DLA PHillips Fox Performance is performance managing instead of making people redudant to avoid paying packages. I alone know of 2 people who are being targeted by management. One is a lawyer and one is in the business development function. Apparently the firm has decided on a new structure and is trying to managing all of the “extras” out without paying redundancies so that the press doesnt find out how badly they are doing. It is utterly dispicable and people need to know!

Thanks to the AFR for the following profile:

Partner Remuneration System

Performance-based system partnership.

Partner Pay For 2008/09

The lowest level equity partners pull in $400,000.00, while the top level receive $1,200,000.00. A bonus takes the top performers to $1,400,000.00. Fixed share partners earn between $200,000.00 and $400,000.00.

Pay

Estimated Profit Margin = 35%

Estimated Profit = $78,000,000.00

a good year for the fox

Estimated Profit Per Lawyer = $140,000.00

Estimated Profit Per Equity Partner = $820,000.00

Revenue

Revenue 2008/09 = $224,000,000.00

Revenue Change = +2.8%

Revenue Per Lawyer = $410,000.00

Revenue Per Partner = $1,460,000.00

Revenue Per Equity Partner = $2,350,000.00

The Verdict

In his last year at the helm, chief executive Tony Crawford says the firm’s restructuring has created a strong platform for recovery and that revenue grew in litigation, workplace, infrastructure, competition and intellectual property. The amount generated from referrals from its international network grew.

Comment

DLA Phillips Fox recorded the third highest revenue growth of the top 10 firms. Margins were relatively low but held steady, with spending cuts offset by costs from the reconfiguration of the Brisbane office and new premises in Canberra. The dire state of the legal market in the US and UK put pressure on international referrals last year but the firm’s vision is still a global one.

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A regular target for the Firm Spy’s opprobrium is the apparently soon to be formally internationally merged national law firm DLA Phillips Fox.

are you the king of the world, or a passenger on a sinking ship?

But even we must take pause to acknowledge the awe-inspiring rise of former Phillips Fox lawyer James Gorman.

Gorman grew up in the Melbournian suburb of Glen Iris, where he shared the house with 9 other brothers and sisters. He attended Xavier College and Melbourne University, earning an Arts/Law degree, before joining the former incarnation of DLA Phillips Fox; Phillips Fox Mazel in 1982.

Not long after, Gorman left Australia, to pursue a degree in business at New York’s Columbia University. From there, he went to work for McKinsey and, later, Merrill Lynch before moving to Morgan Stanley in 2006.

Earlier this week, Gorman was named as the new head of Morgan Stanley, starting 1 January 2010. In commenting on the elevation, the 51 year old told Adelaide Now:

“I’m very close to my siblings and my parents, and obviously they’re proud… it’s a demanding job but this is the kind of thing you live for, to take on these sorts of challenges…I was a little anxious coming up to the past couple of days but now that we’re launched it seems to have gone very well internally and the stock is behaving and the investors are behaving.

In his first media conference, Gorman reassured those gathered that the bank would stay focused on its core trading and banking businesses, despite the company’s push into retail brokerage.

To the law students dispairing at our report on the estimated reductions in vacation clerkships and graduate recruitment, take heart! James Gorman is a testament to the fact that anything is possible.

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It seems the combination of fumbled redundancies, rumoured pay reductions to juniors and general bad publicity has caused a deep rot to develop at DLA Phillips Fox. So much is this the case, it has been reported that DLAPF has trotted off to its international affiliate DLA Piper seeking a formal merger.

i need somebody!

As reported in the AFR (21/08):

DLA Phillips Fox might cease to exist by as early as next year as a source with the firm says partners are keen on a full merger with global firm DLA Piper… A DLA Phillips Fox spokeswoman said partners at both the DLA Phillips Fox and the global firm would vote on full integration by early next year.

There is no indication of whether the firm would continue as a partnership business model or, like the proposed Deacons/Norton Rose merger, seek to incorporate. Other than unfortunate publicity, it is unclear what DLA Piper stands to gain from the deal.

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In response to our report last week that Mallesons Sorcerer Partner Robert Milliner is apparently thrusting

The Sorcerer snapped seeing the future

Better than DLA Phillips Fox. They pay less than 2 weeks per year of service plus notice.

Does this mean that DLA Phillips Fox also has a voluntary redundancy scheme in place? If it does, this is the first we have heard of it! More likely is that these terms (if true) are part of either wave one or wave two of the involuntary redundancies announced by DLA Phillips Fox over the last few months.

More to the point, what are the redundancy packages that are being offered at your firm? Please take the time to send us details, anonymously if you so choose.

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We reported yesterday the heartaching rumour that DLA Phillips Fox staff were subject to a revelutionary pay

Foxy lady breaks hearts

I am an employee of DLA Phillips Fox (Sydney) and ‘all’ staff have not had their salaries reduced by 10%. There a number of junior lawyers on my floor who have been asked to ‘work flexibly’ for eg one works a 9 day fortnight and is paid accordingly.

So is the firm asking the junior lawyers, or are the junior lawyers asking the firm? Are the purportedly affected staff entitled to a day off each fortnight, or will they have to come into work on their day off if there is ‘work to do’? Will they receive the 10% if they come in on their day off?

We look forward to further clarifications from both DLA Phillips Fox spies and/or from the firm.

