Occasionally we get it wrong with our stories and this is one such instance.

No, we don’t think the content we previously published was inaccurate, it was just way too personal and irrelevant.

We agree with the comments from Marco below and have thus withdrawn the post.

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Baritone belly-man Matt “I-hide-my-chins-with-a-tea-towel” Preston may have slightly piqued the Firm Spy’s interest in this year’s edition of Masterchef. But nothing, not even a Lander & Rogers chest-waxing featuring Masterchef contestant Peter Kritikides, has come within a lightly-seared cow’s rump of evoking our interest in the show like the allegation that former Clayton Utz lawyer, contestant Claire WInton Burn, had a secret love affair with a MARRIED former colleague.

over-valued?

In mid-June we quoted The Daily Telegraph which reported:

[Claire] is in a relationship with a work colleague at … Clayton Utz … the colleague left his wife and three children for Claire just after the birth of his third child [we have since been informed that the man has only one child]. A recent interview Claire gave to New Idea set a cat among the pigeons at the law firm when Claire named the man as her “partner”, something which also shocked the ex who is struggling at home alone with a baby and two other young ones.

Despite knowing the identity of the alleged male in question, the Firm Spy originally declined to name him. We were concerned that doing so would cause undue stress to the single mother dealing with the marital breakdown allegedly brought on by Masterchef’s Claire Winton Burn, while at once mothering an infant. Nincompoop Highly esteemed paparazzo Jamie Fawcett - who hilariously refers to himself as “an accreditated [sic] journalist” - had an issue with our logic regarding the naming of the cuckold. We think he may have been involved (but we are speculating) in snapping the photos of the gentleman that appear in this week’s edition of Woman’s Day beside the following edited extract of an accompanying article revealing the man’s identity:

Making a rare public appearance outside the Masterchef kitchen, contestant Claire Winton Burn showed off more than just a first look at her lawyer beau Trevor Thomas - she also flaunted a new sparkler on her engagement finger… While Claire has refused to discuss allegations that she was a factor in the break-up of Trevor’s marriage… it seems her relationship is heating up as quickly as the cooking competitiion. Claire’s dazzling new rock suggests the pair have taken the next step - and there’s speculation she will soon be planning a very special menu… for her wedding guests. “If anything, it’s made us stronger,” Claire says of the rumours about her relationship and adds that marriage and babies aren’t out of the question, “One day it’d be lovely to do all those types of things.”

Indeed it would be lovely Claire, but don’t count your chickens before they hatch. Cook them, but don’t fertilise count them!

New Idea reported:

The former work colleagues at Clayton Utz law firm began dating after Trevor, 36, separated from his wife XXXXXX in December 2008, when his only child XXXXX was 22 months old.

It appears that several months before Clayton Utz’s Trevor Thomas allegedly decided to leave his wife and newborn for Claire, he had the temerity to assert “The value is whatever I say it is”. He also dubiously gave the following advice to students considering undertaking a graduate degree at the Melbourne University Law School:

The course obviously involves a great deal of work and commitment and, while it might sound trite, it is the type of degree where the more you put into it, the more you get out of it. Consequently, one really needs to make the appropriate amount of time available to devote to study.

Work, commitment, devotion, values; gee Trev, it sounds an awful lot like … A MARRIAGE!

Best of luck with the next one!

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In early June, The Australian characterised the IPO of Valemus as:

nothing like a char-grilling!

the biggest of the year and the largest since Myer’s … float last year, potentially giving hope to the stagnant IPO market.

Very proudly, and almost immediately thereafter, Clayton Utz posted a media release on its website announcing that it was lead advisor on the float. But in yet another blow to the firm, Lawyers Weekly reported last week that the deal has been thrown on the backburner. Said Lawyers Weekly

It is believed [lead partner] Stuart Byrne led a team involving up to 18 partners…

According to the AFR, Clayton Utz has a total of 194 partners, meaning that if the Lawyers Weekly figures are correct, almost 10% of the Clayton Utz partnership is suddenly “calling for a smoko”.

