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)
Arthur Mee | 31-Aug-2010 5:08 pm
Question: what exactly do the Law Society and the Solicitors Regulation Authority do? Surely these former equity partners of Halliwells should be the subject of investigation and criminal prosecution.
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Anonymous | 31-Aug-2010 9:04 pm
Afraid Private Eye might be well on the money when it states that SRA has come to stand for "Supine Regulation Authority".
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Plato | 31-Aug-2010 10:48 pm
The Salford University story is extemely worrying. I bet Heatons didn't see that one coming. Let's hope he has delivered some clients (Salford University?) otherwise the junior staff will be questioning the wisdom of the partners who appointed him and departures/recruitment difficulties will ensue.
We are all looking forward to seeing what the Administrator/the bank/the Landlord of Spinningfields/the Landlord of King St/the Landlord of St James's Court/the Landlord of the London premises/HMRC and the FSM's are going to do next. A winter of discontent followed by frenzied litigation looks like a good bet.
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Anonymous | 1-Sep-2010 1:19 pm
What is known for certain is that University Council (of which Austin is a member) has been dipping into the charitable accounts to have weekend binges at expensive Lake District resorts under the guise of 'strategising' the future of the University. How much work has been done given the alleged quantities of alcohol involved is open to dispute.
With £37 million of expenses on the books (nobody has yet examined the receipts that make up this enormous sum of money, which is actually more than the University has raised in tuition fees from its British students in the same financial year), there are likely to be all kinds of bodies buried in the financial yard.
Those who appointed Austin as Chair of Audit deserve particular praise for spotting a compliant squanderer when they saw one, and it must be said they got a handle of his character long before RBS, Halliwells or the SRA even became suspicious. Over the last few years, this has allowed Salford University to dump well over £120 million of financial profligacy under the heading 'expenses' in the Annual Accounts.
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Anonymous | 1-Sep-2010 5:23 pm
Austin "Lookalike" Warden Samuel Norton of Shawshank. There's more than just a slight resemblance! Watch the film again. Oh and Austin if you are reading this, that was NOT a compliment. Although in your (under) world, it probably was!
Ex Halliwells employee.
P.s I can't wait until I bump into you!
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Anonymous | 2-Sep-2010 8:12 am
If the comments get to 200 then this will surely be the most commented on story the Lawyer has ever seen. The Halliwells debacle was one thing but there were no real surprises in Manchester and parts of London when the Firm collapsed. The Salford University story is a brand new revelation and has opened up a whole new chapter. The story in Private Eye promotes Austin to celebrity status and it can only be a matter of time before Panorama carries out a full and detailed investigation into Halliwells collapse.
Does anybody know how much Austin is paid by Salford University?
Will the name Austin creep into the English Language in the same way as the name of the inventor of the flushing toilet?
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Anonymous | 2-Sep-2010 10:55 am
With all the comments about litigation (some of which are presumably not from FSMs) should we not propose contributons to a fighting fund? How about loans that are only repayable on successful action? Some of the money could even be used to find Alec Craig. The Law Society still has him as a M of Halliwells LLP.
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Anonymous | 2-Sep-2010 12:40 pm
Yes whatever it takes, but I think all the other foul ex Halliwells' equity partners should be in the frame too. And I don't just mean the ugly women ones. As solicitors we actually have an obligation under the Solicitors Code to report to the SRA (if it hasn't already been done). Let's face it, we all have good reason to doubt the integrity of this unscrupulous lot! They have been taking the *iss and are laughing at every one of us, despite what lies they will tell you. However, as fat cats go they are still too small fry not to be made an example of by the SRA. So let's start taking some action. Who knows it may even deter our new management from doing the same to us!! Do we even know whether the Hill Dicks equity partners took a reverse premium on their new premises?? People are too busy boot licking round the next bunch of bosses and wowing at nice new premises instead of ACTUALLY DOING SOMETHING! Start getting evidence sent to the SRA (you can do this anonymously). There probably won’t be a spare law firm to bail you out next time. So as Brown,Russell ,Mason et al are stuffing their fat bellies, you'll be stacking shelves in Tesco.
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Anonymous | 2-Sep-2010 1:19 pm
I'm delighted at the flurry of activity to ensue after the Salford University revelations - given it was me who broke the story.
Austin - if you're reading, I've got a very, very long memory, and I do not take kindly to being threatened. Perhaps you ought to have stopped and considered what you were doing before you allowed yourself to be complicit in squandering vast sums of my money then instructing one of your shockingly awful lawyers to follow this up with a lengthy diatribe full of menacing language and few facts.
Lets just wait and see what those £37 million of expenses at Salford contain, shall we?
@Anonymous | 2-Sep-2010 8:12 am
It is not a matter of public record how much Austin is paid as Chair of Audit at Salford, unfortunately.
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Anonymous | 2-Sep-2010 3:03 pm
Come on students at Salford Uni. If this load of ex Halliwells fixed share "partners" (or employees as they ought to be called) haven't got the balls to stand up for themselves - you nail him! Just been looking into that MediaCityUK ...and Jon Corner appointment.....mmmmmmmmm... doesn't smell fishy AT ALL.
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