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21 Feb. 12
Some do. Some don’t. Beaton wonders why.
George Beaton
Every year at this time the BRW Client Choice Awards generate a great deal of interest amongst the larger professional service firms of Australia. This year there are 40 finalists from amongst 130 firms measured by Beaton.
Just last week for example I received this email from the managing partner of a prominent firm: “We’re delighted to be a finalist for the first time and we’re holding thumbs for good news on the big night” – referring of course to the Client Choice Awards awards dinner on 14 March in Sydney.
This email set us talking in the office. About how the leaders, owners and staff of firms Beaton measures feel about knowing the reasons why some firms win consistently, why some appear sporadically and why others never even make it into the finalist lists.
The reasons for winning (and failing to win) are explained in the Beaton Benchmarks, our reports that inform the relative performance of firms. We see generally several kinds of firm. As with all generalisations there are exceptions, but we believe there are insights in these categories of firm:
16 Feb. 12
The US law firms are coming…
Eric Chin
Just six days after my initial post on the advancing American law firms in the global legal industry, The Asian Lawyer is speculating some American law firms are in tie-up talks with Australian law firms.
The questions still stand: How many and how quickly?
15 Feb. 12
Barbarians at the gate
George Beaton
In an earlier post I reported on some of my observations at the Law Firm Leaders November 2011 forum in New York.
What I didn’t report–because it seemed somewhat impolite at the time–was a conversation overheard during a break. A couple of the delegates were discussing why ‘they’ were on the program. ‘They’ were the speakers from Pangea3 and Axiom Law. To at least these delegates the enormous paradigm shift that David Perla and Paul Kerr, respectively, represented was not apparent.
Jordan Furlong’s post today has prompted me to report this telling conversation: “The fatal flaw of all market incumbents is a failure of imagination, the inability to perceive that what they currently do could be done differently and better by someone else….They’re actually competing against new models, new approaches and new attitudes..”
To some these so-called non-firm firms are barbarians at the gate. Others don’t even know they are there. Yet others are alert to the opportunities and acting NOW. Some Australian firms are in this vanguard.
13 Feb. 12
The new commandments for professional service firms?
George Beaton
It’s strange, but true, the basics are so obvious we often ignore or forget them.
These truths about professional service firms are worth being reminded about:
#1. Professional service firms exist for only one reason: To serve clients.
#2. The people of a firm are critical to serving clients.
#3. Firms that temporarily forget #1 and #2 stumble. Left too long, they fail.
#4. Mergers that do not serve clients and people destroy owners’ value.
#5. Owners who don’t remember #1, #2, #3, #4 have only themselves to blame.
Reports like this are timely reminders: http://asia.legalbusinessonline.com/news/in-house-counsels-lukewarm-on-global-merger-activity/107827
09 Feb. 12
Adviser optimism bucks trend: Zurich Beaton Life Risk Survey
Jelena Dodic
The third Beaton IFA Market Pulse survey – an omnibus survey tapping into the mind and mood of financial advisers – of approximately 300 life risk advisers conducted by Beaton for Zurich’s life and investments business reveals that life risk advisers in Australia hold a moderately positive outlook, even in the face of somewhat challenging macro trends.
Results of the survey were announced on a range of industry media websites, including:
- Money Management
- Financial Standard
- Risk Info Magazine
- Wealth Professional website
- Professional Planner
- Investor Daily website
Advisers were asked about their sentiment across five key areas: consumer demand for advised life insurance, current sales volume, the regulatory environment, likely sales volume for next quarter and the long term viability of their practice.
Despite the overall negative sentiment in terms of the current regulatory environment, advisers are looking beyond the short term and remain positive about the long term viability of their practice.
Beaton IFA Market Pulse is conducted quarterly.
09 Feb. 12
Congratulations 2012 BRW Client Choice Award finalists
Mel Chee
If you have not already seen a copy of this week’s BRW magazine (released this morning) then we suggest you go and pick one up.
The 2012 finalists for the BRW Client Choice Awards have just been announced!