And as the embers fade on that deal, comes a sparke from one of our anonymous Clayton Utz spies suggesting more rumoured defections from the charred giant:

More Clutz Defections? Apparently a smallish Brisbane firm with big (and often advertised) ambitions is taking or has taken a mining and resources team of up to 7 lawyers from Clutz Brisbane. Mind you, out of 174 lawyers 7 might not be that big a deal.

Presumably the “team of 7” involves up to 2 partners. And this comes after other comments received from another anonymous Clayton Utz spy last week:

Another prominent Clutz partner has resigned from the sydney office - apparently going to a major teleco

These rumours come after The Australian reported that Clayton Utz partner Simon Irvine has defected to Blake Dawson. Said The Australian:

Irvine has been a partner at rival firm Clayton Utz and built experience in international and domestic project finance for the resources, energy and infrastructure sectors in Australia, London, Singapore and Hong Kong.

If true, that’s another 4 defectors, on top of the 14 Clayton Utz partners who defected from the firm to create an Australian branch of Magic Circle firm Allen & Overy earlier this year. So for those keeping score at home, the grilling Clayton Utz has received in 2010 should now read:

• 14 very profitable, well respected partners defected from Clayton Utz to build two Australian offices of Magic Circle firm Allen & Overy;
• Clayton Utz sacked over 30% of its Melbourne graduates;
• a former employee was given leave to pursue further claims against the Clutz for alleged sexual harassment and bullying;
• the firm was stripped of its credentials as an employer of choice for women by the Equal Opportunity for Women in the Workplace Agency;
• a librarian has created considerable controversy by hording an inordinate amount of firm fruit;
• a Clutz lawyer appearing on a reality TV show revealed her homewrecking past, cooking up a dish of office romance with a side of “single-mother-left-with-three-young-kids”;
• it emerged that another former lawyer is alleging the firm defamed her;
• renewed allegations were directed at the firm that it had orchestarted a calculated redundancy scheme during the GFC; and
• 10% of the firm’s partnership is calling for smoko after the largest IPO deal of 2010 was thrown on the backburner.

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In our eyes, the AFR’s Hannah Low hit a personal high last Friday when she clinically disemboweled sick law firm Clayton Utz. For those who missed it, Low - a very highly regarded legal surgeon journalist - wrote an utterly excellent article that went tantalisingly close to validating medicinal claims made by the Firm Spy about Clayton Utz over the last year.

rush this one into the emergency ward!

With a scalpel in her hand, Low wrote:

Clayton Utz has shed 124 lawyers since January 2009, despite having no formal redundancy program.

Clayton Utz spokesperson Lauren Scott says the drop is due to “natural attrition”. The AFR understands that a significant part of this 13.4% drop affected junior lawyers. In 2009, barely half of Sydney’s summer clerks were offered a full time graduate position at the firm. Some Melbourne graduates also suffered a blow when several contracts were not renewed.

One Clayton Utz lawyer says graduates “were told you can only stay if you can find a partner who can take you”, which left many unable to secure a permanent position. That “is really stressful and unfair and they didn’t know that from the beginning,” the lawyer says, who declined to be named for fear of losing her job.

That’s right - a 13.4% drop in headcount despite no formal redundancy program. We repeatedly published stories over the last year based on claims from our anonymous spies that, far from the result of “natural attrition”, Clayton Utz job losses were the product of a calculated redundancy scheme. But only now, with the benefit of the AFR’s terrific journalism, do those claims have a life of their own:

• Blake Dawson fee earners have dropped from 715 to 662 in the past 12 months - a fall of 7.4% - following a round of redundancies;
• Allens Arthur Robinson’s full-time head count plummeted from 947 in January 2009 to 839 in January 01 0[following a redundancy program], a fall of 11.4%;
• Mallesons Stephen Jaques has sliced 21.2% off its fee earner head count since July 2009, or 227 lawyers. Mallesons also had a voluntary redundancy program which aimed to cut 100 staff.

