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)
Knows Nowt About Owt | 5-Aug-2010 10:57 am
"The entrepreneurial Ian Austin has combined an astute hiring and merger policy with an infectious enthusiasm and ambition, to put Halliwells back on the map as a serious UK player".
http://awards.legalbusiness.co.uk/pdfs/manpar.pdf
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Anonymous | 5-Aug-2010 2:17 pm
Bring-on the litigation...but can Mr Austin and his merry band afford it?
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More, More, More | 5-Aug-2010 8:00 pm
Come on Ian, feed the flames with some more ill judged comments. I really hope that you have not learnt your lesson because you make me laugh out loud. How about a quote like "that firm had the best of me" or "when the seagulls follow the trawler it`s because they think sardines will be thrown into the sea"
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Toothless SRA | 5-Aug-2010 9:25 pm
The problem is that it's one rule for a small high street firm run by ethnic minorities and another rule for the national firms. The SRA should have intervened but they didn't have enough staff or a possible firm on panel to deal with this. Then the white knights BLG, HBJG and HD come galloping to the rescue salivating at the prospect of non-existent riches. The partners disappear off into the distance with their ill-gotten gains. 3 months time all will be forgotten. Easy money.
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Prestbury Bentley Dealer | 6-Aug-2010 6:05 am
Though it doesn't for a moment detract from his monumental hubris, greed and sheer stupidity there is a tiny grain of truth in what he says - at least he and a few others did stay to the final curtain. What about all the others who pushed off? How about Ms Liversidge, former Sheffield head, for example? I'm not aware of any other former Halliwells' equity partner who marked mass redundancy by posting a jaunty music video to Youtube. The crass insensitiivity is truly staggering. It doesn't suggest much by way of humility or, (like Austin) the first inkiling of recognition of what they have done.
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Anonymous | 6-Aug-2010 4:49 pm
‘I gave my life to that practice’-
this reminds me of Mrs Overall, Acorn Antiques after she got sacked "Does a faithful dog expect to be kicked? That show was my life."
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Anonymous | 7-Aug-2010 2:14 am
Greedy equity partners. Was always a firm with a well deserved hard boys attitude. Looks like they got what they deserved - but unfortunately at the expense of the jobs of a lot of overworked and exploited staff. Someone should carefully examine that transaction - maybe the money will be clawed back. Lets see.
Ian can not possibly be soley responsible for this. Decisions in law firms are taken by groups of partners.
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Anonymous | 7-Aug-2010 1:44 pm
Not many are favourable. I think even the most thick skinned moron would have got the message by now. Good luck Heatons, inspired appointment, you are now known for all the wrong reasons.
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Anonymous | 9-Aug-2010 5:09 pm
Anyone noticed his maths are a bit adrift he lost everything and put in £700,000 but took, if reports are to be believed at least £1m as part of the property windfall and I am sure has had a pound or two of drawings in his time. Most of us would be lucky to earn £300K in our working careers.
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Bambi | 9-Aug-2010 9:27 pm
Re Anonymous 9 Aug 2010, 5.09pm
He may not have any cash, but his ill-gotten gains are in his SIPP, as are those of the other 40 equity partners.
On the bright side, section 342A of the Insolvency Act 1986 allows a trustee in bankruptcy to claw back excessive pension contributions. Let's hope that something is done to make them pay something back.
I would expect that if any of the equity partners do get made bankrupt, the legal costs will be competitive. I can think of a lot of people who'd willingly do the job for nothing.
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