Australasian Legal Business (OzLB) Issue 8.5

Australian firms in Asia A new rush for the North

The total lawyerMBAs for associates – are they worthwhile?

Job marketMid-tier firms ready to pounce

ISS

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8.5

DEALS ROUNDUP US, UK REPORTS INDUSTRY ANALYSIS APPOINTMENTS CAPITAL MARKETS, M&A DATA

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The long road to recoveryNEW ZEALAND 2010

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GRAYSCALE VERSION

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EDITORIAL >>

Australasian Legal Business ISSUE 8.522

IN THE FIRST PERSONA ge means experience and experience means credibility with clients. Thus has run the conventional wisdom in the legal profession, replete as it is with distinguished silver-haired gentlemen in their 50s and 60s. Law firms with an average partner age under 45 are eyed with suspicion.

Where is the experience? Where is the leadership? There is a ready rejoinder to this conventional wisdom but it is not one which

you will see publicly stated. The rejoinder goes something like this. The most productive years of a lawyer’s

life are in his or her 30s and 40s. The typical client – and in particular, the typical general counsel – is likely to be in a similar age range. The typical client is therefore likely to gravitate towards an advisor of the same age, other than in those situations where particular seniority and experience is required.

It is therefore in the interests of firms to maintain a younger average partner age – a position which also provides a natural hedge against the perennial danger of having underperforming senior partners becoming entrenched in the organisation.

In certain industries this theory clearly does not hold true. There are many examples of well-known GCs who are well beyond their 40s. It might be said that decades of experience – and perhaps specifically private-practice experience – appears to be almost a prerequisite to becoming general counsel in some blue-chip companies, for example.

The exceptions, however, do not necessarily disprove a trend. Some rather youthful-looking faces have graced the pages of our monthly general counsel profiles in recent years, and this is a pattern which warrants attention. Has the tyranny of youth finally struck our conservative profession? Perish the thought.

According to many an older lawyer, Generation Y may not be advancing towards partnership as purposefully as their predecessors, but if the youth-oriented theories are correct, Gen Y may be exacting their revenge on firms sooner than expected.

“I am cautious because the general outlook for high-end legal services is volatile. More businesses tend to fail on the way out of a recession than on the way in”Mark Weenink, Minter Ellison Rudd Watts (p42)

“Last year there were a lot of tyre-kickers and enquires that didn’t go anywhere at all – now a lot of those are actually coming onstream so we are seeing a lot more activity than we were last year”Peter Chemis, Buddle Findlay (p27)

“Not being across the road means we cannot be at their office in half an hour, but we can hop on a flight and be there in eight hours”Anthony Latimer, Corrs Chambers Westgarth (p11)

It is in the interests of firms to maintain a younger average partner age – a position which also provides a natural hedge against the perennial danger of having underperforming senior partners becoming entrenched in the organisation

The age of reason

Australian firms in Asia A new rush for the North

The total lawyerMBAs for associates – are they worthwhile?

Job marketMid-tier firms ready to pounce

ISS

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8.5



The long road to recoveryNEW ZEALAND 2010

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contents >>

contents

Copyright is reserved throughout. No part of this publication can be reproduced in whole or part without the express permission of the editor. Contributions are invited, but copies of work should be kept, as Australasian Legal Business can accept no responsibility for loss.

ANALYSIS

10 AustralianfirmsinAsiaCompetition to consolidate an Asia presence intensifies

12 ThetotallawyerTailor-made MBAs for lawyers in the junior ranks – are they necessary?

FEATURES

44 TaxTax lawyers are enjoying improved workflows – and it’s not all about the effects of the recently released Henry Report

46 VirtualdataroomsWhat are the best technological services on offer for the smooth processing of your legal transaction?

50 CasemanagementExploring the murky waters of this frequently misunderstood area of firm management

36 ALB-KensingtonSwanIn-houseprofile:JohnBlair,AirNewZealandA look at the professional journey of one of New Zealand’s top-flight general counsels

40 ALB-LexisNexisManagingPartnerseries: MarkWeenink,MinterEllisonRuddWatts

Market perspectives from one of New Zealand’s leading lawyers

REGULARS

6 DEALS14 NEWS

• Norton Rose: today the airport, tomorrowthe world

• Clayton Utz to pursue Fuzi• Hogan Lovells: new 2,500-lawyer firm storms

onto world stage• Blake Dawson may pave way for more Aussie

firms in Japan• Mid-tier ready to pounce on top talent• Top-tier promotions proceed apace• Mallesons tops M&A league tables• China-MetroCoal joint venture shows the way

for future investment• Mallesons top league tables• High hopes as ribbon is cut on Kensington

Swan’s Abu Dhabi dabble• India and sport big business for Aussie firm

COLUMNS

13 Legaltraveller15 USReport17 UKReport19 In-houseQ&A54 M&Adealupdate

55 Capitalmarketsdealupdate

COMMENTARY

21 BusinesslawHarris Wagner

24 NewZealandBuddle Findlay

23 Employmentlawsparke Helmore

ALB ISSUE 8.5

COVER STORY

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26 ALB Special Report: New Zealand 2010 New Zealand’s economy is a step or two behind Australia,

but firms are planning for better times

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australasian legal business ISSUE 8.5

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NEWS | deals >>


deals in brief

in which Newcrest will acquire Lihir under a scheme of arrangement

• Blake Dawson has previously advised Lihir Gold on A$1.1bn merger in 2008 of Lihir and Equigold and the A$350m merger in 2006 between Lihir and Ballarat Goldfields. Both transactions were led by Philip Maxwell

• Blake Dawson also advised Lihir

| M&A | ► NEWCREST–LIHIR GOLD BID A$9.2bn

Firm:AllensArthurRobinsonLead lawyer: Jon WebsterClient: Newcrest

Firm:BlakeDawsonLead lawyer: Philip MaxwellClient: Lihir Gold

• Newcrest and Lihir have entered into a merger implementation agreement

| M&A | ► SHELL OVERSEAS HOLDINGS DIVESTMENT OF 37% INTEREST IN FULTON HOGAN NZ$472m

Firm:ChapmanTrippLead lawyers:Barry Brown,Geof ShirtcliffeClient: Shell Overseas Holdings

Firm:AnthonyHarperLead lawyer: Paul HartlandClient: Fulton Hogan

Firm:HarmosHortonLuskLead lawyer: Andrew HarmosClient: Fulton Hogan Limited

• Chapman Tripp and Buddle Findlay also advised on Shell Overseas Holdings’ divestment of Shell’s New Zealand downstream business

• Completion is over a four-and-a-half year period to June 2014

| M&A | ► SHELL OVERSEAS HOLDINGS DIVESTMENT OF SHELL’S NEW ZEALAND DOWNSTREAM BUSINESS NZ$900m

Firm:BuddleFindlayLead lawyers: Gene Turner,Jason Boyes Client: Aotea Energy

Firm:ChapmanTrippLead lawyer:Barry Brown Client: Shell Overseas Holdings

Philip Maxwell Blake Dawson

Barry Brown Chapman Tripp

“[The divestment of Shell’s NZ downstream business] broke new ground, being the first arrangement of its kind for the parties and in New Zealand”

Gene Turner, Buddle Findlay

on a major capital raising in 2007 comprising A$1.2bn entitlement offer and placement

• Newcrest long-standing AAR client

NEWS | deals >>

7www.legalbusinessonline.com

► YOUR MONTH AT A GLANCE

Firm Jurisdiction Dealname A$m Practice

Allens Arthur Robinson Aus Newcrest-Lihir Gold bid 9,200 M&A

Aus Origin energy bank debt facilities 2,600 Debt

Aus Development of 168 Castlereagh Street Sydney 400 Property

Aus Collgar Wind Farm development 740 Energy

Anthony Harper NZ Shell Overseas Holdings divestment of 37% interest in Fulton Hogan

360 M&A

Blakiston & Crabb Aus Clough Operation–Forge Group bid 98 M&A

Blake Dawson Aus Western Areas convertible bond issue 125 debt

Aus Newcrest–Lihir Gold bid 9,200 M&A

Bell Gully NZ Rubicon capital raising 16 Equity

NZ Aotea Energy –Shell assets acquisition financing 543 Finance

Blake Dawson Aus Refinancing of FirstMac Bond Series 2006-1C 340 Debt

Buddle Findlay NZ Shell Overseas Holdings Limited divestment of Shell’s New Zealand downstream business

686 M&A

NZ Aotea Energy –Shell assets acquisition financing 543 Finance

NZ Sky Television rugby rights n/a Media

Chapman Tripp NZ Shell Overseas Holdings divestment of 37% interest in Fulton Hogan

360 M&A

NZ Shell Overseas Holdings Limited divestment of Shell’s New Zealand downstream business

686 M&A

Clayton Utz Aus Mungana Goldmines IPO 76 Equity

Corrs Chambers Westgarth

Cyprus, Netherlands

AED Oil acquisition of Nations Petroleum subsidiaries n/a M&A

PNG PNG treasury issue of treasury bills n/a Debt

Aus ImpediMed equity raising 20 Equity

DLA Phillips Fox Aus MetroCoal–ChinaCoal joint venture 30 JV

Freehills Aus Mirvac Group capital raising 500 Equity

Aus Collgar Wind Farm development 740 Energy

Aus Australian Prime Property Fund Retail capital raising 500 Equity

Gilbert + Tobin Aus Citigroup–Virgin Money venture n/a Financial services

Harmos Horton Lusk NZ Shell Overseas Holdings divestment of 37% interest in Fulton Hogan

360 M&A

HopgoodGanim Aus MetroCoal – ChinaCoal joint venture 30 JV

Aus Northern Energy - Xinyang Iron and Steel Group coal off-take agreement

700 Energy

Mallesons Aus Origin energy bank debt facilities 2,600 Debt

Aus Western Areas convertible bond issue 125 Debt

Aus Refinancing of FirstMac Bond Series 2006-1C 340 Debt

Minter Ellison Aus Collgar Wind Farm development 740 Energy

Russell McVeagh NZ Aotea Energy–Shell assets acquisition financing 543 Finance

Sparke Helmore Aus Development of 168 Castlereagh Street Sydney 400 Property

Firm:BellGullyClient: Lenders’ syndicate

Firm:RussellMcVeaghClient: Lenders’ syndicate

• Purchaser Aotea Energy is a 50/50 joint venture between Infratil Ltd (a NZX-listed infrastructure company) and NZ Super Fund

• Buddle Findlay assisted in this deal by CMS Cameron McKenna in London; specialist energy sector advice also provided by Hale & Twomey

• Infratil is a long-standing Buddle Findlay client, and Buddle Findlay regularly acts for it and a number of its subsidiaries

• Buddle Findlay acted for the consortium on all aspects of the transaction, including financing and ongoing supply arrangements

• Chapman Tripp also advised on Shell Overseas Holdings divestment of 37% interest in Fulton Hogan

| EQUITY MARKETS | ► METROCOAL–CHINA COAL JOINT VENTURE A$30m

Firm:DLAPhillipsFox/DLAPiperLead lawyers: Eugene Fung, Wan LiClient: China Coal

Firm:HopgoodGanimLead lawyer: Michael HanselClient: MetroCoal

• China Coal has acquired 51% interest in MetroCoal’s Columboola coal exploration acreage in the Surat Basin, Queensland for A$30m

• Joint team from DLA Phillips Fox and DLA Piper advised China Coal on deal

• Last year DLA Phillips Fox also advised on a JV between Mega Uranium,

Does your firm’s deal information appear in this table?Please contact [email protected] 61 2 8437 4700

Gene Turner Buddle Findlay

Michael Hansel HopgoodGanim

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NEWS | deals >>


Japan Australia Uranium and Japan’s ITOCHU corporation in Lake Maitland

| DEBT | ► ORIGIN ENERGY BANK DEBT FACILITIES A$2.6bn

Firm:AllensArthurRobinsonLead lawyer: Alan MaxtonClient: Origin Energy

Firm: Mallesons Lead lawyers: Richard Hayes, Scott GardinerClient: mandated lead arrangers

• Transaction involved syndicated bank loan for A$2.3bn and US$200m, together with an A$100m bilateral bank guarantee facility

• New facilities will be used to refinance A$1.8 bn and US$200m of existing facilities that mature in FY2010 and FY2011

“[The Origin Energy bond debt facility deal] is the largest syndicated corporate finance deal so far this year and shows the growing appetite in Asia for good corporate credits. It was a great result for Origin and the banks and provides strong support for Australia’s thriving energy sector”

richard hayes, Mallesons

| DEBT | ► WESTERN AREAS CONVERTIBLE BOND ISSUEA$125m

Firm:BlakeDawsonLead lawyers: Roger Davies, Matthew Rumpus, Sasha LimClient: Western Areas

Firm:MallesonsLead lawyer: John SullivanClients: UBS, Macquarie Bank (underwriters)

• Bonds due in 2015 and are to be issued at premium of approx 28% to last share price of Western Areas, prior to launch of $A5.18 per share

• Only the second such deal in recent years

• Mallesons acted for lead manager in Commonwealth Property Office Fund’s Singapore listed CB issue in December 2009

| DEBT | ► REFINANCING OF FIRSTMAC BOND SERIES 2006-1C A$340m

Firm:MallesonsLead lawyer: Paul SmithClient: FirstMac Limited

Firm:BlakeDawsonLead lawyers: Paul Jenkins, Graeme TuckerClient: Perpetual

• FirstMac will seek to refinance A$340m of mortgage-

backed securities without government support, which will involve FirstMac agreeing to acceptable terms with investors in a distressed market

• Participating noteholders having their debt replaced with notes reflecting current market terms and conditions

| M&A | ► COLLGAR WIND FARM DEVELOPMENT, CONSTRUCTION AND OPERATION A$740m

Firm:AllensArthurRobinsonLead lawyer: Phillip CornwellClient: financiers

Firm:FreehillsLead lawyers: John Nestel,Andrew ClarkeClient: Collgar

Firm:MinterEllisonLead lawyer: Sam MacGibbonClient: UBS, REST

• 206MW wind farm will provide renewable electricity to the Western Australian power grid, under a 15-year power and green credits purchase agreement with Synergy

• Other wind farm deals upon which Freehills has advised include the Ryan Corner and Hawkesdale wind farms and the Emu Downs Wind Farm project in Western Australia

Roger Davies Blake Dawson

NEWS | deals >>


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NEWS | analysis >>


The North FaceBlake Dawson in Tokyo, Clayton Utz in Hong Kong and Minter Ellison in Beijing: 2010 seems to be the year of an Asia renaissance for Australian firms. ALB investigates

ANALYSIS >>

Three top-tier firms announce new Asia offices. Norton Rose is welcomed into Australia with open arms by Deacons. Allen

& Overy arrives via the back door. Rumours persist that Linklaters and Clifford Chance are sniffing around the Australian market. One top-tier firm is apparently so concerned about the possibility of a raid that it has been holding a series of crisis meetings aimed at anticipating and preventing a Clutz-style exodus. Is all this a coincidence, or symptomatic of the same pervasive trend?

The common theme here is the lucrative potential of the Asia market. Australian firms are looking north and international firms, in turn, are looking to Australia at least in part as a means of resourcing an Asia assault. However, while there is evidence of a collective dash to capitalise on Asia, this analysis is tempered somewhat by a look at the individual circumstances of each venture.

ALB has previously noted that the expansion of Allen & Overy into Australia was as much a product of the unique circumstances within Clayton Utz as it was a testament to the attractiveness of the Asia-Pacific.

Clayton Utz itself is an interesting case study. Despite protestations that

NEWS | analysis >>

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NEWS | analysis >>


the expansion into Hong Kong is a “natural progression” of the work the firm has already done in Asia – and to be fair, the firm has built some good relationships in the region – we are yet to see any convincing explanation as to why, after 20 years of relationships-based strategy, the firm has suddenly decided to hang out the shingle in Hong Kong. The irresistible inference is that Clutz came to the conclusion that its previous strategy was wrong and that a physical presence was preferable to an offshore relationship-based presence. In last month’s managing partner profile, CEP David Fagan denied that such an epiphany had taken place.

