Earlier this week, the federal governement, through its Equal Opportunity for Women in the Workplace Agency (EOWA), named 12 Australian law firms that support women in the workplace. Those named were: Corrs Chambers Wegarth, Baker & McKenzie, AAR, Blakes, Cooper Grace Ward, Freehills, Holding Redlich, G+T, Maddocks, Mallesons, McCullough Robertson and Sparke Helmore.

One firm was conspicuous in its absence - Clayton Utz.

We received the following comments from an anonymous spy last night in relation to the non-appearance of Clutz this year:

Six is an interesting number.

Six is the number of new partners @ Clutz - all male. It is also, according to what firmspy would have us beleive the number of grdauates - all female who were terminated by Clutz in Melbourne. Considering these numbers it probably won’t come as any surprise that Clayton Utz was today stripped of its ‘Employer of Choice for Women’ citation. Freehills, Mallesons, Blakes, Allens all retained theirs 
 
Here is what the firm had to say last year about being awarded the citation -

Clayton Utz’ Chief Executive Partner David Fagan said the firm was proud to be recognised by EOWA as an employer of choice for women. “We are committed to fostering a culture of genuine equality and opportunity for women at Clayton Utz,” he said. “We are working hard to find new ways to help create an environment that will maximise women’s opportunities to succeed and advance their careers.”

In particular, Mr Fagan said the introduction and availability of flexible working arrangements had been well received and had had a positive impact on the retention of women at the firm.

“A number of our female staff have been promoted while on maternity leave or while working part-time, including to the partnership. This shows that flexible working arrangements do not limit opportunities for career progression at Clayton Utz.”

Following the introduction of a formal Working from Home policy, a number of staff - both legal and non legal - have been able to balance their family and work commitments through working from home arrangements. These include several senior lawyers, a regional HR manager, and the entire team of eight word processing operators in Brisbane, some with previously long commutes or childcare responsibilities.

A large percentage of women at Clayton Utz also works part-time or under job share arrangements.

Earlier this month Mr Fagan formally launched MOMENTUM, a national network for Clayton Utz’ female lawyers to support them in building successful careers at Clayton Utz.

“MOMENTUM is an important part of our commitment to being an employer of choice for women so we continue to attract, grow and retain Australia’s most talented female lawyers,” said Mr Fagan.

So, what has happened this year Dave?

EOWA acting director Mairi Steele said, in announcing this year’s cited organisiations:

“By applying for and receiving this citation, these organisations are not only meeting the pre-requisites and criteria, but are publicly declaring their commitment to making their workplaces equitable… They know they are not perfect, but they are working hard to make their organisations good places for women to work. Women still earn less than men, women are still sadly absent from many key decision making roles in business, women are still sexually harassed and bullied in the workplace and women are still discriminated against based on old fashioned stereotypes and work practices.

By extension, does this mean Clutz is no longer ‘committed to making its workplace equitable’? No longer a ‘good place for women to work’?

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Short of an earthquake shredding razing its offices, things could probably not get much worse for Clayton Utz right now.

A few weeks ago we heard the scandalous details of the defections of over a dozen of the firm’s most respected, most employable partners to A&O. Then yesterday we reported that Clayton Utz sacked in excess of 30% of the firm’s Melbourne grads in an episode of corporate abUtz.

And now this, thanks to a sexist lighthearted Clutz spy:

You ladies are a little slow to the punch, or are there too many Clutzers working at your site. A new decision’s been released in Mitchell v. Clayton Utz.

The decision widens the scope of the claims against Clayton Utz at the same time that it also makes an important point about sexual harassment law. In October, the ADT refused Mitchell leave to pursue complaint of sexual harassment for allegations that he was called Trench because the Tribunal found that “Trench”  did not constitute sexual conduct.  The Tribunal has now corrected the decision.  If the word “Trench” is used alone (as some of Mitchell’s allegations claimed), it is still not sexual. However, if, as some of the allegations claim, Trench is used in connection with other conduct of a sexual nature, such as jokes that “articulated the association Trenchcoats with deviant sexual behavior”   then in those instances the nickname “Trench” does constitute conduct of a sexual nature.  Mitchell was given leave to pursue these latter allegations, along with  his other sexual harassment, disability discrimination and victimization complaints that were already granted leave.

