For a slight change of tack, this is not strictly China-related, but it’s one of those things that really got my interest in the last couple of days.
Allen & Overy, a global UK-based law firm of significant stature in the legal sector, is opening two offices in Australia. Such is its reputation, that it is known as one of the “Magic Circle” elite of British law firms. Allen & Overy has completed a bit of a coup by recruiting a team of 14 partners from Clayton Utz, a national Australian firm (and, I should say, a firm I worked for between 1999-2005). The legal media seems agog at this development, including the American Lawyer marvelling at the “surprise move“.
Is it so surprising? The apparent reason for the astonishment is that international law firms have, by and large, shied away from setting up in Australia, whether through opening new offices or merging with existing players. There have been some toes dipped in the water here and there, but the conventional wisdom was that Australia was just too competitive an arena and too congested a market, with not enough of the spoils to share at the profitability levels that the global firms are used to.
What has changed? Why would a legal giant “suddenly” decide to step foot into this crowded marketplace? And do so by poaching some top partners from a local firm?
I worked 9 years in Australia. In the last year, I have been back to visit twice. When it came to shop-talk, all I heard about from lawyer friends was the work coming out of China into Australia and what they could do to secure more of it. The recession was taking hold (though not as badly in Australia as in other places) and the obvious profitable work left (as everything else was drying up) was the Chinese investment into resource-rich Australia.
That’s the work that A&O are looking at. That is why they have poached selected talent from Clayton Utz, its rival law firm Freehills and banker JP Morgan to do so. They did not take over an existing law office, with all its bits and pieces. They cherry-picked, instead.
They are not looking to build a full-service outfit for, in my opinion, they are looking to build a China-service outfit. Why else would Allen & Overy open a second office in Perth, Australia’s fourth largest city situated way over on the Western coast five hours’ flight from Sydney? Perth is Australia’s mining centre. Coincidentally, A&O recruited some of Australia’s best known energy and resources lawyers in their swoop.
Yes, the Aussie legal market is small, if you consider its population of 22 million or so. But Australia is still a “Great Southern Land” with a lot of promise for resource-hungry China.
When I worked in China during the foreign investment rush for a piece of the market, I often thought of us lawyers as the ones who supplied the shovels to those who searched for gold. And the basic laws of supply and demand favour shovel-suppliers – so long as there is gold to be dug for.
2 Comments
I know two swallows does not make a summer but I wonder if Australia is looking to take a lead in terms of digital/internet law:
An ISP was not liable for the copyright infringement of its customers, an Australian court has ruled, in what the judge claimed was the world’s first full trial of its kind. Australian and UK law on copyright liability are very similar.
http://www.out-law.com//default.aspx?page=10735
uk visa, that’s a very interesting comment.
Based on my own experience, Australian cases can be very persuasive in a number of commercial law areas including contract law, property law, trust law and, indeed, IP law. It seems to me a reasonable judgment.
The significant number of expatriate Aussie-trained lawyers in common law jurisdictions around the world could be an additional indicator that Australian legal training is, on a global scale, viewed quite positively.
On the other hand, it could also be a personal bias!!