The mysteries of Clayton Utz aside, now is the time for firms to take a close look at their Asia credentials. Such an analysis may or may not result in a change of policy. It is worth noting that some of the new ventures – particularly Blake Dawson’s foray into Tokyo – have attracted some scepticism about exactly what is to be gained from pushing further into a market which is already well served by Australians. In the end, the matter comes down to a reprisal of that familiar debate about what a physical presence in a

BYGEOGRAPHICALSPREAD

MallesonsStephenJaques

AllensArthurRobinson

BlakeDawson

MinterEllison

Freehills ClaytonUtz

Hong Kong 13 partners 5 partners 7 partners 2 partners

93 lawyers 18 lawyers 23 lawyers 4 lawyers

Beijing 3 partners 1 partner

9 lawyers 6 lawyers

Shanghai 1 partner 1 partner 1 partner 1 partner

6 lawyers 7 lawyers 4 lawyers 5 lawyers

Singapore 4 partners 2 partners 3 partners

8 lawyers 2 lawyers 9 lawyers

Port Moresby 4 partners

12 lawyers

Jakarta 2 partners 2 partners nil

16 lawyers 17 lawyers 1 lawyer

Tokyo 1 partner

3 lawyers

Bangkok nil

5 lawyers

Hanoi 1 partner

6 lawyers

Ho Chi Minh City 2 partners

7 lawyers

Phnom Penh 2 lawyers

nil

BYTOTALLAWYERNUMBERS

MallesonsStephenJaques

AllensArthurRobinson

BlakeDawson

MinterEllison

Freehills ClaytonUtz

NortonRose

Number of offices in Asia 3 11 5 2 1* 1 13

Total number of partners and fee-earners in Asia

125 91 48 35 14 6 298

* Formal alliance with TransAsia lawyers in Beijing and Shanghai. Correspondent offices with Soemadipradja & Taher – Jakarta; Frasers Law Company – Ho Chi Minh City, Hanoi

given jurisdiction adds to any given relationship.

Lining up to plead the case in the negative will be Freehills, Gilbert + Tobin and Corrs, all of whom are persisting with a relationship-based or “fly in, fly out” model.

Corrs partner Anthony Latimer told

ALB that a physical presence made little difference, as long as Australia-based staff make themselves available and mobile. “Not being across the road means we cannot be at their office in half an hour, but we can hop on a flight and be there in eight hours,” he said. Corrs has six partners across its Melbourne, Sydney, Perth and Brisbane offices dedicated to China- related work. Latimer says that his firm’s Asia offering is on a par with that of firms which have a physical presence there, aided by a combination of modern technology, strong language skills in Australia and senior partners

who have spent most of their lives in China. At the other end, Mallesons has 125 fee earners in Asia and would scoff at the suggestion that a physical presence was irrelevant. As certain individuals within Mallesons are fond of reminding us, it is the size of the footprint that counts, not necessarily the number of offices or shop-fronts a firm can claim to its name.

In the end, it may be the case that there is room for more than one Asia-Australia model. Now, however, is the time for firms to review their strategy and to stake their claim on the lucrative opportunities to the north. ALB

“Notbeingacrosstheroadmeanswecannotbeattheirofficeinhalfanhour,butwecanhoponaflightandbethereineighthours"ANTHONYLATIMER,CORRSCHAMBERSWESTGARTH

► AUSTRALIAN FIRMS IN ASIA

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NEWS | analysis >>


Should MBAs remain the preserve of senior lawyers and firm management, or should junior lawyers participate in this career-enhancing opportunity?

When London firm Simmons & Simmons recently announced that it would defer the start dates for

some of its 2010 graduate trainees, that news alone barely rated a mention. In contrast to the Australasia region’s cautious optimism, austerity is still very much the order of the day in Europe. What was unusual, however, was how the firm intended to keep those young lawyers-to-be busy in the intervening period. Simmons & Simmons decided to send them on a custom-designed MBA program.

Welcome to the brave new era of the “total lawyer”.

In the 1970s, Dutch football coach Rinus Michels turned 100 years of football strategy on its head when he devised the concept of ‘totaalvoetbal’

The total lawyer

ANALYSIS >>

(total football). The concept was simple: each player on the pitch had no single nominated role but was instead expected to play as an attacker, midfielder or defender, depending on the passage of play.

The concept was so successful that Michel’s team, Ajax Amsterdam, dominated both Dutch and European football in the late 60s and early 70s.

So what success lies on offer for law firms who embrace this concept? The point of difference here is that

“Clientsexpectstrongteamwork,businessacumenandprojectmanagementskills”KATERIMER,MALLESONSSTEPHENJAQUES

news in brief>>CLAYTONUTZOPENSHKDOORSBetter late than never: Clutz finally celebrated the official opening of an Asian centre on 20 April, when its Hong Kong office was launched. In line with local regulations, Clayton Utz will act in association with HK firm Haley & Co and will initially focus on construction and projects, dispute resolution and international arbitration work. Clayton Utz partner Colin Dodd, who resides in Hong Kong, will oversee the office, working with Glenn Haley, the former head of Deacons’ construction group in Hong Kong.

FREEHILLS,BAKER&MCKENZIEBILLA$5M,A$6MFORELECTRICITYPRIVATISATIONFreehills has billed the NSW Government A$5m and Baker & McKenzie has billed the NSW Government A$6m in 2007-2008 for advice in relation to the proposed sale of electricity assets. The figures appeared in documents tabled in the Upper House following calls by the Opposition.

NSW Shadow Treasurer Mike Baird said that the complexity of the electricity sale and the fact it had been delayed was sending costs “sky high”.

SLATER&GORDONARRIVESINALBURY/WODONGA,DUBBOANDGILGANDRAListed law firm Slater & Gordon has opened its doors in Albury/Wodonga, Dubbo and Gilgandra, after finalising its previously announced merger with local firm Adams Leyland. These changes follow on from the acquisition of Stewart & Noble Lawyers in Wangaratta last month.

Slater & Gordon now has 34 offices nationally and also operates visiting offices in several other regional centres. The firm has also flagged the intention to open a Townsville office in the next two months.

AARPARTNERSWORNINASJUDGEAllens Arthur Robinson solicitor Michael Ball has been sworn in as a judge of the Supreme Court of NSW at the Banco Court. Ball’s appointment as a judge had previously been announced by NSW Attorney-General John Hatzistergos in March.

He had been a partner with AAR since 1987 and had advised on a number of high-profile cases including the epic C7 case before the Federal Court.

NEWS | analysis >>


the ‘total lawyer’ is not one who is able to play any role with their firm, but a lawyer who is better able to understand the pressures facing their customers. In essence, the ‘total lawyer’ is one who is best able to also play the role of his or her clients.

The total lawyerSimmons & Simmons paired up with local educational provider BPP Business School to launch an MBA course specifically tailored towards lawyers. The one-year MBA (Legal Services) course is designed to create “first-rate, commercially astute lawyers, capable of offering legal advice based on an understanding of the business context” – in other words, young lawyers who have a deeper appreciation of the real-world financial pressures acting on their clients.

“The MBA will give our future trainees a great head-start in terms of gaining commercial business skills, but the skills they acquire will remain with them for life,” said Simmons’ partner Nick Benwell. And this innovation has not gone unnoticed in other parts of the world. Nick Seddon, managing director of Eversheds in Hong Kong, believes such initiatives are long overdue.

He said any program that brings lawyers closer to their clients may be a crucial factor helping law firms separate themselves from the rest, in increasingly saturated legal services markets. “You will see law firms in Asia following what is happening in the UK because it is vital to their future success. Asian clients can sometimes be more demanding than those in the US or UK because there is potentially more cost pressure on them. As a result, lawyers here need to be more than just draftsmen.”

In Australasia much has been written about the benefits of MBAs and postgraduate education for lawyers. This dialogue, however, has largely taken place in the context of managing partner and CEO roles, and the benefits which accrue to those lawyers who are aspiring to hold such roles. Will firms

in Australia and New Zealand take one step further and embrace the concept of the total lawyer?

Partner David Gould of New Zealand’s Anthony Harper Lawyers says that the key point is business acumen, not necessarily formal qualifications. “The best people always rise to the top, regardless of training. Experience and having business skills – we expect that of all our lawyers,” he said. “It comes down to street credibility and knowing how a business is run that is critical. You don’t necessarily need to go to that level of formality (of an MBA).” That said, he noted that most of Anthony Harper’s corporate partners have commerce degrees.

Kate Rimer, who is executive director of people & development at Mallesons, says that at the more junior level it is commercial experience and secondments that are most valuable for lawyers moving towards understanding clients and business needs. “We tend not to push junior lawyers to study MBAs – it's not going to be of real value to their development at that level. There is a strong focus on technical skills and understanding industries and sectors which we develop internally, as well as through a significant commitment to external study and seminars,” she said. MBA or not, it is clear that the days of the black-letter lawyer are behind us. “Clients expect strong teamwork, business acumen and project management skills,” said Rimer.

The Simmons approach may simply be an example of a one-off strategy, but then again it may prove to be food for thought for law firms, when the war for young talent begins to flare again. ALB

Liam Prescott Partner, HopgoodGanimLitigation and dispute resolution, Brisbane

Favourite city to visit on businessSydney. It’s a great city and is convenient for short trips from Brisbane.

Best restaurant for business lunch Il Centro or Alchemy in Brisbane. Both have excellent atmospheres, menus and perennial ‘specials’.

Worst business travel experience Flying back to London from Edinburgh on a small twin engine commuter flight. One of the engines cut out shortly after take-off so we had to fly back to Edinburgh and land with a full emergency escort. Thankfully nothing happened but no one was prepared to get back on the plane after they had ‘fixed the problem’.

Best business travel experience A trip to to Rio de Janeiro to interview directors of a state-owned oil company. I was put up in the Copacabana Palace and had an insight into how royalty enjoy their time away – far too rich for my own tastes, but a great experience.

Least favourite destinationI visited South Africa in 1993 and 2004, and both times I found it difficult to look past the pervasive poverty and human suffering, both historically and today. As a holiday destination I found it a hard place to enjoy without feeling guilty about the privileged life we have in Australia.

Favourite destination France for its history, scenery, culture and food. While I don’t speak French at all, I admire the French for their passion and patriotism.

Most exotic leisure destination ever visited In 2006 my wife and I stayed at the Ice Hotel in Kiruna, Sweden. The hotel is reconstructed every year and different artists are invited to design and sculpt their own rooms, so no two rooms are ever the same. It wasn’t exactly a comfortable place to sleep, but it was exotic, and eating reindeer was an experience we were not expecting.

Most dangerous travel experience In 1996 I was on a rugby tour in Thailand. I have a vivid recollection of an overnight bus ride (if you could call it a bus) from Bangkok to Don Sak in order to get over to Ko Phangan. Sharing the trip with crates of live chickens and travelling at what felt like 140 km per hour on a single lane ‘road’ through the jungle was a bad way to expect to die. We didn’t want to tempt fate twice and borrowed money to get a flight back to Bangkok on the way home.

LEGAL TRAVELLER >>

“Thebestpeoplealwaysrisetothetop,regardlessoftraining.Experienceandhavingbusinessskills–weexpectthatofallourlawyers”DAVIDGOULD,ANTHONYHARPERLAWYERS

David Gould, Anthony Harper

Kate Rimer, Mallesons

14

NEWS >>


INDUSTRY >>

Norton Rose: today the airport, tomorrow the world

It’s been a sign of the times which has been hard to miss at airports

throughout Australia: large billboards proclaiming the arrival of Norton Rose. The billboards were part of a saturation promotion campaign to promote the Deacons-Norton Rose transformation throughout February to April. “It wasn’t cheap, but the ads were incredibly commented upon – every dollar spent was worthwhile,” Norton Rose Australia chief Don Boyd told ALB.

Boyd has a deeper purpose than brand awareness. He has made six lateral partner hires so far this year and plans to make another 24 appointments over the next two years, as part of a push to align the firm’s expertise in Australia with that of Norton Rose globally.

However, the headhunters should not become too excited – the firm is planning to do much of the recruitment itself and will continue a strategy of identifying and making systematic approaches to likely candidates. “Our partners are in the best position to identify the best and the finest and quite often they already know them – we’re not afraid to make that approach ourselves,” said Boyd.

Boyd says that he has also received

High hopes as ribbon is cut on Kensington Swan’s Abu Dhabi dabble

Last month New Zealand trade minister Tim Groser was on hand

in Abu Dhabi for the official opening of Kensington Swan’s pioneering new Middle East office.

The fact that it was the Minister himself wielding the ribbon-cutting scissors gives credence to the claims of Kensington Swan’s chairman, Clayton Kimpton, that the new office was important “not just for Kensington Swan but for the New Zealand professional services sector as a whole”.

“We believe having an office in Abu Dhabi will lead to a strengthening of economic and commercial ties between

NEW ZEALAND >>

our two countries, by promoting trade and investment cooperation,” he said. “Undoubtedly the opportunities a firm like Kensington Swan can open up will lead to increased trade opportunities between the two countries.”

Non-oil trade flows between New Zealand and the UAE are currently worth NZ$400m, said Kimpton, but given the country’s ambitious plans for growth, many future opportunities existed. The UAE is New Zealand’s fifth-largest trading partner.

Kickstarting the office will be a team of five lawyers cherrypicked from a forest of eager hands that went up

“Itwasn’tcheapbuttheadswerecommentedupon–everydollarspentwasworthwhile”DONBOYD,NORTONROSE

news in brief>>COMMUNITYLEGALCENTRESINFUNDINGPUSHThe National Association of Community Legal Centres is lobbying the Federal Government for an increase in funding, to meet increased demand for community legal centre services as a result of the economic downturn. The association is seeking A$28m in funding in the May budget. Meanwhile, Attorney-General Robert McClelland has foreshadowed the option of low-cost practising certifications for community legal centre volunteers.

GADENSPARTNERELECTEDPRESIDENTOFTENNISAUSTRALIAGadens property, planning and construction partner Steve Healy has been elected as president of Tennis Australia. Healy is a current Tennis Australia board member and Tennis NSW president. His term as president will commence in October 2010 following the retirement of current president Geoff Pollard. Healy will continue to serve as a full-time partner of Gadens Lawyers.

FREEHILLSPARTNERAPPOINTEDCOUNCILLOROFLONDONCOURTOFINTERNATIONALARBITRATIONFreehills partner Bronwyn Lincoln has been appointed a councillor of the London Court of International Arbitration Asia Pacific Users Council (LCIA). The LCIA is one of the longest-established international institutions for commercial dispute resolution. The LCIA Users’ Councils have more than 1,600 members from 83 countries.

GOAT-RACINGLAWYERRETURNSFORANOTHERDERBYQueensland wills and estate lawyer Dr John de Groot is once again sallying forth in an effort to revive the historic sport of goat racing across Australia. He is donating A$2,000 towards his eponymous John de Groot Australian Goat Racing Cup, which will be a main event at the annual Tree of Knowledge Festival in the Queensland bush town of Barcaldine over the Queensland Labour Day long weekend in May.

Dr de Groot, who raced goats as a child, wants to make Barcaldine the goat racing capital of Australia. “We hope the prize money will help revive the century-old sport and encourage more people to take it up,” he said.

NEWS >>


us reportNorton Rose: today the airport, tomorrow the world

High hopes as ribbon is cut on Kensington Swan’s Abu Dhabi dabblewhen the firm invited applications for a transfer to the region. New UAE managing partner Quentin Lowcay (outsourcing, procurement, technology) will oversee senior consultant Richard Cathie (construction, large projects), associate Julian de Lange, and solicitors Mark Brown and Karen Sanderson.

As the choice of Abu Dhabi (the seat of the UAE national government)over the more commonly-selected Dubai suggests, the team is targeting government work as a significant source of revenue, along with private clients and outbound investment into Australasia. ALB

a number of unsolicited enquiries from partners at other firms, including the top tiers. “They are attracted to what we are offering – we have a different story to tell and offices in 30 cities which is attractive to partners seeking to develop cross-border practices. We’ve also had a lot of queries from Australians who are currently offshore and looking to return to Australia, but wanting to continue working with the same international clients.”

An ambitious graduate recruitment program designed to eventually assist the resourcing of the firm’s Asia offices will help to maintain leverage, as will the fact that several existing partners have taken advantage of the opportunity to relocate to Norton Rose offices in places such as Moscow, Singapore, London and Jakarta. While there is an expectation that these partners will eventually return to Australia, they draw their remuneration from the local office while they are working offshore. It is a way of ensuring that the firm can operate globally without full financial integration, although Boyd reiterated that financial integration was still the main objective and Norton Rose was still anxious to resolve the well publicised complications relating to liability. ALB

ROUNDUP• Linklaters recently appointed Jean-Philippe Brisson as head of its US environment and climate change

practice in New York. He joins a four-partner team in the firm’s practice• US firm Akin Gump Strauss Hauer & Feld has poached Hogan & Hartson’s Geneva office to launch its

own Swiss practice this month. The team will be led by Charles Adams, Hogan’s former Geneva office managing partner and co director of the firm’s international litigation and arbitration practice, and will continue to focus on international arbitration, international civil litigation, corporate and commercial law and giving tax advice to corporates and high-net-worth individuals

• Mayer Brown has launched a competition and distribution practice in Paris with the hire of partner Nathalie Jalabert-Doury from Carreras Barsikian Robertson & Associés, who joins the office as the new practice head

• Milbank Tweed recently hired Shearman & Sterling’s Latin American practice head Andrew Jánszky, to lead its new São Paulo office. Jánszky – previously Shearman’s Latin American head and managing partner in São Paulo – will arrive at Milbank with associate Tobias Stirnberg, who joins as partner

• Hogan & Hartson and Lovells may want to re-think their name post-merger, after it emerged that the Hogan Lovells name has already been trademarked by a road haulage company in Nebraska. If the name is not changed it could develop into a costly litigation battle

LovellsChicagoofficetoclosecurtainsLovells recently announced plans to close its seven-partner Chicago office, due to its underperformance for a number of years. Although the plan is still subject to partnership approval it is expected that the office will close at the end of October, six months after the firm’s merger with Hogan & Hartson goes ahead. However, firm officials stress that the closure has been under review for some time and is not related to the merger. Lovells is currently in discussions to see whether there is scope to transfer the Chicago partners to another office, although this is not guaranteed.