For those who are unfamliar with the saga that is “Trench”, let us refresh your memory with some extracts from the NSW Anti-Discrimination Tribunal decision to permit ex-Clutz lawer Michael Mitchell to pursue claims against his former firm:

Mr Mitchell alleges that Mr Williams, Mr Taylor, Ms Goumenis, Ms Best and Mr Robinson, all employees of Clayton Utz, sexually harassed him. With respect to Mr Williams, it is alleged that:

…He says they were making jokes about him ‘articulating the association between trench coats and deviant and illegal sexual behaviour and referring to him as a ‘flasher’ and as ‘trench’.

[it is alleged that]… On one occasion, Mr Williams ‘explained to the applicant how solicitors could take paralegals home for sex’.[emphasis added].

[it is alleged] One Friday evening Mr Taylor went into Mr Mitchell’s office, took his coat, put it on and ran up and down the hallway calling out ‘trench, trench, trench’. He then went into the office of Mr Ho and continued to make fun of Mr Mitchell. Mr Taylor agrees that he put Mr Mitchell’s coat on and walked several metres down the hall, saying ‘trench-coat’ several times in a sing-song voice.

…With respect to Ms Goumenis, Mr Mitchell alleges that she referred to Mr Mitchell as ‘trench’ as a way of ‘getting his attention’

Mr Mitchell says that Mr Robinson is a partner of Clayton Utz and that he was aware that he was being called ‘trench’ and did nothing to stop the conduct… According to Mr Mitchell, Mr Robinson derived ‘maximum enjoyment’ out of the [Trench] comments.

Conclusion. Leave is granted for the complaints of sexual harassment against Mr Williams and Mr Taylor personally and against Clayton Utz as their employer…

And who would have thought that, in the immediate aftermath of this remarkable saga, the Firm Spy would come into the possession of some photos, rumoured to be of alleged “Trench” harasser Jaime Taylor, cross-dressing with a blow-up sex doll?

Do you have faith in our justice system? How about the legal justice system?

Send the Firm Spy your news and views!

With a heap of fanfare, Clayton Utz announced on Monday that 6 new partners had been appointed to the firm. The firm said that the appointments reflected the emergency situation where several lawyers were rumoured to be readying themselves to give the partnership an ultimatum “calibre and depth of talent at the firm”. You’ll recall we reported a rumour that 6 partnership promotions were set to be announced one week prior to the official announcement.

In that post, we mentioned that the Clayton Utz equity pool might shrink on the back of the promotions and in light of the fact that the firm will soon be opening an office in Hong Kong and had also resolved to lift the pay freeze.

But something didn’t add up. Yes it was a dire situation, but how could Australia’s greatest corporate tighwad show such a preparedness to splash the cash?

Alas, our instincts have proven correct. What does an emotionless, money-hungry corporate enterprise do when equity value is threatened? You guessed right - they sack a few people!

In the words of the numerous Clayton Utz firm spies who have written to us in the past day (thanks to all for your efforts):

First this:

Clayton Utz did not renew the contracts of 8 out of their 20 2009 graduates today.

Then this:

Clayton Utz Melbourne hired 20 graduates in 2009. 2 graduates resigned last week to take up other jobs. Yesterday the firm advised 6 of the 2009 graduates that they would not be kept on. The 6 let go will be paid out the remaiing 4 weeks of their contract and not allowed back to the office. In less than 12 months the original group of 20 is now just 12. Pay is still frozen at 56k with a review in the coming weeks.

…[moments later, this was sent] Correction re Clayton Utz graduates: There are only 11 with ongoing employment, the 12th has been put on a 6th month contract.

Then this:

Yesterday (2 March) Clutz Melbourne told six of their 2009 grads that their careers at the firm were over. In a series of orchestrated meetings, the unlucky ones were told of their fate and then… wait for it… given a cab charge and advised to take the rest of the day off!

