidence against me. I am being arbitrarily detained and the British government don’t give a damn.’

Presumably armed with this knowledge, it is little wonder that ex-Baker & McKenzie partner, and newly appointed Mills Oakley partner Anthony Brearley allegedly left Dubai when allegations apparently arose against him while working for Nakheel Corporation. As reported by the Sydney Morning Herald:

Australian lawyer, Anthony Brearley, [is] believed to have left Dubai before a police investigation, thus avoiding jail. Well-placed sources last night confirmed that Mr Reed and Mr Brearley have been declared “fugitives” in Dubai and will be tried in their absence.

In relation to Mills Oakley’s recruiting practices, CEO John Nerurker recently said:

What we do is add that little bit extra; like only hiring lawyers who share our passion for an unwavering client focus and making absolutely sure that all our lawyers are as well, if not better, trained than their top-tier counterparts… This is one way we will continue to differentiate ourselves.

Does your firm have a point of differentiation?

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In a Firm Spy exclusive, we yesterday revealed claims that Baker & McKenzie staff had been told recently that a pay

Bakers precedents wrote a book about their alleged ordeal

We can today reveal additional comments received from another Bakers spy:

there has been a reduction in the number of library staff here at Bakers - where there once was a Sydney manager and a Melbourne manager, there is now a single “national” manager. Futhermore, precedents staff have had their hours cut and the number of grads starting next year has halved. Funny that we have moved into this posh new office, yet the way things are going, there will be no one to fill all the offices!

The Firm Spy understands that the Melbourne office of Baker & McKenzie has recently relocated to 550 Bourke St (sharing with Deloitte), indicating that these comments come from a Victorian. What is more certain however, is that, if true, any reduction in precedents staff would not be a precedent.

Has Bakers blown the budget with its new offices?

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It’s that time of year again: partners are in a tizz about billing targets, secretaries are getting antsy over unbilled time and lawyers are generally working too hard.  Given the EOFY party season, it’s also the time of year when pay arrangements for the coming financial year tend to come to light.

In what will come as sad news for the Bakers staffers among us, the Firm Spy can today exclusively reveal that, despite ranting as recently as April that there would be no salary reduction, the Australian offices of international law firm Baker & McKenzie are presently subject to a pay freeze.

the Firm Spy is proud to be on the frontline

We received the following information from a Bakers spy earlier in the week:

we were told about a month ago that there would be a pay freeze this year. Performance reviews are largely finished now and I understand that there have been a handful of exceptions, but not many.

A pay freeze would bring Baker & McKenzie into line with its other major competitors, if true. Other major national firms to have announced a pay freeze include: Mallesons, Allens, Freehills, Minter Ellison, Corrs Chambers Westgarth and Clayton Utz.

Is your firm freezing pay? Let the Firm Spy know first!

Whereas top-ties firms Freehills, Allens Arthur Robinson and Minter Ellison have each now enforced a firm-wide pay

A lawyer baking bread

Baker & McKenzie Australia has confirmed that unlike its North American offices, there will be no staff or wage reductions. Of course, this does not indicate that staff will receive wage increases, but it has presumably engendered a measure of confidence in staff who might otherwise have been fearful for their futures in light of international developments.

In an official statement last week announcing further redundancies, it was noted

‘Our management in North America and Global Services today has informed 38 attorneys and 86 paralegals and professional staff that their positions are being eliminated due to the economic downturn. These changes involve various practices, offices and Global Services departments in North America.’

This is the third round of redundancies for the firm, following January’s initial cut of eight associates in New York, and March’s slashing of about 85 jobs in London.

Is your firm cutting more staff? Let the Firm Spy know first!