Meanwhile, Lovells US managing partner Marc Gottridge has vowed to continue building the firm’s New York presence, following its May merger with Hogan & Hartson.

BryanCavelookforUKtie-upSt Louis firm Bryan Cave has been active on the merger front for a number of years – an attempted large-scale tie-up with Squire Sanders failed but a useful one with Atlanta-based 220-lawyer firm

Powell Goldstein went ahead last year. Now, however, it has installed one of the key players behind the Powell move – litigation partner Rodney Page – as head of its London office, with a specific directive to find a UK partner firm. Bryan Cave’s London office had a tough 2009 and its UK and European growth ambitions needed the extra impetus. The most likely merger candidate will be a mid-rank firm with similar PEP.

MayerBrownslashesstaffMayer Brown recently cut 28 associates and counsel and 47 members of staff from its US offices in the firm’s third round of layoffs in 18 months. The firm cited that ‘overall demand for legal services has not recovered fully’ and ‘voluntary lawyer departures have been significantly lower than our normal levels’, as reasons. Mayer Brown’s recently released financial results revealed that revenues fell by almost 14% in 2009, along with a decline in total revenue from US$1.12bn to US$1.29bn. The firm’s London office also saw a double-digit decline in revenues, with turnover falling by 16% to £93.8m from £111.6m in 2008.

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NEWS >>


JAPAN >>

Blake Dawson: paving way for more Aussie firms in Japan

Blake Dawson says its precedent-setting move in being the first

Australian firm in Japan may help other Australian firms launch there as well. Since announcing its intentions last year, the firm has since coordinated with the Japanese Ministry of Justice to obtain regulatory approvals and has secured its licence to operate as a foreign firm advising on Australian law.

“It was a fairly lengthy process in confirming that our office would satisfy all the legal requirements of the ministry,” said resident partner Natsuko Ogawa. “It was probably made more difficult in that the Australian system has not had to come into their scrutiny in the past. That in some ways may benefit other firms following in our

India and sport big business for Aussie firmThe Queen’s Baton made its way

to Australian firm Middletons’ Melbourne office last month as part of a networking event which presented an opportunity for the firm to not only host the baton before it makes its way to Delhi later this year but also promote and develop cross-border business through a common love of sport.

The firm played host to the Confederation of Indian Industry’s Building Business through Sport event, organised by Australian business groups such as the Australia India Business Council, of which the firm is a major sponsor. India group head Cameron Abbott said his firm understands that sport is a big business in both countries. “Both Australians and Indians love their sport including cricket and the Commonwealth Games and many a business deal has no doubt been struck while watching their beloved side win or lose.”

Abbott is certainly on the money. For both Australian and Indian business, India’s growing population of the affluent middle class will be a key part in growing their brand through sport. For example, the brand value of the Indian Premier League is currently

INDIA >>

estimated to be around US$4.1bn (A$4.43bn).

Abbott’s firm is looking to play a key part in this business. “Sport sometimes presents unique legal challenges, often in the context of public scrutiny, that characterises all facets of professional sport,” he said. “We encourage our local clients to look to India when investing or offshoring work [there] because of the similarities of our laws and that fact that India recognises copyright and trade marks – not a luxury available in many countries with a low-

footsteps if they choose to, but it’s hard to say.”

Managing partner John Carrington said the office is the fruit of many years of focus on Japan: “Attaining the licence represents not just a major step for Blake Dawson but for the Australian legal profession,” he said. “It follows extensive discussions and engagement with the Japanese regulatory authorities.”

Ogawa is accompanied by three other lawyers stationed at the new office, with another to join later this year. Although the firm has a stable list of Japanese clients such as Kirin and Mitsui, there is scepticism that the market for an Australian firm in Japan may not be sustainable.

cost manufacturing base.”Abbott said he is advising a number

of Australian companies, mostly in the logistics industry, going to India ahead of the Commonwealth Games. “We’ve assisted a couple going to India, around the transport and logistics side, and we’re seeing a range of sporting organisations from cricket to football [expressing], interest in the Indian market.” Past clients of the mid-tier firm’s six-year old India practice have included Oxfam Australia and Monash University. ALB

NEWS >>


uk reportBlake Dawson: paving way for more Aussie firms in Japan

Critics have said that while there has been a surge of investment transactions from Japan to Australia in the past two years, the fact that all of that work has been accomplished and serviced without any permanent Australian presence in Tokyo illustrates that the large investment to open offices and staff people to Tokyo is not justified.

Ogawa says that the firm is focusing on building relationships with clients and Japanese firms on the ground. “For [companies] less familiar with the Australian market there will be some level of attraction in having someone close by, with a local presence,” she said, adding that the firm does not see itself in competition with international and domestic firms in Japan. ALB

The antics of Allen & Overy and Norton Rose have kept the

Australian market somewhat distracted from the momentous Lovells – Hogan & Hartson marriage, which is being billed as the first significant trans-Atlantic law firm merger.

The deal has finally been consummated, with Hogan & Hartson and Lovells officially joining forces on 1 May. The result is a 2,500 lawyer firm which will undoubtedly put a few shivers up competitor spines. The ramifications of such a move may be that the next spate of international mergers will be across the Atlantic, rather than in Australasia.

However, not all partners from the two firms have chosen to be part of the merger. Most notably Robert Lewis, Lovells’ former Beijing managing partner, quit the firm to join local outfit Allbright as a senior international legal consultant as a senior international legal consultant. ALB

Hogan Lovells storms onto world stage

ROUNDUP• DLA Piper recently appointed a 19-lawyer team from Simmons & Simmons to enhance the capabilities of its

existing 100-strong lawyer practice operating from Milan and Rome. The team includes four partners• Lovells promoted 21 lawyers to its partnership this year in the litigation, IP and finance practice areas. It is the

firms largest promotion since 2007, compared to the 19 and 18 made up in 2009 and 2008 respectively • Addleshaw Goddard litigation partner Monica Burch has won the partnership’s backing to succeed senior

partner Paul Lee following a contested election for the position of chairman of the firm’s board. Burch will take over from former managing partner and current chairman of the LLP Mark Jones

• Konstantin Mettenheimer and Guy Morton recently announced that they would not be taking on third terms as joint senior partners at Freshfields Bruckhaus Deringer. An election campaign is likely to be held in autumn, but the firm is yet to decide whether it will continue having a joint senior partner or instead opt for one lawyer to take on the role

• Scott Bowie was recently appointed to succeed Tim Shipton as head of Linklaters global investment management team. Shipton will continue in his role as co-head of Linklaters’ investment managers

• Reed Smith recently recruited four senior construction partners from Pinsent Masons, boosting its construction practice and leaving Reed Smith with just two London-based construction partners

• Walker Morris is set to scrap its executive chairman role once current chairman Peter Smart retires in May 2011. The role of executive chairman will be replaced by a non-executive chairman and managing partner

Meanwhile, Linklaters has announced its associate pay scale for the coming year, maintaining its current rates after a reduction 12 months ago.

SJBerwincourtProskauerRoseformergerIts scope would always have been much narrower, but the talks around a merger between West Coast-headquartered US firm Orrick and UK player SJ Berwin were already underway even before the Hogan-Lovells merger had actually come into effect.

Some industry observers saw the Orrick-SJ Berwin tie-up as the first in a possible series of UK-US reactions to the Hogan-Lovells coup. Alas, the talks fell over as most such discussions do, in the early stages.

Not to be deterred, though, SJ Berwin is already pressing ahead with another potential US partner – Proskauer Rose. This merger is said to be driven by the funds practices of the two firms, who already have a working relationship. The combined firm would have revenues of approximately US$900m, putting it in the global top 30 by revenue.

Part-timerspatchupcapacityatFreshfieldsAn anticipated upturn in work levels later this year has prompted Freshfields to consider tapping into its network of alumni to handle increased workloads. Given the working title “Fresh Work”, the scheme is aimed at former fee-earners who might be available to work either part-time or on a short-term basis during busy periods.

Changesafootforassociatesalariesin2010Clifford Chance has followed suit behind Freshfields to become the latest Magic Circle firm to unfreeze associate salaries. The firm raised rates for assistants as well as allowing them to progress through the lockstep system.

From 1 May, associates and trainees will enjoy increased rates by an average of 3%– NQs will now earn £61,500, up from £59,000 last year. An associate with one year’s PQE will now take home £68,000 and three-year PQE salaries have increased to £84,500. Trainees will also benefit from a small salary increases: first and second years will now earn £38,000 and £43,000.

AUSTRALASIA >>

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NEWS >>


MetroCoal JV shows way for future China investment DLA Phillips Fox, DLA Piper and

HopgoodGanim have advised on an A$30m joint venture between China Coal Import & Export Company (CCIEC) and Australian junior miner MetroCoal. DLA advised CCIEC and HopgoodGanim advised MetroCoal.

As an example of an Australian-China collaboration between DLA Phillips Fox and DLA Piper, the deal is also notable in that the Chinese side is taking a lead role as the joint venture manager. DLA Phillips Fox partner Eugene Fung

Mallesons tops M&A league tables

CHINA >>

M&A >>

said that the deal could potentially flag a more hands-on approach to future Chinese investments.

HopgoodGanim partner Michael Hansel said that the transaction also represented a shift in foreign mining investment interest in Australia. “It shows how greenfield projects like MetroCoal’s exploration are gaining interest from cashed-up overseas producers, whereas before they were looking at more mature projects or mature assets,” he said. ALB

Mallesons has topped both the Bloomberg and Thomson Reuters

M&A legal advisor league tables for the first three months of 2010.

According to Bloomberg, Mallesons advised on US$8.96bn worth of deals in the Jan-March 2010 period, just ahead of nearest rival Freehills which advised on US$8.88bn worth of deals. Continuing a pattern observed last year, Freehills actually had a higher deal count than Mallesons (9 to 4) but Clayton Utz had the highest deal count overall – 16 deals.

Australia’s M&A legal market has remained active despite global economic difficulties, a number of large Australian corporates having accessed capital markets over the last 12 months. This has helped to underpin the market and, in particular, shored up company balance sheets in a manner which has allowed them to make acquisitions.

Mallesons Sydney partner Jason Watts said that M&A activity over the last six months has been driven by the resources sector and continuing interest from foreign purchasers, including China.

“In 2009, sponsors focused on managing portfolio companies through the cycle, with very little new activity. Now, sponsors are starting to look at more opportunities and banks are increasingly willing to lend again. However, the mega deals of the pre-GFC world are likely to be scarce this year.”

Watts says moving further into 2010, there is the possibility of more scrip-based mergers, involving the offer of shares in place of cash, as well as structured transactions and the separation of businesses.

Mallesons’ notable transactions this year include BG’s LNG deal with China Offshore Oil Corporation (CNOOC)

http://www.caseflow.com.au

NEWS >>


Mallesons tops M&A league tables

Clayton Utz has retained a QC and invoked a dispute resolution process under its partnership agreement to call

former partner Grant Fuzi to account over an alleged breach of fiduciary duty, according to a report in the Australian Financial Review. Fuzi is widely understood to have been the instigator of the defection of 14 Clayton Utz partners to Allen & Overy in February, establishing the Magic Circle firm’s presence in Sydney and Perth. A Clayton Utz spokesperson declined to comment on, or confirm the report.

Among other claims, Clayton Utz is understood to be pursuing a A$700,000 payout to Fuzi made upon his departure from Clutz, which was said to have been on the condition of Fuzi not joining a competitor. The firm is also understood to be aggrieved that Fuzi allegedly intercepted Freehills partner Chris Robertson, who was considering joining the Clutz partnership.

The dispute resolution process will call for mediation and arbitration, resulting in a binding award. This is the second dispute between a breakaway partner and their former firm recently – the founding partners of Chang, Pistilli & Simmons recently lost their claim against prior employer Atanaskovic Hartnell for their share of fees earned prior to their departure to set up the new firm.ALB

Clayton Utz to pursue Fuzi: report

Grant Fuzi, Allen & Overy

INDUSTRY >>

Whyhavein-houselawyersbecomeanincreasinglyindispensablepartofanorganisation?

I think that an increased role for in-house lawyers is part economic, part quality and part risk management. In terms of economic value I believe that the right in house team structure is able to deliver a better service to the organisation through relationship building and an intimate understanding of commercial and technical risk; these things enable an in house lawyer to provide more commercially focused advice. Sometimes the fact that advice can be communicated more ‘informally’ than an external opinion makes the advice more effective. Getting the right balance to the team structure is important, and also identifying what work is best done internally and what should be briefed to our external partners. If you can get these mixes right then the economic and quality benefits follow. In house lawyers also have the opportunity to work ‘on’ the business rather than just working on outputs. By this, I mean the ability to create processes, systems and education programs that contribute to the overall efficiency of the business and risk management profile. I think there is also a clear recognition that lawyers can also add a great deal of value to a company’s overall risk management approach; particularly in the context of an increased regulatory and compliance environment that Australian companies operate. We also have a number of very clever ‘legally qualified’ leaders in our business who operate in commercial roles. I think that these sorts of people are actually the ones that can become totally indispensable to a business.

Inrecenttimes,theroleofthegeneralcounselhasdiversifiedintoamultifacetedone,wheretheGCcanwearthehatoflawyer,legalmanager,compliancemanager,andcompanysecretary.Hasthis

increasedyourriskprofile?I look at this question a little differently. Rather than increasing my risk profile I think that the broader scope of the general counsel position is recognition by companies that ‘legal’ is only one aspect of risk management and that lawyers are well trained to provide leadership and responsibility for risk management across the business. I believe that the ability to provide input into these broader areas actually allows in house lawyers to better fulfill their responsibility to their company stakeholders, and not to mention a more challenging and fulfilling career path.

Whatarethemainchallengesyouandyourteamwillfacein2010?I don’t think that the challenges are necessarily any different to the ones faced in previous years except that with the sharp upward trend in the

demand for our mining, infrastructure and engineering services our legal team and external partners will have to continue working hard to deliver the outputs that our businesses expect.

Peter Tompkins general counsel commercial

Downer EDI

1

2

IN-HOUSE Q&A >>

3

integrity legal ► AUSTRALIA & NEW ZEALAND ANNOUNCED DEALS BY VOLUMEFirm Volume

(US$)Rank(byvolume)

Marketshare%

Dealcount

Rank(bydealcount)

Marketshare%

Mallesons Stephen Jaques

8,955 1 25.9 4 7 23.1

Freehills 8,880 2 25.7 9 1 49.4

Gilbert + Tobin 4,219 3 12.2 3 22 0.5

Blake Dawson 3,670 4 10.6 7 8 9.1

Clayton Utz 3,210 5 9.3 16 13 3.9

Corrs Chambers Westgarth

2,916 6 8.4 2 9 7.3

Baker & McKenzie 1,856 7 5.4 5 3 37.8

Freshfields Bruckhaus Deringer

1,232 8 3.6 3 4 36.3

Allen & Overy 1,114 9 3.2 2 - -

Lovells 1,114 9 3.2 1 30 0.0

White & Case 1,114 9 3.2 1 30 0.0 Source: Bloomberg

– one of the largest ever gas sales to Chinese interests. The firm acted for BG in relation to its deal to sell LNG from its Queensland Curtis project to CNOOC and for the equity investment in that project. ALB

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NEWS >>


http://www.lawinorder.com.au

T here are many benefits to gain from mergers and acquisitions (M&A) featuring in a firm’s growth strategy. Opportunities often include access to new markets, greater capability to meet client needs,

enhanced leverage through economies of scale, a broader demographic footprint, improved market perceptions of the brand, or an expanded suite of services. However, when it is all said and done the key driver for M&As is usually centred on delivering financial gains to the shareholders.