And finally, this:

Dear Firmspy, In case you haven’t already heard, the Clayton Utz graduate lawyers found out yesterday whether they were offered a permanent placement. Of 16 graduates, 6 were “not offered” a permanent placement due to “business reasons”. All 6 were women. The graduates have been given the option of being paid out until the end of the month. A silver lining i suppose. It is a repeat of 200, where 7 out of 19 graduates were let go. The way HR approached the situation has been appalling, with graduates made to feel as though they should exit quietly through the back door as opposed to being thanked for their hard work and long hours over the past 12 months. Clutz are only starting 15 graduates in the March 2010 intake - here’s hoping that at least half of them can actually keep their job…

You read it right: a cab charge; a few grand; and a polished boot to the backside. Where we hail from, that’s called abUtz!

How can Clutz make a business case for sacking the Melbournian grads, given the paltry wages paid to them and the fact that the defecting partners were all Sydney based?

Send the Firm Spy your news and views!

Last Friday, the AFR reported in an excellent article profiling the Clayton Utz/A&O partnership defections that Clutz would, as part of its response to the shocking departures, open an office in Hong Kong. Although it was reported that the decision to open the office was made months prior to the A&O defections, the Clutz partnership is understood to be hopeful that the international office will alleviate what the AFR considered disenchantment within the Clutz partnership that the firm had no exposure to Asia.

But it will come at a major cost. It is a major risk for the firm, especially when several other local firms (Mallesons is an excellent example) have entrenched ties with clients in Hong Kong, not to mention a multitude of international firms.

But the costliness of the Clayton Utz response to its flailing fortunes of late does not stop there. In an apparent win for the long suffering lawyers/support staff at Clutz (some of whom have apparently been repeatedly dodged on pay), it was reported yesterday that the firm has unfrozen wages. As noted by ALB:

Clayton Utz has brought forward its remuneration review… Now all staff will have a salary remuneration review at the beginning of April [from July 1]. “Remuneration will be set in an accelerated fashion”.

The announcement made it very clear however, that staff will be “eligible” for a raise in wages, signalling that the partners, with a rumoured history of pay-dodginess, will retain the discretion to say “no, we’re not concerned about losing your services, so your wage can remain steady”. As for the staff it hopes to keep, it is unclear whether the “accelerated fashion” with which pay will be set means that lawyers will effectively have their wages set two years in advance of its current level to offset the year of frozen wages.

As you can therefore see, the announcement is opaque and the freezer hasn’t quite defrosted yet.

In other news, the Firm Spy received the following comments last night about new Clayton Utz partnership announcements:

Clayton Utz has made up 6 partners. A decision was made over the weekend by the Clutz partnership, in yet another ‘emergency meeting’ that 6 new partners would be required to fill the void left in the Sydney offices by the A&O defections…

Given that it cannot be expected that these new partners will initially generate the same revenue as their defecting brethren, and in light of the massive cost of opening an office in Hong Kong, can junior lawyers really expect that partners will approach the April 1 remuneration review with bona fides?

We think not.

Send the Firm Spy your news and views!

We understand that you’re probably sick of reading about it - we’re certainly sick of writing about it - so unless something explosive happens, we’ll make this our final post about the Clayton Utz partnership defections to Allen & Overy.

This post clarifies further the Clayton Utz machinations giving rise to the defections. We have extracted some excellent info from the AFR 12/2, shedding light on how former Clutz Banking & Finance head partner Grant Fuzi was the protagonist in the Clutz partnership defections:

It is Mr Fuzi’s history with Clayton Utz, and his long-time association with Mr Trahair, a fellow Australian, that was instrumental in facilitating A&O’s bold and sudden arrival here. As one partner said about Mr Fuzi this week: “The mistake we made was taking him on again.”

Mr Fuzi and Mr Trahair were poached by A&O in 2001, with Fuzi stationed in Hong Kong where according to the AFR he:

learned the ins and outs of A&O’s Asia practice.

