Throughout 2010 and 2011 as a spate of international firms considered and then duly arrived into the Australian legal market with focus of these firms was typically firmly on the Sydney and Perth markets. A Melbourne presence was considered a bonus but far from essential and Brisbane was, at best a footnote and one that was typically considered as a little too hard to read. Now, the 2014 arrival of international firm Baker & McKenzie as well as Melbourne based firm Lander & Rogers, the 2013 launch of CBP Lawyers (via merger with Hemming & hart) as well as the statement of intention to launch by UK firm Clyde & co into the Brisbane legal market as well as a string of rumours surrounding the likes of Allen & Overy, Pinsent Masons, Seyfarth Shaw, Squire Sanders and even White & Case has placed a focus on the Brisbane legal market at a time when the market itself isn’t quite sure what to make if itself.
Since the latter parts of 2013 the Brisbane legal market hasn’t been the happiest and most positive of places. While other markets struggled throughout the GFC the vast majority of firms had enjoyed and indeed feasted upon the false nirvana of the resources boom and a string of property related insolvency work. With these two wells of work now largely dry and the effective removal of the steady stream of government work via the Newman government’s cost cutting measures has seen revenues and profitability drop in most corners of town.
It’s a significant disconnect for a number of firms of different types and styles to be considering entry into a market that isn’t performing overly well and, at a time when most of the larger firms are reducing partner numbers. Sure this creates the prospect of opportunistic moves and hires but it’s also fraught with danger. As such we thought it timely to take a quick look at each of the current and potential entrants into this Brisbane market and rate their prospects of long-term success.
The starting point of our assessment is that the resources boom is, by and large, dead. There is unquestionably energy and resources work to be had in the Queensland market, there always has been and likely always will be but it’s an area to add to a firm’s offering rather than to base operations around. Indeed if you look at the historically stronger firms in the Queensland market the starting point for any new entrant needs to be to establish strong property and corporate practices. If a firm can get these areas right then strong practices in almost every other area will benefit. Finally, when it comes to the Queensland market, it’s important to remember that it’s small and certainly small enough to mean that most practitioners know each other, or, at the very least “know of” each other. In Brisbane reputation is equally as important as financial metrics.
The Entrants
Baker & McKenzie
Bakers have been trying hard to enter the Brisbane market for the last few years and their lack of early traction was somewhat surprising. As it currently stands the firm has three Brisbane based partners, Philip Christensen (Corporate – ex-Freehills), Jo Daniels (Competition – ex-Allens) and Darren Fooks (Resources – ex-Clayton Utz). It’s a handy mix and Fooks’ ability to generate fee revenue overcomes the fact that Christensen has been largely out of the market in recent years. Both Allens and Clayton Utz would have been sad to see the respective departures of Daniels and Fooks – not a bad litmus test in determining if you’ve made a decent hire.
Nonetheless Baker & McKenzie is a firm known for the breadth of service offering with respect to practice areas as much as jurisdictionally and so to really grab a hold of the Brisbane market they need to attract individuals in property, construction and litigation sooner rather than later. The below rating is dependent on the firm adding additional areas/individuals by the end of 2014. If there’s not movement early then Bakers should only look to just how hard it was for Johnson Winter & Slattery and Piper Alderman to build up their Brisbane office if you let the early stage dust settle too long.
Prospects of Success:
Above Average
Recommendation:
Act quickly – if nobody else joins soon then people might think there’s a reason not to do so in the future.
CBP Lawyers
There’s an argument to say that CBP lawyers isn’t really a “new” market entrant but rather just a rebadged and re-painted Hemming & Hart (who they merged within later 2013). That’s probably fair enough but the post-merger additional of a both an environment and a banking practice perhaps changes the complexity of the former’s Brisbane services mix.
There’s certainly a glint in the eye of the CBP partnership and, at present, the firm appears to have a genuine belief that it can be bigger and better but questions remain over the strength of the firm’s brand and whether its unique culture can deliver on such hopes.
Prospects of Success: Average
Recommendation: Need a stronger property practice.
Lander & Rogers
At this stage one litigation partner lured away from a haemorrhaging DLA Piper isn’t exactly a significant market move but a strong mid-tier brand combined with healthy finances means Landers shouldn’t be discounted as a potentially serious market player in the future. Providing the firm bypasses the potentially easier early stage path of establishing an insurance practice then there’s certainly room in the Queensland market for another strong upper mid-tier operator.
Prospects of Success:
Average
Recommendation:
Strong property, corporate and employment practices in Southern markets should be the matched in Brisbane.
The Proposed Entrants
Allen & Overy
Talk of Allen & Overy launching a Brisbane office was largely on the back of the firm’s work for Adani on the Abbott Point coal terminal. With Herbert Smith Freehills now having secured much of the Adani/Abbott Point work in the short to medium term it’s questionable if A&O still have the appetite for a Brisbane office.
Prospects of Success: Low
Recommendation: Play it safe. For now stick with Sydney and Perth.
Clyde & Co
Clyde & Co’s Australian footprint is starting to have a distinctly impressive look about it. There’s a strong mix of playing to the firm’s strengths in transport, litigation and insurance as well as catering to areas such as property and infrastructure. Add to this a few Queenslanders already part of its Australian partnership and there’s real possibilities here.
Prospects of Success:
Above Average
Recommendation:
Ignore our comments above in relation to the importance of property and corporate – stick to your strengths.
Maddocks Lawyers
If scuttlebutt is to be believed, Maddocks’ Brisbane office plans were torpedoed in 2011 when it narrowly missed out in luring the group of nine DLA Phillips Fox partners who eventually chose to establish the Brisbane office of Thomsons Lawyers (now Thomson Geer).
Since then not much has been heard about Maddocks’ attempts to set up a northern outpost but that doesn’t mean the firm doesn’t still harbour ambitions.
Prospects of Success:
Above Average
Recommendation:
If the firm sticks to its strengths in planning, property, construction etc then the Brisbane legal market has a place for it.
Pinsent Masons
Who the hell knows what‘s going on with Pinsent Masons Australian presence? It’s been a year since the firm abandoned merger talks with Maddocks and almost nine months since the firm announced that former Maddocks’ CEO David Rennick would be launching the firm’s Australian operations. The clock is ticking and there’s a feeling that something needs to happen sooner rather than later.
Prospects of Success: Low
Recommendation: Look elsewhere – Brisbane might be too difficult a starting point.
White & Case
Premium international brand? Check. Whopping partner earnings compared to other Australian firms? Check. Strong corporate and real estate practices globally? Check.
Three compelling reasons for White & Case to have made easy headway in establishing a Brisbane office (and Australian offices generally for that matter). There are numerous individuals and firms who claim to have spoken to White & Case but that it just didn’t proceed. Maybe White & Case is being too picky? Maybe they’ve got their pitch wrong? Either way, if White & Case do enter it will turn heads.
Prospects of Success:
Average
Recommendation:
Brisbane would a strange and risky choice for an Australian launch.