Please find below our revised report into Mallesons lawyer salaries. Thankfully, the firm has introduced a sweeping redundancy scheme in between the receipt of many of these responses and today’s publication, making it difficult to determine who has submitted the relevant responses and whether they remain at the firm.

Of course, we’re dealing with a chief executive warlock, so anything is possible! Please let us know if you’re worried that we have inadvertently exposed you as an anonymous tipster (of sorts) by sending us your remuneration package details.

We still need more people to complete the survey, so by all means continue your great work by filling in the remuneration survey.

We will post each of the Big 6 law firms in order of revenue.

Mallesons is on the record as saying that its partnership has a whopping profit margin of 44%. It is easy to see why when looking at the paltry salaries given to staff.

Firm Spy cannot guarantee the accuracy of these figures. They come from anonymous sources.

Brisbane

0-1 Years PQE

Admitted between July 2008 and June 2009. Daily billable target - 6 hours. Gross package 2008/2009 - $60,000. Gross package 2009/2010 - $65,000. Perks - free fruit; free gym; subsidised further education.

6-7 Years PQE

Admitted between July 2002 and June 2003. Daily billable target - 7.5 hours. Gross package 2008/2009 - $139,000. Gross package 2009/2010 - $139,000. Perks - blackberry; free fruit; free gym; subsidised further education.

7-8 Years PQE

Admitted before - July 2002. Daily billable target - 7.5 hours. Gross package 2008/2009 - $138,000. Gross package 2009/2010 - $138,000. Perks - blackberry; free gym; subsidised further education.

Melbourne

Graduate

Admitted 2009. Daily billable target - 4.5 hours. Gross package 2008/2009 - $64,000. Gross package 2009/2010 - $66,000. Perks - free fruit; free gym; subsidised further education. Comments:

I’m employed - counts for something.

[and]

Hi guys I’m a recently admitted (20 Oct) Solicitor in Mallesons’ Melbourne office. Your figures are correct but the billable targets are not. It was 4hrs/day when we were grads and is now 6hrs/day (since admission). Cheers

0-1 Years PQE

Admitted between July 2008 and June 2009. Daily billable target - 6 hours. Gross package 2008/2009 - $68,000. Gross package 2009/2010 - $68,000. Perks - free fruit; free gym; subsidised further education.

1-2 Years PQE

Admitted before - July 2008. Daily billable target - 6.5 hours. Gross package 2008/2009 - $74,000. Gross package 2009/2010 - $74,000. Perks - free fruit; free gym; subsidised further education.

2-3 Years PQE

Admitted between July 2006 and June 2007. Daily billable target - 7 hours. Gross package 2008/2009 - $82,000. Gross package 2009/2010 - $82,000. Perks - free fruit; free gym; subsidised further education. Comments:

MSJ’s remuneration strategy is to pay below market (ie 80-90%). Lovely strategy given that the partners are the most well paid in Australia! If only they put that in their recruitment promotional material! Re the subsidised further education - there are quite strict rules about how long you must remain after you receive you final results (12 - 24 months) otherwise you must pay it all back.

4-5 Years PQE

Admitted between July 2004 and June 2005. Daily billable target - 7.5 hours. Gross package 2008/2009 - $102,000. Gross package 2009/2010 - $102,000. Perks - blackberry; free fruit; free gym; subsidised further education.

6-7 Years PQE

Admitted between July 2002 and June 2003. Daily billable target - 6.5 hours. Gross package 2008/2009 - $115,000. Gross package 2009/2010 - $123,000. Bonus - $11,500. Perks - free fruit; free gym; subsidised further education.

8-9 Years PQE

Admitted between July 2000 and June 2001. Daily billable target - 7.5 hours. Gross package 2008/2009 - $163,000. Gross package 2009/2010 - $163,000. Perks - blackberry; free fruit; free gym; subsidised further education; purchase additional leave. Comments:

I don’t think a blackberry is a perk! The fresh fruit is only available in some departments. Generally it’s a great place to work but so much depends on the particular partners you are working with. One thing that could be improved is transparency in career paths and future prospects.