 Several years later, Fuzi returned to Australia and to his old firm Clayton Utz. In 2005, speaking of Clutz’s absence in Asia, Mr Fagan told AFR that the firm:

did not see the client demand nor the business case for opening an office in Asia.

The AFR considers that this is a view that may have sat at odds with those who had tasted the global law firm life in Asia.

The AFR went onto note last Friday that:

Mr Fuzi resigned in December, after the announcement of Mr Fagan’s retirement, after a nine-year stint, from the role of chief executive in November. Mr Fuzi was a strong contender to replace Fagan, but lacked the numbers in the partnership vote.

“…obviously if I had been made chief executive partner I would not have left.

Fuzi would not have left if made CEP and, apparently, some of the defecting partners may not have left if Clayton Utz had an bigger Asian presence. If you Fuz snooze on these global opportunities, evidently you lose…

So now we know who, what, when, how and why. That’s a wrap on certainly the biggest Australian legal story of 2010.

Let the Firm Spy - your Firm Spy - know first when the big stories break.

Send the Firm Spy your news and views!

We reported yesterday on the astute comments from an anonymous spy that the A&O foray into Australian soil might do no more than dilute its healthy equity pool. It is, of course, a huge risk. And while A&O risks the dilution of its equity, it appears that the defection may also soon result in a major additional strain on the remaining value of the equity points at Clayton Utz.

This incredible update from an anonymous Clutz spy last night:

I am told that a group of my colleagues, ranging from senior associates to senior lawyers, met privately yesterday to discuss the demands they would place on the Clayton Utz partnership to remain at the firm. I suspect, though I cannot be certain, that the senior associates/lawyers remaining in the affected (defective?) groups will be asking for considerable pay rises. I am not aware that any will immediately be asking to be made up to the partnership, though I imagine this is on the radar for some. I think these lawyers are wise enough to realise that this is a once in 20/30-year event and if they don’t hold the partnership to ransom, they may be “dodged” - as the Firm Spy so eloquently put it - on pay into the future.

This rumour was sent just hours after CEP David Fagan told Lawyers Weekly that Clayton Utz was rapidly regrouping and had announced a number of leadership replacements. He alse told LW that:

It also gives an opportunity to critically review different areas - it makes sense for us to restructure in those areas.

This announcement of a ‘rapid regrouping’ came, however, mere moments after Clayton Utz confirmed that another partner, accompanied by 3 Clayton Utz lawyers, was defecting from its Canberra office to rival Sparke Helmore.

Is CEP David Fagan regrouping or degrouping? Are you a Clayton Utz groupie?

Meanwhile, three of the other mysteries surrounding the defections becmae slightly clearer overnight. Firstly, how can A&O open its offices on March 1 with partners having announced their defection only last Monday? What about gardening leave? Lawyers Weekly very helpfully reported that the relevant defecting partners intended “to retire on May 8”. The 1 March A&O kick-off will therefore apparently involve very little legal work. Secondly, where will A&O be located? The Lawyer reported that A&O would occupy the recently vacated Sydney tenancy of merged Australian firm Deacons. Thirdly, did anyone know about the imminent defections? Lawyers Weekly reported that the Clayton Utz Chairman only became aware of the defection when he took a phone call from an A&O partner announcing that the relevant partners would be retiring. This accords with the information sent to us by an anonymous Clutz spy yesterday:

…what I find most intriguing about this saga is that none of my colleagues here in the Sydney Clayton Utz office had any idea that the departures were about to happen. Many of the junior lawyers were mid-way through the completion of tasks/projects for the partners leaving…

Finally, ALB  reported yesterday that A&O has set a target of 50 lawyers and 20 partners for the Sydney & Perth offices for their first year, rising to 25 partners and more than 60 lawyers in three to five years. This adds considerable weight to the rumours, reported by us that some 25 Clayton Utz lawyers and senior associates will be accompanying their defecting partners.

Send the Firm Spy your news and views!