The grandiose plan to acquire a rival firm has been known to turn well respected and savvy business executives into hopeless romantics akin to a teenager under Cupid’s spell. Given this phenomenon, maybe it holds true that similar lessons apply to achieving a successful merger or acquisition as those that apply to courtship and marriage.

Our scenario begins in our late teens or early twenties (the firm is now a well established entity), when we look for a soul mate whom we one day plan to marry and ideally produce offspring (we source a target firm we plan to acquire in order to generate more wealth). We sketch out in our mind a list of the characteristics that appeal to us (an inventory of selection criteria is established) before eventually finding someone whom we feel meets our romantic ideals (an acquisition target emerges). If both parties oblige, a courtship begins (discussions of a potential merger leads to the commencement of due diligence).

During the courtship we are invariably on our best behaviour as we seek to impress our new beau (the financial statements are favourably presented and forecasts are acutely optimistic). Further, as we are completely besotted with our new love (we can only see pots of gold at the end of the rainbow) we become incapable of recognising the very character traits that infuriate us (we fail to acknowledge that both firms espouse contrasting values and organisational cultures). However, in a state of euphoria we tend to forego our instincts (our conservative appetite for unnecessary risk is ignored in favour of the lure of great wealth). Before long we pop the question of marriage prior to celebrating our engagement with family and friends. This includes authenticating the union with a diamond ring and a formal engagement notice (we enter into a pre-merger agreement and announce our intentions to staff, clients and the media).

Even though fundamental problems have begun to emerge, with our pride at stake and an extreme level of optimism, we decide to press on and agree that everything will be fine once we are blissfully married (we have a reputation within the industry to uphold and agree to address market perceptions now and work out the details of the consolidated firm once the M&A is completed).

Sound familiar? What is uncanny is that the results of marriages and M&As lead to similar rates of success with published statistics indicating that approximately 50% of marriages in Australia end in divorce. M&A’s fair somewhat worse with almost 70% reported to fail at achieving the financial objectives that initiated the merger or acquisition in the first place. Interestingly, unlike in western societies, the divorce rate in India is a mere 1% where marriages are typically arranged. Such unions begin with careful planning by arguably wiser and less emotionally implicated parents who consider the social standings, class status, educational levels, financial compatibilities and religious beliefs of the couple in question. Indeed, if romance blossoms, this often occurs many months or even years after the wedding.

With this in mind we are not necessarily advocating arranged marriages. However, maybe the odds of a successful merger or acquisition can be significantly improved when romance gives way to commercially minded strategies that are executed in a structured and professionally managed style. Achieving such outcomes often requires trusted advice from a range of industry professionals, who have no emotional stake in the long-term success of the union, and therefore are far less susceptible to Cupid’s spell.

Marriages and mergers – For love or money?


“The grandiose plan to acquire a rival firm has been known to turn well-respected and savvy business executives into hopeless romantics, akin to a teenager under Cupid’s spell”

Robert Wagner,PartnerHarriss Wagner Management Consultants

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EDITORIAL | Harriss Wagner >>

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NEWS >>


► LATERAL HIRES

Name Practice areas Organisation going from

Organisation going to

AlisonLindsay Media, telecoms Clifford Chance MinterEllisonRuddWatts

AmandaDavidson Construction Davidson Construction HoldingRedlich

AndrewJinks Securitisation AAR ClaytonUtz

BruceHeddle Employment, IR Clayton Utz Maddocks

DuncanFletcher Employment, IR Mallesons Middletons

EweLeongLim Corporate Hesketh Henry AnthonyHarper

IanCommins Construction Queensland government HoldingRedlich

JonCane Corporate/ commercial Corrs Chambers Westgarth HoldingRedlich

KentonSteicke Banking/ finance Mallesons Kelly&Co

LeveasquePeterson Employment, IR Mallesons RussellKennedy

LeonPasternak M&A Freehills MerrillLynch

MarshallMcKenna Dispute resolution Hunt & Humphry AAR

PatrickIbbotson Infrastructure Blake Dawson Maddocks

RodSmith Dispute resolution Barrister AnthonyHarper

RobertAustin Corporate Sydney University MinterEllison

SylviaCheah Property Hesketh Henry AnthonyHarper

TonyChong Corporate Griffin Group LavanLegal

APPOINTMENTS

NewGCforHSBCHSBC has appointed Bridget Powell as general counsel in Australia. Powell was previously deputy general counsel for HSBC Australia. In this role, Powell will be responsible for legal, compliance, the company secretariat and is a member of

HSBC’s executive committee. Powell has worked at HSBC for ten years.

Bridget Powell

Freehills Merrill Lynch

Freehills’PasternakheadsforMerrillLynchSenior Freehills partner Leon Pasternak has joined Merrill Lynch as vice chairman and managing director of M&A, a firm source has confirmed. The snaring of Pasternak is part of a broader recruitment push by the investment bank which notably included the poaching of the UBS property team of ten bankers and ten traders from the Royal Bank of Scotland. The Pasternak move is the latest in a series of high profile movements including Blake Dawson’s David Williamson shift to BHP and John Holland GC Anthony Arrow moving to Allens Arthur Robinson.

AAR Clayton Utz

Hunt & Humphry AAR

NewPerthpartnerforAARResources and native title practitioner Marshall McKenna has been appointed a partner at Allens Arthur Robinson, focusing on litigation and dispute resolution matters. McKenna joins Allens from boutique Perth firm Hunt & Humphry, where he has been a partner since 2000. McKenna will join AAR in July.

Marshall McKenna

news in brief>>

MID-TIERREADYTOPOUNCEONTOPTALENTHaving recently snared Bruce Heddle from Clayton Utz and Patrick Ibbotson from Blake Dawson, Maddocks CEO David Rennick has a stark message: this is just the beginning.

“There is certainly a lot more movement [of lawyers] now compared with even five months ago – the change is palpable,” Rennie told ALB. He says that this trend is attributable to more than just an improving of economic conditions. Rennie believes that the market is becoming increasingly segmented and lawyers are gravitating to firms which offer the best chance of supporting their particular specialisation. He says the arrival of international brands such as Norton Rose are accelerating this process.

“These firms have said that they are going to tackle particular areas and particular market segments – that forces other firms to ask themselves: what are our specialist areas? And in turn, it’s having an impact on people – they are asking themselves, where would be the right place for my practice to flourish?” he says.

Rennie says that Maddocks’ commitment to infrastructure as one of three key areas of firm specialisation was an important factor in attracting Patrick Ibbotson from Blake Dawson. He said that Maddocks had several more lateral hires in the pipeline.

Another factor which is said be important is firm culture. Maddocks has a structure which is designed to encourage partner involvement in firm decisions – for example, decisions such as who should become a partner are reserved to the partnership.

HSBC

ClaytonUtzbackontheprowl,snaresAARpartnerClayton Utz has recruited Andrew Jinks from Allens Arthur Robinson in a bid to shore up the banking & finance team which was famously raided by Allen & Overy in February. Jinks, a prominent name in the securitisation space, had previously been a partner at AAR for 13 years and has advised Westpac and St George on securitisation matters. Clayton Utz commented in a press release that the recruitment of Jinks comes at a time when Australia’s securitisation market was showing signs of resurgence, with credit makets stabilising and economic confidence returning to pre-GFC levels.

TOP-TIERPROMOTIONSPROCEEDAPACEThat intriguing middle ground between “senior associate” and “partner” became more populated last month with both Freehills and Mallesons announcing new special counsel and executive counsel promotions.

Mallesons has appointed four new special counsel in the firm’s M&A and and banking & finance teams. The new special counsel are located in Sydney, Perth and London.

Meanwhile Freehills has announced three new special counsel in the employee relations and litigation teams. At the same time, the firm has also made ten executive counsel appointments. The executive counsel role was created by the firm last year and performs the dual function of an alternative to partnership for those not wishing to pursue that goal and also a stepping stone for prospective partners to hone their leadership and business development skills. Freehills now has a total of 20 executive counsel.

David Rennick

NEWS >>


UPDATE >>

Employment Law

The terms ‘management’ and ‘control’ are terms used in occupational health and safety legislation across the country. The practical application of these terms in SA has been somewhat unclear, until a recent decision

in Markos v Commercial and General Projects Pty Ltd which clarified their meaning under the Occupational Health Safety and Welfare Act 1986 (SA) (the Act).The facts:South Shores (SA) Pty Ltd owned a site for which it engaged Commercial and General Projects Pty Ltd (Commercial) to undertake the development of a residential complex and an agent to sell the properties. During the development phase the agent facilitated a couple’s inspection of the site. While the agent remained in the onsite sales office the couple walked about the site.

During the course of their inspection, the wife attempted to inspect an upper level of a partially completed development by climbing a ladder, which had been accidently left by a contractor. As she attempted to descend, she fell and sustained serious injuries. Significantly, the incident occurred on a Sunday, a day which Commercial did not conduct any work on site.

Commercial were prosecuted under s 22(2) of the Act for failing to ensure the safety of members of the public whilst at a workplace under Commercial’s management and control.The decision:The issue turned on whether Commercial could be deemed to have “management or control” of the site when the injury was sustained. The Court found that control within the Act refers to actual control, related to things which the duty holder is managing or organising. It noted, ‘the duty imposed by s22(2) relates to an entity that not only has overall responsibility for the workplace, consequent upon its management of it, but also in the actual control of it.’

As the incident occurred on a day which Commercial did not perform work on the site, the company could not be considered to be in “actual control” of the site. Hence, the charge against Commercial was dismissed. The impact:This decision highlights the need to clearly set out each party’s obligations from the outset of an engagement, in order to provide clarity about what each party is required to do. Further, the actual arrangements must reflect what is provided in the written contracts and agreements.

In light of the decision, those dealing with contractual relationships should review their:

• engagement contracts, and in particular those clauses dealing with OHS duties;

• practices to check that they are in line with agreements in place; and

• policies and procedures to make sure that there are systems in place to control those aspects for which the employer is managing and organising.

Luke Holland, special counsel Sparke Helmore Lawyers For further information, please contact [email protected] Luke Holland

Management and control – what does it mean for you

Griffin Group Lavan Legal

PerthgroupcounselmovestoLavanLegalLavan Legal has announced the appointment of Tony Chong as partner in the corporate services group. Chong previously spent six years as in-house group counsel and head of tax for the Griffin Group. He will bring Lavan experience in commercial transactions and corporate advisory within the banking, property and energy sectors.

Tony Chong

Blake Dawson Maddocks

ToptierpartnersmovetoMaddocksFormer Blakes infrastructure and government lawyer Patrick Ibbotson has joined Maddocks as a partner in the firm’s Sydney office. Ibbotson’s practice extends to advice on project documentation, development issues, approvals, regulatory compliance, planning law, climate change and land access issues.

The announcement comes not long after former Clayton Utz partner Bruce Heddle made the switch to Maddocks in Sydney. Heddle is an employment and workplace relations specialist with over 20 years experience in the area.

Patrick Ibbotson

CliffordChancepartnerreturnstoMintersNZMinter Ellison Rudd Watts has welcomed back telecommunications, media and technology law specialist Alison Lindsay. Lindsay, who rejoins the firm as special counsel, was previously at Minters for seven years before joining Clifford Chance. She was most recently

Alison Lindsay

ThreenewfacesatHoldingRedlichTwo senior partners and a special counsel have joined Holding Redlich. Amanda Davidson has been appointed leader of the Sydney national construction and infrastructure practice. Before joining Holding Redlich, Davidson was CEO of Davidson Infrastructure in Singapore and has also been a partner at Freehills and Blake Dawson.

Jon Cane has joined Holding Redlich in Sydney as a partner in the firm’s corporate and commercial practice. Until recently he was a senior associate at Corrs Chambers Westgarth and previously a director at PriceWaterhouse Legal.

In Brisbane, Ian Commins has joined Holding Redlich as a special counsel in the construction and infrastructure practice group. Most recently he was acting director of legal services for the Queensland Department of Infrastructure and Planning and prior to that a partner with Nicol Robinson Hallets.

Amanda Davidson

PromotionsatMacDonnellsQueensland firm MacDonells has raised its partnership numbers to 27 after appointing three new partners, as well as an associate. In Townsville, the firm has appointed corporate partner Connie Navarro, while its Brisbane base has seen the additions of energy & resources partner Paul Jardine, corporate partner Cameron McKenzie and native title and indigenous law associate Sunil Sivarajah.

based in Hong Kong with Clifford Chance was head of that firm’s Asian telecoms media and technology practice.

Various Holding Redlich

Clifford Chance Minter Ellison

MacDonnells

24

NEWS >>


The tax treatment of New Zealander’s overseas investments may be simplified, if changes proposed in an issues paper,

New Zealand’s International Tax Review: Extending the active income exemption to non-portfolio FIFs, are enacted. The issues paper was released by the New Zealand Inland Revenue Department on 19 March 2010.

The issues paper is the most recent step in a gradual process to remove taxation obstacles to New Zealand companies’ international competitiveness, and to simplify the taxation of overseas investments made by New Zealanders. Overall, the changes represent a welcome shift towards encouraging investment and savings, and diversifying risk.

Until recently, overseas investments made by New Zealanders were generally taxed on an unrealised basis, regardless of whether any income had been repatriated to the New Zealand investor, unless the investments were located in one of a limited list of countries (the grey list). This made investing in countries outside the grey list much less attractive. A New Zealand resident who had an interest in a foreign investment had to pay tax on income as it was earned by the foreign investment, even if no income had been repatriated to the New Zealand investor.

In recognition of the distortions this created in New Zealand outbound investment, the rules were changed in 2009 for “controlled foreign companies” (CFCs). A CFC is a foreign company which, broadly speaking, is controlled by New Zealand residents. The new CFC rules introduced an “active business test”, under which active income of a CFC is exempt from New Zealand tax until that

income is repatriated to New Zealand, if only a small amount (5% or less) of the CFC’s income is earned from passive sources. Passive income is generally income such as rent, royalties, dividends, and interest. The grey list exemption for CFCs has been replaced with a limited exemption for Australian companies.

The issues paper proposes extending the same rules to an interest of 20% or more in foreign investment funds (FIFs). A FIF is a non-resident company, superannuation fund, or insurer under a life insurance policy, which is not controlled by New Zealand residents.

Extending the active business test to FIF interests of over 20% will provide an opportunity for investors in foreign active businesses to obtain more favourable tax treatment than they may currently be subject to. There may also be opportunities for New Zealand investors who currently have small foreign investments to group their investments in a single New Zealand entity that would then invest in the foreign entity.

For example, under current rules 4 single investors owning 6% each of an active FIF are taxed on the income of that investment on an unrealised basis (such as the fair dividend method, where income is generally deemed to be derived at 5% of the market value of the investment at the commencement of the income year), even if no income has been repatriated to the investors. Under the proposed new rules, the 4 investors may be able to group their investments in a single New Zealand entity (for example, a unit trust) that could then invest directly in the FIF. As that unit trust would own 24% of the FIF, it would qualify for the new rules and may not be taxed on the income of the FIF until income is repatriated to New

New Opportunities – reforming the taxation of New Zealand outbound investments

NZ COMMENTARY

Firm Profile Buddle Findlay

24 Australasian Legal Business ISSUE 8.5

Zealand, if it satisfies the active business test. Even better, since unit trusts are taxed as companies, any dividend income will be exempt at the unit trust level.

If an investor owns 20% or more of a FIF that does not meet the active business test (ie more than 5% of its income is from passive sources), then it is proposed that only the passive income would need to be attributed to the New Zealand investor as it is earned.

The issues paper also proposes simplifying the tax treatment of FIF investments of less than 20%. Four methods of attributing income will be available: fair dividend rate, cost, comparative value and deemed rate of return. The current grey list will be repealed, subject to the same limited exceptions as are available to Australian CFCs. An investor owning more than 20% of a FIF will not be taxed on attributed income if the FIF is resident and subject to tax in Australia, or if the interest is less than 20%, if the FIF is listed on the Australian stock exchange.

Submissions on the issues paper closed on 30 April 2010.

Neil Russ leads Buddle Findlay’s

tax practice. He specialises in

corporate and international

tax issues, as well as structured

transactions. In addition to

his tax expertise Neil has a

multi-jurisdictional background

in banking and capital markets

transactions.

Neil can be contacted by

phone: +64 9 358 7002 or

email: [email protected]

Neil Russ, Buddle Findlay

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Office spaceleasing market offers big savings

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SYDNEY 2010Back to the glory days?

