Three substantial commercial law firms have been established in Perth in the past year and each has adopted a fundamentally different strategy and business model.
Three substantial commercial law firms have been established in Perth in the past year and each has adopted a fundamentally different strategy and business model.
The largest new firm was Lavan Legal, established last April when most of the partners of the old Phillips Fox decided they would have a better future as an independent firm rather than continuing as a semi-autonomous franchise.
By merging with Martin Bennett’s commercial litigation firm Bennett & Co, they established Perth’s largest locally owned firm in terms of staff, and second biggest in terms of legal professionals.
DLA Phillips Fox is also effectively a new firm, with three constituent parts.
The residual Phillips Fox partners, who operate mainly in the insurance field, chose to fully integrate their practice with Phillip Fox nationally.
Five months later, Gadens’ Perth partnership, which had operated under a federated structure, merged its business with Phillips Fox.
That was followed soon after by a rebranding to DLA Phillips Fox to reflect the alliance with big international law firm DLA Piper, which the local partners say is central to their growth plans.
The third new firm was boutique corporate firm McKenzie Moncrieff, formed by former Clayton Utz partners Rob McKenzie and Will Moncrieff.
They have joined what appears at first glance to be a very crowded space but are confident their strategy will set them apart from other boutique firms.
Each of the new firms has professed to being pleasantly surprised by their trading performance since hanging out their shingle, helped by the booming economy.
A bigger test of their strategies will come when the business cycle turns and the market becomes more competitive.
Lavan Legal has grown over the past year to have 21 partners, 98 legal professionals, and 200 staff, according to data compiled for WA Business News’ Book of Lists.
This makes Lavan slightly smaller than Jackson McDonald, which was for many years the only big, independent law firm in Perth.
Freehills continues to be the biggest firm in Perth, with 189 legal professionals, followed by Clayton Utz, with 116 legal professionals and 198 staff in all.
Lavan has a distinctive strategy that plays to its independence, its Perth head office and strength in litigation.
“Sixty five per cent of our work is litigation and 35 per cent is commercial,” managing partner Greg Gaunt said.
“The national firms would be the mirror image of that.
“Their thrust is the corporate and commercial part. Our thrust is to be the best litigation firm and whether you are national or not is not really relevant.”
Lavan aims to build on its litigation practice by doing commercial work for clients who come to the firm initially for litigation.
Partner Dean Hely said the firm had long planned to pursue this strategy and now it was coming to fruition.
“Having a bigger commercial litigation practice and having some depth in our corporate practice, which we didn’t really have before, that has started to really build up,” Mr Hely said.
Central to its strategy is its general counsel Martin Bennett, who is widely regarded as one of Perth’s most effective barristers.
Mr Bennett is also one of Perth’s most aggressive litigators, hence he tends to polarise opinion.
Mr Hely acknowledges Mr Bennett is very important to the firm but says Lavan has other strengths.
“The level of activity has increased but it wouldn’t be correct to say the entire increase is by reason of Martin,” Mr Hely said.
He points the firm’s strengths in planning, liquor licensing and personal injuries to illustrate the breadth of the practice.
Mr Hely accepts that many people remain sceptical about the firm’s prospects.
“We are quite open about the fact that people are watching to see if Martin implodes and cause huge grief, but we a year down the line there is not a sign of it,” he told WA Business News.
Mr Gaunt said the merger with Bennett & Co was designed in part to provide more support for Mr Bennett.
“A big part of this was to take pressure off Martin because he was carrying such a lot running his own firm,” he said.
Mr Gaunt said Lavan was getting better at freeing up Mr Bennett but acknowledged there was room for improvement, and also scope to develop other lawyers to work alongside Mr Bennett.
“We still haven’t achieved that well enough, we still want to free him up but we have got a lot better in terms of having other people involved with the clients,” Mr Gaunt said.
With the benefit of hindsight, Mr Hely believes the partners should have broken away from Phillip Fox much earlier.
“People look back now and think, the risks weren’t as great and maybe we should have moved earlier,” Mr Hely said.
“As it stands now, we think why didn’t we do this six years ago.”
Mr Gaunt said the firm’s financial performance had improved significantly since it broke away from Phillips Fox, helped by its move away from insurance work.
The development of its own corporate culture had also been important.
“We wanted to have a lot more fun. As a national firm, about the only way you can do it is to legislate for fun,” he said.
Mr Gaunt said the partners’ use of an old Kombi van – to ferry documents and clients to court – illustrated the point.
“If we were to put that to a national board meeting of Phillips Fox, they would look at you like you were crazy, and maybe they are right; but who cares, its just something we want to do,” he said.
Mr Gaunt believes the culture and independence of the firm provides a real competitive edge.
“Our relationship with our clients is what holds the whole thing together,” he said.
“You have to produce great work, but other firms have the same aspiration to do that.
“I think the advantage is how well you know your clients, how well you look after them, and just how human that relationship is.”
While Lavan emphasises its autonomy, DLA Phillips Fox emphasises the advantages that flow from being part of a fully integrated national practice with a strong international alliance.
Executive director David Prentice, who was previously Gadens’ chief executive in Perth, said Gadens’ Perth partnership had achieved significant growth over the past two years, helped by a focus on energy and resources, and reached a point where it needed to change.
“We needed a brand that was going to support the kind of work we do,” he said.
Mr Prentice said the partners saw multiple opportunities flowing from its new branding.
These included the international DLA Piper alliance, a higher national profile, a more recognizable brand and better IT and knowledge support.
Mr Prentice said the DLA Piper alliance was much more than just a soft marketing agreement and provided a real point of difference.
“We are probably the first of the big firms to engage in a hard alliance with an international firm,” he said.
The partners were hoping new deals would flow from the alliance, and “that is happening in spades”.
Partner Alan Drake-Brockman said the Gadens brand – which nationally is associated with volume banking and conveyancing work – had little to offer compared with DLA’s international connection.
“That is probably the biggest change and the most positive change,” Mr Drake-Brockman said.
McKenzie Moncrieff founder Rob McKenzie said the firm had got off to a fantastic start, with 15 listed companies on its client list.
McKenzie Moncrieff’s clients are mainly in mining and mining services, and it has also undertaken reconstruction and receivership work.
Mr McKenzie said the firm’s clients liked the fact that he and Mr Moncrieff operated across a range of practice areas, in contrast to the highly specialised approach of the big firms.
“People are particularly impressed by the flexibility we offer,” he said. “They like top-tier experience but you don’t need a top-tier firm.”
Mr McKenzie said the firm’s 10 legal staff included several part-timers, who had a lot to offer but may not fit in at a bigger firm.
“That enabled us to secure quality people that we otherwise couldn’t afford.”
One of the firm’s niches is the “less glamorous” area of drafting sophisticated commercial contracts.
Mr Moncrieff has also continued representing Canadian broking firms, which are managing large capital raisings on the Toronto Stock Exchange for WA mining companies.
