Herbert Smith mulls Australia to jump-start global plan
May 17, 2011 by Damian
Here is the text of a very interesting story that I have just come across in The Lawyer. It looks like the Australian market is just about to get even more interesting! Again what ramifications this will have on the NZ market is extremely hard to judge but one certainty is that it will make Australia an even more attractive destination for our top lawyers who will be able to combine work of the very highest quality for an international law firm with a lifestyle that London lawyers can only dream of.
‘Herbert Smith is the latest firm to set its sights on the Australian market with a plan to follow the likes of Allen & Overy (A&O), Clifford Chance and Norton Rose Down Under.
While Herbert Smith has taken a conservative approach to international expansion in recent years, it is now understood to be eyeing an Australian launch.
It is unclear whether the firm is keen to identify a merger partner or whether, like A&O and Clifford Chance, it is planning to cherrypick teams to launch its own base. Sources suggest that it has held merger talks with Blake Dawson and Freehills.
“Blake Dawson has an excellent energy and natural resources practice, just like Herbert Smith,” said a partner at an Australian firm. “One of its main clients is BHP Billiton, so it would be a great fit for Herbies.”
Herbert Smith has long shown an interest in Australia, with the firm hiring directly from Australian law schools for a number of years, but it has upped its focus on the country recently.
A partner at another Australian firm said: “They seem to be paying more attention than ever before. For firms like Herbert Smith, there’s a feeling that if they don’t do something they might get left behind.”
Another partner at an international firm revealed: “In Sydney there’s quite a bit of talk that Herbert Smith will do something in Australia this year.”
Lawyers in Australia have reported a dramatic increase in the number of firms from the UK, US and Canada visiting the country over the past 12 months.
“Most major law firms have an enlivened interest in Australia and are working out what to do here,” said the head of one Australian law firm. “There have been more visitors over the past 12 months and things have taken on a heightened intensity since Christmas.”
This, along with the arrival of a number of UK-headquartered firms over the past 18 months, has led to unease among many partners in Australian firms.
“Quite a number of firms are really feeling the pinch,” admitted another local partner. “I think there’s dissension among partners in the likes of Freehills and to a lesser extent Blake Dawson. They’re both strong firms in their own right, but partners are wondering what the future holds.”
Herbert Smith did not return calls for comment. Blake Dawson denied that it is in merger talks with Herbert Smith.’
Clifford Chance sizes up options for Australia launch Part 2
December 14, 2010 by Damian
For anyone who read my post yesterday and has any interest in Clifford Chance’s intention to open an office in Australia, it seems as if the story is starting to gather some real momentum judging by this story in The Lawyer –
Sydney firm Gilbert & Tobin has emerged as the leading candidate as Clifford Chance steps up its search for an Australian tie-up.
The magic circle firm is understood to have held talks with a number of firms in both Sydney and Perth with a view to finding merger partners in both cities.
While talks with Cochrane Lishman Carson Luscombe in Perth have stalled, speculation has intensified in Australia that a deal with Gilbert & Tobin is still on the table.
The Sydney firm was launched as a telecoms and media boutique in 1988. It is now a full-service firm with more than 50 partners.
One Sydney-based source said: “They’re ideally set up to merge with a magic circle firm.”
While discussions with Cochrane Lishman have ended, sources in Perth said that a deal could still be possible, with the situation currently described as “up in the air”.
One Perth source said: “It’s true to say that with A&O [Allen & Overy] coming here and the investment there’s been in Western Australia, it’s something they [Clifford Chance] would like to do.”
A&O launched in Perth and Sydney earlier this year when it swooped for teams of lawyers from Clayton Utz and Freehills.
Norton Rose also established itself in Australia at the beginning of the year when its tie-up with Deacons went live.
Asked about Clifford Chance’s search for a merger target, another source revealed: “There’s no doubt Clifford Chance has been hard at it and has been for some time.”
Clifford Chance is thought to have pursued an Australian merger ever since informal talks with Mallesons Stephen Jacques concluded in 2008.
The firm declined to comment on the story.
While A&O and Norton Rose’s entry into the Australian market was big news, this is absolutely massive news. Gilbert & Tobin are a hugely well respected firm in Australia on their own merits and are market leaders in certain practice areas but if the merger with CC goes ahead, they would automatically leap right to the top of the pack. I am sure that their partners are licking their lips in anticipation…
New Rules For Migrants In The UK
November 26, 2010 by Damian
I have just seen this article in the ALB and thought that it would be worth sharing. It seems like not only are there currently fewer jobs in the UK but the government are making it harder for overseas lawyers to have access to them.
