03/02/2004 - 21:00

Big firms’ future has a familiar look

03/02/2004 - 21:00


Upgrade your subscription to use this feature.

PERTH’S biggest law firms have been shrinking over the past decade while the smaller firms have been growing, leaving some pundits to suggest most law firms will end up looking remarkably similar.

Big firms’ future has a familiar look

PERTH’S biggest law firms have been shrinking over the past decade while the smaller firms have been growing, leaving some pundits to suggest most law firms will end up looking remarkably similar.

Allens Arthur Robinson partner Michael Cole, who is also a former Parker & Parker partner, believes most of the Perth firms will end up a similar size.

“The Perth practice needs to fit with the strategic intent of the national firm,” Mr Cole said. “You don’t need a 40-partner practice in Perth to achieve that.

“If everybody is driven by the same external pressures you will see everybody moving to the same trend line.

“I think the trend line is still coming back to a practice size of about 12 to 20 partners.”

Not surprisingly, Perth practice director Nic Tole expects Allens, which presently has nine Perth partners, to fall into this band.

“I see the firm continuing to grow, particularly our corporate practice, energy, resources and infrastructure, and litigation,” Mr Tole said.

“I would expect to have about 15 partners over that time frame.”

Minter Ellison Perth managing partner Sean Larkan offers qualified support for the view that firms will trend towards a similar size.

“Firms are much more tightly managed and run nowadays and cannot afford much slack or inequality of contribution, and hence you will probably not find the large firms of yesteryear,” Mr Larkan said.

“My gut feel is that about 20 partners is about right for this market, but at the end of the day it’s not a quantitative issue but a qualitative one.

“If you have the right calibre partners working for the right clients serviced by the right people, the results will be achieved for everyone.”

Freehills chief executive Peter Hay believes his firm’s Perth practice – the largest in Perth with 35 partners - will continue to hold its lead, despite falling partner numbers in recent years.

“As we’ve gone national and focused on the upper reaches of the legal market, it was inevitable there would be some attrition in Perth,” Mr Hay said.

“Some would have happened anyway, but that process is over.”

Looking ahead five to 10 years Mr Hay said future growth would largely be driven by the market.

“Perth is growing gradually. I can’t see any reason why the firm wouldn’t be at least as large as it is today,” he said.

Clayton Utz Perth partner-in-charge Peter Wiese is also aiming to reverse the shrinkage in partner numbers.

“We want to grow, not shrink, and our strategies and focus are clearly directed towards growth,” Mr Wiese said.

Like many others, he expects energy and resources to be the major growth driver.

“We are also confident about the future of agribusiness and we remain very much involved in litigation work, which never seems to slow down,” he said.

Mr Wiese said the industry trends had affected prospects for aspiring lawyers.

“It is clearly more difficult now than it was in the 1980s to achieve a partnership in the first-tier firms in Perth but, I think, much easier now to succeed as a boutique firm to gain a significant corporate client base,” he said.

Minister Ellison’s Sean Larkan agrees that small firms pose a real competitive challenge.

“I would say good on them,” Mr Larkan said. “For many years the organised profession and so called law management gurus were saying that such firms, particularly mid-level firms, were a threatened species.

“As usual, clients and the market had the final say.

“There are many of these firms thriving today – they are well led, well managed and have focused their efforts on their strengths.”

Mid-level firms in Perth include Deacons and Jackson McDonald, both of which have experienced notable changes recently.

Deacons has recruited litigation partner Shaun Temby from Phillips Fox and project finance partner John Chandler from KPMG Legal.

Deacons’ chief executive Don Boyd said the firm’s focus on the ‘mid corporate’ market, which includes clients such as Portman, Evans & Tate and Retravision, had been successful.

“Since integration [in 2000], our profit has improved dramatically and we have more than doubled revenue,” he said.

Mr Boyd said the firm was pursuing further lateral partner appointments in Perth.

“Over the next five to 10 years we will grow by another 20 to 25 per cent,” he said.

“Perth needs to be about 10 per cent of the firm.”

Jackson McDonald is also chasing the ‘mid corporate’ market, although it suffered a setback last December when corporate partner Ken Mildwaters, who was the firm’s prize recruit in 2003, returned to London.


Subscription Options