10+ Years PQE

Admitted before - 1999. Daily billable target - 7.5 hours. Gross package 2008/2009 - $130,000. Gross package 2009/2010 - $130,000. Perks - free fruit; free gym; subsidised further education.

Sydney

Paralegal

 Daily billable target - 4 hours. Gross package 2008/2009 - $65,000. Gross package 2009/2010 - $65,000. Perks - free gym.

0-1 Years PQE

Admitted between July 2008 and June 2009. Daily billable target - 6 hours. Gross package 2008/2009 - $76,000. Gross package 2009/2010 - $76,000. Perks - free fruit; free gym; subsidised further education.

1-2 Years PQE

Admitted between July 2007 and June 2008. Daily billable target - 6.5 hours. Gross package 2008/2009 - $84,000. Gross package 2009/2010 - $84,000. Perks - free fruit; free gym; subsidised further education; parking on weekends; subsidised pilates and yoga; various discounts on products.

2-3 Years PQE

Admitted between July 2006 and June 2007. Daily billable target - 6.5 hours. Gross package 2008/2009 - $85,000. Gross package 2009/2010 - $85,000. Perks - blackberry; free fruit; free gym; subsidised further education.

5-6 Years PQE

Admitted between July 2003 and June 2004. Daily billable target - 7.5 hours. Gross package 2008/2009 - $137,000. Gross package 2009/2010 - $137,000. Bonus - $13,500. Perks - free fruit; free gym; subsidised further education; purchase extra leave.

8-9 Years PQE

Admitted between July 2000 and June 2001. Daily billable target - 7.5 hours. Gross package 2008/2009 - $153,000. Gross package 2009/2010 - $153,000. Perks - blackberry; free fruit; free gym; subsidised further education. Comments:

Crappy salary makes me feel sad and the partners’ massive profits do not help.

Perth

1-2 Years PQE

Admitted between - July 2007 and June 2008. Daily billable target - 6.5 hours. Gross package 2008/2009 - $77,000. Gross package 2009/2010 - $77,000. Bonus - $5000. Perks - free fruit; free gym; subsidised further education. Comments:

Despite the freezing of my already below market salary, my billable targets increased and so did my charge-out rate. Further, there is no rewards for top performers as can be seen by the token bonus received.

Thanks to the BRW for the following interesting stats:

1. Mallesons - $552,000,000.00
2. Freehills - $493,000,000.00
3. Minter Ellison - $493,000,000.00
4. Clayton Utz - $490,700,000.00
5. Allens Arthur Robinson - $405,000,000.00*
6. Blake Dawson - $357,000,000.00
7. Corrs Chambers Westgarth - $235,000,000.00
8. DLA Phillips Fox - $223,500,000.00
   

   GFC? What GFC?
9. Deacons - $215,500,000.00
10. Baker & McKenzie - $155,100,000.00
11. Gadens Lawyers - $147,000,000.00
12. Gilbert + Tobin - $114,000,000.00
13. HWL Ebsworth - $106,900,000.00
14. Sparke Helmore Lawyers - $104,000,000.00
15. Slater & Gordon - $103,000,000.00
16. Middletons - $97,000,000.00*
17. Henry Davis York - $85,000,000.00
18. Maddocks - $82,000,000.00
19. McCullough Robertson - $73,000,000.00
20. Moray & Agnew - $63,500,000.00
21. Holding Redlich - $61,000,000.00
22. Herbert Geer - $53,700,000.00
23. Piper Alderman - $51,500,000.00
24. Lander & Rogers - $50,000,000.00
25. Thomas Playford Cutlers - $48,000,000.00
26. Arnold Bloch Leibler - $47,900,000.00
27. Hunt & Hunt - $46,000,000.00*
28. DibbsBarker - $42,800,000.00
29. Hall & Wilcox - $31,000,000.00
30. HopgoodGanim - $29,000,000.00*

*BRW estimate.

Following our reports last week profiling the revenue and changes in headcount of major Australian law firms, this week we will give a brief overview of the major accounting firms.

overheads are now lower

The overview shows that in contrast to the major law firms, revenue has remained largely unchanged amongst the Big 4. However, the redundancy schemes that we have reported in respect of PwC, KPMG and Ernst & Young, in addition to the rumoured redundancies at Deloitte, have no doubt considerably reduced headcount. Based on that, the slight movements in revenue must be considered in the light of fewer workers doing more and partners paying less to get the work done.

