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Firms explain partner crunch
Judgment in on ASIC application against Aussie firm:

Firms explain partner crunch

IT WAS NOT just top-tier firms that saw a wave of partners depart over the past six months, with smaller firms experiencing an exodus of senior partners, including entire teams, since December…

IT WAS NOT just top-tier firms that saw a wave of partners depart over the past six months, with smaller firms experiencing an exodus of senior partners, including entire teams, since December 2004.

Thomson Playford has seen a significant drop in partner numbers this calender year, with a churn rate of 40 per cent. Of its 47 partners late last year, 14 have departed, leaving the firm with 35 partners after two were appointed in recent months. Ebsworth & Ebsworth saw 12 partners leave the firm, with a churn rate of 25 per cent. However, the firm also acquired five new partners, taking its partner headcount to 47.

At the top end of the scale, the losses were considerably less dramatic, with Allens Arthur Robinson seeing one per cent of its partnership depart this year. Mallesons Stephen Jacques lost 3.9 per cent, or eight of its partners. Clayton Utz, as well, lost 2.4 per cent of partners after five departed this year. However, the firm has also acquired six partners since January.

Explaining its losses since December last year, which equated to four partners out of eighteen, Coudert Brothers managing partner Michelle Harpur said three of the departing partners went to Addisons Lawyers, while the fourth, still a partner, is heading the City Bank in Australia.

A triumvirate of partners was lured across to Addisons earlier this year by former Mallesons Stephen Jacques partner Jeff Mansfield, who landed at Addisons at the end of 2004. A further two partners also left the firm for Addisons Lawyers during 2004. Jamie Nettleton and David Selig changed teams last November, leaving the door swinging for the other three partners.

However, said Harpur, the firm does have plans for growth in upcoming months. Although unwilling to reveal all, she confirmed this would include appointing new partners, “particularly in the corporate area — that is our focus”.

Holding Redlich managing partner Chris Lovell told Lawyers Weekly that the firm’s partner losses over the past six months can be attributed to a number of factors, but essentially, “last year was one of those years”.

Explaining the loss of eight partners, the 2005 Managing Partner of the Year said: “Two went because they wanted a change of environment, four went because we wanted them to go. One went because he knew we wanted him to go. And one went for personal reasons — he was moving cities”. But while the firm lost those partners, it also welcomed seven new partners to its ranks, Lovell said.

With 34 partners, the mid-tier Australian Law Firm of the Year winner plans considerable growth over the next year. Lovell expects the firm will have close to 40 partners by the end of this financial year. And, he estimated, “we’ll be around 50 in two to three years time”. But after that, a firm’s culture begins to change, he said, which “is something we’d need to think about very hard … I am not sure a that for a firm like ours it’s sensible to go too much beyond this. We’re not planning to double our partnership in the next four years”. Lovell said he agreed with many managing partners that “the trend of growth for growth’s sake is well and truly over”.

Abbott Tout, which this year has seen four of its partners depart, also appointed one new partner this year.

Managing partner Peter Noble said the statistics provided in newspapers last week are just a snapshot, suggesting a look over the past three or four years would show the partnership has been “fairly constant”. “These are just people who have decided to do other things. A couple of senior partners left, but it’s not one single event.”

The firm is now looking at its future partnerships, examining what the right paradigm will be by looking at the younger lawyers in the firm. “We’re now looking quite closely at young lawyers and testing with them what their career aspirations are. We want to build the business and make it an attractive place for younger lawyers to work,” Noble said.

The firm is trying to get its younger lawyers to focus on those things it would like to see in its partners, Noble told Lawyers Weekly. The firm is “looking at what values these lawyers have and encapsulating this in the workplace”. As well, he said, all lawyers, including partners, need to “stand up and take responsibility for what they do”. “If partners can’t lead by example then we are not going to achieve the results as a firm that we want.”

Noble said the firm wants to create a partnership where people have a life and can still fulfil their roles. “There has got to be a way that that can be done,” he said.

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