18/05/2022 - 09:00

KWM aims for #1 in Perth market

18/05/2022 - 09:00


Save articles for future reference.

Perth’s top law firms open up on the extraordinary wave of partner poaching that is reshaping the sector.

KWM aims for #1 in Perth market
Nigel Hunt (centre) says new partners Antonella Pacitti and Roger Davies will support KWM’s expansion. Photo: David Henry

THE retirement last year of two long-serving partners at law firm King & Wood Mallesons has set in motion a series of changes that are still cascading through the Perth market.

KWM undertook a major strategic review that crystallised an ambitious goal for its Perth office.

“It was more than our usual review,” partner in charge Nigel Hunt said.

“We started thinking about where we wanted to take the firm here in Perth.

“We want to get it to a clear number one position.”

Mr Hunt acknowledged KWM was not alone in having that goal but said the firm differed from its competitors in what it had done about it.

“We set about a really intentional plan to grow the centre and invest heavily in Western Australia,” he said.

Its response has included recruiting four partners from rival firm Ashurst, starting with project partners Lorenzo Pacitti and Peter Vaughan to replace retiring partners John Naughton and Alan Murray.

KWM’s aggressive expansion strategy caused more of a stir early this year when it lured Roger Davies and Antonella Pacitti, widely considered among the top lawyers in public company mergers and acquisition deals.

Commenting on the move for the first time, Mr Davies said he and Ms Pacitti had been undertaking their own review, designed to build on and futureproof their practice.

“It was a bit serendipitous that KWM was doing its strategic review and approached us,” Mr Davies told Business News.

“The thing that attracted us was the shared version for wanting to be the leading firm in Perth.

“We wanted to continue our leading public markets M&A practice within a firm that had a very similar ambition.

“It was as simple as that really.”

Of course, such a move is never simple, with most people in the Perth market assuming Mr Davies would be an Ashurst ‘lifer’.

After 32 years with the global firm, he said the review was a very healthy process.

“You do run the risk, if you do things exactly the same way, of getting into a bit of a rut, so mixing things up a little bit is quite healthy,” Mr Davies said.

“We both found it quite an invigorating process.”

Mr Davies said KWM’s plan to build stronger links with Singapore and the region was a particular attraction.

“Investing in Perth as a hub for the Asia Pac region was super attractive,” he said.

Ms Pacitti said she normally provided advice to other businesses; on this occasion, she was reviewing her own business.

“Where does my practice, and our practice, best thrive in the medium to long term?” she asked.

“How do I recruit people and keep them and give them the opportunities that I have enjoyed?

“It’s a very personal thing to work out where you see the practice thriving.”

A self-described deal junkie, Ms Pacitti said she also was attracted to KWM’s philosophy, the firm’s depth of talent and commitment to the region.

“I’ve always been very ambitious about the practice,” she said. “I was very attracted to a firm that matches my own ambition for the practice and continuing to have Perth recognised as a centre for complex, contested M&A transactions.”

While Ms Pacitti remains focused on doing deals, Mr Davies signalled his role was likely to evolve, taking more of a strategic focus at KWM and looking at external roles.

But he’s not in a rush.

“I will practice [law] as long as I’m enjoying it, there is no deadline on it,” Mr Davies said.

Asked about KWM’s ambition to be the number one firm in Perth, Mr Hunt offered a concise definition.

“The ‘go-to’ firm, without question, for the work that we do,” he said.

That meant practice areas like banking, project finance, M&A, equity capital markets, private capital, high-end property and litigation.

“How do we move the dial in each of those to be clear number one,” Mr Hunt said.

Industry ranking

In its pursuit of that goal, KWM has become a substantially larger practice over the past year, according to Business News’ Data & Insights.

Herbert Smith Freehills remains the largest law firm in WA, with 21 partners and 130 legal professionals (see list, page 30).

KWM has moved up to second on the list, with 117 legal professionals, while Perth-based Lavan has moved up to third with 105.

HWL Ebsworth Lawyers was one of the biggest movers in the opposite direction, dropping down to sixth with 98 legal professionals.

Ashurst sits at number 11, with 63 legal professionals.

The Business News data shows that most firms in Perth have expanded their head count during the past year.

Like most industries in WA, law firms are battling to get enough people to meet the demand for their services.

The response has been an extraordinary surge in the number of partners being poached from rival firms (see graphic, above).

KWM’s expansion strategy and the entry of east coast firm Hamilton Locke has added to the wave of change in the sector.

Hamilton Locke opened a Perth office early this year after recruiting four corporate finance partners, including Shaun Hardcastle from HWL Ebsworth.

That was followed last month by the recruitment of litigation partner Chris Hood, also from HWL Ebsworth.