Three comparable top tier law firms, after formally-announced redundancy schemes, were able to reduce fee earner head count respecitvely  by 7.4%, 11.4% and 21.2%. Yet Clayton Utz over the same period - that is, during the worst financial crisis since the depression - was able to reduce head count by a staggering 13.4% … as a result of “natural attrition”!

When pressed on the issue, Clayton Utz spokesperson Lauren Scott maintained:

“Our priority is and was and continues to be protecting jobs.”

But according to the AFR:

the firm announced it was going to increase payouts to partners.

What about partners decreasing payouts to themselves in order to protect jobs? For example, instead of pocketing a reported $1,600,000.00, 8 partners could have volunteered to take home $1,530,000.00, thereby keeping the 8 reportedly abUtzed Melbourne graduates employed. Or the wages of the grads could have been spread across the entire partnership, meaning partners might have taken home, say, $1,595,000.00. Sounds like a simple surgical procedure to us.

So after reading the AFR article, still dressed in our theatre gowns, we immediately went looking for our copy of the Law Council of Australia’s Model Rules of Professional Conduct. We have transplanted a couple of sections that we think are particularly appropriate for the folks at Clutz still clinging to life the “natural attrition”/”protecting jobs” line:

Standard of Conduct

30.1 A practitioner must not engage in conduct, whether in the course of practice or otherwise, which is:
30.1.1 dishonest;
30.1.2 calculated, or likely to a material degree, to … diminish public confidence in the administration of justice.

Relations with Third Parties

Practitioners should, in the course of their practice, conduct their dealings with other members of the community … according to the same principles of honesty and fairness which are required in relations with the courts and other lawyers and in a manner that is consistent with the public interest.

Is it time to wheel Clayton Utz into the palliative care unit? Is it time to flick the life support switch?

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If someone had told us at the start of the year that we might see the corporate collapse of a major Australian firm, we wouldn’t have believed it. Today, however, we hold very grave, very genuine concerns for the viability of Clayton Utz.

We were sent the following link by an anonymous Clayton Utz spy earlier in the week. It is an interlocutory decision of the NSW Supreme Court relating to DEFAMATION PROCEEDINGS AGAINST CLAYTON UTZ BROUGHT BY A FORMER EMPLOYEE.

This brings to three the number of proceedings currently afoot or contemplated that involve Clayton Utz:

1. the sexual harassment claims being brought against the firm by former employee Michael “Trench” Mitchell;
2. the alleged breach of fiduciary duty action being brought by the firm against mastermind defector Grant Fuzi; and
3. the new emergence of defamation claims being brought by former employee Bridgette Styles against the firm.

For our accounting firm readers (and this is obvious, but we’ll point it out just to be certain), this is a remarkable situation because lawyers are customarily involved in representing clients in court proceedings, as opposed to appearing in court proceedings on their own behalf.

Our good friends at RoF reported this story a few weeks ago. We too had been tipped off to the story but, after contacting Ms Styles, agreed with her that we would wait for the interlocutory decision to be handed down before further reportage.

So what does the interlocutory judgment tell us?

To begin with, it tells us that Clayton Utz has done a miserable job at contesting Styles’ application to amend her pleadings, having comprehensively lost the hearing. More importantly, the judgment tells us that Bridgette Styles is alleging that her former firm defamed her. The genesis of that defamation can be directly traced to the alleged publication of the following alleged statement to Joe Catanzariti by a lawyer named Luis Izzo:

“Bridgette Styles, your new graduate solicitor, is making extremely serious and unjustified allegations about Abraham Ashe, Cilla Robinson and James Simpson and I. She is accusing us of conspiring to place pictures of me in Abe’s office. She is saying that she has been sexually harassed by the pictures and she is threatening to use the sexual harassment allegations as bargaining chips against the firm, to force us to let her stay in the Workplace Group after her rotation finishes. She was very aggressive and even grabbed me even though I was backing away. I don’t want to come back from secondment to the Workplace Group if she’s in it.”

Styles alleges that the “sense and substance” of the above statement (that she alleges is defamatory of her) was subsequently republished widely both inside and outside the firm, including “the general population” of legal practitioners in Sydney. Joe Catanzariti - the partner alleged to have originally received Izzo’s allegedly defamatory statement - is the current President of the Law Society of New South Wales.