Australia lawyers thinking of heading to the UK in the near future will need to consider their options carefully following changes to the British skilled migration rules. From April next year Australians and other non-European Union nationals wishing to work in the UK under the skilled migrant visa will need to have a job before they can apply. The number of migrants able to apply for a skilled migrant’s visa without a job offer has been cut to 1000 per year and will only apply to people of “exceptional talent”. The tier one general category has been widely used by law firms to bring in new recruits from overseas; law firms will now have to apply under the tier two general category for skilled workers, but will be restricted by the new annual migrant cap of 20,700 per year.
“In recent times some employers have preferred for staff to come on a tier one visa, as they don’t require a sponsorship and the individual is responsible for themself. But that option is no longer available to lawyers. If you are a lawyer, you will now only have the tier two option available,” said Mary Horniblow, manager, private practice and international, Mahlab.
Applicants under tier two are required to apply for a visa from the UK Border Agency through the PBS, will have to be of graduate level, be sponsored by an employer and will be awarded points based on scarcity of skills and salary. “Because they have limited the tier two numbers and severely limited the tier one cap, there will be more competition for skilled migrant visas,” added Horniblow.
The new limit will also affect law firms which swap staff with “best friend” firms in other jurisdictions, but will not affect intra-company transfers where the income of the professional is more than £40,000. However, those professionals are limited to a five-year stay. This may lead to more Australian and New Zeland based lawyers trying to get jobs in UK firms with offices locally, said Horniblow.
Australians who can show British heritage can still apply for ancestry visas, while those under the age of 30 may still apply for working holiday visas. However, those professionals who enter the UK on such a visa will need to re-apply for a skill migrant visa if they intend to stay past their 30th birthday or longer than two years.
Notwithstanding the fact that there is now a limited amount of visas available, this is similar to the system that was in place before the introduction of the Highly Skilled Migrant Visa which did seem to work reasonably well.
However, my view is that although these rule changes are understandable given the current state of the market in the UK and the amount of locally qualified lawyers looking for work, if and when the UK market picks up again and staff become increasingly harder to find, they could be very detrimental to UK firms who rely heavily on recruiting overseas lawyers when they are busy.
When that scenario eventuates, I would not be surprised to see some loosening of these restrictions to allow UK firms to hire good quality overseas lawyers in order for them to function properly. When that will be is the million dollar (or pound) question.
Bad News From The UK
October 27, 2010 by Damian
All of the talk in 2009 was about redundancies. Most of the talk in 2010 was, if not about mass hiring, it was at least about consolidation. The accepted wisdom was that the days of making redundancies were now past. However the news that came out of the UK last week highlights in a very stark way that the dark days have not been consigned to a distant memory just yet.
Here is a summary of an article from this week’s ‘The Lawyer’:
Edinburgh-headquartered McGrigors has launched a redundancy consultation with the aim of cutting 40 jobs across its UK network of offices.
The redundancies are expected to affect fee-earners and support staff and will take place across the real estate, banking, projects and procurement, corporate, and risk advisory practice areas. The redundancy consultation, which began on Monday, is expected to conclude on 1 November.
In a statement a firm spokesperson said: “In May 2009 we announced a series of cost-saving measures which we hoped would allow us to ride out the worst of the downturn, protect jobs and safeguard the long-term health of the business in the event of an economic recovery.
“Unfortunately, over the past 12 months it has become increasingly clear that an immediate recovery is not going to emerge, and that we are instead facing a sustained period of market uncertainty – particularly while the effects of the public sector spending review become clear.
“This is not a matter which has been entered into lightly, and we do so only as a last resort. We’ve always endeavoured to do the right thing by our people and believe that everything possible has been done – such as secondments to clients or other departments, sabbaticals, flexible working, pay freezes – for as long as possible, to avoid this measure.”
McGrigors put in a fairly strong performance in the 2009-10 financial year, with turnover increasing 10 per cent to £69m.
McGrigors last cut jobs in May 2008, when it laid off nine real estate fee-earners (30 May 2008).
What is worrying about this redundancy exercise is that it is affecting not only property but also banking and corporate which are areas that were reportedly getting busier as opposed to contracting. Obviously this round of redundancies could be related to factors specific to McGrigors such as the firm still being over-staffed, poor management decisions or poor performance among other things.
Regardless of the reasons why, it should serve as a timely reminder to all NZ lawyers heading to the UK thinking that things are back to normal, they are not.
UK firms remain wary despite elevated recruitment figures
April 23, 2010 by Damian
The title of this post is the title of an article from the latest edition of the UK’s The Lawyer magazine which you can read here – http://www.thelawyer.com/1004112.article.
The tenor of this article sums up for me exactly the uncertainty in the recruitment market at present and the influence that the press has on people’s perception of the state of that market.
