Law partners make their moves

If there is one figure that reveals the state of the legal profession in Perth in recent years, it’s the 16 per cent fall in the number of partners at the state’s top 20 law firms from the peak in 2012.

Data compiled by Business News and published online in the BNiQ Search Engine shows the top 20 firms currently have 240 partners – down from 287 six years ago.

There has been a similar fall in the total number of legal professionals at these firms over the same period.

To a considerable extent, these numbers reflect the slowdown in the state’s economy, and particularly the drop-off in big-ticket project and construction work.

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They also reflect the changing shape of the industry, as international and interstate firms have snared a greater share of the market.

The latest example of this trend is US-based Quinn Emanuel Urquhart & Sullivan, which has lured its second high-profile Perth recruit in less than a year.

King & Wood Mallesons partner Michael Lundberg, who is considered one of the state’s top litigators, will be joining former state solicitor and Herbert Smith Freehills partner Paul Evans at the litigation specialist next month.

Mr Lundberg’s move is one of several lateral hires by law firms seeking to bolster their position.

Jackson McDonald has recruited Brendan Fyfe, a Kalgoorlie-raised banking and mining specialist who has spent the past decade working in Asia.

International firms Hogan Lovells, Norton Rose Fulbright and Clyde & Co have bolstered their Perth ranks.

Local boutique firms such as LSV Borrello Lawyers and Murfett Legal have also recruited new partners.

In addition, there have been a couple of mergers among local firms seeking to strengthen their market position, as discussed further below.

Long-term backdrop

The longer-term backdrop to these developments is a notable lack of growth across the profession in Perth, as shown by the table below.

Partner numbers at major law firms in Western Australia such as Herbert Smith Freehills (22), King & Wood Mallesons (13) and Clayton Utz (17) have steadily declined during the past 15 years.

(The decline by market leader HSF was exaggerated by the fact its Perth practice was unsustainably large after it was formed from a merger of Perth’s two biggest firms, Parker & Parker and Freehill, Hollingdale & Page, in 1997.)

Other leading firms such as Ashurst, Allens, and Norton Rose Fulbright expanded through the decade-long mining construction boom, but have slimmed down in recent years.

Locally owned practices Jackson McDonald and Lavan have fluctuated in size over the past 15 years but remain two of the largest law firms in Perth.

In fact, when measured by number of partners, Jackson McDonald (27) and Lavan (26) are the biggest.

On the upside, MinterEllison has achieved solid expansion in recent years, after the national firm had to rebuild its Perth practice almost from scratch in 2011.

HWL Ebsworth Lawyers has also grown rapidly, especially at partner level, after the national firm acquired Perth-based Downings Legal in 2013.

Other national firms to have enjoyed some growth include Mills Oakley and Gilbert + Tobin.

In contrast, Sparke Helmore Lawyers has not achieved a great deal from its growth-by-acquisition strategy.

It was aiming to become one of the larger firms in Perth through its acquisition of locally owned insurance specialist Jarman McKenna, which had a dozen partners at its peak in 2015.

By the time of the merger early last year, only five partners moved across to join Sparke Helmore’s two incumbents.

Since then, Roger Sands has retired from the partnership but has stayed on with the firm as a consultant, while Jonathan Wyatt and members of his team have joined Clyde & Company.

With five partners and 33 legal professionals, it is currently ranked number 20 in the BNiQ Search Engine listing of WA law firms.

International presence

The international law firms that moved into the Perth market during the past six to seven years have come in many shapes and sizes.

Some firms, such as Allen & Overy, Clifford Chance and Ashurst came in with a big bang and continue to have a substantial presence.

Others like Quinn Emanuel, Jones Day, Hogan Lovells, and Pinsent Masons have been more cautious, recruiting experienced partners and aiming to build slowly.

Quinn Emanuel does not aspire to be a big law firm in Perth, but the calibre of its partners means it is likely to take some of the cream from its larger competitors.

Mr Lundberg said Quinn Emanuel was undeniably the leading disputes firm in the world, and its specialist focus meant he would not be constrained by the client conflicts that invariably arose at large commercial law firms.