Following the major coup announced on Monday that over a dozen Clayton Utz partners would be defecting to international rival A&O to establish Australian offices of the firm, Allen & Overy yesterday added a new page on the careers section of its website featuring the following advertisement:

We are looking forward to building our practice in Australia. We expect to have vacancies for experienced lawyers shortly, so please submit your covering letter and CV if you are interested in working for Allen & Overy in Australia. You can do this via the job search function to the right of this page. We will keep your details and will contact you if any suitable opportunities arise.

Soon after this, Paul Quinn from Quintessential Marketing told Smart Company that after a tough year, the sector is booming again:

Anecdotally I know that for recruiters, some of them have had their best month ever in January and had a good result after an ordinary year last year. Recruitment activity is on the rise, which would also flow through into headhunting and poaching.

Meanwhile, Chandler Macleao, executive general manager David Reynolds, told Smart Company last month he had:

already heard of workers leaving for greener pastures… employees may have stayed in their current roles during the global financial crisis because of high unemployment, and have put up with actions they might not have otherwise such as pay freezes.

These comments are to be contrasted with the hallucinations remarks made by Susan Ferrier of AAR a couple of weeks ago that there are, in effect, no jobs out there.

But is there a new talent war? If so, what will this mean for your firm and your pay freeze? By our count, no less than four of the six top tier firms are still enforcing a pay freeze or something closely resembling it…

In relation to Clayton Utz’s loss of key personnel, Dwyer Heath’s director Ted Dwyer told the AFR:

[it must be a] shock to the system… one of the things the major firms pride themselves on is the quality of their people. Any dilution of that base represents a dilution of the strength of the firm, and not only that, but they will take a lot of people with them.

As we reported yesterday, indeed new A&O partners may take other Clutz fee-earners with them - 25 lawyers are rumoured to be leaving. But will they take clients? One astute, anonymous firm spy sent us the following comments yesterday:

I consider the dilution of A&O’s equity to be a major risk that could well come to nothing. Think about it - clients ‘belonging’ to the 14/15 partners leaving the firm may consider that it is currently ‘top heavy’ and that the depth of expertise is lacking. However they may also consider that Clayton Utz no longer has the partnership expertise that their business requires. All of this could mean that other top-tier firms will claim new clients and both Allen & Overy and Clayton Utz will suffer.

So what does all of this mean for Clayton Utz? Is it past its Utz-By Date? One anonymous Clayton Utz spy told us that remaining partners are already seeing the silver ining:

…I cant believe I overheard a Clutz partner joking about how we will make a great saving on tenancy costs. Already!

Send the Firm Spy your news and views!

The Genesis

In November last year, the Firm Spy reported that Clayton Utz had appointed Darryl McDonough as the new CEO of the firm. At the time, we reported that McDonough’s appointment very much came to the chagrin of some Clutz partners. An excellent Clutz spy told us the following:

“one of the senior lawyers has heard that [Clutz board member] Linda Evans told the partners at the AGM a week ago that she wanted the firm to change its size and shape. Apparently some partners think this is code for dumping 30 to 40 partners”.

The Firm Spy understands that Evans was instrumental at board level in securing McDonough’s appointment. Very soon after this appointment, the Firm Spy understands that a number of Clutz partners began looking for employment opportunities with competitors.
In a major scoop, The Australian yesterday reported that some 14 Clayton Utz partners from the Sydney office have defected to Allen & Overy, heralding the arrival of the first Magic Circle firm in Australia. Initially, the 14 Clutz partners will be joined by a Freehills partner, a former Freehills (joining from JP Morgan) and a former Clayton Utz partner.

One partner making the move told AMLaw that:

 ’the plan grew out of unique circumstances - the dissatisfaction key players felt with management succession at Clayton Utz - and was unlikely to be replicated by other Magic Circle firms any time soon.’

The Comments

Among a number of insightful remarks received by the Firm Spy last night were the following comments from an anonymous Clutz spy:

“I notice that the major legal publications have failed to report on the number of other fee earners and support staff who are set to accompany the departing Clayton Utz partners. I know of at least 10 Clayton Utz senior associates who also be heading to Allen & Overy, in addition to more than 15 lawyers. Initially, it is rumoured that the new offices will be run ‘lean’, so we won’t lose a proportionate number of non-fee earners.”

