Halliwells’ ex-managing partner: ‘I gave my life to that practice’
Exclusive: Ian Austin on Halliwells’ culture, job losses and his own exit
Ian Austin
Halliwells’ former chief Ian Austin has hit out at critics of his management of the Manchester-based firm, which went into administration last month, arguing that “we all bear responsibility” for the firm’s failure.
Speaking exclusively to The Lawyer, the 48-year-old former managing partner and executive chairman of the firm related that Halliwells’ collapse was a “bitter pill to swallow”.
“I’ve lost everything. I fought hugely. I’ll not have anyone question that commitment,” he stated. “I’ve always said that I stand up and hold myself responsible, [but] so does every single partner that contributed to the performance of the firm. I worked my bloody socks off for that firm. I put in £700,000.”
He argued that the financial difficulties that Halliwells experienced, which saw fee income drop from £87m in 2007-08 to £67m in 2009-10, lay primarily with the downturn in the corporate and property markets.
“At the end of the day we lost the best part of £18.5m to the downturn,” Austin said. “Moving to [new headquarters at] Spinningfields did add substantial cost, but when the decision was taken the firm was in a strong position. As a consequence of earnings dropping, partners decided to leave.”
Austin defended the disbursement of £15m of a £20m cash incentive from landlord Allied London to equity partners following the firm’s move into the new building, citing tax efficiencies as the rationale for distributing money at that point.
He added that, at the time of the deal, while the business was recording year-on-year growth of 16-17 per cent, external consultants thought the building would be “pretty full” in six to seven years on the basis of just 6-7 per cent growth. At the time the firm filed notice of its intention to go into administration on 24 June, occupancy was running at around 65-70 per cent.
“The decision to move into Spinningfields was a decision taken by a board, by external consultants [Sheppard Robson] in conjunction with group heads. This was not a decision of my own making,” he said.
But despite the firm’s reputation for having an ’eat what you kill’ remuneration system, Austin denied that partner exits were as a result of an individualistic culture.
“[That] bears no resemblance to the remuneration [structure],” he insisted. “People were judged on their ability to bring in work, not on what they killed and ate.”
Austin cited the announcement that the firm’s insurance team would leave for Kennedys in December 2009 as “the straw that broke the camel’s back”, as it represented £4m-£5m in fee income.
Austin also defended his decision to negotiate his exit to Heatons as head of commercial litigation before the final deal on the firm’s assets was completed and with the fate of 51 future trainees still hanging in the balance.
“I stuck by Halliwells to the death and I’ve taken this opportunity because it was the right thing for me,” he said. “I’ve been committed – I gave my life to that practice.”
Readers' comments (342)
Anonymous | 2-Aug-2010 9:04 am
Nothing at all to do with not being able to fill your pockets fast enought then?
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Anonymous | 2-Aug-2010 9:34 am
If the writing was on the wall in December 2009 how does he explain recruitment and promotion of partners up to June 2010?
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Anonymous | 2-Aug-2010 10:01 am
With all due respect, Austin’s commitment demonstrably fell way short of the mark: if what he says is true, he demonstrably lacks ability rather than application (an “A” for effort; an “F” for achievement). I wouldn’t hire him.
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sebastiannook | 2-Aug-2010 10:20 am
Why is this man trying to defend his actions when , indirectly or directly , he has had a part in seriously damaging the welfare of hundreds of innocent staff and a good number of innocent creditors too
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Anonymous | 2-Aug-2010 10:44 am
This is a pathetic response… I would have expected the powers that be at this publication to at least try and give him half a grilling, rather than a just a free platform to peddle this drivel.
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Anonymous | 2-Aug-2010 10:47 am
Nice to see that Ian Austin has retained the same capacity for denial having left Halliwells as he had when he was the managing partner of the firm. Crass mismanagement combined with hubris and naked greed led to the downfall of the firm - and all of these characteristics flourished under the leadership of Ian Austin.
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Anonymous | 2-Aug-2010 11:11 am
The arrogance of this guy is unreal.
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Anonymous | 2-Aug-2010 11:23 am
Good to see the Lawyer really cross-questioning him hard on these issues.
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a hack | 2-Aug-2010 11:38 am
I think you'll find that these are responses to the sort of tough questions that journalists, bloggers and commentators have been asking of Austin ever since the ship went down.
The answers he gives are there to be interpreted by the reader as he or she chooses. It's not the job of a reporter on a news story such as this to guide opinion one way or the other. This magazine, and others, have offered plenty of opinions over the last few weeks on what happened at Halliwells.
Has no one heard of right to reply?
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Anonymous | 2-Aug-2010 12:00 pm
Are you Tony Hayward in disguise?
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Anonymous | 2-Aug-2010 12:33 pm
Speaking of right of reply, it's a shame the hundreds of staff who got shafted by Austin's intransigence don't enjoy a similar priviledge isn't it?
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Anonymous | 2-Aug-2010 12:46 pm
When poor Ian Austin is complaining about putting in £700k is this before or after he took his share of the reverse premium? Is it reasonable to suspect that this has been forgotten and he had actually only put in what used to amount something about equal to or less than his income for a single year?
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Ian Austin's Assistant | 2-Aug-2010 1:24 pm
You've got to admire Ian Austin's front at least - he's the captain of the ship when it hit the icerberg and sank but claims he isn't to blame. Fantastic stuff.
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Anonymous | 2-Aug-2010 1:31 pm
A Fred Goodwin for the legal profession . . . . .
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Rufus | 2-Aug-2010 2:26 pm
This man has no self awareness at all. He is now at some tiny firm in Manchester and still he is spinning it like he is still in Spinningfields.
Not all the partners took the reverse premium. Ian elected not to tell the FSM`s despite them being small stake holders. That represents bad faith.
Taking the reverse premium in the most tax efficient way is utter rubbish. Ian and his cronies took the money from the Landlord and distributed it as profit. That act was not in the best interests of the firm.
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My Life | 2-Aug-2010 2:31 pm
The LLP was put into his hands and his greed and ineptitude resulted in him leading the mad £17m reverse premium dash and in a few short years he brought the firm to its knees.
He may have lost 700k but he took close to £1M out in the reverse premium oh and don`t forget that 75k your trousered as a bonus for doing such a good deal with the Landlord. Clown
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Skint Halliwells partner | 2-Aug-2010 2:36 pm
The administrators report shows that the firm made a loss of 1.8M in fy April 09. So Ian why were you going around telling evrybody the firm was in great shape? You forced many of us to put money in and you failed to divulge that the firm was loss making.
We are now left to pay our own tax because you did not put money into our tax reserve accounts as you promised. Why did you take advantage of the HMRC time to pay scheme for insolvent firms and then email us and say the firm could have paid it if it had wanted to. This is an integrity issue because you either lied to us or you lied to HMRC. I hope the SRA investigates and strikes you off
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Gentle Ben | 2-Aug-2010 2:39 pm
Addleshaws saw the recession coming and built up a war chest. Every business commentator knew what was coming. Austin thought he knew best (or didn`t care) and took 17M out of the firm. Tells you all you need to know, the guy is a fool as are those who blindly followed him down the dark road into administration
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Rock Creature | 2-Aug-2010 2:43 pm
Get back under your rock you shameless creature. You now work for a little league firm and we hope that we will never hear from you again. Go with a semblance of grace and keep your trap shut
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Anonymous | 2-Aug-2010 2:47 pm
He sounds exactly like Gordon Brown.
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