THE double hit of shock news this week that 14 partners from Clayton Utz would be departing, and moving to the soon-to-open Australian office of Allen & Overy, was also a shock to Clayton Utz, the firm's managing partner said yesterday.
Unusually, Clayton Utz was told of the partner retirements not by the 14 partners themselves, but via a call on Sunday evening from Allen & Overy (A&O) itself, followed up by an email Monday morning, Clayton Utz managing partner David Fagan told The New Lawyer.
Speaking on Thursday, Fagan said "it's certainly been a hectic 48 hours". He said he only received notice of the partner retirement on Monday morning after he had received calls from Allen & Overy late Sunday.
"So we had little notice on that. But in a sense this is part of the globalisation of legal practice. This is a new entrant in the market. The partners who were approached obviously saw it as an opportunity and wanted to take it up, they were receptive to that," he said.
Fagan said the nature of the notice was "somewhat unusual". "One would have thought that you would be called. But it's a reflection of the nature of legal practice. And obviously these partners wanted to deliver the notices in that fashion," he said.
A&O announced this week the launch of its Australian practice with the appointment of 17 new partners, 14 based in Sydney and three in Perth. Fourteen of the new partners were taken from law firm Clayton Utz.
The details of how the recruitment of the 14 partners came about remains a mystery, at least to Clayton Utz. Fagan said yesterday he had not spoken to any of the partners, and was "not really certain how it transpired".
"We were told by Allen & Overy that it had been planned for some time. So one would have thought they were planning it last year. That is only a guess," he said.
But the remaining 201 partners at Clayton Utz have been galvanised into action by the news, said Fagan.
Pressed as to how the firm will succeed in competing with a new firm of predominantly former partners, he said: "Competing against a new firm comprising against former partners and other people is a little but unusual, but it's not that out of the oridinary. It's just another competitor and we'll just have to make sure the offering to clients is suitably compelling. The partners have been galvanised into action as a consequence of the events of the last 48 hours."
He said that while the departures will have a short-term impact on the firm, "in the medium-term the firm will emerge stronger".
Fagan said that because most of the firm's clients operate using panel arrangements, they have expressed to the firm that the recent news will have little or no impact on their purchase of legal services.
Meanwhile, the firm is waiting with bated breath on which, if any, lawyers will be following the departing partners out the door. As yet, it has had no resignations apart from the 14 partners, Fagan said.
The question of whether that door is still swinging remains to be seen, but the firm is "seeking to retain as many lawyers as we can". Any departures, however will provide opportunities for promotions elsewhere in the firm, depending on the levels of departures.
"It gives us an opportunity to make a number of promotions, which were are looking at. We're looking at a number of deserving senior associates who will be appropriate for partnership. We're looking at certain areas. Obviously this gives us a chance to review different practice areas and see that we are appropriately structured in those areas for the type of work that we are doing," Fagan said.