And then this, from another anonymous Clayton Utz spy in response to Clutz Chief Executive Partner David Fagan’s comment that “Clayton Utz is [still] in excellent shape”:

“I would characterise CEP Fagan’s comment that the firm is still in good shape as delusional. We have lost a major portion of our corporate practice. Partners, senior associates, lawyers and, no doubt, support staff are gone. The engine of the most prestigious group in by far our most prestigious office is now, sadly, a hollow shell.”

The New Numbers & Losses

Among the departing Clayton Utz partners are the following heavyweights:

• Corporate Group Managing Partner Michael Reede;
• Banking & Finance Head Grant Fuzi;
• Real Estate Practice Leader David Wilke; and
• Perth Office Head Geoff Simpson

Supposing the rumoured number of total lawyer departures foreshadowed by our anonymous spy above is correct, Clayton Utz will soon have about 40 less fee earners. Putting aside the comments of the anonymous Clutz spies above, the impact of the departures is clear when considering several statistics reported by the Firm Spy last year:

• Estimated revenue per lawyer = $560,000.00 x 26 = $14,560,000
• Estimated revenue per partner = $2,260,000 x 14 = 31,640,000
• Clutz revenue grew by 4.9% in 2008/2009 to $491,000,000
• $491,000,000.00 - $46,200,000 = $444,800.00. This equates to a revenue loss of about 9.3%.

Is this a firm in “excellent shape”, or is CEP David Fagan afraid to speak his mind?

Compelling Reasons to Leave Clutz

The catalogue of reasons to leave Clayton Utz is probably too large to mention here. However, some major reasons are listed below:

• the firm is embroiled in an ugly spat with a former employee, presently making its way through the courts, in which it is alleged he was the subject of sexual harassment whilst working for the firm;
• the Firm Spy obtained photos rumoured to by of the Clayton Utz Christmas Party depicting lawyers cross-dressing with sex dolls;
• Clayton Utz apparently has an inordinate number of disillusioned junior staff; and
• a new, shocking rumour received yesterday by the Firm Spy (about which we will report more when we know more - at this stage it is unsubstantiated) that the ATO’s Operation Wickenby has a very keen focus on the firm with charges rumoured to be in the offing.

The Newcomer

Speaking of the major expansion, A&O senior partner David Morley said:

“The Australian market has become much more linked to the Asian and global economy. We see much more inbound and outbound work and that creates an opportunity for a global firm like us that can provide advice seamlessly. We are not envisaging a huge presence in Australia. We think this is the right strategy for us because we are targeting the high-end work and especially the cross-border work.”

It is understood that A&O intends to open offices initially in Sydney and Perth. The move comes after the January 1 Norton Rose merger with Deacons, and reports that US firm Jones Day intends to double its partnership from 25 to 50 in its Sydney office. The arrival in Australia will take A&O’s number of Asia-Pacific lawyers to 360 across 8 offices. Allen & Overy has more than 450 partners and about 5000 staff globally, populating its 31 offices in 22 countries. A&O is the fourth largest UK firm by revenue. Last year it cut 450 jobs worldwide - including 47 partners - in response to the GFC.

Stay tuned for more details, the details you want to hear, as they come to light.

 Send the Firm Spy your news and views!

This is an interesting one. We could be off the mark here, but on our reading of the below leaked email from Clayton Utz mind speaker Chief Executive Partner David Fagan, there was almost an expectation that the email would be leaked and so covert attempts have been made to score points. For example, a ridiculous number of high-profile M&A transaction are cited.

For this reason, we have used our discretion to edit some small details out of the email. The last thing we would want is for our site to be responsible for any unmerited kudos being directed at arguably Australia’s tightest corporate firm.

you blow my mind David

This from an anonymous Clayton Utz spy last night:

Its going to be a very chilly Christmas for all Clutz staff who received the following email yesterday confirming that the firm, quite outrageously, believes that it is justified in maintaining the current pay freeze.. and a very Merry Christmas to you too Mr Fagan!

