Big six face challenge on profits

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."