Mr Hardcastle said the firm had a total of 17 lawyers in its Central Park office and was aiming to expand.

“We are looking to establish other practice areas,” he said.

This would include employment and workplace relations, possibly restructuring and insolvency and more people in litigation.

Ashurst has also been busy on the recruitment front, with Paul Lingard, Miriam D'Souza and Jessica Davies planning to move from Norton Rose Fulbright in July or August, once they complete their commitments there.

In addition, Ashurst announced this month it had recruited a fourth project partner, Chris Campbell, from Corrs Chambers Westgarth.

Perth office managing partner Gaelan Cooney said the four new hires were a result of the departures late last year of Peter Vaughan and Lorenzo Pacitti.

Dean Hely (centre), with partners Ben Fong and Framy Browne, has overseen strong growth at Lavan. Photo: David Henry

“That was an opportunity to do a reassessment of what we want and opportunities in the market,” he said.

Mr Cooney said the new partners would strengthen Ashurst’s offering in project development, particularly in energy, infrastructure and property.

He added that Mr Lingard and Ms Davies had experience in private M&A.

“It’s almost fortuitous that two of them, Paul and Jessica, do a fair amount of corporate work, which is obviously what Roger and Antonella did,” Mr Cooney said.

He said a key point of difference for Ashurst was its integrated global structure.

“We are not only a global firm, we’re a single profit pool,” Mr Cooney said.

“That means we will always be able to provide the best experts to a particular deal or clients.”

He said a good example was the work Ashurst did last year for Perth-based Sandfire Resources, which gained funding in the UK for an acquisition in Spain.

“We had the mining expertise, the relationship, the financial expertise, the local knowledge and could deliver wherever they wanted it,” Mr Cooney said.

Asked about the loss of four partners, Mr Cooney was hesitant to buy in.

“Partners leave for all sorts of reasons,” he said.

“It’s not common but it’s a pretty active market in terms of competition for talent.” Mr Cooney said.

Ashurst negotiated separately with the three new recruits from Norton Rose.

“It’s not a package,” he said.

“We approached Paul first and he works very closely with Miriam and Jessica.

“They often go to market in combination, so they see the benefit of each other.”

Mr Cooney argued that Ashurst’s Asian links provided an added attraction.

“We work across the jurisdictions and Paul sees the opportunities in Asia as a benefit,” he said.

Commenting on the pending loss of three partners from her firm, chief executive partner Alison Deitz talked up Norton Rose’s national network.

“We have strong national corporate M&A and energy teams that are working on leading deals in the market,” Ms Deitz said, adding that the firm’s Perth office had provided a lead role on a number of national deals.

These include advising Stanmore Resources on its $US1.35 billion acquisition of BHP’s 80 per cent interest in a coal joint venture.

This deal was led by Perth corporate partners Adam Edelman and David Jewkes, and Perth banking and finance partner Alen Pazin.

Like Ashurst, Corrs Chambers Westgarth has been actively recruiting to bolster its local practice, after losing two partners to rivals.

As well as Mr Campbell, Corrs has lost litigation partner Spencer Flay to Clifford Chance. It has recruited projects partner Tracey Greenaway from Allens and workplace relations partner Anthony Longland from Herbert Smith Freehills.

A third recruit is Oliver Carrick: formerly a senior associate at Gilbert + Tobin, he was made a partner after joining Corrs in January.

Perth managing partner Kirsty Sutherland said the local practice had also been supported by a fourth recruit to the firm: energy and resources partner Anthony Lepere.

While based in Melbourne, Mr Lepere spends about one week a month in Perth.

Other notable moves in the Perth market include litigator Paul Evans moving to HFW and workplace partner Bruno Di Girolami moving to Lavan.

Perth firms Lavan best illustrates the potential for independent, Perth-based law firms to thrive in a market increasingly dominated by national and international competitors.

With 24 partners and 105 legal professionals, it is the third largest firm in the WA market.

Other Perth-based firms that rank high in the Data & Insights database include Jackson McDonald, along with Steinepreis Paganin, HHG Legal Group and Bennett & Co.

The success of local firms cannot be taken for granted, evidenced by the closure last year of Kott Gunning, which had been trading for more than 100 years and in its prime was one of the larger firms in Perth.

Lavan managing partner Dean Hely said new hires had helped but mostly it had achieved organic growth.

As well as Mr Di Girolami and his employment and industrial relations team, Lavan recruited a team of litigators from MinterEllison.

This group includes independent consultant Kevin Stewart and senior lawyers Millie Richmond-Scott and Kristy Yeoh.

Mr Hely said growth areas across the firm included construction, property, family law and reconstruction.

