Australian top 30 financial results: mid-tier soar, top-tier sluggish

Mid-tier law firms in Australia are the biggest winner in terms of revenue growth in the past two years, according to the latest Top 30 Law Firm list released by Australia’s BRWmagazine.

The 10 fastest growing firms by revenue growth rate in the two years to 2011 are all mid-tier firms or specialty boutique firms (see table below).

With a stellar 52 per cent increase in revenue, Macpherson + Kelly, a 145-lawyer national firm focusing on servicing SMEs, claimed the top spot on the list. The firm’s mergers with Queensland firm BCI Lawyers in 2011 and with a Tasmanian firm in 2010 contributed to the hike in total revenues.

Slater & Gordon, the ASX-listed law firm with strong focus on personal injury cases, is ranked second on the list with 46 per cent growth. Its record performance is also a result of a number of mergers in the past two years.

Hall & Wilcox, a Melbourne-based single-office commercial and corporate firm, reached third place with a organic growth rate of 19 per cent. The firm’s managing partner Tony Macvean said that he saw the rapidly changing Australia legal market offering promising opportunities for mid-tier firms.

“The entry of a number of top-tier global firms have shaken up the legal industry here. Top-tier large national Australian firms are the most affected. But what it means for us is that the top-end of the market now focuses more on international work, and it gives mid-tier firms more space to grow in the mid-market domestic work,” said Macvean.

The movement of high-profile partners from top-tier firms to mid-tier is another emerging trend. “Some large top-tier firms are trimming down their partnerships to increase profitability in an attempt to attract international suitors. So mid-tier firms have attracted more very capable partners,” added Macvean.

Some of the  “Big Six” national firms have clearly felt the pressure. Mallesons Stephen Jaques, although remains to be the top three firm by annual revenue, was the worst performer among its larger peers, with a negative growth rate of -0.6 per cent. Clayton Utz and Allen Arthur Robinson also experienced flat growth, reporting 0.7 per cent and 4 per cent respectively.

As an attempt to spur its future growth, Mallesons is currently in talks with King & Wood to form an alliance relationship (see story).

BRW magazine publish annual lists of  Australia’s top 30 law firms by revenue and revenue growth.