THE UNPRECEDENTED level of consolidation in the superannuation industry is having an effect legal firms acting for the super funds, according to Maged Girgis, newly appointed partner for Minter Ellison’s growing superannuation practice.
Girgis, among the country’s most respected financial services lawyers, with more than 13 years in the practice, made a move last month to Minter Ellison from Blake Dawson Waldron, where he had been for eight years. Blakes simultaneously lost its other financial services partner, Michael Vrisakis, to Freehills.
Girgis lamented the way some of the press had written about the departures. While Vrisakis was said to have “dumped” Blakes, Girgis “said sayonara”.
“Yet it wasn’t like that at all,” said Girgis, stressing that his colleagues at Blakes were “a good bunch of people”, and that he regretted “having to leave them short handed”.
Vrisakis and Girgis left Blakes for similar reasons, he said. Superannuation is the fastest growing industry in Australia, expanding at an annual rate of 10 per cent. Much of that growth is fuelled by changes in legislation and strong recent investment returns. Financial services as a whole has been estimated to be a greater proportion of GDP than mining. On the other hand, licensing changes mean that super has been consolidated into fewer funds, and many corporations have outsourced their super funds to huge master trusts, like AMP, BT and MLC.
The consolidation of the industry has also led to consolidation in the legal fraternity, with master trusts setting up three-year panels of a few law firms, which tend to be maintained as the status quo. “Blakes hadn’t traditionally operated in the master trusts area, and it was getting more and more difficult to get into it, with well-established law firms already in an exclusive position,” said Girgis.
“Both [Vrisakis] and I realised that we had to be with those master trust clients if we wanted to continue doing the cutting edge legal work that those master trusts would generate.”
Minter Ellison had long operated in the master trusts base and boasted clients like AMP, Challenger, BT and AXA. Girgis’s predecessor at Minter Ellison, Ruth Stringer, who left to work in-house at MLC, left a strong financial services client base and a team of four lawyers. “It wasn’t a very difficult decision for me to start talking to them,” said Girgis.
With the additional team of four lawyers that Girgis brought from Blakes, Minter Ellison looks well set to compete in the ever-changing field of superannuation law. “The big issue right now is corporate governance as it relates to super,” said Girgis.
“Consumers are looking for better governance from their funds, as for many people super is becoming a bigger investment than their home. For the players, it’s a bit of a minefield, and lawyers need to help them negotiate that.”
Deborah Hodgson is the new Features Writer at Lawyers Weekly.
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