Lavan moved into family law five years ago, a notable step given very few of the big national firms – and no international firms – practice in the field.

“We saw that as an opportunity,” he said. Lavan now has 19 people working in family law, led by partner Framy Browne.

Mr Hely believes high-profile businesspeople find it easier to work with Lavan rather than attend a specialist family law firm.

“We see a lot of those C-suite clients come into our firm, coming here is more familiar,” he said.

Lavan is also able to handle associated services like property, tax and corporate matters.

Mr Hely said Lavan had a solid corporate practice led by Ben Fong but saw potential to achieve more.

“To be honest we still need to focus on our corporate area, we’ve never really hit it out of the park,” he said.

“It’s certainly something that we’re focused on growing.”

Mr Hely said Lavan had always kept tabs on who had been successful in each market over east.

McCullough Robertson in Brisbane and Arnold Bloch Leibler in Melbourne are two examples he cites.

Unlike those firms, Mr Hely said there were no plans to open in other states.

“We feel there is a lot more we can be doing in this jurisdiction before we would ever consider that,” he said.

As well as pursuing deeper coverage of the WA business sector, Mr Hely said there was an opportunity for the WA government to provide more support for local firms.

“The government has done a relatively good job with the Buy WA campaign, and I think there is an opportunity to promote that into the services industry,” he said.

Mr Hely believes such as a policy would help to ensure expertise in areas such as legal, accounting and engineering was retained within the state.

Growth drivers

Several major growth drivers are encouraging major law firms to invest in their Perth practices.

Mr Hunt goes so far as to say there is an “amazing confluence of events” that makes WA an attractive market.

One trend was the strategic repositioning of big companies, best shown by Woodside acquiring BHP’s petroleum business.

Another was the strong growth in battery metals and rare earths This has supported the development of major projects by companies such as Iluka Resources and Lynas Rare Earths, while also triggering major M&A deals. A notable example was IGO selling out of the Tropicana gold project to fund its move into lithium.

“There is this amazing buoyancy across all the commodities produced in WA,” Mr Hunt said.

Another positive was the large amounts of capital, from super funds to family offices, seeking investment opportunities.

Ms Pacitti said people outside Perth regularly talked about WA as a boom-bust market.

While acknowledging she had to pivot in response to fluctuations in particular commodity markets, her overall experience as a corporate lawyer was very positive.

“I don’t think it has ever really been boom and bust through my 20 years,” Ms Pacitti told Business News.

Ashurst’s Mr Cooney said another big trend was decarbonisation, which was triggering changes in multiple industries.

This included big investments in renewables and green energy projects but also included changes in sectors such as construction and property.

Another practice area that keeps on delivering plenty of work is litigation, according to Ashurst partner Catherine Pedler.

“Definitely project delays and cost blowouts are significant issues,” she said.

Ms Pedler said a recurring issue was which party bore the extra costs.

“People are looking to share the load across the project chain, which can often lead to disputes,” she said.

She added that project participants were paying much more attention to dispute resolution mechanisms in their contracts.

“In the past they were very much considered the boilerplate clauses that nobody really read or cared about,” Ms Pedler said.

“People are becoming more sophisticated at understanding the differences between arbitration and traditional court-based litigation.”

She said some of the hoped-for cost benefits of arbitration had not played out in major, complex commercial disputes.

The main benefit in many cases was confidentiality.

“The cost-benefit analysis is quite different now,” Ms Pedler said.

A trend that has arguably become more pronounced is the focus on building strong connections with small companies, especially in the resources sector.

“In WA, a small company can become big very quickly,” Mr Cooney said.

“If you can become their trusted adviser at the outset, as they grow it becomes much more relationship driven and collegiate and much less transactional.”

Mr Hunt said a prime example was ASX company Prospect Resources.

He has worked with the company for several years while it has focused on proving up a lithium project in Zimbabwe.

Prospect hit paydirt in December, when it signed a deal to sell the project to a Chinese buyer for $528 million in cash.

“That’s what is great about Perth,” Mr Hunt said.

Ms Pacitti said it wasn’t just geologists and mining engineers who were exporting their skills to other jurisdictions.

“One thing that excites me is when you get a call from a company that has no connection to Perth, but they say: ‘You have the technical capability, I want you to do this’,” she said.

“That means your product has a quality and a following.”

Mr Hunt said he was keen to see KWM work on more international transactions where the management and the assets were not in WA but local lawyers had the expertise.

With the additions to the partnership, he believes KWM is better placed to do more across the region.

“We now have the capability to push up into Asia and executive more deals and other things we had been aspiring to do.”

He also signalled KWM planned to pursue further growth.

“Am I done yet? No.”


Subscription Options