The high-flyers who jumped ship from Herbert Smith Freehills to White & Case had to leap through a few hoops before launching the Australian offices of the new market rival but their old partnership may yet question the group’s status at a hearing for final orders.
As the dust settles on an interlocutory order made by the NSW Supreme Court last week, HSF and White & Case have made public statements confirming that they are pleased with the decision.
While the interlocutory order has provided some clarity for all parties moving forward, Lawyers Weekly understands that possible contention lingers.
At issue is how the restraint provisions are to be interpreted with respect to the status that the group of eight now share with the HSF partnership that they resigned from last September. The answer to that question may impact when the group can officially become partners of White & Case.
Fixing a date for the final orders hearing in Australia’s BigLaw showdown of 2017, barrister Juliet Curtin flagged the need for a question of fact to be resolved by the bench.
Last Friday Ms Curtin, who was one of three counsel to appear for the HSF partnership in the action against eight of its retired members, told Supreme Court Justice David Hammerschlag that the plaintiffs wanted seven days for a hearing.
The barrister estimated that seven days would be a suitable duration for the court to determine, among other things, whether Brendan Quinn, Andrew Clark, Joanne Draper, Jared Muller, Tim Power, Joel Rennie, Alan Rosengarten and Josh Sgro were considered to be 'Outgoing Partners' of HSF Australia.
Lawyers Weekly previously reported that letters tendered to the court showed the eight lawyers considered themselves "effectively suspended" from the HSF partnership from late December last year. That date is significant because should the court find the partners had been suspended, it will reduce the restricted period that is considered to be tied to their status as 'Outgoing Partners'.
A determination as to the defendants' status as 'Outgoing Partners' has bearing on partnership restraints relevant to the next six months.
Delivering his judgment last week, Justice McDougall also acknowledged that whether any of the defendants had served a 'period of suspension' after 1 September 2016 remained a live factual issue.
Six of the eight defendants continue to work for HSF on a consultancy basis. It is understood that this retainer arrangement is for the benefit of certain HSF clients and projects with which the new White & Case hires have had heavy dealings.
According to a representative from HSF Australia, the 1 March interlocutory orders were a “successful outcome”. The representative indicated that HSF was happy with the court's decision.
“These proceedings had the objectives of protecting [HSF’s] interests, including protecting our valued relationships with clients,” the spokesperson said.
“The decision prevents the departing partners from joining W&C as partners, and from soliciting our clients for a six-month period. We’re happy with this outcome.”
But Lawyers Weekly understands that the other side may be prepared to argue that HSF’s reading of Justice Robert McDougall’s decision, as to whether they can immediately join the partnership of their new firm, is wrong. The question stands why the judge would find that the lawyers can practise at the top end of town in the new Sydney and Melbourne CBD offices of White & Case, albeit not rendering legal services to HSF clients, but prevent them doing so as partners of the firm.
White & Case is not a party to the action, however a spokesperson for the US-headquartered global said that the firm looked forward to the eight Australian lawyers, who are experts in the finance, real estate and projects (FREP), finally joining its local practice.
The firm opened its Melbourne office in December last year and said the doors to a fully operational White & Case Sydney office will open “very shortly”.
White & Case offered no direct response when asked if the firm planned to build out its Australian practice groups beyond FREP, however Lawyers Weekly notes the reference to “continued growth” in its answer about the ongoing proceedings.
“We’re glad that these individuals will join White & Case in the near future as we continue to grow our Australia practice,” the White & Case spokesperson said.
“The firm’s Melbourne office has been active since 1 December 2016 and will continue to operate as normal. The Sydney office will open very shortly and it, too, will be fully operational upon its opening.”
White & Case LLP is currently advertising for associates' roles in Sydney with its energy, infrastructure, project and asset finance (EIPAF) group. LinkedIn shows that at least 23 applicants have responded to the ad. The firm has also listed a legal secretary’s vacancy in its pending Sydney office on LinkedIn.
Hearing of submissions for final orders has been fixed in the NSW Supreme Court over a five-day period, starting from 5 June.