Big six face challenge on profits

Niche firms Sparke Helmore and Gilbert + Tobin top Australian profits league; Mallesons keeps top spot for revenue


Although the big six Australian firms are still holding their own in terms of turnover, they are facing a greater challenge from the smaller players when it comes to profitability, a survey by Australian publication BRW has revealed.

In the 2002-03 financial year, the survey showed that there was no change in terms of ranking by revenue, with Mallesons Stephen Jacques still leading the way with an income of A$420m (£172.1m). Minter Ellison took the number two spot with A$402m (£164.7m), and Freehills earned A$392m (£160.6m) to take third.

In terms of profits per equity partner, the two top-ranking firms are Sparke Helmore and Gilbert + Tobin. The former is an insurance and government law firm, which rates fourteenth in terms of turnover, and this year saw tremendous growth, opening an office in Perth and taking on a Freehills team in Canberra. Gilbert + Tobin is a single-site practice based in Sydney, and has hit the headlines recently for acting on behalf of the family of the now deceased Rolah McCabe in the British American Tobacco litigation.

The two firms’ rankings in the profits per equity partner table is in no small part due to the fact that they obviously keep a tight rein on the equity. If one looks at the estimated profits per partner, Mallesons heads the group, with partners there getting A$738,000-A$844,000 (£302,000-£346,000), Gilbert + Tobin takes second place with profits of A$641,000-A$732,000, (£263,000-£300,000), and Freehills takes the third spot with A$634,000-A$727,000 (£260,000-£298,000).

The biggest growth came from Sparke Helmore which increased its turnover by a whopping 22.8 per cent. Deacons was the second best in terms of growth, increasing revenues by 18.7 per cent.

Minter Ellison’s London managing partner Michael Whalley told The Lawyer: “Australian firms have weathered the worldwide slowdown much better than some of the firms in Europe and the US. Australian firms have generally seen continued growth.”

Firm Revenue A$m (£m) Change (%) Revenue per partner A$m (£K) Estimated range profits A$m (£m) Estimated profits per equity partner A$K (£K) Total no of equity partners Total no lawyers ***
Mallesons Stephen Jaques* 420.0 (172.1) 5.0 2.1 (860) 147.0-168.0**** (60.2-68.8) 816-933 (334-382) 180 895
Minter Ellison Legal Group 402.0 (164.7) 8.1 1.4 (574) 141.0-161.0**** (57.8-66.0) 550-629 (225-258) 256 1,252
Freehills 392.0 (160.6) 9.5 1.8 (737) 137.0-157.0**** (56.1-64.3) 634-727 (260-298) 216 860
Allens Arthur Robinson* 320.0 (131.1) 1.3 1.6 (656) 112.0-128.0**** (45.9-52.4) 583-666 (239-273) 192 710
Clayton Utz 317.0 (129.9) 5.0 1.7 (697) 111.0-127.0**** (45.5-52.0) 657-751 (269-308) 169 696
Blake Dawson Waldron* 305.0 (125.0) 5.2 1.6 (656) 107.0-122.0**** (43.8-50.0) 581-663 (238-272) 184 750
Phillips Fox 201.5 (82.6) 9.7 1.1 (451) 60.5-70.5 (24.8-28.9) 644-750 (264-307) 94 672
Corrs Chambers Westgarth 176.0 (72.1) 10.0 1.5 (615) 61.6-70.4**** (25.2-28.8) 716-818 (293-335) 86 407
Deacons 159.0 (65.1) 18.7 1.1 (451) 47.7-55.7 (19.5-22.8) 477-577 (195-236) 100 470
Baker & McKenzie 112.5 (46.1) 4.7 1.5 (615) 33.8-39.4 (13.8-16.1) 786-916 (322-375) 43 246
Gadens Lawyers** 96.0 (39.3) 6.7 1.1 (451) 34.6 (14.2) 606 (248) 57 191
Hunt & Hunt 89.0 (36.5) 7.2 0.9 (369) 26.7-31.2 (10.9-12.8) 325-380 (133-156) 82 373
Gilbert + Tobin* 75.0 (30.7) 0 1.8 (737) 26.3-30.0**** (10.8-12.3) 1,011-1,154 (414-473) 26 166
Sparke Helmore 70.0 (28.7) 22.8 1.7 (697) 21.0-24.5 (8.6-10.0) 1,312-1,531 (538-627) 16 238
Henry Davis York 54.0 (22.1) 17.4 1.4 (574) 16.2-18.9 (6.6-7.7) 578-675 (237-277) 28 160
Dibbs Barker Gosling 48.6 (19.9) 13.0 0.9 (369) 14.6-17.0 (6.0-7.0) 442-515 (181-211) 33 177
Ebsworth & Ebsworth*# 47.0 (19.3) -5.2 0.8 (737) 14.1-16.5 (5.8-6.8) N/A N/A N/A
Middletons Lawyers*# 42.0 (17.2) 5.0 1.1 (451) 12.6-14.7 (5.2-6.0) N/A N/A 90
McCullough Robertson 40.4 (16.6) 15.4 1.4 (574) 12.1-14.1 (5.0-5.8) 484-564 (198-231) 25 104
Abbott Tout# 38.0 (15.6) 8.6 1.2 (492) 11.4-13.3 (4.7-5.4) N/A N/A 77
 
* BRW estimate
** Gadens was the only firm to provide profit figures
*** including all partners but not paralegals/articled clerks
**** 35-40% of revenue; other firms 30-35%
# Declined to specify equity/fixed share partner split

Source: BRW