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Around The Firms
19 September, 2008  
Defamatorium

Freehills dumped as Mark O’Brien and the boys take over The Sydney Morning Herald’s legal machine. The brief – to slash litigation costs and do a bit of cultural re-engineering


The appointment of Johnson Winter & Slattery as The Sydney Morning Herald’s lawyers has been met with grief on the editorial floor.

The move has been accompanied by the winding-up of the prized in-house legal unit of Richard Coleman and Mark Polden.

Commodore Polden (RANR) is planning to go to the bar. It seems that the boss of the business publications (the AFR and BRW), Michael Gill, refused to accept the new outsourced arrangements and is retaining Coleman in-house.

Leanne Norman, who seamlessly managed Fairfax’s work for 25-years, has been sacked from the Herald account, although she and her team will retain the AFR and BRW litigation.

imageMinters in Melbourne keeps The Age. The Fairfax Radio work stays put with Bruce Burke and Graham Hryce from Banki Haddock Fiora in Sydney representing the insurers and Justin Quill from Kelly Hazell in Melbourne will continue to look after the 3AW work.

Yesterday (September 18) the Herald and Sun-Herald journalists house committee, under the advisory hand of David (Raymondo) Marr SC, scratched together a missive for editor Alan Oakley (pic):

“When the prospect became known a week ago among the senior journalists that Mark O’Brien and JWS might become the outsourced lawyers for The Sydney Morning Herald, it was widely seen as unbelievable.

Many of the senior writers on the paper have had dealings with Mr O’Brien.

While Mark Polden [the now redundant in-house solicitor] in his farewell speech this afternoon asked us all to give his friend Mark O’Brien an even break, he skirted around the key issue for us all who need to deal with the post-Polden era.

We have little doubt that Mark O’Brien is a successful defamation lawyer, but the issue at stake isn’t what sort of a lawyer he is.

He has represented many of the people about whom we have written, and he has acted to threaten or to bring defamation actions against the paper and individual journalists.

This includes some of the most high profile people with which we as journalists, and the paper itself, has dealt with in critical and investigative stories in recent years.

Most recently, he sent an abusive letter to you specifically threatening senior writer Kate McClymont over a matter involving the Keddies law firm. He has threatened the Higher Education reporter Harriet Alexander over our coverage of one of his clients, the head of the NSW Conservatorium of Music Kim Walker.

[snip]

It would be an understatement to say this has upset many of your senior staff who work their guts out at the Herald and Sun Herald, often under stressful personal circumstances, to do what they and the papers do best: uncover malfeasance and improper practices in this city and in Australian public life.

It’s the very basis of the sort of high quality journalism that we are determined to protect. The relationship and trust that develop between journalists and the lawyers who assist the paper in finding ways of publishing contentious material is a critical one.

The idea that the paper is knowingly employing a law firm which has acted so consistently to represent people whom we have identified as being involved in questionable activities raises many serious questions that we believe need good answers.”

[and so on ]

imageMark O’Brien and his team, which includes the two Pauls – Svilans and Reidy (pic) – will also retain most of the Rural Press work. It was the Rural Press connection that got them in the door at the Herald.

JWS says it will drop all its plaintiff defo work that conflicts with Fairfax.

It’s one thing to dice clients the Herald has upset, but it’s still ticklish, to say the least, to drop a client one day and act for the other side the next.

O’Brien told the paper’s senior editors yesterday that if he has a problem with a matter, then someone else in his firm would handle it.

What if James Packer started making threatening noises against the paper? Packer has been a long-standing client of O’Brien’s and the other JWS lawyers on the Fairfax account.

And how’s the Keddies’ matter to be handled from now on?

These imponderable juggling tricks suggest the whole enterprise has been poorly thought out by Fairfax.

If Freehills faced a conflict with its Fairfax work it would decline to act for either party and the job would be handled in-house. Without an in-house team there’s no capacity for back-up.

imageFreehills asked if it could make a submission by Monday (Sept. 15) but by then the decision to shift the SMH work to O’Brien had already been made by Fairfax deputy CEO Brian McCarthy (pic).

It is understood that Freehills ended up presenting a “capacity statement” to Fairfax, to demonstrate it had the resources to do the pre-publication work.

No formal tendering was called.

The company must be hoping to save legal costs by reducing the incidence of litigation and by settling quickly and quietly. In the short term the costs of pre-publication work have only one way to go – up.

Even the files that Freehills had in progress for the paper are to go across to O’Brien, pronto.

Having decided to get rid of the in-house SMH legal team why wasn’t some competitive tension introduced into the process?

It might also have been appropriate to appoint a principal firm to handle the paper’s pre-publication and litigation work and a back-up team of lawyers for emergencies and conflicts.

What really is at play is a cultural shift at the paper with McCarthy wanting people around him with whom he is familiar.

Once the in-house lawyers had been dismantled whichever outside firm landed the work would be faced with potential conflicts.

imageThat is why the Coleman-Polden team was so culturally important to the sort of newspaper that the Herald sought to be.

There’s no doubt that O’Brien (pic) and his boys are keen to build respect and support from the journalists and it’s not to be said that they can’t do that.

As Polden said to the journos at his farewell:

“Give them a go. Give them four weeks.”