What I mean by this is that the first sentence of this article states:
“The UK’s top 25 firms are back in recruitment mode, with an estimated 2,133 people having been brought on board to UK offices in 2009-10 alone.”
I am sure that everyone reading this would think – ‘brilliant – now it’s time to dust off the CV because I’m outta here’.
Well ‘no’ I’m afraid. The next sentence states:
‘However, the total number of hires is still exceeded by the 2,370 people firms made redundant during the downturn, suggesting management caution has far from subsided.”
The article goes on to state that :
‘The highest numbers of hires were made by two firms with large volume businesses, Irwin Mitchell and Eversheds, which recruited 414 and 293 people respectively’. This sounds positive for your chances at Irwin Mitchell and Eversheds – yes? Well ‘no’, the next sentence states:
“Since late 2007 Irwin Mitchell has laid off 16, while Eversheds parted company with 735.’
So the question remains – are firms back in recruitment mode or not?
This article does not answer the question and shies away from coming to a conclusion, finishing off instead with a very bland non sequitur from the Chief Executive of DLA Piper, (incidentally a firm who made more redundancies than most). So what was the point of the article? To be honest, I am not sure as it seems to give hope to people but then tempers it with caveat upon caveat.
What this article highlights to me is that no-one knows what will happen in the coming months, not even the esteemed journos at The Lawyer. The market is still going through a lot of uncertainty and how long it will take for this uncertainty to be removed, is anyone’s guess.
As for whether I, sitting down here in NZ, am going to come to a conclusion as to the state of the recruitment market in London, well if the journos at The Lawyer aren’t going to, then neither will I!
However, if you are thinking about making the move to London or elsewhere, please get in touch with us. We would love to have a chat to you about your background and what we can do to help you over there.
To specialise or not to specialise?
December 11, 2009 by Damian
From years of experience in overseas recruitment, the main feedback that clients give me about NZ (and Australian) lawyers is that one of the main reasons that they are so employable is because of their versatility.
Due to the nature of the market down here, few practitioners are what UK lawyers would call ‘specialists’. For example, there would not be one finance lawyer in NZ who would be dedicated to only doing aviation finance. My own legal career in the UK (for what it was) was purely in tobacco litigation – I did nothing else. This degree of specialisation just does not exist in NZ firms.
Until now, allowing practitioners to specialise in London has worked. The deals are huge, sophisticated and specific so people with detailed knowledge of the subject matter are necessary. One unforeseen consequence of the GFC, if the Linklaters’ plan as laid out in The Lawyer article below works, may be that the specialist lawyer may be a thing of the past in London -
http://www.thelawyer.com/1002837.article?nl=TL-LND.
If the way of the future for London lawyers is to become generalists rather than specialists, this could have some effect on the employability of NZ lawyers in the future. If that point of difference is taken away, it will be up to NZ lawyers to come up with another selling point to differentiate themselves from the rest of the market.
Any ideas?
Only £85,000?
July 8, 2009 by Damian
I laughed when I read this story this morning on The Lawyer’s website -
http://www.thelawyer.com/1001294.article.
Doesn’t your heart just bleed?
I would also recommend having a read of some of the comments made by various posters about the issue. Thank goodness we don’t have that arrogant attitude over here!!!
UK/NZ Law Firm Mergers
June 30, 2009 by Damian
The big news this week in the legal world is the merger between UK heavyweights Norton Rose and the mid-tier Australian firm, Deacons – http://www.thelawyer.com/norton-rose-signs-tie-up-with-australias-deacons/1001147.article.
It is the first merger between a major UK law firm and a significant player in the Australian market and has provoked a lot of intense debate on websites such as The Lawyer and Legal Week, some of which has been very insightful, some of it being just downright xenophobic.
The rationale behind the merger seems to be a desire to shore up both firm’s practices in the Asian market. Only time will tell if it is successful or not but as more than one contributor to the debate has pointed out, it will definitely increase the amount of top quality Australian lawyers wanting to join Deacons as people see the inevitable secondment opportunities that the merger will bring to lawyers within the firm.
The merger has got me thinking about the possibility of a UK/NZ merger. I have never heard any talk of it, probably because the UK firms cannot see any upside to it but if it did happen, how about these potential merger partners?
If Slaughter & May merged with Russell McVeagh, the firm could be called Slaughter & McVeagh.
If Simmons & Simmons merged with Simpson Grierson, the firm could easily be called Simpson & Simmons.
Similarly, Olswang and Kensington Swan could be Olswan and AJ Park and SJ Berwin could be AJ Berwin.
It is doubtful that any of these fanciful mergers will ever happen but I am sure that the leading lights in the NZ firms, as well as the Australian firms, will be looking at the Norton Rose/Deacons merger to see how successful or not it turns out to be.