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 | 10-Aug-2010 7:04 am
What about the minimum £25k loans that partners were asked to take out whilst the firm was in serious trouble and that they are now personally liable for?
The partners were bullied into signing these and were told that if they didn't sign you have no future at Halliwells.
What about the six months of tax that Halliwells should have paid but instead raided so now partners owe 6 months tax?
Six months tax plus minumum £25k loan. All done at a time that he must have known the firm was going bust.
As for a property deal whereby they paid the highest rent so as to trouser £16m well that is beyond words. They received £21m and put only £5m back into the firm and pocketed the rest! Had they not done that then Halliwells would still be afloat.
None of that money should have been taken as a bonus but if you are going to do that then take £5m and put £16m back into the firm because do you know what happens if you don't? Take a look at what has happened if you don't know.
This is basic stuff that a corner shop owner could tell you.
Time for businessmen to run law firms, not lawyers.
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Mona | 12-Aug-2010 9:44 pm
so stop moaning and start suing
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winners and losers | 12-Aug-2010 9:55 pm
There is a lot of emotion here but do you honestly think Ian and his fellow equity partners care what you think? They have bought land, built houses and filled their pension pots. There are winners and losers in business. The 40 who took the money are winners and all of you who lost your jobs or foolishly poured money into the Halliwells money pit are losers. Common sense and a less gullible approach would have helped you to avoid these losses. Clever lawyers vs stupid lawyers and look who has won, they have got away with it because the stupid lawyers listened to the hype and failed to look properly at the financials
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Tristram Badger | 13-Aug-2010 7:25 pm
Winners and Losers - that's a shockingly heartless answer. Are you autistic?
Many employees - front office and back office - who competently and calmly got on with their jobs for many years - are now out of work. They're not 'gullible' or lacking in common sense - they simply did what they were asked to do - trust their employer, to whom they owed a duty of good faith.
They were mislead, not misguided.
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Anonymous | 14-Aug-2010 11:07 am
Is there a possibility the "stupid" lawyers were just lied to?
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B | 14-Aug-2010 11:25 am
winners and losers | 12-Aug-2010 9:55 pm, the remainder who 'foolishly poured money in' were told that if they didn't then they didn't have a future. They was no 'put this money in and reap benefits', it was more what would happen if you didn't.
It isn't gullible and nobody put it in lighlty. There wasn't much choice.
They are all losers because the 'clever' lawyers destroyed a business - how is that success?
If Directors of a normal business behaved in the way these equity partners did they wouldn't be allowed to run a business again.
Let's wait for the results of the bodies looking through this.
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missing them already | 14-Aug-2010 9:03 pm
We will miss the scallywags and their false profits and pep figures. Now Kennedys and their disturbing homo erotic video stars will have to be the laughing stock of the legal community
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I was only following orders | 16-Aug-2010 5:45 pm
is that a defence? What happened if you refused to put the money in? Were you shot at dawn?
Surely the lawyers could have requested financial information to enable them to evaluate the risk. Isn`t that a lawyers job?
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Lied to? | 17-Aug-2010 8:30 pm
If this is true then those who told the lies should be sued for misrepresentation, breach of contract and deceit.
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Anonymous | 18-Aug-2010 12:14 pm
Reading Ian Austin's comments again the sad thing is that he probably believes them.
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