As you know, earlier this year the firm made the decision to hold pay levels for all staff in anticipation of a drop in demand for legal services in FY10. In my recent office strategy briefings, I said that we would review this decision in November, based on the firm’s activity levels and following November’s release of the results of the Mercer Legal Remuneration Survey (July 2009). Although we are currently achieving our reduced financial budget, we are still experiencing lower work levels in a number of parts of the firm relative to our position in FY09. As at the end of November, on a year to date activity basis, the firm’s revenue was $11.9M behind last financial year. Plus, we are facing increasing fee pressure from clients. The legal services market remains subdued and other law firms are facing similar challenges.

The AFR (Legal Partnership Survey, published 10 &11 December) states that the major Australian law firms have shed 500 senior associates and lawyers since June 2009. By comparison, Clayton Utz has focused on retaining jobs where possible and continues to take a cautious approach to managing costs. The Mercer survey confirms that the majority of firms (including Mallesons, Allens and Freehills) held pay for all staff across all locations, including for those lawyers moving up a year of professional experience. The survey reports median pay increases in all locations for all career levels was 0%. There are, however, positive signs of improvement and we remain optimistic that the recent increase in work levels will be ongoing. For example, over the past few months we have seen a material increase in M&A activity across the firm including a number of significant and high profile matters. These include: advising XXX on the proposed acquisition of XXX; advising XXX on the sale of entities to XXX and advising XXX on its takeover offer for XXX.

On balance, we believe it would be premature to undertake firm-wide adjustments to legal remuneration now, ahead of the next legal remuneration review in July 2010. However, in line with our desire to pay for performance, we have identified a number (approximately 83) of consistently high performing lawyers who will be rewarded in recognition of their outstanding contribution to the firm throughout FY09 and FY10, in January 2010. We will review Shared Services remuneration as usual in April 2010

I would like to take this opportunity to thank you all for your continuing commitment to the firm and wish you and your families a safe and happy holiday season

Regards David Fagan

Disgraceful lack of speaking your mind there David. Moreover, if there was such a focus on the retention of jobs, and if Clutz proposes to use this as a justification for for the continuance of the pay freeze, explain the repeated reports of Claytons Redundancies. Speak your mind Dave!

Perhaps the most objectionable part of the email are Fagan’s references to what other firms are doing and his deference to the Mercer remuneration survey. If the dollars are in the bank, which they are, then how other firms are acting as all but an impertinence. Act unilaterally. Be a market leader. Speak your mind David!

We thought the following comments, also received last night though from a different Clutz spy, give a good commentary as to how Clutz lawyers feel about the email:

Clayton Utz’s David Fagan has just sent out a firm wide email telling us that there will be no pay review this year. He said: - firm revenue $11.9m behind last year’s performance - bonuses will be paid to 83 high performers, “in line with our desire to pay for performance” (which means that those who don’t get bonuses can assume they didn’t “perform”?) - Clayton Utz opted to retain lawyers where possible instead of making people redundant - increasing fee pressure from clients - “On balance, we believe it would be premature to undertake firm-wide adjustments to legal remuneration now” (except for partners, obviously) - states” The Mercer survey confirms that the majority of firms (including Mallesons, Allens and Freehills) held pay for all staff across all locations, including for those lawyers moving up a year of professional experience. The survey reports median pay increases in all locations for all career levels was 0%.” (forgetting that Mallys staff got bonuses and more annual leave - we get nothing) - states that there are signs of improvement and reasons to be optimistic - “there are, however, positive signs of improvement and we remain optimistic that the recent increase in work levels will be ongoing” (i.e. reasons for partners to be optimistic that they can expect more coin, and reason for us to be pessimistic that we can expect to be doing more work for less money) All in all, not surprising at all, but still… would be nice to at least keep our salaries in line with CPI…

We agree. Do you?

Send the Firm Spy your news and views!

Rounding out the Remuneration Report into the Big 6 today is Clayton Utz. From a partnership perspective, Clutz has enjoyed one of the best financial performances over the last year. In 2008/2009, revenue for Clutz skyrocketed by a whopping 4.9% to $491,000,000.00, making it the fourth highest be revenue nationally. An incredible result, really, in the midst of a financial crisis.