02 8437 4731

http://www.legalbusinessonline.com

http://www.collaw.edu.au


the long road backI

n February this year, New Zealand Deputy Prime Minister Bill English laid out a stark assessment of the country’s economy. Rising

unemployment, sluggish growth – even in the pre-GFC era – and a five-year drop in exports were the highlights (or lowlights) of what English described as an extended passage of decline. While that prognosis about the long term challenges may be correct, credit must also be given where it is due – the NZ economy, like its trans-Tasman neighbour, has proven to be surprisingly resilient.

The Reserve Bank of New Zealand’s latest forecast is for around 3% growth this year and 4% growth the following year. Meanwhile, the NZ government has laid out an ambitious long-term plan to help revive the country’s economy. It has increased its capital allowance by NZ$7.5bn over the next five years, with much of this earmarked for

NEW ZEALAND:

26

► NEW ZEALAND FIRMS – BY LAWYER AND PARTNER SIZE

Firmname

Total Lawyers Partners Offices

Anthony Harper

34 18 16 Auckland, Christchurch

Bell Gully 199 152 47 Auckland, Wellington

Buddle Findlay

186 143 43 Auckland, Wellington, Christchurch

Chapman Tripp

207 153 54 Auckland, Wellington, Christchurch

DLA Phillips Fox

88 65 23 Auckland, Wellington

Duncan Cotterill

115 83 32 Auckland, Wellington, Nelson, Christchurch, Sydney

Kensington Swan

128 92 36 Auckland, Wellington, Abu Dhabi

Minter Ellison Rudd Watts


Russell McVeagh


Simpson Grierson

231 184 47 Auckland, Wellington and Christchurch

Note: figures supplied by firms and accurate as at April 2010. This list does not purport to be exhaustive

ALB SPECIAL REPORT | New Zealand 2010 >>

infrastructure projects – the rollout of ultra-fast broadband, better hospitals and more modern schools. NZ$7bn will be spent on the road network and NZ$3.3 bn on strengthening the national electricity grid.

Sweeping regulatory reforms – which have been in train since last year – will continue, led by more reforms in the tax and resource management areas. The reforms to taxation will sound rather familiar to Australian readers, but as NZ lawyers have tartly pointed out, their government has not shrouded its plans for taxation with the same level of secrecy and obscurity as Canberra has.

It is a mixed environment for lawyers, many of whom remain optimistic that transactional activity is on the mend. However, the counter-cycle appears to be playing a stronger part in law firm workflows than is the case in Australia, and firms are also strengthened



by the government’s renewed commitment to infrastructure investment. The result is an operating environment for law firms which is fragile, but not without redeeming features.

How are firms performing? Observing the customary secrecy surrounding NZ revenue figures, nearly all law firms interviewed by ALB described their results with adjectives rather than numbers. Russell McVeagh’s Gary McDiarmid said that his firm was tracking towards “comfortable” growth in 2010 following a “flat” 2009. Chapman Tripp’s Alastair Carruthers was even more cautious, saying that he was “very happy” with his firm’s performance. That can presumably be understood as meaning that the firm is, at least, recording growth. Minter Ellison Rudd Watts’ Mark Weenink said that his firm had recorded “double-digit” growth last financial year. Bell Gully’s Roger Partridge said that his firm recorded “modest” growth last year and was expecting a similar result for 2010.

Kensington Swan’s Clayton Kimpton said that his firm had recorded growth last year and expected further growth in 2010. The firm recorded a 10% increase in profitability last year – a result of increased revenue and running a tighter ship. Duncan Cotterill’s Janice Fredic says that her firm has recorded “just below double-digit growth” evenly spread across the offices of the trans-Tasman firm.

Simpson Grierson did not record growth last year but chairman Kevin Jaffe says that things are looking “stronger” for 2010. Buddle Findlay’s Peter Chemis, who we suspect is not enamoured with rigid industry traditions at the best of times, brushed aside the customary adjectives and put a percentage figure on his firm’s growth – 4% last year and tracking at around 5-8% this year. This is a good result which Chemis says is attributable to across-the-board performance and not just one or two practice areas.

“There’s been a bit of interest from private equity, a bit from offshore, perhaps more of a resources and primary industry focus – but it’s not possible to draw a common [theme]”

Roger PartridgeBell GullyClayton Kimpton

Kensington Swan

ActivityCommercial activity is beginning to show signs of life. “It is looking the best it has in one to two years – that is good, but obviously off a low base,” observes Gary McDiarmid. “Like all overdue downturns, there is a deep bathtub- shaped trough. You can spend a fair amount of time in the bottom before the inevitable upturn – but without doubt an upturn is on the way.” McDiarmid is well known for his apt turn of phrase and usually has a new metaphor to describe the economic season whenever ALB pays a visit (last year’s post-GFC slump was described as “the hangover following the party”), he hastened to make the disclaimer that this year’s bathtub analogy was borrowed from a colleague at a rival firm.

On the subject of M&A, New Zealanders evince the same level of caution and optimism as their Australian counterparts – but perhaps slightly more weighted towards caution. Alastair Carruthers suspects that M&A workflows will be “soft” all year. Gary McDiarmid says that there are “encouraging” signs that various players are looking at targets, but he too is unsure whether 2010 will see a genuine acceleration in activity.

Roger Partridge says that he has seen something of a pick-up in activity, although it’s a far cry from the halcyon days. “There’s been a bit of interest from private equity, a bit from offshore, perhaps more of a resources and primary industry focus – but it’s not possible to draw a [common] theme,” he says. Peter Chemis is optimistic. “Last year there were a lot of tyre-kickers and enquires that didn’t go anywhere at all. Now a lot of those are actually coming onstream so we are seeing a lot more activity than we were last year,” he observed.

Buddle Findlay and Chapman Tripp recently played key advisor roles on a complicated series of deals relating to Shell Overseas Holdings’ divestment of New Zealand downstream businesses. A number of firms were also busy with capital raisings last year and this work has continued into 2010, albeit at a reduced level. Gary McDiarmid says the bond market also may have peaked, for a similar reason. “Expect to see relatively less of that this year as bank debt is gradually becoming more available for good risks and is, as a result, also becoming cheaper. As a result this is

Gary McDiarmid Russell McVeagh

Alastair Carruthers Chapman Tripp

► ANTHONY HARPER RAIDS HESKETH HENRY, WARNS MORE TO COME

One swallow does not a summer make, but a recent raid by Christchurch-based Anthony Harper on Hesketh Henry in Auckland says a good deal about the respective fortunes of the two firms. AH has picked up corporate specialist Ewe Leong Lim and property expert Sylvia Cheah from Hesketh Henry, along with barrister Rod Smith who joins as a dispute resolution partner.

The move is notable because AH has previously serviced Auckland on a “fly in, fly out” basis and this represents the firm’s first permanent presence in the city. With the new recruits on board, AH now has three partners and four lawyers in Auckland and it has ambitions to double the size of this team over the next 12 months. “There is definitely more [recruitment] to come,” managing partner David Gould told ALB. “It is partly driven by us looking to expand but we also have had lawyers approaching us because they have heard of us and are attracted by what we offer. We have a clear specialist focus – our partners need to be true specialists – and we don’t try to be all things to all people.”

Gould’s comments reflect a similar analysis to that of Maddocks CEO David Rennick, who told ALB last month that an increased segmentation of the market was driving talent to specialist firms. Like Maddocks, Anthony Harper has recruited strongly and has grown from 10 to 16 partners in the last 12 months.

David Gould

DLA Phillips Fox

28



easing the pressure on corporates to diversify their debt profiles.”

Unsurprisingly, firms are still reporting strong workflows in traditional counter-cyclical areas such as insolvency, restructuring and litigation – however there is a distinct possibility that the bulk of the major insolvency matters have already passed.

A host of regulatory reforms, both planned and already enacted, is proving to be a particular headache for the in-house sector. “These changes are very challenging for business – on one level they are good, but on another level you would rather be helping business with constructive deals that actually create value, rather than [focussing on] compliance,” says Partridge.

Pressure on GCsIn the February edition of ALB, former CLANZ president Rebecca Holbrook warned that cost pressures on the in-house profession were set to remain strong. “This is not a time for firms to decide that the GFC seems to have passed, so they can put their fees up by 10%,” she said then. Julian Daly, general counsel & company secretary at PGG Wrightson says that it is possible to identify discrete trends within the overall pattern of belt-tightening. “It is more

legal and banking advice available and have just had to bear the pain whatever the cost of that advice.”

In last year’s New Zealand report, ALB aired the theory that there could be a “flight to quality” in difficult economic times – a theory which, to the extent that it implied that certain firms were not “quality”, drew a sour response from firms outside the Bell Gully/Chapman Tripp/Russell McVeagh triumvirate. Some, such as Simpson Grierson’s Kevin Jaffe, felt that ALB was demonstrating an entrenched bias. Peter Chemis also delivered his customary broadside at the top-tier concept. “It’s part of the myth they like to perpetuate – but we take work off the top tier all the time. They are losing work to all the other majors. “Flight to quality” –it’s self-serving nonsense. The market doesn’t care anymore what you say about yourself – it cares about what you deliver and what you deliver it for.”

Government and infrastructureInfrastructure projects are offering a measure of certainty in an unpredictable environment. “We’re not as much looking at GDP and the dollar as looking at where the government and business activity is,” says Clayton Kimpton. He says that the infrastructure workflow from the government’s ambitious plans is well underway, with projects requiring extensive and diverse advice covering front-end documentation, risk

management, property, litigation and even IT.

Kensington Swan, Chapman Tripp and Buddle Findlay have recently been appointed to the panel of the newly-formed New Zealand Transport Agency and will be in a good position to assist with the many billion dollars worth of road projects on the table. However, as Kimpton points out, local government authorities and the contractors themselves will also be major players in this work.

The other big story in the government space is the Auckland Super City project, which will see the amalgamation of

Rebecca Holbrook CLANZ

“The market doesn’t care anymore what you say about yourself – it cares about what you deliver and what you deliver it for”

Peter ChemisBuddle Findlay

keenly felt in areas of ongoing general business-as-usual work where the focus has been on driving further efficiencies,” he says. “However, on the bigger matters – for example, recapitalising balance sheets and capital structure issues, there is not the same opportunity to avoid big legal spend. In many cases these initiatives are a matter of ‘life and death’ for the organisations involved. Accordingly those organisations have necessarily sought the best financial,

Peter Chemis Buddle Findlay




several local government bodies, many of whom are significant consumers of legal services. The new Auckland City Council, in its final form, is likely to have an annual legal spend of about NZ$20m. Some rationalisation looks to be an inevitable result of the consolidation, but in the meantime the merger process is generating a large amount of work for external advisors. “There is a huge amount of transition work to be done – which is way beyond the resources and time frame that the transition agency has been afforded,” says Buddle Findlay partner David Thomson. “For example, integrating huge contractual obligations around the region and integration of technology – those are projects which will be ongoing for a few more years to come.”

Trans-Tasman driftA perennial story in the Australian-NZ dynamic is the relocation of work from New Zealand to Australia, either through the movement of head offices across the Tasman or through the acquisition of NZ companies by Australians. Mark Weenink draws a link between these trends and what he says is a ‘shrinking’ in the overall size of the NZ legal services market. However, there is no consensus on what impact, if any, this pattern will have on the business of law.

For example, Gary McDiarmid says that while some impact is likely for lawyers in certain areas, there has not been any impact on his firm. “The move of head offices removes a certain kind of work – not a huge amount of top-tier work. It hasn’t had a discernable impact for us.” CLANZ president Rebecca Holbrook notes that the trend for companies relocating from NZ to Australia does appear to be slowing. However, she says that trans-Tasman drift is still making itself felt. “For those companies that have relocated or are part of trans-Tasman or multinational entities, the level of oversight, scrutiny and involvement from parent companies is increasing,” she says. “This offshore oversight may have an impact on NZ law firms, with processes and agreements being driven centrally from off-shore.”

A new factor is the prospect of Australia acting as a vital conduit for legal work from Asian investors interested in NZ. In last month’s ALB Special Report: Sydney feature, we reported on claims that Sydney firms were experiencing an increase in queries from Asian investors

► IN-HOUSE COUNSEL SPEAK OUT – AND OFF THE RECORD

ALB sought commentary from some senior NZ-based in-house lawyers on their market perspectives. Several correspondents preferred to remain anonymous but nonetheless were prepared to share their thoughts. Below are some of the more thoughtful and candid observations.

ALB:Howwellarefirmsadaptingtothechallengeofprovidingmorecost-effectivesolutionstoclients?

In-houserespondent1: My honest opinion is that law firms are slow to adapt and they struggle to identify how they can truly add value to the business of their clients.In addition billing practices tend to continue along traditional lines. I suspect that to truly see change the drive has to come from clients as there seems little motivation or incentive for the law firms to change their approaches to billing.

In-houserespondent2: I have not noticed, nor have others noticed, any changes of significance by firms in terms of legal [fees]. I know of one partner in one firm, and a senior associate in another who largely focussed on government and Crown entity work, who have been released over the past year or so due to fee earnings not being high enough for the firms. It seems to be a case of riding through the downturn rather than any forward focus on better client value.

ALB:Whatotherissuesareabsorbingtheresourcesofin-houseNZlawyers?

In-houserespondent1: Managing legislative changes remains a huge issue. In the banking and financial sector there is a raft of key legislation e.g. Financial Advisers Act, Securities Act Review, and anti-money laundering legislation. Following the financial crisis I think that is only going to continue with further legislation to protect consumers. Recovery work continues to take up a disproportionate amount of resource...that is set to continue for the next couple of years. Other than that I see a push to focus on good governance and for organisations to ensure that they meet best practice in that regard.

In-houserespondent2: In the Crown Entities legal forum, there is a drive for efficiencies in practice management by introducing better systems for workflow management, peer review, knowledge spread to avoid reliance on individual experts, making legal advice more focussed and client friendly. An example is reducing the size and complexity of advice by cutting out much of the legal research and analysis components that clients normally skip over. Focus more on providing options and scenario plotting, and largely having a greater focus on the bottom line of interest to the client.

Generally speaking, law firms seem to still see a need to provide “complete advice” – there is a feeling among them that if they do not show full consideration of all issues in their advice, then the firms and their partners run a legal and reputational risk.

In-houserespondent3: It is, of course, good practice to keep legal models under review to ensure efficiency, client service and value demands are being met and continuously improved. The pressures of “cost out” in many sectors only go to reinforcing the importance of this. For in-house counsel this requires greater focus than ever on ensuring that the right prioritisation is occurring and the value is going into the right places within an organisation.

The focus is on efficient solutions, options and management of risks for business – the advice needs to be applied to the business issue. There is less time for academic lengthy opinions critiquing each and every legal interpretation point. What in-house counsel want is the distillation of the legal expertise into business solutions and options so it can be immediately applied.

11

2

1

2

3

30



ALB SPECIAL REPORT | Sydney 2010 >>

http://www.kensingtonswan.com




http://www.kensingtonswan.com

32



who, unfettered by traditional ties with centres such as Melbourne, were drawn to the bright lights of what is arguably the region’s best known city.

Is it possible that the same effect would see New Zealand-bound investors look to Sydney or Australia for guidance? “Work [originating from Asia] seems to come to us via Australia, whereas US work still comes to us directly,” says Mark Weenink. “Perhaps Asia views NZ as part of Australia much more than the rest of the world.” He says that links with big Australian firms will be more important than international links. “International work will come through Australia.” Roger Partridge is another to take the view that trans-Tasman relationships have a new significance in the post-GFC environment. “It’s certainly a significant phenomenon – I’m conscious of the importance of referrals from Australian firms,” he says.

Partridge would not go so far as to say that the majority of Asia-based work comes through Australia, but says that the matter comes down to one of profile and size. “Australian firms are significantly more visible on the world stage – they have a presence in Asia which NZ firms don’t,” he observes. “They are well-known and respected in Asia.”

McDiarmid agrees that there may be situations where an Asian investor may find it helpful to carry out a

transaction via an Australian firm – for example, where an investment relates to Australasian assets containing both a NZ and Australian component. However, he baulks at the suggestion that this approach is a blueprint for how all Asia/NZ transactions will occur. “The Asian investor in our view will invest directly in NZ business, commercial property and similar ventures if that is perceived as being the most efficient way to go about it. That is common sense and entirely logical,” he says.

Duncan Cotterill’s CEO Janice Fredic affirms this viewpoint, saying that her firm has had direct approaches from China. “It depends on where the communications channels are,” she says. Simpson Grierson acted for China-based Haier Group on its recent cornerstone investment in Fisher & Paykel. Chairman Kevin Jaffe says that the manner in which this kind of work flows to NZ firms is a question of existing relationships. He says he hasn’t detected any recent change in the manner in which work is directed to his firm.

