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Around The Firms
9 December, 2008  
Sick of it

The pips are squeaking and the pickings are slimmer. Various of the biggest national firms have owned up to redundancies. Kate Gibbs speaks to Holding Redlich and Swaab Attorneys to see how they’re travelling

Chang Pistilli boomed when its client Babcock & Brown went on an acquisition spree. Times were good.

Now, as the economy spirals south, B & B’s assets are being unloaded and times are still pretty cheery for Chang Pistilli.

imageHowever, the adage that lawyers will always do well in good times and bad is not universally true.

Clients are in the process of reducing their legal spend, avoiding litigation and putting fresh projects on hold.

“Times are tough and anyone who tells you different is pulling your leg,” said Chris Lovell (pic), managing partner of Holding Redlich.

“There is definitely cost pressure all round. I don’t think there is any doubt about that.”

Lovell says it’s been, “a shocking half year for almost everybody”.

The firm’s Brisbane property practice saw three “massive” construction projects shelved in one week. Lovell said:

“It was probably a year’s work. The partners weren’t very happy.”

At Swaab Attorneys “it was like the work fell off a cliff in a couple of areas for two weeks in October”, said CEO Bronwyn Pott.

“People were really spooked.”

While work at Holding Redlich and Swaab has picked up again in some areas, those steering law firms in these uncertain waters are groping for ways to cut costs.

In many cases that means cutting staff numbers.

A lawyer was hired at Kemp Strang for work in the corporate group for Babcock & Brown and Lehman Brothers, among others.

Just weeks into the job, work for those clients dropped and the partners were left with little to do.

The new hireling was out the door before he got through his probationary period.

At Swaab, while people have not been made redundant, Pott says there is a process.

“You don’t replace full time employees. First you look at contractors and consultants and casuals. Then you look at people who are not full time.”

She told Justinian that some people, including herself, might be willing to go part time.

Swaab recently lost a construction partner to Gilbert + Tobin. He was requested not to take his team with him, and he didn’t.

However, Swaab was left with a relatively new construction team that suddenly was nervous about its future.

One lawyer wasn’t persuaded by the soothing reassurances that there would be enough work. He moved to HWL Ebsworth, leaving the door swinging for other nervy solicitors.

The question of how much can be done to reassure employees is stumping many firm leaders. Pott told us:

“Morale is very important. If you’ve got great people you have to do what you can. But I imagine if it’s all in the toilet in six months’ time, all bets could be off.”

imageYounger lawyers are seeing their friends in other industries being sacked, Pott (pic) said, and “they’re quite concerned about it”.

On being pressed for absolute assurances by staff, she added:

“We’re not the public service and, even there, nothing is guaranteed forever. You just have to trust we’ll do what we can and not rush at slashing and burning.”

At Holding Redlich where, “we’ve always been pretty carefree with travel and how long people go for”, the firm has pulled in the purse strings.

“We’ve reined in all that nonsense,” Lovell said.

When one area is busy, lawyers in less frantic practice areas will lend a hand. Lovell told us:

“Commercial people will be asked to give the litigators a hand. It’s not a permanent move, it’s just resourcing up.”

When people go on maternity leave, a replacement is not hired and lawyers in less intensive practice groups will “lend a hand”.

But partners and lawyers alike are willing the year to an end, said Lovell.

“People have been knocked around in business and knocked around personally … They’re all feeling a bit down. You can tell everyone is busting to get on holidays. They are just sick of it.”