Should we talk about the Government?

04 March 2014 By Justin Whealing

Recent events support the verdict of our readers that a change in government is not a panacea for the legal profession in Australia.

A Lawyers Weekly poll that asked Do you think law firm profitability will pick up in 2014 under the current Liberal Government? attracted a record number of 2250 responses.

While ‘Yes’ received 28 per cent of the responses, our readers were either ambivalent about the government’s impact on the legal sector (‘external factors’ and ‘impossible to say’ received just over half of the vote), or downright disagreed (the ‘No’ vote attracted 26% of respondents).

“At the moment, I would say there’s not a lot of additional work that has been driven by the Abbott government,” Holding Redlich managing partner Chris Lovell told deputy-editor Leanne Mezrani.


Lawyers Weekly concurs with Lovell and would also go further in stating that during what has nearly been six months in office, the Abbott government has sent contradictory and conflicting views to the business community.

Since assuming office Prime Minister Abbott has often repeated a well-worn line he used during the election campaign that Australia is “under new management and open for business”.

Such a cliché rings hollow when you knock on the head a proposed $3 billion merger between GrainCorp and America’s Archer Daniels Midland after lobbying from National Party politicians.

Lawyers Weekly agrees with The Wall Street Journal which said such decisions raise questions about the government’s commitment to foreign investment.

The Federal Government has also shown itself to be contrarian on its attitude to corporate bailouts.

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On the one hand, Lawyers Weekly agrees with the Federal Government’s decision not to throw more money at the ailing car industry.

However, the ramifications of changing the Qantas Sale Act provides no guarantee that more local jobs won’t be lost in addition to the 5000 job losses announced by Qantas chief executive Alan Joyce last week.

Tony Abbott has also failed to coherently articulate why the Cadbury’s factory in Tasmania was given the funding tick of approval, but SPC Ardmona has been given the cold shoulder.

“What will make a difference to the legal profession is if the government keeps calling Royal Commissions [such as the one on union governance], because where there’s a Royal Commission, there are lawyers,” said Lovell again, somewhat tongue-in-cheek.

The initial optimism in the markets and corporate legal community on the ascension of the Abbott government has become jaded.

In February, Lawyers Weekly has broken exclusive stories on redundancies at Piper Alderman  in Adelaide and Gadens in Brisbane.

In talking to Lawyers Weekly, another sage of the legal profession, Danny Gilbert, hit the nail on the head when he talked about the main reasons for large law redundancies and cost-cutting over the past 12 months.

“The biggest driver for the under-utilisation of capacity at all law firms has been a downturn in the volume of work – and that has a lot to do with post-GFC economic uncertainty; due to a reduction in demand for commodities in China, and uncertainty in the US and trouble in Europe,” he said.

There is not much the Federal Government can do about that.

Where it could be useful, however, is that with external shocks still sending ripples through the Australian economy, domestic market sentiment would be somewhat assuaged if the Abbott Government articulated more clearly, without cliché, what it actually stands for.


This is an edited version of the Lawyers Weekly 632 magazine editorial from Friday 28 February


Should we talk about the Government?
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