Whether true or not, the hypothesis underlines the importance for NZ firms to maintain good relationships with Australian firms – something which McDiarmid says should always be a goal. “We have always believed that quality relationships with the top-tier Australian firms is very important, given Australia

Roger Partridge Bell Gully

► NEW EQUITY STRUCTURE RUFFLES FEATHERS AT KENSINGTON SWAN

Kensington Swan has suffered several partner departures in recent months and may be set to suffer more defections, sources have told ALB. Departures thus far include corporate partners Peter Missingham and Neil Millar and tax partner Peter Speakman. The defections come following the introduction of a new internal structure which was designed to give salaried partners an equity share.

Partner David Lewis said that not all of the departures were related to the new structure and that there had been a good deal of movement in the market in recent times. “There has been a lot of movement around town. Some get stuck in the headlights, some don’t,” he said, observing that there were other firms which appeared to have slimmed down their partner numbers. Lewis added that a change in structure was often a catalyst for movement, whether “by accident or by design. I would have been very surprised if there was no change,” he said.

Kensington Swan has had a high proportion of salaried partners in recent years which is understood to be a legacy of the 2000 merger with KPMG which was subsequently discontinued in 2003. Industry commentators have told ALB that the restructure was an important strategic move and some short term pain was justified to secure a sustainable structure in the longer term. Kensington Swan has also had some positive news of late – the official opening of a ground-breaking Abu Dhabi office. New Zealand trade minister Tim Groser was on hand to cut the ribbon on the venture last month.

David Lewis

Kensington Swan Janice Fredic Duncan Cotterill

http://www.bellgully.com



is an important market for NZ business,” he says. “To the extent that there is a need to involve a NZ law firm [in an Asia transaction] then the Australian firm will no doubt brief a firm or person where they have a relationship.”

But if you don’t have any formal relationships, you don’t have anything to lose. That was the reasoning process at Duncan Cotterill when it made the decision several years ago to open a Sydney office. Fredic says the move has helped build relationships with Australian firms. Despite the common assumptions of Australian-Kiwi cultural homogeneity, she says that there are significant differences between the two countries. The firm’s presence in Australia has afforded an enhanced perspective into how business is done there.

Trans-Tasman harmonisationPlans to integrate Australia and NZ into a single economic market are hardly fresh news – the concept has been existence in one form or another for many years. Last year Australian PM Kevin Rudd and his NZ counterpart John Key agreed to a joint statement of intent which expressed, inter alia, a general desire to“ deliver substantively the same regulatory outcomes in both countries in the most efficient manner.”

“Harmonisation will take some time to achieve, but over the next ten years the legislation will align more and more,” says Weenink. “Financial services, insolvency and bankruptcy are all well

on the way there, as is competition law.” Weenink says that there is a real possibility of Australian firms encroaching further on Kiwi turf as harmonisation occurs. This already does happen to some extent, with Australian firms such as Truman Hoyle accepting briefs from international clients to advise on NZ laws, either providing the advice themselves or outsourcing the work to a local firm where appropriate.

Whether or not this is a new trend or pattern that is likely to become more prevalent in the near future is debatable. Carruthers points out that the eventual goal of common regulation is a long way off and there are more pressing issues to occupy government in the meantime. “The game has changed from 18 months ago. The pressing issue is how we can get growth back to 3-5% and [economic] harmonisation is unlikely to add much to GDP. It does make sense, it will make life easier for business, but there are bigger fish to fry,” says Carruthers.

One lawyer who has had more cause than most to ponder the trans-Tasman divide, is McDonalds’ NZ senior counsel Michele Sang. For many years, McDonalds had no in-house lawyer in New Zealand, preferring to coordinate its work from Australia – an approach which was found wanting. “A lawyer from Australia could not deal with all the legal issues in NZ and vice versa. Even though conceptually

Michele Sang McDonalds NZ

“The Asian investor in our view will invest directly in NZ business, commercial property and similar ventures if that is perceived as being the most efficient way to go about it. That is common sense and entirely logical ”

Gary McDiarmidRussell McVeagh

http://www.bellgully.com

34



the issues are the same, you still need to have an understanding of the local laws,” she explains.

“That is why I was appointed for the NZ market. The Australian team could possibly have done the legal work out of NZ but they would have required a lot more external legal assistance.” As an example, Sang cites major differences in Australian and NZ leasing laws and overseas investment legislation. “For instance, in NZ if we purchase land that is either over a certain size, is situated near water or a historical site or a Maori burial ground, then we have to apply for overseas investment consent. This can take up to six months to obtain and costs us $20k in filing fees! [But] Australia is able to get an exemption under their equivalent legislation: at the beginning of each year, they can file a list of all potential sites they are looking at and at the end of each year, they do reconciliation. Their process is very simple and is inexpensive.”

Sang also cites franchising and trademark laws as another area of significant difference. McDonalds recently applied to trademark a new coffee brand in both Australia and NZ. The Australian filing has already been successful, but in NZ the company is still waiting for a result, having filed statutory declarations on evidence of use.

Outsourcing Some firms have reported an increase in the number of queries relating to outsourcing of work from international firms, particularly in the UK. “These opportunities are driven by the need for big UK firms to provide lower cost solutions,” says Carruthers. “There’s been more interest recently but not necessarily something that we would call a trend.” With its strategic alliance with Clifford Chance, Chapman Tripp is well-placed to take advantage of any Magic Circle outsourcing – should the firm decide to pursue this path.

Mark Weenink says he has seen a rise in outsourcing queries and says that this appears to be client driven. He says that NZ firms are particularly well-placed to provide these services. “New Zealand lawyers are particularly well travelled and are able to assist in relationships and they know what the Magic Circle firms expect – because quite often they have done a stint there,” he observes. But others remain unconvinced.

“I wonder to what extent it really is happening – it might be a case of firms agreeing to something in the abstract rather than anything real,” said one managing partner. “It doesn’t square with me – if the Magic Circle firms are quieter than normal, wouldn’t they keep that work to keep the juniors busy?” Kevin Jaffe shares this scepticism. “It’s something that’s been talked about for years. It is something which could work in theory, but is quite logistically challenging. There are a lot of potential complications and you need the right sort of work and the right sort of timing. We’re always in contact with Magic Circle firms, but I don’t see it as ever being a substantial part of the practice.”

The other challenge for law firms is the quality of work which is likely to be associated with such an arrangement. “It perhaps might be suitable as an entrée to something of more interest – but it’s not exactly attractive being someone’s back-room,” one commentator observed.

It is important to draw a distinction between the outsourcing of low-level process work, which is likely to be sent to developing markets such as India, and the outsourcing of higher level work where the experience of NZ lawyers is likely to be an attraction. Kensington Swan is a well-known example of a firm which has used a lower cost base to attract work both in the UAE and from Magic Circle firms.

However, the firm does not actively chase bottom-end work. “The nature of the work we’re doing in the Middle East is big, exciting – our lawyers feel that it’s really something special,” says Clayton Kimpton. He says that in his observation, lower-end work seems to be more likely to be directed to South Africa for time zone reasons, and that he has not seen a great deal of this work at home.

Talent drainDespite having to negotiate tougher economic conditions, NZ firms have

Kevin Jaffe Simpson Grierson

generally done a better job than their Australian counterparts in retaining staff and maintaining morale during the downturn. Nearly all large firms managed to avoid redundancies and salary freezes. The fragile state of the economy notwithstanding, NZ firms have been anxious to shore up their ranks in anticipation of better times. “We grew headcount last year – partly as a result of staff not travelling to the UK and overseas,” says Partridge. “We also made a conscious decision to recruit [expatriate New Zealanders] – you don’t want to waste a good recession.”

He says that he has noticed the market is starting to become a little tighter and UK firms are beginning to reengage with the Australian and NZ markets. “We’ve had staff approached for interviews and we recently lost someone to a Magic Circle firm,” he says. McDiarmid has also seen the same trend. “We are actively recruiting at all levels – we think that demand will outstrip supply quite soon.”

Clayton Kimpton says that Kensington Swan has not had any trouble finding good people. “London has not been hiring in a big way yet – but a couple of our people are testing out the market and there must be some reason for that level of confidence.” Simpson Grierson’s Kevin Jaffe has also observed this renewed confidence: “Last year there was almost zero movement – whereas now people are starting to take their chances. We’re starting to see people travel, take time out, even if they don’t have a job to go to. Fewer people seem to have something concrete lined up, compared to the past.”

Kimpton also notes that there is likely to be an increase in salary pressure for law firms, owing to perceptions that the downturn has passed – and also as a result of employees seeking compensation for a widely anticipated increase in GST later this year.

Janice Fredic says that Duncan Cotterill has managed to garner some “really good candidates” but she is expecting this to be a short-lived luxury. “We are expecting [market tightening] to happen, especially since Australia is so far ahead of NZ in terms of recovery.” ALB

“For those companies that have relocated or are part of trans-Tasman or multinational entities, the level of oversight, scrutiny and involvement from parent companies is increasing”

Rebecca HolbrookCLANZ



http://www.russellmcveagh.com

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FEATURE | interview >>


ALB’s Renu Prasad speaks with one of New Zealand’s most respected GCs about the turbulent world that is the global aviation industry

John Blair, Air New Zealand The sky’s the limit

Asenior role with an international airline during the financial crisis sounds like a uniquely vulnerable place

to be, but for John Blair it was just another chapter in an eventful career. “The issues we’ve had coming out of the GFC are no different to the issues we’ve had over the last 20-30 years,” says Blair. “In the years I’ve been in the industry we’ve had the Asian financial crisis, SARS, 9/11, Avian flu, the Gulf wars – all those things are of a global nature which impact the industry right around the world.”

Blair says that Air New Zealand has weathered the latest financial storm well, considering the circumstances. “The GFC affected a lot of airlines quite a bit more than it’s affected [us]. We were fortunate that at the start of that period we had a good strong balance sheet – we had number of projects going on which the board decided to continue with,” he says.

Given the long lead times for projects in the industry ( a new aircraft order may not see the first plane roll out onto the tarmac for seven or eight years) Blair was in the unusual position of having to deal with ambitious plans for growth, during the darkest hours of the crisis. Still, he says this accords with CEO Rob Fyfe’s philosophy that the best time to overtake during a marathon is during an uphill stint. “We want to position ourselves so that when the opportunity comes, we are ready to go for it,” he says.

But being an airline general counsel means dealing with shorter-term challenges as well. Blair says that the trans-Tasman market is one of the most

competitive airline markets in the world, with eight airlines vying for passengers. “That makes it more intensive than the trans-Atlantic market, in terms of population to aircraft capacity ratio,” he explains. Blair says that this is driven

by players such as Emirates, who are already flying to Australia but adding a trans-Tasman leg in a bid to pick up more revenue, or airlines servicing routes which need to pass via New Zealand to reach Australia. “The market geographically lends itself to these big international carriers flying this extra sector on the Tasman,” he says.

This is a state of play which has driven a lot of the legal work handled by Blair and his team – for example, applications to the ACCC and the NZ Commerce Commission for a proposed (and eventually abandoned) alliance proposal with Qantas, and scrutiny of how Air New Zealand can modify its operations without infringing the terms of its existing alliance or code share offerings. There is also a strong IP dimension to Blair’s work. “We have seen the concepts that we’ve introduced copied by other airlines around the

IN-HOUSE PERSPECTIVE

“The GFC affected a lot of airlines quite a bit more than it’s affected Air New Zealand. We were fortunate that at the start of that period we had a good strong balance sheet – we had a number of projects going on which the board decided to continue with”

John Blair Air New Zealand

world,” he says ruefully. “We don’t get overly excited about that. We take the view that imitation is the sincerest form of flattery, but we protect IP obviously where it’s appropriate.” A recent example is Air New Zealand’s much vaunted flat-

reclining economy class seat for couples (or “cuddle class” as it's known) which, together with a new premium economy seat, accounted for 80 new patents.

Negotiating contracts for the construction of new aircraft is perhaps not as big a part of Blair’s role as might be thought. “That happens only occasionally,” he explains. “With Boeing and Airbus there are only the two suppliers you can go to, so their contract terms are pretty difficult to negotiate other than around the fringes. So most of the negotiation is commercial rather than legal – ie it might come down to price.”

Nonetheless, there is a tremendous amount of contract, financing and procurement work involved. Air New Zealand’s iconic Boeing 747s are being gradually phased out and replaced with the new Boeing 787 and 777s. ‘They’re a fantastic aircraft,” Blair says of 747s, “but by comparison with the new 777s





38



and 787s it’s an expensive aircraft to operate – and cost is everything .” Adding a further layer of complexity, half of Air New Zealand’s aircraft are leased rather than owned outright, for capital structure planning reasons.

Internal and external advice Blair is in charge of a centralised team which handles all legal matters except employment law and IR, which are handled by a separate dedicated team within the airline’s HR department. Blair says that this is a system which works well. “Employment law is a specialist field and you can very quickly soak up a lot of resource with a lot of issues. You do need dedicated resources in that area [in companies] where you have large and highly unionised workforce – we deal with quite a number of different unions,” he says.

For external advice, Blair uses Bell Gully in New Zealand. “They are easy people to deal with – we have a comfortable, but professional relationship,” he says. In Australia,

Air New Zealand has historically used Freehills but recently has worked more closely with Corrs. Blair says that he is pleased with the work of Freehills and there was never any conscious decision to favour one firm over the other.

However, Blair describes Corrs partner Michelle Carr as the “linchpin” of Air New Zealand’s relationship with the firm and is impressed with her work. “She is somebody who thinks outside the square, is determined and gets on with the task – sometimes you get the sense that partners go to meetings, but delegate the work afterwards – whereas Michelle will read through truckloads of lever-arch files herself because she is so keen to make sure she’s across the details,” he says.

Role in transitionBlair is regarded as one of New Zealand’s most experienced GCs. After a four-year stint in private practice, he has since spent 30 years as an in-house lawyer, including 20 years as general counsel – 14 of those years have been

38

with Air New Zealand. The changes seen in the general counsel's role over his years of service has been a cause for reflection. “If you go back 15 years, NZ and Australia didn’t have the same regard for the GC role as they do now – they didn’t have that level of seniority they had in the UK or the US," he says. “When I was in private practice in NZ there was a real division within the profession, in that if you were an in-house counsel you often couldn’t get a job at a law firm.”

Blair says that Europe, the UK and particularly the US were quicker to see the full potential of the GC role. In his earlier years as a lawyer he was particularly struck with his dealings with US general counsel. “On an M&A deal they would be running the transactions on a commercial as well as legal level – they had a lot more autonomy than was usual at the time,” he says. Blair is of the view that the role of the modern GC probably originated in the US, spread to the UK and Europe before eventually reaching Australia and New Zealand. ALB

http://www.grlaw.com.au

http://www.albmasterclass.com

PROFILE | managing partner >>






Let it never be said that the Kiwis don’t have a sense of humour. At the offices of Minter Ellison Rudd Watts – or “Munters”, to use the

correct local pronunciation – they have a tongue-in-cheek annual award for the most embarrassing thing done by a staff member. The firm also holds a netball competition where teams vie for a coveted prize – the official “Munters toilet seat.” And as managing partner Mark Weenink explains, there is a method behind the madness.

“Teamwork and people relationships are very important to the culture of Minters – it has traditionally been known as the fun firm to work in. The unique culture is important and we like to preserve the irreverent nature of the firm,” he says.

Weenink is a project finance/ M&A lawyer by trade, and has spent the past ten years working in Sydney and London, including time at Magic Circle firm Clifford Chance and in-house at an investment bank. Having returned to New Zealand for family reasons, he set about fulfilling a long-held ambition – a move into management. “After doing an MBA early in my career, I have

always set my sights on management,” Weenink explains. “It is a natural progression for me in terms of my skills and passions. I love the ‘people’ aspects of the job. I deal with a lot of talented people, each with different skills, and being part of a team with all of them working together towards a shared goal is immensely satisfying.”

Minter Ellison Rudd Watts is the New Zealand arm of a four-partnership structure which comprises the Minter Ellison Legal Group. The other partnership groups are the Australia East Coast, Western Australia and South Australia, and all overseas offices except New Zealand are part of the East Coast partnership. However, there are no current plans to integrate the partnerships.

Having profiled Minters’ Australian chief executive partner John Weber in February, ALB ventures across the Tasman to speak with his New Zealand counterpart, Mark Weenink

ALB 2010 MANAGING PARTNER SERIES

Mark Weenink, Minter Ellison Rudd Watts:View from across the ditch

“I love the ‘people’ aspects of the job. I deal with a lot of talented people, each with different skills, and being part of a team with all of them working together towards a shared goal is immensely satisfying”

Mark Weenink Minter Ellison Rudd Watts

So what advice can Weenink give to lawyers who are aspiring to join the management ranks? “Embrace the unique nature of law firms. You need to spend more time on communication to get initiatives underway – there will be some lively discussion,” he says, adding that having patience, empathy and being able to read the mood of the partnership is also critical, and that “you can’t just impose strategy from above.”