Top partners are reported to have taken home $1,600,000.00.

fear not, David

But it has all come at significant cost to the firm’s reputation and brand. Myopic partners, consumed by their bank balances, will likely count the cost in years to come with a crop of dud graduates and laterals who fill the seats vacated by disillusioned staff.

The Firm Spy had a hearty chuckle at the assessment recently given by our friends at ALB to Clayton Utz Chief Executive Partner David Fagan:

While most firm revenues took an inevitable slide during the GFC - some firms declined to release their 2009 figures at all - Clayton Utz has been something of a quiet achiever, maintaining growth at a rate in excess of its comparable rivals. Fagan is an astute commentator on the industry and a rare example of a law firm boss who is not afraid to speak his mind.

Not afraid to speak his mind? Sydney graduates would beg to differ. Those folks were apparently promised $5k raises at the end of each of their rotations, only to be reportedly dodged by the partnership! Was Mr Fagan minded to tell the grads that the partners would not be delivering on the alleged promise to pay the raises?

Fagan wasn’t minded, we don’t think, to “speak his mind” in relation to the procession of claims (reported by us) that the firm was allegedly systematically managing-out staff at the height of the GFC.

And what about that shocking hullabaloo in relation to the pay freeze?! Remember - when the AFR reported the firm as having said that it had “not made a final decision yet” about legal salaries, despite staff having been earlier informed that a pay freeze was being implemented!? Was someone, perchance, afraid to speak their mind?

Now onto lawyer salaries.

Firm Spy cannot confirm the veracity of these figures. They come from anonymous sources.

Sydney

0-1 Years PQE

Admitted between July 2008 and June 2009. Billable hours target - 7hours. Gross package 2008/2009 - $67,000. Gross package 2009/2010 - $67,000. Perks free fruit. Comments:
All graduates were told they would receive a salary increase of at least $5k p/a at the end of each of our 3 rotations (every 6 months). A detail conveniently not included in our employment contracts, but generally accepted and relied on by the graduates. For some reason our first rotation was extended from 6 months to 7 months and finally in March 2009, the Friday before we were due to start our second rotation and when we were eagerly expecting or anticipating our pay-rise, we were taken aside by someone from HR and told that the firm had decided to ‘hold’ grad salaries at their current rate because of market conditions - and that this was basically to avoid redundancies. This was actually prior to CU announcing the firm-wide salary-freeze.

and, from another tipster:

the buggers stiffed usin March on a pay rise they had promised us

1-2 Years PQE

Admitted between July 2007 and June 2008. Billable hours target - 7 hours. Gross package 2008/2009 - $73,000. Gross package 2009/2010 - $73,000. Perks: blackberry; free fruit; sparkling water on tap. Comments:

all overly demanding and hormonal partners; office politics; trying to avoid daggers every day from other solicitors; redundancies that have been made have been made very quietly, one day someone is in their office, then it’s empty.

3-4 Years PQE

Admitted between July 2005 and June 2006. Billable hours target - 7hours. Gross package 2008/2009 - $89,000. Gross package 2009/2010 - $89,000. Perks free fruit; blackberry

4-5 Years PQE

Admitted between July 2004 and June 2005. Billable hours target - 7hours. Gross package 2008/2009 - $103,000. Gross package 2009/2010 - $103,000. Perks free fruit, blackberry

Brisbane

0-1 Years PQE

Admitted between July 2006 and June 2007. Billable hours target - 7hours. Gross package 2008/2009 - $63,000. Gross package 2009/2010 - $63,000. Perks free fruit; mobile; subsidised further education

Melbourne

Paralegal

Not admitted. Billable hours target - 3 hours. Gross package 2008/2009 - $56,000. Gross package 2009/2010 - $56,000. Perks free fruit.

Special Counsel

More than 10 years PQE. Admitted before 1999. Billable hours - 7 hours. Gross package 2008/2009 - $195,000. Gross package 2009/2010 - $205,000. Perks - blackberry; free fruit.

Canberra