Recent global law firm arrivals have bypassed Melbourne when launching their Australian practices. Justin Whealing investigates whether Australia’s second-biggest city still offers law firms the chance for big corporate transactions.

Once upon time, Melbourne was Australia’s corporate capital.

Many of Australia’s largest corporations were based in the first Australian city to host the Olympics and, when national law firms started emerging in the 1970s and 1980s, Melbourne was viewed as the place to be for banking and finance and M&A lawyers.

While ANZ Bank and the National Australia Bank have kept their HQs in Melbourne, other iconic Melbourne-based brands like Foster’s and Visy have been embroiled in controversy through the actions of their owners, with the former sold to a foreign consortium. Sydney-based upstarts like the Macquarie Bank have also muscled in and attracted investment and the corporate limelight.

Because of these changes, commercial law firms, which follow the money, started shifting internal resources from Melbourne to Sydney late last century, while the below-ground resources boom this century has seen Perth and Brisbane emerge as the fastest-growing cities for many national Australian law firms.

In a telling move, when Allen & Overy and Clifford Chance opened Australian offices in 2010 and 2011 respectively, they didn’t view Melbourne as important enough to warrant a dedicated office on the ground.

The ‘Bleak City’ might still be Australia’s sporting capital, but has it lost its lustre as a business and commercial legal centre?

“I don’t think so,” says Craig Semple, the head of the Melbourne M&A group at King & Wood Mallesons. “I think the decision of A&O and Clifford Chance not to open an office in Melbourne reflects more on the focus of those firms, which is quite a narrow and select focus.

“I think any firm which purports to be a full-service firm to all clients in all sectors views Melbourne as being very relevant.”

Semple has been a Melbourne-based lawyer for 17 years, which includes a stint in-house with the National Australia Bank. He believes the nature of modern legal practice means that geography is becoming less and less important, and that you can still reach the top of the M&A and banking and finance pile by being a Melbourne-based lawyer.

“The need for face-to-face meetings is diminishing because every deal you have has a permanent tele-conference line,” he says.

       Craig Semple, partner, KWM

“Whenever people want to talk, they don’t jump on a tram anymore and go down the other end of Collins Street. You just do the dial in and off you go.

“The reality is that partners and lawyers are far more mobile, so if something happens and the client wants you, you just jump on a plane and go there.”

Branching out

One Melbourne-based firm that has outgrown its hometown and expanded substantially over the past decade is Holding Redlich.

A firm which grew out of the trade union movement in Victoria in the 1970s, it now has offices in Sydney and Brisbane and a client base that includes Westfield and many of Australia’s leading superannuation funds.

Other Melbourne-based mid-tier firms such as Arnold Bloch Leibler, Herbert Geer, Lander & Rogers and, most notably, Middletons, have followed suit and also launched interstate offices.

“The reason we moved was because we had a national client base and we needed to move to serve the clients,” says Chris Lovell, the 60-year-old managing partner of 12 years at Holding Redlich and a fixture in the Melbourne arts scene. “I am not sure why those other firms have done the same thing. It could be because there is not much growth in the Melbourne market. Melbourne is a pretty tight market.”

Lovell says that it is fair to say that Melbourne is not as important a location in the banking and finance and capital markets practice groups for law firms when compared to late last century.

However, he says the one exception in this trend downwards has been with regard to superannuation and funds management, an area the firm has targeted with the names of high-profile clients including AustralianSuper.

“That has been a huge growth area for us,” says Lovell.  “It has not been a hugely lawyered area and we are very sympathetic to the whole industry-fund movement. Because it is a not-for-profit thing, once we could demonstrate that we could do the work, we were seen as a pair of sympathetic and capable hands.”

If you count Corrs Chambers Westgarth as a top-tier Australian law firm, then it is unique when compared to the half-a-dozen or so traditional rivals it has when reverting back to those old, and some would say outdated, competitive categorisations.