The following fantastic statistics come from BRW (27/8) and BRW (3/9):

PwC

Partners - 475

Other Accountants - 4260

Revenue 2008/09 - $1,424,478,000.00

Growth - +1.1%

Revenue Per Partner - $2,998,901

KPMG

Partners - 399

Other Accountants - 3455

Revenue 2008/09 - $1,021,000,000.00

Growth - +1.4&

Revenue Per Partner - $2,558,897.00

Ernst & Young

Partners - 391

Other Accountants - 2951

Revenue 2008/09 - $943,000,000.00

Growth - -1.8%

Revenue Per Partner - $2,411,764.00

Deloitte

Employees - 4,308

Revenue 2008/09 - $854,000,000.00

Growth - +11%

We thought it was worth replicating two of this week’s posts to calculate the odds that a vacation clerk will be offered a graduate job among major Australian law firms. That is, by contrasting the estimated number of graduates taken on by the firm, compared with the estimated number of vacation clerks to be taken on, we can work out a rough estimate of the likelihood that a given vacation clerk will ultimately be offered a graduate job.

a four-week roll of the dice

The urban legend that a Baker & McKenzie vacation clerkship ‘isn’t worth the paper it is written on’, is apparently finally substantiated by these stats. Contrastingly, the odds are apparently stacked in favour of clerks at Corrs and Deacons this year.

NB: These statistics do not contemplate the situation where a non-vacation clerk is offered a graduate position. We don’t believe this would influence the percentages markedly.

Full Year 2009

• Allens Arthur Robinson 45% (94/206)
• Baker & McKenzie 35% (16/45)
• Blake Dawson 45% (85/185)
• Clayton Utz 65% (96/147)
• Corrs Chambers Westgarth 80% (53/66)
• Deacons 91% (43/47)
• DLA Phillips Fox 55% (43/77)
• Freehills 63% (120/190)
• Mallesons 54% (135/248)

Estimate for Full Year 2010

• Allens Arthur Robinson 47% (94/200)
• Baker & McKenzie 37% (16/40-45)
• Blake Dawson 45% (85/185)
• Clayton Utz 67% (80/118)
• Deacons 52% (22/42)
• DLA Phillips Fox 64% (40/62)
• Freehills 71% (105-110/140-160)

Yesterday, our friends at Lawyers Weekly reported that at the firms it had contacted, summer clerkship recruitment remains a ‘top investment priority’. The report published the following comments from Mallesons partner Trish Henry:

“We haven’t finalised numbers yet … but we would expect our numbers to be reduced slightly… But, as in past years, our summer clerkship program continues to be our main recruitment tool and where we want to get our graduates from. So it’s the heart of our recruitment strategy for our graduates.”

The article went on to report:

Summer clerkship co-ordinators also confirmed that they had no intention of reducing the number of graduate roles. Henry explained: “There are obviously a lot of rumours that fly around, and they do every year. But our approach this year is similar to previous years. We would hope that all our summer clerks, so long as they perform and they’re happy, would be taken on and we have no intention of reducing the number of graduates taken on out of the clerkship program.”

These sentiments conflict with the report produced by the AFR (04/09), which we reproduced earlier this week, that Mallesons estimates a 25% drop in the number of graduates it will recruit in 2010 compared with 2009. It goes without saying that the comments are out of sync with the above statistic that only 54% of seasonal clerks at Mallesons will commence a graduate role with the firm.

Does this mean 46% of vacation clerks don’t perform or are unhappy with the firm?

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Following from yesterday’s post revealing a considerable drop in the number of vacation clerkships being offered by major Australian law firms, we can today reveal an analogous drop in graduate recruitment.

updated law faculty advertising

Alarmingly, it appears that law firms are expecting a protracted downturn as a result of the GFC.

Our friends at AFR published the following graduate intake statistics for major Australian law firms on 4/09 (see below).