We reported a few weeks ago the rumour that Clayton Utz was “lowering the bar” by promoting a lawyer with a mere 2 years PQE to senior associateship. At the very same time that the announcement was made in respect of that junior lawyer, one Luis Izzo - a gentleman embroiled in very serious defamation proceedings arising out of his employment - was also made senior associate. An alleged corporate defamer … made SA!

How close is Clayton Utz to doomsday midnight?

We would suggest that every further incident we add to this list of nuclear bombs is another second closer to the end. In 2010:

• 14 very profitable, well respected partners defected from Clayton Utz to build two Australian offices of Magic Circle firm Allen & Overy;
• Clayton Utz sacked over 30% of its Melbourne graduates;
• a former employee was given leave to pursue further claims against the Clutz for alleged sexual harassment and bullying;
• the firm was stripped of its credentials as an employer of choice for women by the Equal Opportunity for Women in the Workplace Agency;
• a librarian has created considerable controversy by hording an inordinate amount of firm fruit;
• a Clutz lawyer appearing on a reality TV show revealed her homewrecking past, cooking up a dish of office romance with a side of “single-mother-left-with-three-young-kids”; and
• it emerged that another former lawyer is alleging the firm defamed her.

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When we reported a couple of weeks ago that Masterchef contestants Peter Kritikides and Adam Liaw, both lawyers, had variously:

that office "burn"

• participated in a firm-sanctioned chest-waxing; and
• proclaimed a belief that “it is a God-given right for a Prime Minister to host a secret sex party with a bunch of hookers and other Prime Ministers”,

we thought we had adequately exposed the dirt on this year’s show. Oh how we burnt the toast on that one!

A trickle of anonymous comments began filtering through last week in relation to something slightly fishy. First we received this, from an anonymous Clutz spy:

Which Clayton Utz employee is currently sweating like, shall we say, a Masterchef contestant in the “pressure cooker”?

At that point, we had no idea what was going on, but surmised that it must have involved Clayton Utz lawyer Claire Winton Burn (for those keeping score - we incorrectly stated that she’d been voted off the show in our earlier Masterchef post). But we never would have guessed that it involved Claire’s entangelment in a sizzling office romance with a Clayton Utz lawyer. Or that the relevant Clayton Utz lawyer is, in his spare time, a father to three young children.

In an article entitled How Claire’s affair sizzled, the Daily Telegraph walks readers ingredient by ingredient step by step through Claire Winton Burn’s corporate love affair. And the news isn’t good for beleagured Clayton Utz partners:

[Claire] is in a relationship with a work colleague at … Clayton Utz, which made her so miserable she joined the reality show searching for a better life. The problem is, the colleague left his wife and three children for Claire just after the birth of his third child. A recent interview Claire gave to New Idea set a cat among the pigeons at the law firm when Claire named the man as her “partner”, something which also shocked the ex who is struggling at home alone with a baby and two other young ones. Claire refused to comment on the relationship when we contacted her. Her partner was tight-lipped, but offered this when we called for comment. I don’t really want to talk to the press about anything, Claire’s told me,” he said. “I don’t really have anything to contribute, thank you.”

We were preparing last night to report on this kitchen nightmare when the following email came through:

I have been following the claire winton burn story with regards to her alleged relationship with a clayton utz lawyer. We have his name and he was apparently off work yesterday and at this stage I disclose I am a freelance tabloid photojournalist.

We photographed the alleged ‘partner’ read not a law firm partner, in Melbourne today.

The funny thing is pictures which were online of the male party have since been removed so we are unable to corroborate our pictures. Its seems Clayton Utz or the male party concerned are doing everything they can to isolate the firm from the story.

If I send you a picture of the male person for your use, (publication) can you please try to corroborate the identity of the person in the picture, assuming it is the name of the male lawyer in the construction division that Claire once worked.

