FREEHILLS will establish a multi-disciplinary practice (MDP) upon implementation of the National Profession Project (NPP), it was confirmed last week.
CEO Peter Hay said plans to take advantage of provisions permitting lawyers to go into partnership with other professionals Australia
wide were already “well progressed”.
The landmark move involves a disbanding of Freehills’ tax practice, from which resources will be taken to help establish what is expected to be a one-stop tax shop for commercial clients.
The news immediately solicited positive feedback from industry observers. Founder of KPMG Legal, Australia’s first lawyer-run MDP branch, Alan Bennett said: “I am impressed. It’s about time the larger law firms decided to grab a greater share of the work.”
The top-tier firm will use its long-established relationship with accountants Greenwoods & Freehills as a base to launch the MDP, which is anticipated to operate nationally alongside capital city law offices.
Pursuant to directives arising from last year’s top-to-bottom strategic review, Freehills will split its tax practice. Revenue partners and associates will be moved into the MDP, while the remaining lawyers are expected to be subsumed by other divisions such as banking & finance.
“We’re well progressed towards the stage of having both Greenwoods & Freehills and our [Freehills] revenue law practice in a position to merge when regulations permit,” Hay said.
The MDP option has been available to lawyers in NSW since 1994. But because other jurisdictions have not followed that lead in the nine years since, integrated national partnerships such as Freehills were prevented from seriously considering their options.
Now the state-based discrepancies are set to topple with the imminent advent of the NPP, more large firms can be expected to eye the MDP structure.
“We’re pushing down that path,” Hay said. “It’s the sensible and rational thing to do.”
While Greenwoods are based in Sydney only, Hay said the plan was for the MDP to operate nationally.
“The mechanics are not absolutely clear at the moment, but in all likelihood we will seek to ensure that the same model of MDP operates in each state in the long run.”
Whether that means finding financial services firms to associate with in Brisbane, Melbourne and Perth has not yet been resolved.
“We may be on the lookout for partners, but in the end that may not be necessary as there are tax people here,” Hay said. “But in saying that, we are not above looking at other resources.”
Generally speaking, Hay felt there was room for MDPs, so long as their operators were aware of the particular service the model could best offer.
Bennett, who endured a long and at times brutal campaign against MDPs in the mid 1990s to set up KPMG Legal, was more forthright.
“Tax has been the domain of accounting firms for the past 20 years. When you look at the numbers of tax lawyers in large accounting and law firms its absolutely disproportionate to their numbers overall,” he said.
“Tax is a wonderful area for the large law firms to enter into. There are natural synergies with other work, plus clients have the advantage of legal professional privilege at a time when information is being guarded jealously by taxpayers.”
According to Bennett, the value of “top-end” tax advisory work held by the Big four accounting firms is approximately $500 million, which, he agreed, was enough to go around.
“Those who don’t throw their energy and resources at this will be left at the mark,” he said. “It’s a lay down misère.”