Economic prognosisLike many of his colleagues, Weenink is eyeing the road ahead with optimism mixed with a healthy degree of trepidation. “I am cautious because the general outlook for high-end legal services is volatile,” he says. “More



demand for our services,” he says, citing insolvency, dispute resolution and employment as particularly busy areas. “While the big-ticket insolvency work is all but finished, there is a lot of restructuring still required in the PE and SME end of the market.”

The large New Zealand firms generally do not have offices in Australia. While rivals may question the extent of the connection between Minter Ellison Rudd Watts and Minter Ellison in Australia, it is fair to say that the firm has stronger trans-Tasman links than most. Yet it will be interesting to see how the trend towards a single Australia-NZ economic market and harmonisation of laws will affect the firm’s fortunes. “We are a natural port of call for businesses looking to take the natural step of expansion across the ditch or those seeking expertise on both inbound and outbound transactions,” says Weenink.

“With the single economic market and harmonisation becoming closer and closer, and the impact of Australian-style legislation [here], our Australian experts are becoming increasingly valuable for our NZ clients. The considerable amount of financial regulatory work based on Australian legislation is the most tangible example of this currently.”

All this, of course, raises the inevitable question of financial integration. “We have discussed financial integration from time to time,” says Weenink. “The difficulty with it is the complex profit-sharing and foreign exchange provisions that you need to make, which can outweigh the benefits of financial integration.”

In the meantime, the priority is to ensure that the best talent is made available to clients, regardless of geography or location. “Minter Ellison Australia has been incredibly supportive in being part of our offering for many trans-Tasman initiatives,” he says. “We genuinely believe we have the best of all worlds with our current model and are not supportive of moving to full financial integration.”

And how does Weenink keep himself occupied away from Minter Ellison? “I’m always at Minters,” he laughs. Weenink describes himself as “sports mad” – as a keen cricket, rugby union and rowing enthusiast, and by taking part in skiing and marathons. ALB

businesses tend to fail on the way out of a recession than into it. We know that the overall legal spend among the big firms has shrunk, and a lot of work that we have traditionally done has started to move across the Tasman. NZ companies need to go through a long hard process of deleveraging and demonstrating solid growth before they can get into the acquisition or capital raising mode.”

The country has had patches of capital raising activity of late, but Weenink says that the window of opportunity for further raisings has probably closed for the next few quarters. “My personal view is that I don’t think it is likely to experience resurgence in 2010,” he says. “For example, only one-third of the capital raisings were successful last year across Australasia. Many companies that should have raised capital took the risk and didn’t. While the balance sheets have improved with the increase in share prices across the listed space, we were surprised that a lot of companies took the risk.”

Weenink says that national unemployment figures to date have “surprised on the upside” and says that this has impacted on confidence across the board. “General activity is not going to show solid signs of recovery until unemployment peaks and increased consumer confidence starts to impact on company revenues,” he observes.

“There is obviously retail demand in the bond market. At some point the yields will be such that the equity capital markets will start to improve. Those companies that have raised capital and are in acquisition mode will do well over the next 12 months – but there is still a gap between vendor and purchaser expectations. Some of the private equity investments will need to come to the market sooner rather than later – a push rather than a pull factor.”

Firm prognosisDespite the uncertain environment Minter Ellison Rudd Watts recorded double digit revenue growth last year, although Weenink describes this year’s figures as “steady rather than spectacular.” Lawyer numbers have increased from 110 to 130 and partner numbers have increased from 33 to 39 over the past two years.

“We have never faced greater

“I am cautious because the general outlook for high-end legal services is volatile. More businesses tend to fail on the way out of a recession than on the way in”

Mark Weenink Minter Ellison Rudd Watts

http://www.lexisnexis.com.au/affinity

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FEATURE | tax >>


The firm even acquired a few tax lawyers from other firms, including Greenwoods & Freehills and Finlaysons, during the poorest performing times. But he denies that sticking to traditional non-transaction based tax work guarantees stable

the law firm’s unity and integration. “If the tax practice focussed on niche work unrelated to the work of the rest of the firm, we would not see the peaks and troughs,” Baxter says, “but we operate as a team, and consequently are exposed to the fortunes of the rest of the firm.”

A base level of tax work does remain stable. Specialist tax practice Greenwoods & Freehills managing director Andrew Mills says this core work includes advising clients on compliance, responding to tax office enquiries and handling numerous tax law amendments. Indeed, many mid-tier tax practices continue to enjoy the traditional immunity from economic cycles because, unlike their larger counterparts, they don’t rely as heavily on large corporate clients and the tax work flowing from their transactions.

Jack Stuk of Mills Oakley says that his firm’s tax practice enjoys a more mixed client base. “Our work is spread between larger SMEs, high-

In hindsight, perhaps it was no surprise that the Australian government kept the Henry Review under wraps for so long. Why unveil

a blueprint for reform if you don’t have the political will to implement it? Yet the dramatic build-up and subsequent policy fizzle surrounding the review has had little effect on the day-to-day work of tax practitioners. They are currently busy with the steady return of tax work in the post-financial crisis recovery.

Unconventional tax slump Traditionally, during a downturn law firms could always rely on tax work to keep flowing in and to be profitable. But during the recent slowdown tax practices, at least in the larger law firms, also suffered alongside other practice areas. Blake Dawson partner Duncan Baxter says that the big law firms are increasingly tying up their tax work to transactional work, thus exposing it to the same cyclical influences.

“Most of our tax work tends to relate to the one-off events, because for companies [who are] the size of our key clients, their internal tax people manage most day-to-day issues themselves,” Baxter says. “One-off events such as litigation and corporate transactions, by their nature, tend to be ‘lumpy’; they involve occasional large matters rather than a steady stream of smaller matters.” He says that Blake Dawson’s tax practice saw a revenue drop of around 20%, on par with the rate of slowdown seen by its major competitors.

Big-firm tax lawyers may have lost their traditional advantage of stability, but Baxter says this is an inevitable effect of the strategy of providing a full range of legal services to a limited number of key clients. Aligning the firm’s tax practice to its corporate practices may also help consolidate

“Most of our tax work tends to relate to the one-off events, because for companies [who are] the size of our key clients, their internal tax people manage most day-to-day issues themselves” Duncan Baxter

Blake Dawson

FEATURE | tax >>

With the Henry Review recently making front-page headlines across Australia, tax lawyers are enjoying their time in the sun. But as ALB’s Alice Yan discovers, tax workflows have been on the mend for some time now

Taxing times

net-worth individuals and mid-tier listed companies,” Stuk says. “We saw no slowdown in our tax practice or other firm departments during the GFC.” Far from suffering from a dependence on transaction-related work, he said the tax team in fact referred work to the commercial and litigation departments. “It is a net exporter of work,” he says.

Jack Stuk Mills Oakley

workflow at the cost of top-quality work. “Just look at the amount of top tax lawyers who join and stay at Mills Oakley,” he says. “The proof is in the pudding.”

Strong recoveryTax lawyers across the board have seen a steady growth in work with the economic recovery. Baxter says Blake Dawson has seen a real pick-up in the past two to three months. “Sydney is already back to normal, maybe even stretched. Melbourne is still a

► HENRY REVIEWThe Commonwealth Government has finally released the much-anticipated Henry Review of the Australian taxation system, and unveiled the first in what is likely to be a series of reforms in response to the report. Initial measures include a reduction in the company tax rate; what is being promoted as “less red tape for small business”; and a boost to superannuation entitlements, largely funded by a new tax on mining profits.

The common reaction from commentators and lawyers alike has been that these reforms do not go far enough towards answering the widely held expectations of root and branch reform of the taxation system. There is a question mark over the government’s political will to undertake serious reform during an election year.


FEATURE | tax >>

little short of pre-GFC levels,” he says. Mills is equally upbeat. “The double dip is looking less and less likely. Clients are looking at new opportunities, especially in M&A restructuring, expansion and organic business growth. We are already starting to see the spillover of activity into tax,” he says.

In addition to the increased workflow from an expanding economy, tax lawyers enjoy additional streams of work peculiar to an economy’s recovery phase. As clients become more vigilant, tax practitioners reap more. One source is a more stringent Australian Tax Office audit program. Mills says that ATO auditing is cyclical, and coming out of a downturn is crunch time. “The drop in economic activity results in lower demand for ATO rulings,” Mills says. “This frees up the ATO’s resources for a higher level of enquiry.” The ATO is likely to continue to ramp up its audit capabilities in 2010. “The fiscal stimulus package costs a lot of money and the ATO is hungry to collect more revenue,” says Stuk.

A second additional source of tax work uniquely attributed to the recovery phase is from large companies that are normally self-reliant on their

own strong tax team. The downturn forced many of these companies to cut their internal tax departments. “When activity picks up, they find themselves short on tax resources,” says Baxter. “They must look to external tax practitioners to make up the difference.”

Thirdly, tax practitioners are benefiting from growing foreign interest in Australia in the post-GFC world. Australia’s economy came out of the global downturn looking more attractive for investment capital. “In particular we may see growing interest from China and Europe,” says Baxter. “[Their outbound investment flows] mostly went to the US previously, but may now be redirected to Asia and Australia.” This translates into demand for tax advice on structuring joint ventures, regulated acquisitions and divestments.

Yet more recovery-related tax work may come from a government broadening of the tax base. “Government budgets are under a lot of stress, they are over stretched, and most do not want to run a deficit like the US, so they will rely on their tax system,” Baxter says. “They may tax more things and in a different way to drive up revenue.” ALB

Andrew Mills Greenwoods &

Freehills

“The double dip is looking less and less likely. Clients are looking at new opportunities, especially in M&A restructuring, expansion and organic business growth. We are already starting to see the spillover of activity into tax”

Andrew Mills Greenwoods & Freehills

Note: Further analysis of the Henry Review and the government’s response will appear in ALB 8.6.

http://www.marsdeninternational.com

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FEATURE | virtual data room >>


What should law firms be looking for in an online data room provider? ALB investigates

Inside the virtual data room

lucrative ‘brain-work’. So it’s little wonder that quality online data room providers are in high demand now.

Flexibility is king One of the key features that data room providers should be able to demonstrate is flexibility, both in the software itself and the price charged. After all, transactions vary in nature and size and it is only reasonable to expect that their online data rooms should be flexible enough to match. It is therefore important that any software used should be able to accommodate highly complex transactions – but also straightforward due diligences which need only basic functions.

Understandably, law firms want pricing to correspond with the level of sophistication they need in their software, so they are not being charged a premium for features they just wouldn’t be using on a particular transaction. Some providers have eschewed fixed fees or ongoing licence fees and are instead billing clients on how much they actually use the system.

This adaptability on pricing was one of the key factors which led Emma Forbes, special counsel for legal technology at Blake Dawson, to stop running online data rooms in-house and begin using specialist data room operator Ansarada. Forbes says in 2007 she began researching third-party providers, as her software provider changed the terms of its licensing agreement and it became prohibitively expensive to continue running its dealrooms inside the firm. Ansarada’s billing arrangements brought the cost of running online data rooms down considerably.

Service, speed and useability are paramountAnother key feature clients want from their online data rooms is ease of use. As Forbes says, “some providers give you too much functionality and it’s just too difficult to use the software”. The requirement to invest in hardware and being bombarded with requests to download upgrades and plug-ins are

Michael Truelove Herbert Geer


It used to be a rite of passage for corporate lawyers: the days as a junior solicitor poring over files in a sweaty due-diligence room,

somewhere in the basement of a client’s office. Not for much longer, however. Virtual data rooms are taking a lot of the grunt work out of the due-diligence process, while at the same time freeing up solicitors to concentrate on more



typical turnoffs. It pays to research how well integrated and streamlined a service is before signing on. The better providers can supply direct access to a data room by simply logging into a secure website on an internet browser, and can make data rooms operational within 30 minutes of a request.

Organisation is also an integral factor. While the ability to post questions on the online data room is a feature common to all online data room services, Ansarada also attempts to streamline the Q&A process by assigning roles to various people, who will be responsible for answering specific categories of questions. A central administrator is then in charge of ensuring the right questions are fed to the right people, and can run reports from the Q&A to see what questions have been answered and when, and what questions remain outstanding and for how long.

Reports can also be generated in various degrees of detail, so that users can see who has been looking at what

“Trust is crucial because you’re entrusting your client’s sensitive documents to a third party”

Emma Forbes Blake Dawson

documents, who has been logging into the data room and what they have been doing. The ability to export these details to software such as Microsoft Excel enables users to analyse data.

Cornerstone of provider relationship is trustSecurity is an essential feature that clients look for when shopping for online data room providers. Forbes says that trust and the capacity to establish a personal relationship with the people running the firm’s data room is paramount. “You know who you are dealing with and that made it easier to develop trust,” she says. “Trust is crucial because you’re entrusting your client’s sensitive documents to a third party.” To this end, it may pay to use a locally-headquartered provider or one which has, at least, a solid presence in your local market.

Also, it helps when the client itself has shown a preference for a particular provider. Michael Truelove, a partner in Herbert Geer’s mergers

http://www.herbertsmith.com/careers

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either know about or we are working on”. Riley says that the company’s main competition in the past has come from large law firms who still want to run online data rooms in-house. But many of those firms are starting to migrate to using an external provider – not least because they are driven to constantly invest in improving technology and security in order to stay ahead of the game. One of the “trigger points” for Blake Dawson’s decision to discontinue running in-house online data rooms was a hike in a software licensing agreement, which made it more cost-effective to go with an external provider.

Riley says he’s confident that more law firms will see the costs of investing in knowledge and capital to retain an online data room in-house now far outweigh any advantages. He is hoping that the ease and convenience associated with an external provider will make using one irresistible – however, the jury is still out on that question. ALB

and acquisitions practice, advises on a broad range of mid- to large-sized deals which range in value from around A$25m to A$600m. He says that historically his firm had used another service provider but made a switch, partly because one of their investment bank clients was using that provider.

Also, as Ansarada specialises in providing only purpose-built data rooms there are few direct competitors in its market. However, there are providers of online technology which offer diversified services including litigation support (such as through electronic discovery) and online data rooms for due diligence. Predictably, Ansarada chief executive officer Sam Riley claims that only a company that specialises in online data rooms can provide a truly competitive and relevant product, which matches the needs of the clients.

He says that his company has a track record of anticipating and responding to client needs. “Anything we get asked for [in a virtual data room] we

“Anything we get asked for [in a virtual data room] we either know about or we are working on”

Sam Riley Ansarada

http://www.elaw.com.au



http://www.legaljobscentre.com

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FEATURE | case management >>


The fight is on to manage your firm’s litigation – but providers are still establishing the ground rules in this new market

reliability, as well as the traditional case management tasks of scheduling and tracking future events.

Someone’s understanding of what ‘case management’ means can often also be driven by his or her role within a firm. E.law, whose core business is assisting law firms to manage their documents and data, prefers to refer to its litigation-related software as “evidence management”. As general manager Bree Galvin points out, a practice manager might consider case management to be an umbrella term for the methods he or she uses for tracking and invoicing billable hours, storing case notes, and filing client correspondence like emails and letters – “whereas for someone involved in a firm’s IT processes it might mean data storage, security and retrieval systems.”

It’s not just law firms that are now competing for work in a global market. The contest happening between the companies that provide

your software is also an international one – Australian and New Zealand law firms are just as likely to use a provider based in London or Hong Kong as they are one in Sydney, Melbourne or Auckland.

Nowhere is that more apparent than in the case management market, where local companies and global companies are fighting it out tooth and nail for your firm’s business.

Immature markets, unclear meaning One of the main reasons the Australasian case management market is such a battleground is that it is not yet mature. In fact, some Australasian firms – particularly smaller ones – still don’t use an effective case management system at all. On top of that, a lot of uncertainty in this region about what the term ‘case management’ actually means, particularly as it has grown from its original focus on ‘being the life of a case’ to one that now covers virtually all aspects of the litigation process.

Caseflow’s chief executive officer and legal software industry veteran Brian Smith says that a lot of confusion also stems from there being conflicting ideas in the two largest common law markets, about what case management software should do. In the US, case management tends to be a docketing system which schedules deadlines that a law firm needs to adhere to when going to trial. In the UK,

Case management:

myths and misconceptions

however, that’s only one component of case management. “The way I see it is you’ve got practice management which looks after all things financial and who’s doing what; your content management system which is essentially document management but stores all information; then case management is the third element,” says Smith. “It’s a system which allows the professional to do the work, whether he or she is a PA, paralegal, solicitor or partner.”