I am available to email both the name of the alleged male in the relationship and a photo taken today which I believe is that person. I can be contacted on 04######## or ####@#########.com.au

Regards,

Jamie Fawcett

Yes, Jamie Fawcett - the same esteemed paparazzo who made headlines in 2005 for placing a listening device under the water meter outside Nicole Kidman’s home. He was thereafter labelled Sydney’s “most disliked freelance photographer”.

At this stage Jamie, in the interests of protecting the welfare and livelihood of the three young children (not to mention their poor mother) whose lives appear poised to be irrevocably shaped by your prospective “naming and shaming” of their father, we will decline to name the man in question. So perhaps you should place that photo under your water meter. Or in your oven. Just dont bother sending it through to us.

It is difficult to believe that the pantry full of 2010 misfortune could grow any mouldier for Clayton Utz. But it has. So far in 2010:

• 14 very profitable, well respected partners defected from the Clayton Utz to build two Australian offices of Magic Circle firm Allen & Overy;
• Clayton Utz sacked over 30% of its Melbourne graduates;
• a former employee was given leave to pursue further claims against the Clutz for alleged sexual harassment and bullying;
• the firm was stripped of its credentials as an employer of choice for women by the Equal Opportunity for Women in the Workplace Agency;
• a librarian has created considerable controversy by hording an inordinate amount of firm fruit; and
• a Clutz lawyer appearing on a reality TV show revealed her homewrecking past, cooking up a dish of office romance with a side of “single-mother-left-with-three-young-kids”.

Send the Firm Spy your news and views!

The “Trench” v Clayton Utz sexual harassment/bullying/victimisation saga shows no sign of ending. However, it has now reached the offices of A&O matermind defector Grant Fuzi, who is simultaneously allegedly fighting an equitable action against Clayton Utz for a breach of fiduciary duties.

It is one big Trench-coated Clutzy Fuz-ball love-fest!

Clayton Utz yesterday

For those unfamiliar with this forgettable episode in Clutz’s recent history, let us refresh your memory:

[Trench] 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…

We received the following comments yesterday alerting us to a new interlocutory decision in the “Trench” saga (thanks very much to the anonymous spy in question):

Clutz is on a roll.  Fuzi better watch out! Arguing that Mike Trench Mitchell`s claims were “speculative” and insufficiently “particularized,” Clutz scored a major victory against the naked Trench. If they ever get back that $700,000 from  Fuzi they might just buy themselves some champagne - http://www.lawlink.nsw.gov.au/adtjudgments/2010nswadt.nsf/731b718ec02a5793ca25684e00413824/3398fec1280164a8ca25770b001be6c1?OpenDocument

As you’ll note in the decision, “Trench” asked the NSW Administrative Decisions Tribunal for leave to amend his complaint. In particular, “Trench” wanted leave to amend his complaint to add:

1. a complaint of “aiding and abetting” against Mr Trevor Robinson & Ms Sonia Goumenis; and
2. a complaint of victimisation against Mr Grant Fuzi and Clayton Utz.

In what we would characterise as a weak decision, Deputy President Hennessy refused the application. In relation to the complaints against A&O defector mastermind Grant Fuzi, “Trench” made the following allegations:

Mr Mitchell alleges that … Mr Fuzi victimised him… Mr Fuzi is said to be the head of Banking and Financial Services at Clayton Utz. The triggering event … was that Mr Mitchell told Mr Fuzi during an interview that he had been sexually harassed by other employees. The ‘detriment’ was restricting his access to necessary information about the accusation of sexual harassment against him during the investigation process. The causal connection between those events was said to be that Mr Fuzi refused to provide the necessary information straight after Mr Mitchell made that allegation. Mr Mitchell clarified in his reply to the respondents’ submissions that he is seeking to add Clayton Utz as a respondent because they are vicariously liable for Mr Fuzi’s conduct. Mr Mitchell explained the victimisation complaint in his submissions to the Tribunal in the following terms::

“Once I informed Grant Fuzi that I experienced harassment, he refused to provide the rest of the allegations against me … he said he needed to check with some other people before he could release the rest of the allegations although he later provided the allegations by e-mail… Grant Fuzi and Clayton Utz restricted my access to other necessary information about the accusations against me that I should have been guaranteed under the employee handbook… [which] states that it will follow natural justice in dealing with the investigation…”

Mr Mitchell alleges that Mr Fuzi’s conduct constituted discrimination on the ground of sex and/or disability.

