The recent mid-year careers fair confirmed the advantages of WA’s booming economy for vacation clerks and graduates. International firms, which had made the initial plunge into our resources-driven market with a smattering of overseas lawyers and a poaching of existing local talent, have now established themselves. They are now turning their attention to securing the next generation of lawyers. This is excellent news, both in terms of increasing the quality of training within the firms and also the quantity of positions available. As the firms establish themselves in Western Australian, the trend is likely to continue.
This author is sad to report that FirmSpy has been silenced by a litigious threat. FirmSpy’s absence will impede all law students’ ability to make impartial investigations into firm culture, salaries and market activity. However students may still get a good overview of the legal market including major deals by following websites like Lawyers Weekly, ALB News, the Financial Review, Chambers Global and Legal500 to name a few.
Freehills’ full equity merger with Herbert Smith (widely regarded as the premier litigation firm in London) was the big news story of the vacation period. Significantly for Aussie lawyers, because this more formal tie-up will necessitate a single profit pool, there will be a more collaborative approach between the two firms to ensure profits – and thus salaries – remain high. Expect to see the new firm emerge on 1 October. It will be the eighth largest firm in the world (by headcount), comprising 2 800 lawyers in 20 countries with an expected revenue of $1.2bn. This is great news for Australian law graduates. The choice to merge with a London based global giant indicates Freehills is investing in litigation heavy Western firm models.
In contrast, Mallesons has chosen to direct their “energy and resources” into China, as a rising global hegemon, by combining under a Swiss verein structure with China-based firm King & Wood. This will mean lots of potential for lucrative cross-border deals and engagement with multinationals, especially for those students interested in the banking sector. While it remains to be seen who will come out on top, King & Wood Mallesons’ exciting opportunities for employees in the Asia-Pacific region make them an attractive option for clerks and grads.
Allens Linklaters was formed when former “Allens Arthur Robinson” recently went separate ways with its UK ally Slaughter and May to form an “exclusive alliance” with UK Magic Circle firm Linklaters. The alliance is based around a series of joint ventures in Asia. A “magic circle” firm means it is part of a network of top tier global giants. Although this is not a full merger, Allens will no doubt be pleased to be able to share resources with one of the UK’s leading firms, while Linklaters gets its desired foothold in Australia without excessive outlay of capital. For Allens the merger means a move toward more complex litigation and away from more localised practice areas like insurance. The term “exclusive alliance” reflects a work-sharing arrangement that best meets their clients’ needs. This particular merger is not as formalised as those of Mallesons and Freehills.
For the other large firms it has been a less tumultuous period, albeit one rife with rumours regarding their futures. Minter Ellison has been linked to Allens’ former associate Slaughter and May.
For those UK magic circle firms who elected to take a solo plunge into Perth, such as a Allen Overy and Clifford Chance, the past few months has been a period of consolidation as they wait to see the results of their Aussie competitors and English counterparts’ jostling for position. Clifford Chance’s presence in Australia (Sydney and Perth) is thought to be one of the major reasons its profits in the last financial year far surpassed its UK competitors (see Lawyers Weekly). For Australians this means that the mergers and acquisitions market in the next decade is looking to be one of the most dynamic in the world.
For those not chasing a global giant, there has been a trend for partners of the major top tier Australian firms to migrate to smaller top tier firms (e.g Corrs Chambers Westgarth) and large mid-tier firms (e.g Gilbert + Tobin, Middletons). In fact Corrs Chambers Westgarth is only the 10th largest law firm in Australia by revenue but has the highest paid equity partners in Australia (as reported by the Australian Financial Review). Migration of talent from the top tier has most likely been brought about by the lost autonomy felt by their partners in the aftermath of recent mergers. This has meant the line between top and mid tier has blurred (including the difference between salaries) as great legal minds are no longer concentrated in the “big four”.
This author encourages students applying for clerkships to look at the cross-section of traditional “top tier firms” who have just undergone mergers, the new magic circle firms and the smaller top tier and large medium rising stars.
If you have any queries or comments or if you would like to contribute to this blog, please contact me at international@blackstone.asn.au!
Lawrence Ward
