Partner Perspectives – FY 22 – Q1 to Q4
Taylor Root is pleased to present our insights into the latest partner moves across Australia, July 2021 to June 2022, via our interactive web-based format, Taylor Root Partner Perspectives.
The below analysis covers most of the movements of lateral partners and teams in Q4 of the financial year as well as an overview of the full 21/22 financial year. In the last quarter of the financial year, we had a continuation of the quarterly see-saw with 48 moves. The split across the financial year revealed 65 in Q1, 45 in Q2, 82 in Q3, and 48 in Q4.
There were approximately 240 Partner movements for the financial year, up in comparison with the 5-year average which sits at 229. There has been enormous pressure on firms to increase fee-earner salaries in the last 6 months or more for both retention and attraction. Whilst major firms have performed very strongly in terms of revenue growth, the impact of big salary increases on firm profitability will play out over the next financial year and in turn on partner remuneration.
Some firms with lower-margin practice groups that are unable to increase rates, we could see a shift of entire practice groups to lower-cost platforms. Growth is also likely in ‘alternative’ legal service teams with firms looking for ways to reduce their cost of seat in some practice areas to maintain profitability.
Partner remuneration models will be reviewed at some firms to retain talent and attempt to reward the key partners. Interestingly, we have also had an increase in firms across Sydney, Melbourne, and Brisbane markets looking for firm merger opportunities with complementary practices and others seeking entire practice groups.
Partner Movements in FY22
As mentioned above, there were approximately 240 lateral partner moves during the financial year. The interactive diagram below tracks the partner movements between firms. Use your mouse to explore the data.
Based on our statistics, the Sydney market continued to dominate with 108 moves reported across the financial year and accounting for 45% of all lateral partner moves across Australia. Next in line was Melbourne accounting for 23% of all moves, Perth with 15%, and Brisbane with 13%.
In Sydney for Q4, Adelaide firm Cowell Clarke expanded with the recruitment of a corporate and commercial team. Avant Law launched its broader service offering to its member base with the addition of multiple partners in Sydney and Melbourne. Mills Oakley added two new partners and launched its new cyber risk practice as part of its national insurance group. In terms of Big 6 International firms, Ashurst added a partner to its governance advisory practice and King & Wood Mallesons added a partner to its competition practice.
In Melbourne, following PWC’s acquisition of Greenwoods & Herbert Smith Freehills, a specialist tax advisory firm, Herbert Smith Freehills added 3 partners from Greenwoods to its tax group (1 based in Perth). International firms HFW and DLA piper added a partner each in disputes and tax respectively. Hamilton Locke continued its growth with a partner joining its corporate practice from Jones Day. Mills Oakley was also active with 2 new partners joining.
In Brisbane, DWF added a new Head of General Insurance to its office as part of its strategic growth plans. Mills Oakley picked up a Big 6 International firm partner for its employment practice and Hall & Wilcox continued with its growth with new partners in the insurance and property groups. Ashurst added to its infrastructure and projects team and Allens to its employment practice.
Perth had a bit less activity compared with some of the big group moves announced in Q3. Ashurst again added to the infrastructure and projects team. Clayton Utz picked up a planning and environment partner and Gilbert + Tobin added one to its corporate and commercial group. Hamilton Locke again adding to its ranks in WA with a disputes partner.
Breakdown of lateral Partner moves by Practice Groups in FY22
The graph below shows the partner movements by practice groups throughout the financial year. The most active practice areas were banking and finance, M&A, litigation, and corporate and commercial.
The Sydney banking and finance market was certainly in the spotlight, accounting for the bulk of the moves nationally with Corrs Chambers Westgarth and Ashurst the main beneficiaries.
The movement in the M&A market was led by the mid-tiers across Australia, Hamilton Locke made a move into the Perth market in February and otherwise continued its expansion. Kain Lawyers also added to its bench strength in Sydney and Adelaide with 4 new partners. There was some shuffling of seats from the Big 6 internationals but otherwise not a lot of movement.
The litigation and dispute resolution activity were again driven by a spread of single lateral partner moves to mid-tier firms, except for Hamilton Locke and Mills Oakley in with 3 and 2 respectively. Only 6 were to international firms, with HFW the standout adding 3 to its teams and 1 each for Bird & Bird, Squire Paton Boggs, and Clifford Chance.
The Corporate and Commercial practice moves were led by Corrs Chambers Westgarth at the start of FY22 with a team from Minters. The other stand-out was the team joining Cowell Clarke in Q4. It was otherwise a mix of small to mid-tier firms adding to its teams in the first half of the financial year.
Insurance, energy and resources, and employment and workplace safety practices also saw some activity which was reasonably spread across the financial year.
Australian firms attracting the most lateral moves in FY22
The top 5 firms attracting lateral partners for FY22 were Hamilton Locke, Corrs Chambers Westgarth, Mills Oakley, Ashurst, and Hall & Wilcox.
There were a few standouts with net partner gains over the financial year – Hamilton Locke was one that clearly pursued an aggressive expansion plan over the financial year attracting about 17 new partners. Other firms included Hall & Wilcox, Mills Oakley, Corrs Chambers Westgarth, and Ashurst all having net gains of 6 or more partners.
Australian firms with the most lateral departures through FY22
The top 5 firms that lost the most partners were MinterEllison, HWL Ebsworth, Norton Rose Fulbright, Corrs Chambers Westgarth, and King & Wood Mallesons.
Partner moves by practice type
Here you can see in more detail, an interactive map of partners that have moved, along with their corresponding practice areas. Hover over, click and drag the discs in the diagram below for more information.
The second half of the financial year had more activity for whole team moves with 19 teams and 36 partners compared with the first half of the year with 12 teams and 22 partners.
As mentioned above, based on conversations we have had in the market, there is continued interest in firms picking up entire practice groups rather than single lateral partners.
Partner move by gender
Gender diversity at many firms remained in the spotlight when considering lateral hires. The most ‘equal’ quarter being Q2 with a 56% / 44% split male to female ratio. The financial year ending with 61% of all lateral moves being male and 39% female.
The visualisation shows the partner movements by practice area over the full financial year. The transactional space remained the most active with banking and finance, M&A and corporate and commercial expertise consistently in demand. As expected, litigation and dispute resolution teams were bolstered as well as continued activity in the energy and resources market.
There are mixed reports on the outlook for M&A activity both within Australia and globally, with most seemingly taking the view that some markets will slow down from its peak, but domestic activity is likely to be steady. The energy and resources market is likely to continue its demand for expertise with the abundance of activity in the renewable sector, as well dealing with major global energy issues.
As we highlighted in our last report, with economic storm clouds brewing, the need for litigation and dispute resolution partners is likely to continue. construction litigation, as well as insolvency & restructuring teams, will no doubt see continued demand for their services.
With more than 35 years of experience, the Taylor Root Partners team has long been established as a global market leader. Our recruiters have developed trusted and long-standing relationships with the world’s leading law firms, as well as top talent from around the globe. So, whether you are a firm seeking to grow, or a partner looking for your next role, the team at Taylor Root will be able to lead you through the delicate, and often a complex process.