The Tribunal declined to grant “Trench” leave to amend his complaint on the basis of prejudice to Fuzi and based on the Deputy President’s perception that “Trench” had a detailed knowledge of the anti-discrimination laws and had “ample opportunity to make that complaint to the Board”.

Are you convinced? What should “Trench” do next?

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In the wake of the defection of 14 Clayton Utz partners to A&O earlier this year, we reported that a group of Clayton Utz lawyers met confidentially to discuss the demands they would place on the Clutz partnership to remain at the firm. At the time, we reckoned that many of the remaining lawyers were well placed to ask partners for an overdue pay rise. However, we never thought that the Clutz partnership would be so perturbed by the prospect of losing more lawyers that it would take the unprecedented step of awarding junior lawyers with senior associateship.

We received the following comments from anonymous Clayton Utz spies last week and over the weekend:

constructions lawyers have higher to jump

Dear Firmspy Yesterday I reported to you the seemingly *impossible* rumor circulating among polite circles that Clutz has promoted to SA a securitisation lawyer admitted December ‘08. Yes, DECEMBER ‘08! Well, Firmspy, as I tapped away at my computer, I could barely believe it myself. But I sent it anyway, with seemingly carefree abandon for the truth (you know what us Clutz lawyers are like!). But when I saw that you published it, I could feel the anticipation that your readers would now have not knowing if this was true. So I felt that I should try and find out more by way of details. So today I took it upon myself - between some value adding due diligence - to make some more enquiries and, to my sheer surprise and delight, it does appear that Clutz has its very own Australian idol. Our idol’s name is #######…. as A&O continues its ravenous bottom feeding on second tier (Clutz) finance lawyers, I am sure that you too are pondering this question - why didn’t our ####### join A&O. Is our ####### too good for A&O? You bet! Our ####### knows what fiduciary duties are (having learned about them at law school, rather than at Clutz) and is not one to sell himself to the highest bidder like some cheap hooker. This is not the last that you will hear of our ####### … Well done, you.

We then received this:

In answer to the posting on the CU promotions, yes it is true. Some of the new senior associates are 2 years PQE (the historical CU rule was 4 years minimum) and one of the new partners is 5 years PQE (it usually takes at least 8 to 10 years). The accelerated partner and lawyer promotions in Sydney were dominated by anyone who worked for the partners that left (i.e. those with negotiating leverage in Banking and Corporate). If you were just a hard working litigation or construction lawyer working 8 to 11 hours a day you did not quite have the same pull. I think I had better move to Banking and find a defecting partner to work for to get ahead!

And finally this:

As of 1 April 2010 a lawyer who was admitted in NSW on 10 October 2008 was promoted to Senior Associate at Clutz just because the remainder of his team (securitisation - structured capital markets) left to A&O (what a knuckle head, no pun intended!). With only 1 ½ years post admission experience and no prior law firm experience this lawyer has definitely done well for himself by remaining with Clutz. However, for the remaining Clutz Lawyers who in the recent promotions did not get promoted who have been with the firm for more than 4-5 years this is definitely unfair. Clutz did not reward this lawyer for his hard work, but rather are desperately trying to hold onto anything they can since the firms departures in that team to A&O.

Our anonymous sources neglect to mention that the junior lawyer in question may be exceptionally competent, and that this might warrant his incredible progression (but even then, we agree that it is unfair to more senior lawyers who haven’t been made up). However, from a client perspective, particularly in an area like securitisation where there is a whopping market surfeit of under-utilised  lawyers, would it be palatable to pay senior associate charge-out fees for someone with just over one year of post-qualification experience?

Does your firm ever lower the bar?

