Quick shifts mark new phase in Perth’s legal landscape

THE entry of new law firms to the Western Australian market, or the defection of legal teams to competing firms, are normally quite rare events, but in the past few months there has been an extraordinary level of change in the local sector.

English firms Allen & Overy and Norton Rose have officially entered the WA market, while Clayton Utz and Middletons have each been rocked by the loss of three partners.

The winners include local firm Cochrane Lishman Carson Luscombe, which continues to attract top-shelf partners from major firms, and Corrs Chambers Westgarth, which has bolstered its M&A team.

Of all these changes, the entry of Allen & Overy – one of London’s five ‘magic circle’ firms – has attracted the most discussion.

Newly appointed Cochrane partner Ben Luscombe anticipates A&O could become one of the “gorillas” of the Australian legal market over the next decade.

“This has the potential to fundamentally change the paradigm for the big firms,” Mr Luscombe told WA Business News.

A&O’s newly recruited Perth partners Geoff Simpson, Peter Wilkes and Meredith Campion are still serving out their three-month notice at Clayton Utz and have been unable to comment on their plans.

They are among 14 Clayton Utz partners who have agreed en masse to establish A&O’s Australian operations.

A&O announced in early February that it would be opening its Australian practice with offices in Sydney and Perth.

Seventeen founding partners were announced, with 11 taken from Clayton Utz Sydney and three from Clayton Utz Perth.

“Our decision to launch in Australia underlines the increasing importance of Australia in the global and Asia-Pacific economies,” A&O senior partner David Morley said in a statement.

A&O Asia-Pacific managing partner Thomas Brown added “this move also improves access to the deep pool of high-quality lawyers that exist in the Australian legal market, making this the logical next step in our plans to expand our global network”.

Clayton Utz Perth partner in charge Paul Fitzpatrick told WA Business News that Clayton Utz was not alarmed by the defections.

While there have been mutterings in the market that further departures are imminent, Mr Fitzpatrick said his staff were contented and would remain with the firm.

Clayton Utz chief executive partner David Fagan is not so confident. Though he has said that no lawyers or senior associates have officially handed in their resignations, he does expect some to do so.

Norton Rose, in town this month for the official launch of Norton Rose Australia, claims the A&O move vindicates its strategy to capitalise on the business opportunities and legal talent in the Australian market.

Norton Rose announced late last year that it would enter the Australian market via a merger with Deacons Australia.

The official merger date was January 1 2010.

Norton Rose global CEO Peter Martyr told WA Business News the entry would bring a more global focus to the Australasian legal market.

“This unlocks the potential of part of the Australian legal market,” he said.

Norton Rose selected Perth to unlock potential by matching legal skills with business links. Mr Martyr said he was confident the Perth market would benefit from the international deals the UK brand would attract.

He said there was still a legal separation between the Australian practice and Norton Rose’s international business, but insisted the group would operate as one firm, likening the structure to global accounting firms.

“Its law firms starting to do what the accountants have done,” Mr Martyr said.

As part of its Australasian expansion, Norton Rose has already relocated Perth partner Shaun McRobert to Hong Kong, where he will join the growing corporate finance practice.

Following the Allen & Overy announcement, Corrs Chamber Westgarth lured three prominent corporate partners, led by Rob Franklyn, who established a reputation as one of Perth’s leading M&A practitioners at Freehills.

Mr Franklyn founded his own firm, Franklyn Legal, in 2004. Russell Philip and Christian Owen left Freehills and Clayton Utz respectively to join Franklyn Legal in 2005. Franklyn Legal entered a three-way merger with Middletons and Salter Power to establish Middletons’ Perth office in December 2008.

Middletons managing director Nick Nickola told WA Business News that, while the move was not expected, he had known about the exit plans for some time. Mr Nickola said his experience with firm mergers was that “sometimes it’s not for everyone”, adding that “usually there are people who will come and go”.

Mr Nickola said staff and clients had not indicated that they would defect to Corrs, although he does expect some clients to follow Mr Franklyn.

He said Middletons would hire locally to replace the departed partners rather than supplementing their ranks with fly-in, fly-out staff from the east coast as had been the case in the past.

Another significant move this year has been the departure of Jon Carson and Ben Luscombe from top-tier Australian firms to join Cochrane Lishman (renamed Cochrane Lishman Carson Luscombe).

Mr Carson was a former senior partner of Blake Dawson, and a respected operator in the energy and resources area. Mr Luscombe was a former senior partner of Mallesons, and is a highly regarded litigator.

Mr Luscombe and Mr Carson told WA Business News the move wasn’t about the money. Having reached the highest levels of partnership in top-tier national firms, both were looking for new challenges.

Joining Cochrane allowed the pair to: “Do the same work, but in a flexible and less bureaucratic environment in which we can concentrate on our clients’ legal issues without the distractions necessarily incumbent in contributing at the highest level to the workings of a major national law firm,” Mr Carson said.

With speculation rife that more UK firms will flock to our shores, the legal fraternity is waiting with anticipation for the next round of moves and mergers.