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The Australian crawl: the new wave of law firms going 'national'

The Australian crawl: the new wave of law firms going 'national'

The geographic extension of client needs is seeing a new wave of law firms go national. But, as Angela Priestley reports, connecting the dots across Australia requires a look to the long-term -…

The geographic extension of client needs is seeing a new wave of law firms go national. But, as Angela Priestley reports, connecting the dots across Australia requires a look to the long-term - and a little bit of luck.

Going national: a new wave of firms are stretching their offices out across the country
The national coverage ambitions from law firms have long provided the backbone to Australia's private practice history.

For the country's largest firms, like Allens Arthur Robinson, Freehills and Mallesons Stephen Jacques, it's been the successful connection of dots across the country in recent decades - via mergers, takeovers, the acquisition of teams and outright opening new offices - that have ultimately enabled their success.

Still, the foundation blocks typically emerge from century-long traditions of single-city or single-focus law firms that have eventually moved to branch out. In the case of Mallesons, such founding blocks can be traced all the way back to the 1850s, but it was only really in the 1970s and 1980s that cities were linked, mergers occurred and the firm started along the true national path.

These days, a new wave of law firms is looking to connect the dots across a continent and make the ultimate Australia crawl. And, for firms like Moray & Agnew and Thomsons Lawyers, such an expansion is key to not only servicing the growing geographic needs of clients, but also enabling the potential for some significant revenue growth.

Coast to coast

Just what can be classified as "national" is debatable. Some believe offices in Perth, Melbourne and across the Eastern Seaboard is enough. Others, particularly plaintiff firms like Slater & Gordon, look for numerous small office offerings across all states and territories and within regional centres.

For Michael Pitt, the managing partner of Moray & Agnew, being a national firm is about linking one coast to another.

Last month, with the acquisition of a six-person insurance team from Sparke Helmore in Perth, his firm declared that it had finally done just that and could consequently label itself as "national".

But while extending the firm's reach has happened faster than the time it took those in the top-tier, it's still been a slow and deliberate build.

Pitt traces the national strategy back to the 1990s when the firm decided that in order to react to the consolidation of the insurance industry - which is the firm's major focus - it needed to extend its reach. "They [insurers] started looking for firms that could provide them with at least multistate, if not national coverage," he says.

"It was embracing this philosophy that we decided to first extend our reach on the East Coast by opening an office in Brisbane in 2000. That was the start of our expansion."

"I've seen too many firms expand too quickly and then have the inevitable partner disputes and bust ups. We haven't sought to become national overnight; it's been a long range plan and so far it's been successful."

Michael Pitt, Managing Partner, Moray & Agnew

It's been a steady expansion ever since, with the firm then waiting to 2004 to open in Melbourne and later acquiring further spots on the map in Canberra and Newcastle.

Thus far, the steady pace that has predominantly relied on the opportunistic acquisition of practice groups has been deliberate for Moray & Agnew, with Pitt citing previous examples of failed national attempts by law firms as cause for assuring such plans are well scrutinised.

"I've seen too many firms expand too quickly and then have the inevitable partner disputes and bust ups," says Pitt. "Our strategy has been one of ensuring that everything we do is given the maximum chance to succeed. We haven't sought to become national overnight, it's been a long range plan and so far it's been successful."

And for a firm that seeks to extend its reach via opportunities that emerge from disgruntled partners or teams looking for a chance, Pitt also acknowledges the importance of assuring the right cultural fit. "That's been of paramount importance to us," he says.

With offices now in Sydney, Melbourne, Brisbane Canberra, Newcastle and Perth, Pitt concedes the firm's new ability to classify itself as "national" is a loose one. But, having successfully completed a commitment to opening in Perth, he sees little reason for the firm not to explore opportunities in Adelaide, Darwin and Hobart.

Another firm that has recently notched up an additional piece for its national ambitions is Thomsons Lawyers, which is preparing to open in Brisbane shortly via ten DLA Phillips Fox partner who have voted against the 1 May merger with DLA Piper

For Thomsons' managing partner Adrian Tembel, despite the firm coming across a spot of good fortune by way of the ten partners who voted not to be a part of DLA Piper - and thus now in need of a new home, the new Brisbane office is part of a deliberate plan to go national in line with ambitions to break the $100 million revenue mark by next Financial Year.

Tembel counts his firm as part of the second wave of law firm to go national with the larger firms in the Australian legal sector having become what they are today via that series of consolidations or mergers in the 1980s and 1990s.

"I think what we're seeing now is that there's a block of ten or so firms behind the large law firms that are naturally the second wave [of going national]. I think it's the natural progression of a maturing industry," Tembel recently told Lawyers Weekly.

Tembel is not convinced there will be room for all those involved in the second wave to truly reach a full service national capacity. But he's confident that by working with quality lawyers and keeping them and their partners satisfied in the process, his firm can succeed - especially given the fact it has not lost a single equity partner in more than two years.

But, despite the national ambitions of some, there are a handful of large law firms that have resisted the urge to increase their Australia reach - at least at the moment.

One such firm is Middletons, whose size and clout in the Australian market has grown to significant levels despite that fact its presence is limited to Sydney, Melbourne and, more recently, Perth.

While Middletones' managing partner Nick Nichola labels the firm a "full service national commercial law firm" he does note that their limited presence - particularly the missing Brisbane piece - may lead some to question just how national they truly are.

"There's probably one or two other jurisdictions we need to look at as well," says Nichola, who notes that opening further offices in Australia will come down to opportunity. "Then there's the whole international scene, in particular the region on our back door step including China and India. I think there's a lot more that Middletons needs to do."

No doubt the notion that there a "lot more to do" is on the minds of law firm partners and owners across the country. While not all can be successful in their Australia-wide domination plans, Mallesons provides an apt example of why, with opportunity on board, the potential for such success can be unimaginable.

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The Australian crawl: the new wave of law firms going 'national'
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