“I can work for the clients that have wanted to use me,” he said.

Mr Evans said law firms used to have very robust discussions to deal with client conflicts, but his observation now was that corporate clients took precedence.

“Unless your firm is consciously litigation-led, the litigators tend to come second.”

He observed that the mergers and alliances between Australian firms and international firms in recent years meant navigating client conflicts was even more complex.

Mr Lundberg said he expected more work from existing clients.

“I’ve not been able to act for them on incredibly important litigation,” he said.

“And there is a whole world of other people I’ve had to knock back over the years.”

Mr Lundberg, who was formerly partner in charge of Mallesons’ Perth office and head of its dispute resolution team, will move to Quinn Emanuel with three members of his team.

Unlike many other lawyers, who are forced to take several months ‘gardening’ leave when they move between firms, Mr Lundberg is going straight from Mallesons to his new job early next month.

“I’ve got a lot of matters I’m currently working on; clients need continuity,” he said.

Mr Lundberg said the move from Mallesons was very amicable.

“I don’t see myself as a competitor.

“I expect that I’ll continue to work closely with them and we will refer work.”

Mr Evans said Quinn Emanuel would have about 10 experienced staff after Mr Lundberg’s team moved across.

It deliberately had a low-leverage model, meaning partners did not have large teams of junior lawyers.

He added the firm did not have a set strategy on future growth, other than to “hire good lawyers in interesting places and see what happens”.

Mr Lundberg’s clients have included property investor Perron Group, construction company BGC, and mining companies BHP Billiton and South32.

His main focus at Quinn Emanuel would be energy and resources, but he would cover other areas.

“Having a broad skill base means there are incredible opportunities irrespective of the market trends,” Mr Lundberg said.

As well as litigation through the courts, he has handled international arbitrations.

For instance, Mr Lundberg has run London-based arbitrations for disputes involving projects in Libya and PNG.

“That adds to the range of things we get to work on,” he said.

Mr Evans said the long-running Bell Group litigation would not be a focus for his office.

Brendan Fyfe (right) will work closely with Will Moncrieff at Jackson McDonald.

Full service

Jackson McDonald has bolstered its capacity to service the mining sector after recruiting Brendan Fyfe.

Its newest partner grew up in Kalgoorlie, with family members working in mining and banking – the two areas in which he practices.

“There has always been that tangible link, particularly to gold mining,” Mr Fyfe said.

His experience includes several years working underground, including at the Plutonic mine.

Mr Fyfe spent 10 years in Asia with Jones Day and Holman Fenwick Willan, before deciding to move back to Perth with his young family.

“I’ve done a lot of international work, but the thing that’s closest to my heart is mining in Western Australia,” he said.

“Being with JacMac lets me really focus on that

“We now have a full service offering for the mining sector.”

Jackson McDonald partner Will Moncrieff said the firm would be able to offer a broader service.

“When we first met Brendan, we were intrigued by the fact he was both a mining lawyer and a banking and finance lawyer, which is a fairly unique offering,” Mr Moncrieff told Business News.

“We think clients are looking for lawyers who can fulfil a number of roles; that suits our practice, which is fairly broad.”

Mr Moncrieff said the firm would also be looking to do more work on project development and project finance.

“We’ve probably had a focus up to now on the corporate, transactional side of things, but we see opportunities now on the project side of mining,” he said.

“That requires people with specialist skills, that someone like Brendan provides.”

Mr Fyfe’s specialist knowledge is evidenced by the fact he is possibly the only law firm partner to have been accepted as a member of AusIMM, the mining institute that sets technical standards for the industry.

Mr Moncrieff said Jackson McDonald’s international clients included Indonesia’s PT Amman Mineral Nusa Tengarra, which acquired a big stake in Macmahon Holdings last year, and Canada’s First Cobalt Corp, which merged with Cobalt One.

It is also acting for Perth-based but Africa-focused manganese miner Jupiter Mines, which is preparing for a $200 million IPO.