Its CEO, John Denton, is the only Melbourne-based top dog among the traditional Australian mega-firms, some of which have undergone a makeover recently.

In true Melbourne fashion, Denton is fashionably late when arriving for the interview for this piece. However, as befitting someone who is married to Jane Turner, who has made her name parodying middle-class Melbourne in Kath and Kim, he makes a grand entrance on arrival and speaks forcefully when this reporter has the temerity to ask as his first question if Corrs is viewed as a Melbourne-centric firm.

“There is no doubt the name Corrs emerges principally from Victoria, but it also has a bigger understanding on a national, regional and global basis,” he says, before describing any perceived belief that Corrs lacks the strength nationally that it has in its spiritual home of Melbourne as being “misguided, anachronistic, ill-informed, self-serving and ridiculous”.

Corrs has rebounded from a difficult period six or seven years ago, with Denton the architect of a massive restructure of the firm that has seen it broaden its expertise and engage in high- level regional economic discussions.

However, despite an association with one of Victoria’s most famous companies, Foster’s, that dates back to the 19^th century, the brewing giant decided to go with Allens when it completed its $10 billion sale to SAB Miller (who used Allen & Overy) last year. This was a blow to Corrs, as that deal was the largest M&A deal in the Asia-Pacific region last year.

                                              James Denton, partner and CEO, Corrs

Denton scoffs at the suggestion that, by not being aligned with a global network, Corrs will miss out on big transactions

“We are aligned with key law firms in our peer group which are premium independent firms on a global basis, some of whom have quite extensive internal networks,” he says.  “If they look to a key firm in Australia which can give leading independent legal advice in key areas, we are very comfortable in their company.”

It’s not just what you know

The Melbourne legal market, like many legal markets, places a great degree of importance on relationships and connections with the business community.

Peter Stirling, the former head of the Blake Dawson corporate group and a current partner at King & Wood Mallesons, is well connected. As a former deputy general counsel with ANZ Bank and the go-to man for much of General Electric’s inbound investment, he says that, while personal relationships are important, no general counsel would choose a lawyer based on a personal connection if they didn’t think his or her work was up to scratch.

“There is less of that, gaining clients through personal contacts such as university, than what the perception might be from the outside,” he says. “Where I find the personal connections more relevant is with people in the profession who I might have gone to university with and contacts at investment banks with people I might have studied commerce with.”

A firm that encourages networking on a formal basis is Corrs. It has deliberately sought a more high-profile role in the community through its ‘Connecting with Melbourne’ strategy.

“The strategy is built around the four pillars of the business, political, intellectual and social community,” says Andrew Pitney, the managing partner of Corrs’ Melbourne office and a leading Australian infrastructure lawyer. “Within that framework we have identified organisations we want to be aligned with and then, [internally], we really identify the people, not just partners, but lawyers and business development people that want to participate in those organisations.”

As part of this strategy to take an active role in the business community in particular, unlike many law firms, Corrs allows its lawyers to sit on corporate boards if they are invited.

“There is a process and risk assessment conducted before we give the green light to board positions, but we don’t close the door on it,” says Pitney.

While strategies around personal relationships and ingratiating yourself with the local business community is not a novel approach for law firms to take with regard to establishing connections, Holding Redlich has incorporated a change of location into its aggressive corporate strategy.

In early June the firm will be moving from the outskirts of the private practice legal precinct at 277 William Street to the heart of the legal and finance district at 555 Bourke Street.

Not satisfied with recently poaching lawyers, including partners, from Allens, Freehills and DLA Piper, they are now moving next door.

“We just wanted really decent premises,” says Lovell, when asked if a change of scene was about changing the perception of the firm.  “The other end of town is a bit all over the place for a law firm, so you necessarily have to be down this part of the world.

“You don’t want to be too far down the hill on Collins Street, and no one wants to work on King Street, so you are limited in choice really and it is handy to be close to the court if you have litigation going on.”

That is a unique perspective of Melbourne that befits a former chairman of the Australian Film Finance Corporation.