DLA job cuts give rise to enmity between Aussie, UK lawyers
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DLA Piper managing director for Europe Andrew Darwin was in Dubai last week.
The firm is remaining tight-lipped on the reason for his visit, but with the fortunes of the Dubai office being linked closely to the fluctuations of the property and construction market sources claim that the stopover by chief executive Nigel Knowles’s right-hand man was motivated more by business than pleasure.
“Darwin’s been dispatched to target more people for redundancy,” says one source close to the firm. “London has issues with Dubai. They [London] said in quarter one that they wanted major cuts. They wanted 25 per cent. That’s why Dubai did a second [round of cuts] and will now do a third.”
A hiring freeze is reportedly being instituted by DLA Piper in non-strategic departments in slower Middle East markets such as Dubai, and this
is expected to continue until 2011. However, regional managing partner David Church declined to comment on the subject of further redundancies or the alleged hiring freeze.
Outside the management, however, it is easy to find people prepared to lash out over how the firm handled the previous cuts of 8 per cent of Dubai
fee-earners in April 2009 and 9 per cent of the Middle East workforce in June 2009.
Critics have flooded the Backchat section on TheLawyer.com and the battle lines have been drawn along national lines. Some argue that an ‘Aussie mafia’ has taken hold of DLA Piper’s Middle East operations, which is intent on securing ‘jobs for the boys’. The Australians have hit back, claiming that the fact that UK lawyers have lost their jobs in the Middle East is more indicative of “Pommy incompetence” than a bias in favour of the Antipodeans.
DLA Piper Middle East regional corporate head Peter Monk, who joined from Australian firm Minter Ellison last year, says he “cannot comment in relation to idle gossip or emotional outbursts”.
That said, it is true that when people lose their jobs, or fear they might do so soon, emotions run high and scapegoats are sought. Whether there is any factual basis to the assertion that some nationalities have been more affected than others is difficult to ascertain, as DLA Piper will not respond to requests from The Lawyer for a breakdown of redundancies along national lines.
What is clear is that DLA Piper’s workforce in the Gulf has been, and continues to be, diverse. But it is also clear that there is a perception of favouritism, which in some ways poses as serious a PR headache to the firm as any genuine institutional bias.
Some history would be useful here. With Dubai acting as something of a fulcrum for Asia-Middle East investment, Australian lawyers’ extensive experience of Asia was a plus when the firm was recruiting during the Gulf bubble of 2007 and 2008. For example, partners Damian McNair, Tony Holland and Jim Delkousis all came from Australian ‘magic circle’ firm Mallesons Stephen Jacques.
Moreover, DLA Piper could get these people on board without having to fork out as much as it would have to for UK magic circle recruits. According to one recruiter who has brokered such deals, the salary differentiation was as much as 15 per cent. A top-brass UK partner would be paid £550,000-£600,000, versus £400,000-£450,000 for a partner from a comparative firm in Australia or New Zealand.
There is nothing unique about this recruitment strategy - most international firms in the region did the same. But what might have led to the emergence of national faultlines at DLA Piper is the fact that five of the seven practice heads (corporate, finance and projects, finance, litigation and IP), one sector head (social infrastructure) and one office head (Abu Dhabi) are Australian.
According to one source close to DLA Piper in the Middle East, it is these Dubai-based equity partners who are running the show. “[Regional managing partner] David Church is the eyes and ears on the ground,” says the source. “[But management] defer to Damian McNair and his equity partners. They run Dubai.”
With DLA Piper potentially showing the door to further partners, employees will be getting jittery once again. McNair’s position looks safe. DLA Piper’s management will be under huge pressure to ensure that any future job cuts are not only objective, fair and proportionate, but are perceived as such.