Based on these statistics and compared with 2009 levels, Clayton Utz’s graduate recruitment will drop by 17% in 2010 and 22% in 2011; Corrs Chambers Wesgarth’s graduate recruitment will drop by 25% in 2010; Deacons’ graduate recruitment will drop by a whopping 49% in 2010; DLA Phillips Fox’s graduate recruitment will drop by 7% in 2010 and remain steady in 2011; Mallesons Stephen Jaques’ graduate recruitment will drop by 25% in 2010; and Freehills’ graduate recruitment will drop by approximately 11% in 2010.

Full Year 2009

• Allens Arthur Robinson (94)
• Baker & McKenzie (16)
• Blake Dawson (85)
• Clayton Utz (96)
• Corrs Chambers Westgarth (53)
• Deacons (43)
• DLA Phillips Fox (43)
• Freehills (120)
• Mallesons (135)
• Minter Ellison (87)

Estimate for Full Year 2010

• Allens Arthur Robinson (94)
• Baker & McKenzie (16)
• Blake Dawson (85)
• Clayton Utz (80)
• Corrs Chambers Westgarth (40)
• Deacons (22)
• DLA Phillips Fox (40)
• Freehills (105-110)
• Mallesons (102)
• Minter Ellison (87)

Estimate For Full Year 2011

• Allens Arthur Robinson (94)
• Baker & McKenzie (16)
• Blake Dawson (<85)
• Clayton Utz (75)
• Corrs Chambers Westgarth (n/a)
• Deacons (n/a)
• DLA Phillips Fox (40)
• Freehills (100-120)
• Mallesons (n/a)
• Minter Ellison (n/a)

Road to nowhere, anyone?

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The concern among law students that times are getting tougher can now be validated by statistics showing across-the-board reductions in vacation clerk intakes at major Australian law firms.

Our friends at the AFR published the following insightful statistics on 4/09 showing the number of law students each firm will be offering vacation clerkships this year and next.:

a snowflakes chance in hell

Full Year 2009

• Allens Arthur Robinson (206)
• Baker & McKenzie (45)
• Blake Dawson (185)
• Clayton Utz (147)
• Corrs Chambers Westgarth (66)
• Deacons (47)
• DLA Phillips Fox (77)
• Freehills (190)
• Mallesons (248)
• Minter Ellison (n/a)

Full Year 2010

• Allens Arthur Robinson (200)
• Baker & McKenzie (40-45)
• Blake Dawson (185)
• Clayton Utz (118)
• Corrs Chambers Westgarth (n/a)
• Deacons (42)
• DLA Phillips Fox (62)
• Freehills (140-160)
• Mallesons (n/a)
• Minter Ellison (n/a)

These statistics reveal a 20% reduction in the Clayton Utz intake; a 20% reduction in the DLA Phillips Fox intake; and a 22% (approx) reduction in the Freehills intake. In that order, these firms reported growth of +5%, +2.7 and +0.2%, and reduced their employee headcount by -1.2%, 13.9% and -2.1% last financial year.

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Corporate Australia should follow the rumoured lead of a few ex-Deloitte workers and grab a bottle of Moet, a few bags of sniff, and get the party started!

does a quality year mean quality gear?

GFC = Great For Corporates!

With thanks to the BRW Top 500 Private Companies List, released last week, a clearer picture is emerging of Australia’s corporate landscape. And it is very good news. But whereas the corpotates enjoyed double-digit growth prior to the GFC, it is clear that the size of growth has been reduced across the board… but they are still growing!

Below, we have extracted the Big4 Accounting Firms:

09 Rank          08 Rank          Entity          Revenue          Change %      Employees   Change %

13                          15                       PWC                $1,424m              +1.1%               6,088                   +0.2%

25                          27                      KPMG             $1,021m              +1.4%               4,961                    -1.4%

32                          30                      EY                     $943m               -1.8%                 4,431                    -2.1%

40                          51                      Deloitte           $854m                +10.6%               4,308                   -1.1%

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There has been some recent speculation that the GFC has precipitated the emergence of mid-tier law firms in Australia. It is thought that shrinking client budgets are not only increasing the competition for major firms to hold their clientele, but also forcing reconsideration of the traditional billable units model.

yet another emergence

It was recently reported, for example, that Clayton Utz and Blake Dawson had offered valued clients discounted rates, while Allens Arthur Robinson reportedly said some clients were being offered a “risk/reward” billing model.

