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 3:08 pm
Demonstrably a bear with very little brain...
Why did no one seek to gag this one when they finally showed him the door?
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Anonymous | 2-Aug-2010 3:14 pm
interesting - young Austin doesn't feature on Heaton's web site at all.
"Are you in there Austin!"
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Anonymous | 2-Aug-2010 3:21 pm
Impressive intellect, tact and timing are three qualities that I have always associated with Ian Austin. Look forward to seeing more of his media offensive over the next few weeks.
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An Angry Reader | 2-Aug-2010 3:43 pm
GENERIC AND HIGHLY TEDIOUS RAAAAAAAAAAAAAAGGGGGGGGGGEEEEEEEE.
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Anonymous | 2-Aug-2010 4:34 pm
I was upstairs the other week in the cafe, I purchased a boost and with my first bite a filling fell out causing a shooting pain into the upper part of my mouth - I let out an almighty yelp. Mr Austin was stood on the other side of the room and he didn't even bat an eye lid. Some people.
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Anonymous | 2-Aug-2010 5:03 pm
Ian Austin's attitude seems closer to Dick Fuld (post Lehman collapse) - still in denial. Yet he bagged himself a new job. I am surprised that anyone offered him a new position and one with management responsibility. No one in the world will employ Fuld ever again...
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Anonymous | 2-Aug-2010 5:07 pm
What a Joker.....!
"Downfall related to the downturn"
Northern Rock imploded in 2007, the world was entering mass turmoil and "the board", in 2008, thought that it was the right time to take £15 million out of the business.
Given the fact that fee income dropped by around £20m over the previous years it would have been nice to have that £15m as a capital cushion to see the firm through the recession.
You say you put in £700,000 of your own money, how much did you take out of the business in your time there?
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Those pesky quirks of fate | 2-Aug-2010 5:29 pm
I could have been a contender for managing partner of the decade if it wasn`t for;
1. That pesky recession
2. The pesky temptation of £17m
3. Pesky and disloyal partners
4. Failing to tie the pesky ones in
5. The pesky Sheffield office
6. That pesky straw which broke the camel`s back
7. My pesky socks which worked themselves off my pesky feet.
Poor, poor me it is all so unfair, boo hoo
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Drama Queen | 2-Aug-2010 9:25 pm
"I gave my life to that practice" lol pmsl
That practice gave you your life and you squandered the biggest business opportunity which will ever come your way.
Your house, your car, your friends all came from the firm that you mismanaged so badly that it went into administration.
Stop playing the victim, show some dignity
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Nick Leeson | 2-Aug-2010 9:38 pm
I need a warm up man who can get the crowd in the mood for a tale of greed, mismanagement and financial disaster.
You have not lost everything old man, come and join me on the after dinner speaking circuit.
Nick Leeson
How I broke Bearings Bank (available for after dinner speaking but definitely not for investment advice)
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