Australasia, he says, tends to lean towards the UK model. “Case management is taking every aspect of what a lawyer does which isn’t financial, storing content and helping them do it,” Smith says. Caseflow will produce final legal documents like statements of claim and mortgage agreements with a high level of

“Case management is taking every aspect of what a lawyer does which isn’t financial, storing content and helping them do it”

Brian Smith Caseflow



“Their purpose is to enable you to get to the relevant information faster and give you more time to focus on your legal argument and case strategy”

Bree Galvin e.law

“However, if you are a litigation lawyer or one of those lucky workhorses who sits within litigation support, the term that better defines the suite of tools you utilise is ‘evidence management’,” says Galvin, adding that these software models are centred around the discovery stage of litigation. “They provide a central repository for all your case data – electronic evidence such as emails, hardcopy evidence that has been scanned and is now in soft copy, witness statements, affidavits, trial testimony, and exhibits. You can load it all in and then search, review and ultimately produce content as your ‘discoverable list’ or to the court,” she says.

The keys to case managementIt’s perhaps then easiest to define case management by what it is not. One thing everyone seems to agree on is that any decent case management system should not be prescriptive. “The law’s just not like that,” Brian Smith says. Instead, a good system should be able to offer a bespoke solution depending on a practice’s needs. One of the keys is making sure a case management system frees lawyers up to do what they are paid to do: the thinking work. “You could have the best lawyers in the world but they could be chasing down a A$210 Telstra fee,” Smith says. The point is, if a case management system is doing its job they won’t be.

E.law is also determined never to provide a “plug in and play” model to a client which leaves them struggling with a new technology and ends up being more of a hindrance than a help.

“At the inception of a matter an e.law consultant will sit down with our client to scope the requirements of the case, taking into considering the complete evidence management life-cycle,” Galvin says. “Ultimately how are you going to obtain, review, produce and present your evidence?”

Another thing that case management providers are keen to stress is that size

advantage of the rapidly growing Asian market. Galvin says that most firms who use its China-based services are from the UK, US and the European Union, and are conducting discoveries in Asia. But language barriers in these regions create their own set of obstacles. “From a technology standpoint our big push at the moment is to ensure that our technologies are

doesn’t matter when it comes to getting hold of the most effective management software. In fact, there are distinct advantages for smaller firms in using an effective case management system, giving them the opportunity to utilise the same support that a large firm has access to. “Evidence management systems are for everyone!” Galvin says. “Their purpose is to enable you to get to the relevant information faster and give you more time to focus on your legal argument and case strategy. That’s obviously not just a privilege for top-tier firms and it is something you should consider to ensure you are competitive.”

Any decent case management software should also integrate with a firm’s existing platforms as seamlessly as possible, no matter how =many – or how few – functions a client uses. There should be no compatibility issues between case management, content management and financial systems. “I regard integration as our problem, not the client’s,” Smith says.

A battle on many frontsWhile the Australia/New Zealand market might be something of a battleground, the fight to provide litigation support is a global one. The international and Australasian case management providers will fight it out in the local market, yet the global nature of the legal software industry means there are also opportunities for local providers overseas.

Both e.law and Caseflow have used the opportunity to expand internationally, with e.law recently opening a Shanghai office to take

“We work on a fixed-fee basis and every step in every live matter is driven by this. So you really need a system you can rely on 100%”

Mark Calligeros Minter Ellison

52



all Unicode compatible, ensuring we can support what is commonly referred to as CJK characters (Chinese, Japanese + Korean),” she says. Meanwhile Melbourne-based Caseflow is hoping to expand its operations throughout the English-speaking common law world. It launched in New

Zealand last year and, following a good response, has plans to cross the Pacific with a launch in Canada this August, and from there springboard into the massive US legal market. “Our software is completely jurisdiction-independent,” Smith says. “There is no terminology that can’t be changed.” ALB

“They provide a central repository for all your case data – electronic evidence such as emails, hardcopy evidence that has been scanned and is now in soft copy, witness statements, affidavits, trial testimony, and exhibits”

Bree Galvin e.law

► CASE STUDY: MINTER ELLISON’S ADELAIDE WORKERS COMPENSATION PRACTICEIn larger firms it’s not unusual for different practice areas to use different case management systems. As Minter Ellison’s busy Adelaide worker’s compensation division deals with more than 1,000 files a year, the team chose a UK-based provider, Axxia, to handle its requirements as a heavy user, even though other sections of the firm run on other systems.

“For us Axxia not only deals with the relevant dates but effectively runs whole practice management from top to bottom,” says partner Mark Calligeros. “We work on a fixed-fee basis and every step in every live matter is driven by this. So you really need a system you can rely on 100%.”

Calligeros said his practice was introduced to Axxia’s case management system by a Scottish lawyer who had used it for banking transactions while in the UK, and found it extremely useful. The system allows the practice to adhere to stringent key performance indicators, in terms of the time it takes to send out correspondence and perform other tasks during and after hearings, as well as carrying out the procedural matters of a trial. It also links in with Microsoft Outlook.

Calligeros says that while it took him some time to get used to the system, now that he has it adds an incredible amount of value to the practice, and it would be difficult to imagine running efficiently without it. His only gripe was that it was not completely seamless with his e-mail system. “It’s only a couple of clicks but it would be nice if it was fully integrated,” he says.

http://www.yipmag.com.au


FEATURE | case management >>Firm Profile Caseflow

We seem to hear these comments every day and then all of a sudden someone contradicts this

way of thinking and says we are in for a double dip, the problems have not been fixed and Europe is a basket case. The truth is; none of us know what the future holds, so:

“Mitigating risk and increasing your firms Productivity, Efficiently and Accuracy should, regardless of the economic situation, be high on the agenda of most Law firms.”

If your Law firm operates in one or more of the following areas, Banking and Finance, Debt Recovery, Insurance Litigation, Mortgage Origination, Property Subdivision, Leasing, Compulsory Third Party, Motor Vehicle Accident, Mortgagee Repossession, or Workers Compensationthen the following should be of interest.Productivity

• If you turn an 8 hour process into a ten minute process you have won the war, have you not? These sorts of productivity gains aren’t achieved in every case, however this is what we have heard from clients.

• Eliminating the time spent (normally ½ to 1 day) once a week, or once a month to produce client reports is significant. Produce the reports to the desired specification automatically.

• Deploy an “out of the box” Extranet to communicate secure and relevant information and documents to clients. How many unnecessary phone calls is this going to eliminate?

Efficiency• How many times has your firm

rewritten their multitude of Macros and Templates because there was a new version of Word. Eliminate the time consuming and costly process of maintaining and rewriting these Macros and Templates forever.

• How much time is wasted on tasks that cannot be billed for? On the other hand, efficiently completing tasks on time or within the allotted time will get you home earlier.

• It is not necessarily doing more with less, it is about being able to do/bill more with the resources that are available. If in fact the GFC is over, then the quantity of work will increase, be ready for this increase with an efficient system.

Accuracy• When we talk to Knowledge/

Precedents Managers, those that are game relate many a horror story about the misuse of clauses within a firm. Having a system that can remedy just the practice of “Copying and Pasting” will surely reduce the occurrence of these horror stories.

• Let’s face it, if you bill hundreds, if not thousands of dollars to produce the required documents for a client and then find that you have used/inserted the wrong name/information because you have used a document produced for another, the client will not be happy. Avoid this embarrassment.

Mitigating Risk• By following the bullet points

above you have automatically gone a long way to mitigating risk within the firm.

Caseflow, via its multi tiered product mix offers a fully featured “Best of Breed” Case and Matter Management system that produces documents, manages workflow and ensures that deadlines are accurately tracked and achieved. Seamlessly integrating with your Email, Practice Management and Document Management systems, Caseflow is scalable, from a 5 person department to several hundred users over multiple locations.

“Caseflow will in fact, mitigate risk and increase your firms productivity, efficiently and accuracy.”

The Product Range:Caseflow is a mature product that has been employed in Law firms since the early 1990s. Currently there are over 25 Caseflow sites and 2,300 plus Caseflow users (mainly medium to large State and National based Law firms) throughout Australia. The current product range consists of:

THE OUTLOOK CLIENT Caseflow’s fully featured Case Management product, whose interface is driven from within MS Outlook. It features sophisticated workflow and extensive task management. The Outlook Client also contains all the features of the Enterprise Client and ShowClause.

THE ENTERPRISE CLIENT Document automation that operates from MS Word which features a data base. It will eliminate the need for templates and macros which are undeniably costly and frustrating to maintain. The Enterprise Client also contains all the features of ShowClause.

SHOWCLAUSE This clause library solution has application firm wide. It is simple to install and deploy and easy to centrally manage. While integrating with your DMS, it eliminates that age old problem of “copying and pasting”.

EXTRANET The Caseflow Extranet module is an “out of the box” Client Extranet that allows varying levels of customisation to meet the client’s “look and feel” and “branding” whilst still retaining the cost effective approach of a packaged solution.

The GFC is over; things are looking up, what recession?

Caseflow is Case Management Redefined

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www.caseflow.com.au


54

MARKET DATA | M&A >>


Australasian M&A Activity - Quarterly Trends

League Table of Financial Advisors to Australasian M&A (Jan 01, 2010 - May 7, 2010)League Table of Legal Advisors to Australasian M&A (Jan 01, 2010 - May 7, 2010)

29-Apr-10 Westpac Office Trust Mirvac GroupAllens Arthur Robinson 414

27-Apr-10 CBH Resources Ltd (75.9% stake)

Clayton Utz Toho Zinc Co ltd DLA Piper 269

3-May-10 The Boost Investment Group (65% stake)

Hall & Wilcox The Riverside Company Jones Day 65

13-Apr-10 SCADAgroup Pty Ltd Schneider Electric SAAdvising seller:Sparke Helmore

Jones Day Advent Private Capital Pty Ltd 200

61116-Apr-10 NAU Country Insurance Company

Advising seller:Sullivan & Cromwell

QBE Insurance Group Ltd Lightyear Capital LLC

4-May-10 Lihir Gold Ltd Newcrest Mining LtdBlake Dawson 9,117Allens Arthur Robinson

2020-Apr-10 Great Southern Ltd (1,795 Hectares of planted and irrigated olive groves)

Great Southern LtdKailis Organic Olive Groves Ltd

27-Apr-10 Ray's Outdoors Super Cheap Auto Group Ltd 54

AnnouncementDate

Target Company Target/SellerLegal Advisor

Bidder Company Bidder Legal Advisor Seller Company Deal Value(AUDm)


Top 10 Announced Deals - Australasia (10 April, 2010 - 7 May, 2010)

Valu

e (A

UDm

)

Value (AUDm)

Num

ber o

f dea

ls

Volume

00

10,000

30,000

40,000

50,000

60,000

70,000

80,000

20,000

120

140

160

80

100

20

40

60

180

200

Q103

Q209

Q210*

Q110

Q409

Q309

Q109

Q203

Q303

Q403

Q104

Q204

Q304

Q404

Q105

Q205

Q305

Q405

Q106

Q206

Q306

Q406

Q107

Q207

Q307

Q407

Q108

Q208

Q308

Q408

4-May-10 Axon Computer Systems Ltd Integral Technology Group Ltd

Kensington Swan Solicitors

16

MARKET DATE | M&A >>

M&A TRANSACTIONS AND STATISTICAL ANALYSIS

Notes: Based on announced deals, including lapsed and withdrawn bids, from 10 April 2010 to 7 May 2010•Based on geography of either target, bidder or seller company being Australasia•Includes all deals valued over USD 5m. Where deal value not disclosed, deal has been entered based on turnover of target exceeding USD 10m•Activities excluded from table include property transactions and restructurings where the ultimate shareholders' interests are not changed•League tables are ranked by volume•Q2 10 * = 1 April 2010 to 7 May 2010

Rank House Value (AUDm) Deal Count

1 Allens Arthur Robinson 24,950 9

2 Freehills 14,451 14

3 Mallesons Stephen Jaques 13,668 9

4 Blake Dawson 11,208 5

5 Gilbert + Tobin 4,500 4

6 Clayton Utz 3,875 13

7 Knight Coldicutt 1,151 1

8 Baker & McKenzie 959 5

9 Sullivan & Cromwell 624 2

10 Corrs Chambers Westgarth 593 4

Rank House Value (AUDm) Deal Count

1 Macquarie Group 23,050 10

2 JPMorgan 15,292 4

3 Nomura Holdings 13,291 2

4 Deutsche Bank 11,498 2

5 Bank of America Merrill Lynch 10,142 3

6 Greenhill Caliburn 9,216 2

7 Lazard 9,117 1

8 UBS Investment Bank 4,802 6

9 Citigroup 4,191 4

10 Morgan Stanley 3,785 2

In association with

12-Apr-10 Vocus Communications Ltd First Opportunity Fund Limited

35

55

MARKET DATA | capital markets >>


DEBT CAPITAL MARKETS TRANSACTIONS LIST Australia, New ZealandApr 18-May 15

Issuer Proceeds (USDm)

Issue date

Currency Bookrunner(s) Sector

AUSTRALIA

Queensland Treasury Corp 2,743.9 04/21/10 AUD ANZ Banking Group (NZ) JP Morgan Australia Ltd UBS Investment Bank

Government and Agencies

United Energy Distribution Pty 435.0 05/06/10 USD ANZ Banking Group Bank of America Merrill Lynch JP Morgan Westpac Banking

Energy and Power

Commonwealth Bank of Australia 300.0 04/22/10 USD JP Morgan Financials

ALE Property Group 115.6 04/29/10 AUD Macquarie Group Real Estate

Commonwealth Bank of Australia 94.6 04/26/10 CHF RBS Financials

Telstra Corp Ltd 71.1 05/06/10 NZD Bank of New Zealand Commonwealth Bank of Australia Westpac Institutional Bank

Telecommunications

Commonwealth Bank of Australia 47.3 04/29/10 AUD Daiwa Securities SMBC Europe Financials

Commonwealth Bank of Australia 30.0 04/30/10 USD HSBC Holdings PLC Financials

Westpac Banking Corp-Sydney 16.8 04/22/10 HKD HSBC Holdings PLC Financials

Commonwealth Bank of Australia 14.2 04/21/10 HKD BNP Paribas SA Financials

Westpac Banking Corp 12.9 04/21/10 HKD BNP Paribas SA Financials

Commonwealth Bank of Australia 10.0 04/20/10 HKD BNP Paribas SA Financials

NEW ZEALAND

Kiwi Capital Securities Ltd 72.0 05/04/10 NZD ANZ Banking Group Financials

Transpower Finance Ltd 53.5 04/19/10 NZD Westpac Institutional Bank Financials

EQUITY CAPITAL MARKETS TRANSACTIONS LISTAustralia, New ZealandApr 18-May 15

NB: Does not include transactions valued at less than than USD10m, best efforts transactions and private placements

Issuer Proceeds (USDm)

Issue date

Currency Bookrunner(s) Sector

AUSTRALIA

QBE Funding Trust V 850.0 04/29/10 USD Merrill Lynch (Australia) Ltd Financials

Transurban Group 366.3 05/11/10 AUD UBS Australia Ltd Industrials

Macquarie DDR Trust 176.6 05/07/10 AUD Citigroup Global Markets AustMacquarie Equity Capital Mkts

Real Estate

Nufarm Ltd 133.4 04/21/10 AUD UBS Australia Ltd Materials

Gindalbie Metals Ltd 99.9 05/13/10 AUD UBS Australia LtdSouthern Cross Equities Ltd

Materials

Australian Infrastructure Fund 71.0 05/06/10 AUD Credit Suisse Australia Ltd Real Estate

Super Cheap Auto Group Ltd 70.6 04/28/10 AUD UBS Australia LtdMacquarie Equity Capital Mkts

Retail

MMC Contrarian Ltd 67.0 04/27/10 AUD Commonwealth Securities Financials

Atlas Iron Ltd 58.9 04/29/10 AUD Hartleys Ltd Materials

Noble Mineral Resources Ltd 55.9 04/20/10 AUD Patersons Securities Ltd Materials

Ausdrill Ltd 38.8 04/29/10 AUD Argonaut Securities Pty LtdPatersons Securities Ltd

Industrials

Mastermyne Pty Ltd 36.1 05/10/10 AUD Wilson HTM Materials

Transfield Svcs Infrastructure 26.8 05/11/10 AUD Macquarie Equity Capital MktsRBS

Energy and Power

Central Petroleum Ltd 21.0 04/22/10 AUD Patersons Securities Ltd Energy and Power

Source: Thomson Reuters

Source: Thomson Reuters

56

MARKET DATA | M&A >>


http://www.dxmail.com.au

1

http://www.wehi.edu.au

1

http://www.aderant.com

Documents

Australasian Legal Business (OzLB) Issue 8.5