Readers' comments (8)
Anonymous | 20-Jul-2009 11:33 pm
This is again an episode of lazy reporting by the Lawyer and I now feel the urge to speak out in defense of my friends and ex-colleagues at DLA in the UAE. It is absurd to suggest that the "Aussie mafia" are paid anything less than exorbitant salaries, which are completely unjustified by their shameless displays of money grabbing self promotion yet non-existent delivery. That alone is just reason for people in the firm to want these people out - they get paid more and deliver least. Put another way, like Dubai itself they promised the World... and then cancelled the project. These same Aussie 'magic circle' lawyers have brought what had the makings of a successful office to its knees, and have already driven, or are in the process of driving out the heart, soul and life blood of their offices in the UAE. Their lack of judgment in recruitment, financial management, people management and client management is extraordinary, and there are enough ex-DLA lawyers out there (myself included) to verify this. And as for the swipe at the 'incompetence' of the leavers, it is interesting to note the excellent roles now occupied by many if not all ex-DLA people in the region (myself included). Alternatively, why not research the number of ex-DLA people now holding senior in-house positions in the Middle East (myself included) and who actually instruct DLA in the Middle East (I will not)? You will quickly find that the answer will be very few (if any) do instruct DLA and the reason for this will often be cited as the presence of these same Aussie 'magic circle' lawyers. Now isn't that an interesting story....?
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Anonymous | 21-Jul-2009 3:20 pm
Have some guts and post the comments people are writing on this forum (mine included).
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Anonymous | 22-Jul-2009 12:31 pm
This article is just such a load of codswallop and lazy reporting as to be a complete waste of space.
The fault lines in the firm are entrenched in the partnership itself rather than swiping among the lawyers.... and as for your speculation about what McNair and Co are getting paid you are dead wrong.
The 'Aussie Mafia' are among the best renumerated partners in the entire DLA partnership.
And they have not delivered and on top of that the projects team has been the least impacted by redundancies with them all off on secondments or sabbaticals to date rather than getting the chop (so far I expect round three to fall on them heavily though)
McNair was made an equity partner on the basis that he brought Nakheel with him as a client and Nakheel was a very big client.
And anyone with half a brain knows what happened to Nakheel.
Also you completely missed the fact that the head of IT is also an Australian... but perhaps a good omission on your part because Matt Glynn certainly cannot be considered as part of the Aussie Mafia and is the ONLY reason that I would ever instruct DLA on any matter.
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Anonymous | 31-Jul-2009 8:05 am
Does Andrew Darwin read the Lawyer ... ? Lets hope so and lets hope he doesn't "buy" Australian!
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Anonymous | 13-Aug-2009 5:20 am
So, the English who have lost their jobs are whinging that it is due to the Australians in ME. Welcome to the real world. DLA Piper is a global firm and not a purely English, so you can expect many nationalities to be involved in management. The suggestion that the reduction in Nakheel work is due to the Aussies mis-management is laughable. I suspect many of the Australian associates kept their jobs at DLA ME because they came originally from top tier firms and are far brighter intellectually and more able than the "standard issue" mid tier English lawyer. After all, most were probably there because you couldn't get a job back home in the top tier firms in the UK. Suck it up guys. Non performers even at associate level get booted in a downturn. And if you want to look at bias, who lost their jobs first in the UK magic circle firms? Australians and New Zealanders who are simply cannon fodder for these firms in the boom times. They are first to go in a down turn.
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Bob | 13-Sep-2009 7:52 pm
The new GC of Nakheel is an American from a UK Magic Circle firm. Aussies, who can be pisstakers working overseas, or Poms, who must rank as the laziest nation in the white western alliance - it wont matter....no Nakheel work for DLA!!
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Anonymous | 12-Oct-2009 12:58 pm
What a terrifice read! I don't know what was more fun, reading the story, or reading the comments!! Suffice to say that I'm both an Australian and ex Nakheel employee - thanks to a little thing called the GFC (or perhaps it was to do with a huge miscalculation on Nakheels part with respect to loans, funding and no customers!). Anyway, I don't blame anyone for my job loss, not even the Brits!
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Anonymous | 28-Feb-2010 9:47 am
I used to work at DLA and have to say that these so called "Aussie Magic Circle" lawyers at DLA are the same as mid market lawyers in London (ie below Silver Circle). They are nothing like Freshfields, Clifford Chance etc. All they know is the tiny legal market in Australia and have no international experience. They may be good in Oz but not worldwide.
I found them rude and arrogant and quite nasty. They brought all their support staff over and paid them more than lawyers in other firms. They treated their Aussie support staff better than lawyers of other nationalities and undermined those lawyers. That is definitely mafia!!
The quality of the work was quite poor and they did not know how to approach Gulf problems because they were so used to the Malesons way of doing things. What goes around comes around.
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