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)
Graham | 4-Aug-2010 7:38 am
Nice timing. As far as I recall the insolvency Act applies to LLPs, and that there is a section in there relating to transactions at an undervalue - perchance the handing out of a "tax efficient" 15m for nothing ? As connected parties this relates back how far ? Now let me think. Oh yes, two years. I wonder what date in 2008 they took their wedge ? Before July do you reckon ?
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Anonymous | 4-Aug-2010 7:50 am
That's one insolvency Mr Buchanan won't be putting on his CV.
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Anonymous | 4-Aug-2010 9:48 am
This guy even had the temerity to pursuade the IT & Facilities heads to contribute to the firm by making them 'partners' whilst it was going belly up. There again greed makes some people blind and deaf I suppose so no real sympathy for them either. I hear the IT director has bailed out as well to one of the take over firms leaving his staff begind as well - nice one.
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Corporate Recovery | 4-Aug-2010 10:12 am
What a nice change it makes to see people resisting the urge to blow their own trumpets.
The ex Halliwells corporate recovery team have been involved in the largest LLP failure this country has ever seen but not one of them has taken the opportunity to refer to this on the Gateley Wearing website. It warms my heart to see such restraint.
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alec's 4th home | 4-Aug-2010 10:19 am
it's presumably the case this chap was the 'mastermind' of the Halliwells disaster? But it is a shame that more is not said about the other 4/5 board members at the time 'that' decision was made. Instead they have managed to flee like rats leaving a sinking ship to other firms, largely unnoticed. In fact, other firms have played on their coups in the legal press. No doubt these ex board members will be now be exclaiming how halliwells was horrendous and that they've had a lucky escape, generally playing the injured party. The reality is they put the jobs of many at risk (and canned the livelihood of many support staff) without a care in the world.
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Anonymous | 4-Aug-2010 12:19 pm
Anyone out there with any IT nouse able to set up an online petition to have these people investigated?
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Anonymous | 4-Aug-2010 1:07 pm
Hang on: (1) Risky property deals enhancing profits but storing up risk for the future (2) borrowing money to make distributions to equity partners (3) "its OK, lads, we will grow our way out of this" attitude to massive debt (4) partners kept in the dark by a management cabal (5) Finance Director leaves and is replaced with a junior appointee (6) Schemes to get capital from non-equity partners (7) Profit announcements which later turn out to be questionable (8) Disastrous "mergers" (9) A financial mess (10) A "management" who claimed credit in the boom years but blame everyone else when it goes wrong. Is this Halliwells 2009/2010 or Hammonds 2004 (Pre-Peter Crossley, I stress)? The parallels are astonishing and should be noted by all partners in all firms.
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Anonymous | 4-Aug-2010 2:29 pm
Re "Corporate Recovery's" comments: they seem to be experts in advising businesses in distress, and on giving advice about directors' duties.
Are the duties owed by the management of an LLP very different from those of a company director? Reasonable skill and care, anyone?
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Anonymous | 4-Aug-2010 3:36 pm
Come on Ian give us all another good laugh. We all know that you will be enraged by these comments. Please again exercise your right of reply so that we can all again roar with laughter. Where is that good old affable Ian we have read about so often in the press? Where is blunt speaking Alec?
Give us more, try and win our hearts and minds by further protestations, where is your commitment, man? You are not going to take all of this lying down are you? You are a fighter not a loser. Come on let rip.
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Anonymous | 4-Aug-2010 4:24 pm
Mr Austin yet again attempting career suicide, I would imagine your new employers won't be best pleased with their new found stardom and certainly some of the belittling they're getting, that should pull in the new clients eh!
However lets not forget that he was not alone in his actions and those who were involved know who they are, and are here challenged to defend there actions and maybe offer some form of an apology to the staff they once lorded over screaming and shouting from their ivory towers, I WANT I DON'T CARE, like little school children.
In response to the said Hack, talking about non biased reporting and everyone being entitled to an opinion, do you not think that the staff of Halliwells are entitled to a proper investigation as to how their jobs have been sacrificed for the greed of so few, so where are these so called investigative journalists who like to seek the truth in the name of honour faith. Or are you all just to worried that you might miss out on a few free lunches or dinner parties if you upset the wrong people. Maybe your editors are frightened of losing one or two big advertising accounts if you turn over the wrong stone. Typical how the MEN were there to report the success of Halliwells during the golden years but have been very low key when it comes to hundreds of employees seeking the facts and an explaination of the truth. So sharpen your pencils and get your note books out as it doesn't look like the authorities will invoke an investigation and start giving those who deserve the truth, the real facts.
"Never has so much been sacrificed at the expense of so many for the pleasure of so few"
"success is the ability to go from one failure to another without the loss of enthusiasm"
I recall hearing quotes like that in the past! different era I suppose.
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Anon Ymous | 4-Aug-2010 4:33 pm
Has anyone looked at the Heatons website? The pictures are priceless, especially the two of men sitting at a table grabbing their heads in despair -- probably Heatons management re-thinking the decision to hire Austin. The photo of the grown man on a scooter at the Trocadero is not bad either. Looks like a very serious firm. What is it with all these guys from third-tier law firms thinking they can conquer the world?...
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Stan Uniai | 4-Aug-2010 5:00 pm
With all the money this guy "trousered" (you Brits are hilarious), you would have thought he could afford a decent haircut.
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Anonymous | 4-Aug-2010 5:02 pm
Anon at 4 August 10.19 is quite right. The board members at the time and all of those equity partners who took the cash should be named and shamed and held to account - the recent Lawyer article only named those who were there at the death. The "clever" ones who took the cash and ran are equally responsible for the whole sorry mess.
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Anonymous | 4-Aug-2010 5:03 pm
I love the challenge issued by Anonymous | 4-Aug-2010 3:36 pm -- well done!
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Nigel Knowles' Sly Grin | 4-Aug-2010 5:11 pm
Everyone has missed the key point:
If Ian Austin is such a money grabbing b***ard, how come he lives in Ormskirk?
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Laura Biding-Citizen | 4-Aug-2010 6:23 pm
Skint Halliwells Partner. You're not alone and, more to the point, you're spot on. Austin's "woe is me" diatribe speaks volumes about his lack of integrity and judgment. Who was it who informed his partners the very day tax was due last July that the cupboard was bare because tax reserves had been raided and used for working capital? Who was it who told those partners " hey, don't worry, we've used the HMRC Time to Pay Scheme so no tax is due even though we have the funds to pay"? And who was it who bullied and cajoled anyone who complained into keeping shtum? Ian Austin, Ian Austin and ian Austin.
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Anonymous | 4-Aug-2010 8:01 pm
http://www.thelawyer.com/ian-austin-on-the-uncertainties-of-director-disqualification-ian-austin-is-a-litigation-partner-at-halliwell-landau/78379.article
The Lawyer does not seem to have posted a link to this article.
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Anonymous | 4-Aug-2010 10:51 pm
did you not see the palais in Omskirk, Mr Knowles?
Could someone repost the rof pictures of the pleasure palais? All that was missing was the Jaguar charabanc.....
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Anonymous | 5-Aug-2010 6:54 am
Nigel Knowles' Sly Grin | 4-Aug-2010 5:11 pm
That's probably one of his houses across the world.
Full declaration of Mr Austin's assets would help.
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Anonymous | 5-Aug-2010 10:05 am
oh and the flat in St Katherine's Dock and the one in New York - how could we forget those essentially items in a Managing Partners' briefcase. But Austin regards himself as a "Player". Wonder where all this puts him now in the playing stakes, afterall, self-pity isn't really very attractive is it?
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