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It has been a couple of months since the Legal Affairs team at the AFR have had a decent scoop, so we took our collective hats off on Friday at the massive revelation that Clayton Utz is pursuing mastermind defector Grant Fuzi for a breach of fiduciary duties arising from his move to competitor Allen & Overy.

If you missed the AFR article, the following summary was sent to us by an anonymous spy (thanks very much!):

A&O Branding

Read on infoXpress this morning… Clayton Utz - Allen & Overy - Grant Fuzi - Case - Clayton Utz is set to prepare a case against former partner Grant Fuzi alleging that he lied about his intent to join Allen & Overy before leaving Clayton Utz, and breached his fiduciary duty. Mr Fuzi allegedly accepted a $700,000 payout on the condition that he would not go to a competitor. - AFR 45

Then another anonymous spy sent us the following request:

Please write about Clayton Utz’s upcoming suit against the Australian A&O partners, including Grant Fuzi, for breach of fiduciary duty. Would love to hear more goss in this regard.

So what do we know? Well, the following very insightful comments were sent to us last night by an anonymous Clayton Utz spy (this is a truly excellent update, so thanks) which help inform the Clutz motivation to pursue the Fuz Ball:

CU is not just bleeding it is haemorrhaging with its lawyers following their partners to A&O in unprecedented numbers. That’s the real story behind CU’s action against Grant Fuzi, as reported in the AFR on Friday -a desperate attempt to stem a tide which started well before Mr Fuzi departed and an attempt to prevent other groups suffering the fate of its Workplace Relations and Banking and Finance groups. In Banking and Finance the blood started with the departures of securitisation guru Brain Salter and his partners Trevor Robinson and Leah Chic in 2008 (as reported in the IFLR). In Workplace Relations it started with Chris Hartigan and his client John Holland, who moved to Herbert Greer in 2008, followed by Louise Russell, Luci Mumme and her team.  Next to depart were John Oakes and his team in Sydney, followed by Luke Connolly in Melbourne and most recently Bruce Heddle in Sydney. As a result, although embarrassingly, the Clayton Utz website still proclaims that its Workplace Relations group is ranked Tier 1 by the Asia Pacific Legal 500, but that’s incorrect. A quick click reveals that the firm is now ranked Tier 2, as it is in Banking and Finance. The exodus doesn’t stop there either. While the Legal 500 reports that Peter Knight retired, Chambers Global reports that he has moved across to Banki Haddock Fiora and then there was Richard Morrison in Canberra.. That’s another 11 partners. CU hasn’t replaced any of these people it has just promoted a few people… I’m sure you can find a few more.

Forget about finding more, what about the potentially misleading and deceptive proclamations on the Clayton Utz website?! Perhaps Mr Fuzi might find something useful there for the purposes of defending the forthcoming equitable proceedings…

Which brings us to another very interesting rumour sent to us over the weekend regarding this explosive story:

I thought the Firm Spy might like to know how Grant Fuzi intends to defend against the action being brought against him by his former employer Clayton Utz. I’m told that he intends to rely on the very tenuous argument that he did not technically leave Clayton Utz to work for a “competitor” - and was thus entitled to the $700,000 payout - because A&O wasn’t competing with Clayton Utz for work at the time of his defection. Mind you, if the retarded manner in which the firm is currently handling its PR affairs is an indication of its legal competence, I wouldn’t be surprised if the restraint of trade clause was so narrowly drafted as to permit him to defect and pocket the money!

We wouldn’t be surprised either. And it would make another dark chapter in a forgettable year for the firm in which:

• 14 very profitable, well respected partners defected from the firm to build two Australian offices of Magic Circle firm Allen & Overy;
• the firm sacked over 30% of its Melbourne graduates;
• a former employee has been given leave to pursue further claims against the firm for alleged sexual harassment and bullying;
• the firm was stripped of its credentials as an employer of choice for women by the Equal Opportunity for Women in the Workplace Agency; and
• a librarian has created considerable controversy by hording an inordinate amount of firm fruit.

What will happen next? Share your views by voting in our new poll!

Send the Firm Spy your news and views!