“We have international work but our service offering is very much focused on being experts in WAand Australian mining and corporate markets,” Mr Moncrieff said.

Nick Cooper says Clayton Utz continues to benefit from its independence.

Independent view

As the partner-in-charge of Clayton Utz’s Perth office, Nick Cooper has watched with interest as new firms have entered the market.

“Certainly there is increased competition,” Mr Cooper said.

“It will be interesting to see how the international strategies of various firms plays out over the next few years.”

He said Clayton Utz, recently named by Chambers Asia-Pacific as the Australian law firm of the year, continued to enjoy benefits from its independent status.

“Maintaining our independence has been positive,” he said.

“We still get international work through our relationships.

“We’ve received 60 new matters from overseas since 1 July, with $37 million of revenue.”

Mr Cooper said that, while Clayton Utz did not claim to have exclusive relationships, its independence and active international engagement means it now works more closely than before with a significant number of international firms.

“We’ve always had strong relationships with overseas firms,” he said.

“Since the internationals entered this market, these relationships have only strengthened.

“We can refer clients to international firms and they refer work to us.

“They come to us because we’re not a direct competitor in their own markets.”

Mr Cooper said his colleagues across the firm saw many signs of increased activity.

“There is a degree of optimism that’s come back into the market in our corporate area,” he said.

“Our banking and finance practice group is seeing increasing activity and that’s off the back of increased commodity prices.

“What that translates to is a high level of project finance.”

This included renewable energy, mining and property deals.

One of the notable trends over the past decade has been the build-up of in-house legal teams.

Major companies such as Woodside Petroleum, Wesfarmers, Inpex and Rio Tinto each have 20 or more in-house lawyers, according to the Law Almanac.

Other big companies such as Chevron, Shell, BHP and Fortescue Metals Group each have a dozen or more.

Mr Cooper said this means a lot of day-to-day commercial work was done in-house.

“It means we have to be able to distinguish ourselves and add value to their business,” he said.

Mr Cooper said this often meant specialised work, such as big M&A deals or major litigation.

“There will always be occasions when they need to brief external law firms,” he said.

Another significant development was the increased use of software, particularly in the discovery process for litigation.

“It’s a game changer because modern litigation can be extremely expensive and time consuming, and a big part of that is discovery,” Mr Cooper said.

“We now have the latest software that will enable us to efficiently and more cost effectively manage discovery.

“It picks up on patterns and trends and learns; it becomes far more efficient in its ability to weed out irrelevant documents.

“There is always a human element, but we are able to reduce the man-hours needed for physical document reviews.”

Local movers

Local firms to have made notable moves this year include LSV Borrello Lawyers, SRB Legal and the newly established Kings Park Legal.

LSV Borrello Lawyers has appointed Paul Gribble and Rebecca Strom as principals.

Ms Strom joined from Corrs Chambers Westgarth, where she was a partner for more than five years and worked in the property and infrastructure team for more than 15 years.

Mr Gribble was previously at Clayton Utz, where he practised for almost 30 years, mostly as a partner.

“We’re really excited to have Rebecca and Paul join our team, they bring with them a wealth of experience,” managing principal Mark Borrello said.

“For me it’s proof that a boutique firm like ours can attract senior top-end talent because of our value proposition.

“There is a gulf between how quickly we can modify our approach to deliver the best results, our competition can’t even hope to keep up.”

On the merger front, insurance defence specialist SRB Legal has merged with boutique employment law firm Hodge & Smith.

SRB managing partner Graeme Richards said the merged practice would offer a broader scope of complementary services by adding employment, human resources, and industrial relations expertise.

The merger sees partner Kim Hodge and his team move over to SRB.

A new name in the Perth market is Kings Park Legal, which was established on January 1 following the merger of Wojtowicz Kelly Legal and Hayes Poli Legal.

Curiously, this came six months after its near namesake, Kings Park Corporate Lawyers, ceased to exist.

The break-up of that firm resulted in the establishment of two new law firms, House Legal and Armeli Molony Lawyers.