DLA job cuts give rise to enmity between Aussie, UK lawyers

DLA Piper managing director for Europe Andrew Darwin was in Dubai last week.

The firm is remaining tight-lipped on the reason for his visit, but with the fortunes of the Dubai office being linked closely to the fluctuations of the property and construction market sources claim that the stopover by chief executive Nigel Knowles’s right-hand man was motivated more by business than pleasure.

“Darwin’s been dispatched to target more people for redundancy,” says one source close to the firm. “London has issues with Dubai. They [London] said in quarter one that they wanted major cuts. They wanted 25 per cent. That’s why Dubai did a second [round of cuts] and will now do a third.”

A hiring freeze is reportedly being instituted by DLA Piper in non-strategic departments in slower Middle East ­markets such as Dubai, and this
is expected to continue until 2011. ­However, regional managing partner David Church declined to comment on the subject of further redundancies or the alleged ­hiring freeze.

Outside the management, however, it is easy to find people prepared to lash out over how the firm handled the ­previous cuts of 8 per cent of Dubai
fee-earners in April 2009 and 9 per cent of the Middle East workforce in June 2009.

Critics have flooded the Backchat ­section on TheLawyer.com and the ­battle lines have been drawn along national lines. Some argue that an ‘Aussie mafia’ has taken hold of DLA Piper’s Middle East operations, which is intent on securing ‘jobs for the boys’. The Australians have hit back, claiming that the fact that UK lawyers have lost their jobs in the Middle East is more indicative of “Pommy incompetence” than a bias in favour of the Antipodeans.

DLA Piper Middle East regional ­corporate head Peter Monk, who joined from Australian firm Minter Ellison last year, says he “cannot comment in relation to idle gossip or emotional outbursts”.

That said, it is true that when people lose their jobs, or fear they might do so soon, emotions run high and scapegoats are sought. Whether there is any ­factual basis to the assertion that some ­nationalities have been more affected than others is difficult to ascertain, as DLA Piper will not respond to requests from The Lawyer for a breakdown of redundancies along national lines.

What is clear is that DLA Piper’s workforce in the Gulf has been, and ­continues to be, diverse. But it is also clear that there is a perception of favouritism, which in some ways poses as serious a PR headache to the firm as any genuine institutional bias.

Some history would be useful here. With Dubai acting as something of a fulcrum for Asia-Middle East ­investment, Australian lawyers’ ­extensive experience of Asia was a plus when the firm was recruiting during the Gulf ­bubble of 2007 and 2008. For example, partners Damian McNair, Tony Holland and Jim Delkousis all came from ­Australian ‘magic circle’ firm Mallesons Stephen Jacques.

Moreover, DLA Piper could get these people on board without having to fork out as much as it would have to for UK magic circle recruits. According to one recruiter who has brokered such deals, the salary differentiation was as much as 15 per cent. A top-brass UK partner would be paid £550,000-£600,000, versus £400,000-£450,000 for a ­partner from a comparative firm in ­Australia or New Zealand.

There is nothing unique about this recruitment strategy – most international firms in the region did the same. But what might have led to the emergence of national faultlines at DLA Piper is the fact that five of the seven practice heads (corporate, finance and projects, finance, litigation and IP), one sector head (social infrastructure) and one office head (Abu Dhabi) are Australian.

According to one source close to DLA Piper in the Middle East, it is these Dubai-based equity partners who are ­running the show. “[Regional managing partner] David Church is the eyes and ears on the ground,” says the source. “[But management] defer to Damian McNair and his equity partners. They run Dubai.”

With DLA Piper potentially showing the door to further partners, employees will be getting jittery once again. McNair’s position looks safe. DLA Piper’s ­management will be under huge ­pressure to ensure that any future job cuts are not only objective, fair and ­proportionate, but are perceived as such.