Clayton Utz and Minter Ellison refuse to close door on foreign mergers
Clayton Utz and Minter Ellison, the two so-called big six Australian firms that remain independent, are keeping their options open, with neither firm’s management ruling out a merger.
The firms have enjoyed an increasing level of referrals from international and foreign firms without a presence in Australia. But management at both firms told The Lawyer that they had an open mind to the future.
Minter Ellison, for example, has received more referral work from different sources, including some pre-eminent international firms that are keen on building stronger relationships with the firm.
“A number of foreign firms previously engaged us for transactions and matters on odd chances, but we’re now receiving referral work more consistently,” John Weber, the chief executive partner of Minter Ellison, told The Lawyer. “I’ve spoken to chief executive partners of firms in the US and UK that don’t have relationship firms in Australia. They’ll be looking to send work to firms that are not their competitors.”
The Lawyer reported last week that Slaughter and May (25 July 2012), which previously had a non-exclusive referral arrangement with domestic leader Allens (formerly Allens Arthur Robinson), has selected national independents Clayton Utz, Corrs Chambers Westgarth, Gilbert & Tobin and Minter Ellison as its favoured partners on the ground.
In addition to Slaughter and May, it is understood that Minter Ellison is building up relationships with a wide range of firms, including but not limited to Cleary Gottlieb Steen & Hamilton, Freshfields Bruckhaus Deringer, Latham & Watkins, Weil, Gotshal & Manges and White & Case.
However, despite the increase in referral work, Minter Ellison’s management is not ruling out a merger so long as the deal would be beneficial to the firm.
“We don’t have a closed mind for any opportunity. We’re constantly considering all different options. We’ve been approached by many firms for a merger, but so far none has presented a deal that’s in the best interests of the whole firm,” said Weber. “Our business is going strong and cross-border work flow is also rising. Our revenue for 2011/12 has gone up, a good indicator of that. ”
Clayton Utz is in a similar position to Minter Ellison. The firm’s national chief executive partner Darryl McDonough indicated that when he travelled to New York recently he was more warmly welcomed by firms there than in the past.
“The interesting thing we found is that each time an Australian firm announced a tie-up with an international firm, we receive more enquiries from firms in the US, UK and Asia. A number of independent firms have said to us that they are keen for us to remain independent and asked us how they can assist us to achieve that,” said Darryl McDonough in an interview with The Lawyer.
“We’re happily independent at present. But we’re also open to link up on a global baisis, providing that we can maintain our market leading position in Australia and ensure there is added value to our people and clients,” McDonough emphasised.
Currently, Minter Ellison is the largest law firm in Australia, by both size and revenue. According to BRW magazine’s 2011 Top 30 Australian firms ranking (15 September 2011), the firm’s turnover for the 2010/11 financial year reached A$525m (£354m), while Clayton Utz’s turnover for the same year was A$455m.
| ’Big six’ Australian firms by revenue (2010/11) | |||||
| Rank | Firm | Revenue (A$m) | Partners | Lawyers | Revenue per partner (A$m) |
| 1 | Minter Ellison Legal Group | 525 | 293 | 833 | 1.8 |
| 2 | Freehills | 511 | 197 | 679 | 2.6 |
| 3 | Mallesons Stephen Jaques* | 491 | 180 | 663 | 2.7 |
| 4 | Clayton Utz | 445 | 203 | 659 | 2.2 |
| 5 | Allens Arthur Robinson** | 405 | 185 | 742 | 2.2 |
| 6 | Blake Dawson | 380 | 172 | 498 | 2.2 |
* now King & Wood Mallesons, ** now Allens
Source: BRW
Readers' comments (4)
Anon | 1-Aug-2012 4:27 pm
It's pretty clear that both firms will merge, at least once. The logic and the market direction is unavoidable. The only question is when.
It is hard to see how either will benefit from waiting. At present they are both large firms compared to, say, Chinese but that is unlikely to remain the case for long.
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HogLover | 1-Aug-2012 5:01 pm
Hogan Lovells should leap upon this.
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Anonymous | 2-Aug-2012 2:44 pm
Yes, the question is probably more 'with whom?' than 'when?'.
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Anonymous | 2-Aug-2012 8:32 pm
Either of these firms would be insane to merge (except with each other), the field is there to play for - Herbert Smith, Ashurst, Norton Rose are inconsequential in the global legal market place (<1% of global premium market share each) - but have managed to exclude Blakes, Freehills and Deacons from any global referral work from firms that are the real deal - Slaughters, Freshfields, Skadden, Wachtell, Latham, Sullivan, Simpson, Cleary, Davis Polk, Weil, White & Case, Kirkland, Cravath, Shearman, Bredin Prat, Uria, Hengeler, De Brauw, the rest of the AMLaw 100 - the list goes on and on. Linklaters has cut Allens out of the same pool - and the King & Wood Mallesons frolic (weird as it is) must be toxic to any serious US player. No one has given any real justification for any of these mergers - but there's a simple lesson from the corporate world - poor management disguises its performance with M&A. Australian clients are NOT asking for this, 90% of Aussie work is domestic - there will be tears and blood at these merged firms for years to come. Talent be warned - get out now!
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