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Embattled major national firm DLA Phillips Fox appears to be at it again. We received the following email from an

a corporate paroxysm

Not only have DLA Phillips Fox had two rounds of redundancies. But all of the staff have also had their salaries reduced by 10%. To compensate staff for the reduction in pay they are entitled to take off one day a fortnight unless they have work to do or are needed. So it is essentially a 10% reduction in pay with little in return.

If you thought a pay freeze was an oppressive development, think again! If this claim is true, it would make DLA Phillips Fox the first major Australian law firm (that we’re aware of, anyhow) to have introduced a scheme of reduced pay for reduced work. We have seen similar chicanery at KPMG and PriceWaterhouseCoopers, but nothing from the major law firms.

In terms of the corporate paroxysms we have variously reported since the outset of the GFC, this development, if true, must surely mark a new meridian. You’ll recall DLA Phillips Fox is rumoured to have implemented:

• a first wave of redundancies;
• a pay-freeze;
• a second wave of redundancies; and
• a tenancy squeeze combined with an alleged third wave of redundancies.

We invite a clarification from DLA Phillips Fox. Stay tuned for more developments as they come to light. Send the Firm Spy your news and views!

After our report on the KPMG tenancy reduction, we received the following information from a DLA Phillips Fox spy on the weekend:

you new chair is really cumfy!

DLAPF Adelaide is on the hunt again. Five more support staff axed within a week! There may be more to come soon with a floor consolidation that will simply not fit all the people that are now there. Literally, there won’t be enough chairs, offices or cubicles! The environment is: Who’s next?!

The first wave of DLA Phillips Fox redundancies occurred in December 2008. The second wave of  firm redundancies followed in May this year. Will floor consolidations and reductions in tenancy space across DLA Phillips Fox offices give rise to a more broad-ranging third wave of redundancies? When the music stops, will you have a chair?

The Firm Spy is anxious to hear more reports of reductions in tenancy space. Is your firm reducing the size of the office? let the Firm Spy know first, super anonymously if you so choose.

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June, it seems, is the month of the year when retiring partners engage the media to alert future employers that they need a job. Such is the case with the objectionable comments made in today’s BRW by retiring DLA Phillip’s Fox CEO Tony Crawford.

winners are grinners

Crawford, a stickler for using wanker corporate idioms and verbose, ‘I’m-a-smart-lawyer’ language, has today taken out the inaugural Firm Spy Partner Award.

Here are a few choice quotes from Tony that we have been able to dig up (from here, the BRW (4/6) and AFR (29/05)). Warning: they call to mind David Brent.

• Walking the talk is something everyone does; its not just me and the executive team. So that was the base camp for us;
• Law is a business paradigm;
• In a partnership you do really lead through coalescence and pursuit of common goals;
• The directive approach has never really worked well in a relative sense to the corporate world;
• If your values are embedded people tell each other when they’re not congruent;
• This is business critical;
• Boiling it down to the emotional competency inventory we take every couple of years is very important;

As if this cringe-worthy corporate parlance wasn’t enough, Crawford recently spoke of the things DLA Phillips Fox could do to improve the firm, noting:

…this leadership issue hit us in the face. We couldn’t avoid the conclusion that if we didn’t put leadership development at the top of the list we weren’t going to be able to differentiate ourselves as an employer of choice and get our number [of employees]… $100,00-$150,000 would be the sort of leakage that would occur in good lawyers that you lose from the business.

Then, in today’s BRW he said:

All firms are taking a much greater interest in how to engage and retain the very best people. The competition is intense, so firms need to invest heavily in their understanding of people…Maintaining a focus on the values and standards of the profession is critical.

Yet, despite the monetary value of each lawyer and the need to engage and retain staff,  some saff have criticised Crawford for presiding over what is arguably one of the most extensive GFC redundancy processes yet witnessed in Australia. So, for all those employers now considering the services of a soon-to-be available Tony Crawford, some might say his guide to being a law firm CEO should read:

1. tell the world how much the firm cares about nuturing new leaders/quantifies their value to the firm ($150k!);
2. tell the world how much the firm wants to retain and understand its employees;
3. tell the world how much the firm endeavours to uphold the values and standards of the profession.

Then, when the doors are closed, preside over a firm that allegedly:

1. is among the very first to act when partner profit is threatened;
2. leaves junior lawyers in the cold for many months, wondering if they will have a job;
3. freezes pay when partnership profit is jeopardised; and
4. dispassionately wields the axe in a second wave of redundancies, whose purpose remains unclear.

Is this the work of a Foxymoron? You decide. Send the Firm Spy your news and views!

Denuto demonstrates the importance of having up-to-date precedents

We received the following anonymous tip last night:

What firm would get rid of the majority of their precedents team? DLA Phillips Fox, of course.

If this is true, one would imagine there are some understandably unhappy campers among the ex-Foxers.  Like most BigLaw firms, the precedents team customarily ensure that standard documents, which are used by lawyers as a starting-point and then modified to suit a particular client’s needs, are constantly updated to reflect changes in the law.  A new job for the winter clerks, perhaps?

The Firm Spy wishes to thank DLA Phillips Fox Media Relations Consultant Clare Buttner for her previous comments and emails and invites her clarify the roles of the sacked workers.