The Australian legal market is facing a radical over-haul that will allow firms to abolish traditional partnership structures and float on the stock market.
The New South Wales Law Society, which regulates Sydney firms, is expected to introduce new rules this week. They will allow firms to incorporate share profits with other professionals and raise outside capital.
It is thought to be the first time a law society in any country has allowed firms to change their traditional structures. Other Australian state law societies are expected to adopt the reforms because of the importance of Sydney as a legal market.
Jeremy Kriewaldt, managing partner of Australian top-three firm Blake Dawson Waldron's London office, approves of the reforms.
He tells The Lawyer: “If the legislation goes through, we would examine our alternatives very rapidly. My initial feeling is that even if there are some difficulties, we would like to adopt it.
“We have wanted to have the possibility to do this for a number of years and have been one of the major firms in Australia that has been asking the attorney general to make these sort of reforms.”
Another senior Australian lawyer believes the partnership laws are ripe for change.
He says: “It is something law firms all over the world have been trying to get governments to do for a very long time. Why should lawyers be required to expose themselves to unlimited liability when other types of advisers are able to operate through a corporate structure and limit their liability?”
He says the changes could add an impetus to the on-going merger talks between Clifford Chance and Australian practice Mallesons Stephen Jaques.
Says the source: “I would assume a number of major players around the world will watch the experiment in Australia and see how it pans out.
“If [Mallesons] incorporated as an Australian law company, and if that could be a business organisation you could use to operate globally, then I think that a firm like Clifford Chance could find it a very attractive model.”
Further changes to legislation in New South Wales mean anyone practising foreign law in the territory will now need to be registered with the local Law Society or Bar Association.
The new requirements do not affect foreign lawyers employed by local firms to advise local lawyers.