Locals welcome UK firms’ push into their competitive space

THE hive of recent activity in the Western Australian legal market has been added to by the arrival of Norton Rose and Allen & Overy.

The competition has been welcomed by most in the Australian legal fraternity – even Clayton Utz.

Clayton Utz Perth partner in charge, Paul Fitzpatrick, told WA Business News that the loss of three Perth partners and 11 Sydney partners to Allen & Overy did not overly concern the firm. Mr Fitzpatrick said the increased competition the UK firms would provide was welcomed, and the moves were merely a case of top-tier partners leaving to form boutique firms; the only difference being that this boutique firm would carry a UK brand name.

The leaders of most firms expressed similarly upbeat sentiments labelling the entry as “very exciting” and a “fascinating development”.

What is not yet known, however, is how staff, not to mention clients, will react to the changes.

Ben Luscombe of Cochrane Lishman Carson Luscombe considers that, far from being “boutique”, Allen & Overy will be the “big kid” in the legal market and the one to beat in the competition for attracting the best work and clients.

He also believes A&O’s brand will help it attract some of the best graduates each year.

Mr Luscombe said the ‘magic circle’ arrival would push up rates for premium legal work to levels closer to those prevailing in London.

Cochrane partner Michael Lishman believes there is a good chance that partners of Australian firms could be lured away, adding that “there comes a time when more money offsets loyalty to your partners”.

Despite this, Perth lawyers remain positive. Many see the entry of the UK firms as a vote of confidence for the Australian economy. And a clear win for Perth.

In the past, UK firms have avoided the Australian market. But in the wake of the global financial crisis, which has devastated London’s financial sector, Australia, with its relatively unscathed banks and enviable resources industry, has emerged as a viable alternative.

There is speculation as to whether the UK firms are really coming into our market as part of an Asian strategy.

One industry source commented that it was more likely due to the recognition of the money to be made in the Australian space.

Time will tell whether the UK firms have done their “didgeri-due diligence” (as it has been dubbed), and are really ready to permanently call Australia – particularly WA – home.