Blake Dawson deputy managing partner Helen McKenzie, meanwhile, reportedly said that while the firm had not seen clients move to mid-tier practices, rates for some clients had been discounted and the firm’s hourly rate for lawyers had been frozen. Clayton Utz chief executive partner David Fagan also reportedly said the firm had offered big clients discounts, and other rates had been frozen, even though the firm’s costs had increased.

Yet despite all this alarm of a mid-tier emergence and consequent cost-cutting, Allens Arthur Robinson partner Paul Nicols reportedly said he was sceptical about claims that mid-size firms were squeezing into the territory of the major firms.

As the following statistics show, perhaps top-tier alarm at the perceived ‘emergence’ of mid-tiers is misplaced.

09 Rank          08 Rank          Entity             Revenue          Change %          Employees         Change %

210                          202                     Corrs                $235m               -3.0%               893                   -1.5%

226                         228                      DLAPH             $223m               +2.7                 1,232               -13.9

235                         207                     Deacons           $215m                -8.1%               1,000              -3.0

313                         294                     Bakers               $155m                 -8.7%              526                  -9.8%

328                        316                     Gadens               $147m                -7.0%              880                 -10.5%

405                       425                 Gilbert + Tobin        $114m               +1.2%             400                  0%

425                      n/a                   HWL Ebsworth         $105                  +130%           330                  0%

429                     471                  Sparke Helmore        $104                  +2.9               551                   -10.3%

447                     476                  Kennedy Strang        $98m                +13.2%         486                    +8.5%

482                     n/a                    Middletons                 482                    +11.3%         288                    n/a

Other than HWL Ebsworth, Kennedy Strang and Middletons, all other mid-tier law firms reported either modest gains or losses, some of them significant. Are we really seeing a mid-tier renaissance?

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Major financial results were released last week by the BRW which shed light on the status of Australian companies following the purportedly dire economic times. Those results also gave a snapshot of how major Australian corporate firms are tracking.

pack up your belongings

Our suspicion that major Australian law firms were not suffering from GFC-induced revisions on the balance sheet appears very well founded. Call us socialists (as some of you have!), but we here at the Firm Spy consider annualised growth in revenue to be objectionable on the back of wide-spread redundancies, pay freezes and other cut-backs.

Corporate partners across the nation have happily adorned the heavy cloak of the ‘GFC’ to act with utter impunity, thereby engendering in employees anxiety and mistrust. All for a few dollars more!

Thanks to BRW for the following statistics:

09 Rank          08 Rank          Entity          Revenue          Change %          Employees         Change %

73                          78                    Mallesons           $552m             +1.5%                  1,842                 -5.1%

86                          99                    Minter Ellison      $493m              +4.7%                1,838                 -4.5%

86                          84                    Freehills               $493m              +0.2%                 1,754                -2.1%

89                          97                     Clayton Utz           $490m                +5%                    1,704               -1.2%

105                      111                     AAR                        $436m               +3.8%                n/a                     n/a

131                       135                    Blake Dawson       $370m              -0.3%                1,382                 -5.1%

Almost across the board, revenue is up and employee numbers are down.  Firms have cut overheads too. We have seen firms re-negotiate rental contracts or relocate into different premises, presumably under much more favorable terms. Remember the Mallesons Slop-Out? The Allens contract kerfuffle?

So with revenue up, overheads considerably lower and employee numbers down, partnership profit is up.

Yes, up on the boom times of 2008!

We intend to dissect these figures in greater detail later in the week. Stay tuned also for the Big4 and mid-tier report.

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Thanks to the current edition of BRW for the following stats:

a big4 accounting partner with standard PR spin

Accounting Firm          2009 Intake        Change on 2008

Deloitte                            508                           21%

KPMG                               378                          -16%

Ernst & Young                425                          -15%

PwC                                    374                           2.7%

According to our calculations, this means a net increase of 88 grads at Deloitte, 10 grads at PwC and net decreases of 72 at KPMG and 75 at Ernst & Young. If this is corrrect, there is a net reduction of 49 graduate positions amongst the Big4 accounting firms this year.

We wish the very best of luck to all grads on the job-hunt.

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