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 10:02 pm
If you were the University of Salford, do you think you might be a little worried by this.......
Mr Ian Austin (Chair of Audit Committee)
Independently ranked as one of the “most dynamic figures in the North West market,” Ian Austin is a prominent player in the region. He grew up in Cheshire and has remained firmly rooted in the North West throughout his career – from completing his law degree at Chester Law School to guiding Halliwells through a series of bold initiatives that saw it become Manchester’s largest law firm. In 2004, at 42, Ian was elected managing partner and he immediately began delivering his vision of the firm, completing a comprehensive rebrand of Halliwell Landau to Halliwells LLP that same year. He also established a foothold in Liverpool through the successful merger with Cuff Roberts, followed in 2006 by joining forces with James Chapman & Co which boosted Halliwells to becoming the region’s largest law firm. Ian’s achievements and efforts didn’t go unnoticed and perhaps one of his career highlights to date was being awarded Management Partner of the Year at the 2006 Legal Business Awards. The judges described him as having “an astute hiring and merger policy and an infectious enthusiasm”. In December 2007 he welcomed the entire Manchester workforce to the impressive new Spinningfields district when Halliwells relocated to 3 Hardman Square. With Ian’s guidance Halliwells has adopted a modern corporate structure and maps out innovative career paths for its staff. Strong leadership, business focus, open communications and sound financial management are his trademarks but his achievements go far beyond the realm of business. He sits on the development committee of The Prince’s Trust and has championed a number of fundraising campaigns – so far raising £450,000 for The Prince’s Trust, Claire House Children’s Hospice and the Cavendish Centre. He was also behind the decision to sponsor two of the most exciting young athletes in the UK; Francesca Halsall and Shelly Woods. This support enabled them fly the flag for Britain at the 2008 Beijing Olympics and both are currently busy preparing for London 2012. After recently taking up the position of Executive Chairman, Ian is responsible for running the main board and focuses his efforts on the firm’s commercial objectives and strategy. For more than five years he has guided Halliwells through a period of accelerated growth and remains committed to its success and long term future. Ian enjoys strong links with the Manchester business community and regularly speaks at conferences and events. He also comments regularly in the regional, national and trade media on business trends, leadership and the economy. Ian Austin lives with his wife and children in Ormskirk.
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Anonymous | 3-Aug-2010 0:00 am
"I'll not have anyone question that commitment." Who does he think he is?
You would have thought that he would have been best advised to keep his head down for some time...
As for Heatons, has anyone heard of them? Their litigation profile lists their highlights:-
•a six figure professional negligence claim against a firm of accountants
•a defamation case involving an international company and trade journal
•a successful Judicial Review against a local planning authority
•representing a company in a potential dispute worth several hundred thousand pounds involving alleged defects with a computer system
•advising a company in a claim by a pension fund concerning its assets
•representing a company in a prosecution by the Health & Safety Executive following a serious injury at work
Not exactly the big league
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Bernard Madoff | 3-Aug-2010 0:04 am
Incredible - if this was a company director he would be disqualified. The creditors of this LLP must be crying out for their money reading this! He even gives tax avoidance as a reason for taking the reverse premium out of the business.
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Ashley Balls | 3-Aug-2010 5:23 am
Hitting out at critics is not a particularly good look. Sure Halliwells were the victim of some unfortunate timing - expanding rapidly as the credit crunch arrived etc BUT... However anyone with an ounce of management skill and knowledge would say the demise was the result of poor planning and inexpert management execution. Clearly there was no 'wriggle room' once the solids started to hit the air conditioning. Who was it who said that to place the words oxymoron and management into a sentence is to create an oxymoron? Oh yes, it was me!
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Scep Tick | 3-Aug-2010 8:54 am
If Skint Halliwells Partner's comments are correct, surely this is something for the SRA to investigate? Surely lying about such matters is professional misconduct...
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Anonymous | 3-Aug-2010 9:25 am
I personally witnessed the strategic personal targeting, derision and ultimate disposal of a number of quality Equity and salaried Partners who had the temerity to challenge Mr Austin's ineffective,over bearing and dismal 'alleged' leadership...................all those affected have risen to bigger and better things.
Res ipsa locquitor.
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FB | 3-Aug-2010 9:40 am
Um, don't we the taxpayer own 84% of RBS?
Given the bank is due to write off £15m on its duff loan to Halliwells (clearly the perfect bank for the EpicFail law firm, given both organisations' ludicrous financial decisions...), by my calculations that means Halliwells has cost us, the taxpayer, £12.6m.
Marvellous!
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Anonymous | 3-Aug-2010 11:10 am
So the firm had a reputation of 'eat what you kill'? Well, Mr Austin, seems you ate yourself to death through your greed and killed off the firm as a result.
To add further insult to injury, you've negotiated a comfortable position at Heatons (does this firm not read the legal press, let alone screen prospective employees of their past experience?!)
In an era where margins are being squeezed at the directive of client mandates, seems lawyers and partners alike are becoming ever more greedy and when poor lack of judgement is applied, people (or should I say, in this case, the little boy) cried wolf!!!
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Anonymous | 3-Aug-2010 11:12 am
Can you come an take your banners down from above the escalators in Terminal 3 please, they're gathering dust and we ain't doing it
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Matt Gibbs | 3-Aug-2010 11:20 am
Glad to see Mr Austin is getting the support he deserves on here, I bet he is enjoying reading these goodwill messages...
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