Congratulations to all firms that have made the finalist list. There are some new comers in the ranks this year as well as several of the consistent top performers from past years. Finalists are firms who out performed all other eligible firms in their category in Beaton’s Annual Business and Professions Study (ABPS) which was conducted in November last year. Winners will be announced at a gala dinner in Sydney on Wednesday 14 March and profiled in BRW Magazine on 15 March. Tickets to the awards ceremony are available from BRW, for details on the event and ticket purchases please visit www.brw.com.au/events
Here is a full list of the finalists. [ Read more ]
07 Feb. 12
Odds are, the American law firms will win in Australia
Eric Chin
“If there is one principle more deeply rooted in the mind of every American, it is that we should have nothing to do with conquest.” Thomas Jefferson
Forty-one American law firms dominate the 2011 AmLaw Global 50, that is the 50 largest law firms in the world. Drawing on Jefferson, while these American firms have shunned military conquest per se they do seem set to be the victors in the globalising legal industry.
White & Case was the first American firm of the Global 50 to venture offshore through the opening of its Paris office in 1926. And Baker & McKenzie, by far the most globalised American firm, has expanded into 42 countries through its greenfield-only strategy since 1955 with the opening of its first offshore office in Venezuela – just six years after Russell Baker and John McKenzie founded the firm in Chicago. Just as Great Britain did in its colonisation era, [ Read more ]
07 Feb. 12
No light, just more tunnel for law firms
Tristan Forrester
The Commonwealth Bank – Beaton Market Pulse for Q2 FY2012 shows a continued decline in law firm confidence, with perceptions of business conditions falling from net 50% positive 6 months ago to net 41% negative.
Full coverage is available in the 3 February 2012 Legal Affairs section of The Australian newspaper.
While the Q1 FY2012 survey saw confidence fall more sharply amongst top tier firms, in this quarter it was mid tiers who were feeling the pain.
The slow lane gets slower
In the continuing two-speed economy, differences have widened between practices exposed to energy, mining and agribusiness, and those relying on financial services.
Confidence in M&A has collapsed following a December quarter with far fewer announced deals. Most firms now expecting revenue from this area to decline – particularly mid tiers. Anecdotally, however, the pipeline of mid-cap activity seems relatively strong, which suggests that the top tiers are capturing more of this work.
Another flight to quality?
While there is still pressure on legal budgets, all firms will continue to face [ Read more ]
05 Feb. 12
Headline: A risky first for Herbert Smith?
George Beaton
Beaton Capital’s analysis indicates that Herbert Smith has never done a merger of any size to enter a new country. Let alone one with a firm the size of Freehills http://amlawdaily.typepad.com/amlawdaily/2012/02/herbert-smith-confirms-merger-talks-with-freehills.html. The London silver circle firm has 19 offices in 14 countries, all opened by Herbert Smith and not by merger, as far we are able to analyse.
Our work on the globalisation strategies of the world’s 50 largest law firms shows only 12 have used solely organic means, that is opening greenfield offices, to enter new countries. A combination of greenfield and M&A entries has been used by 29.
On the face of it, why would the hitherto seemingly M&A-averse Herbert Smith engage in such a merger? Look at the facts: Herbert Smith has 267 partners and ~$750m revenue in 2011, where as Freehills has 192 partners and ~$500m income. This would be a first time overseas merger for both firms – and a merger of equals in many respects. Conventional wisdom makes it very risky.
Perhaps it is a portent of things to come? Will we see other top tier Australian law firms take the ‘Herbert Smith’ path to globalisation? Of course, portent can refer to something momentous or something calamitous that is likely to happen. Let’s hope for any firm taking this path it is the former.
03 Feb. 12
It’s not just another acquisition
George Beaton
Some in the general business media are asking what the acquisition of the UK’s Russell Jones Walker by Slater & Gordon is all about. Surely, these commentators say, this is just another everyday acquisition, the more interesting aspects of which are the valuation and investors’ early responses.
I disagree. My reasons are set out in today’s (3 February 2012) Legal Affairs in The Australian where I have written about the implications for law firms in Australia, the UK and elsewhere.
Firstly, the UK Legal Services Act now allows persons other than lawyers to own and operate law firms resulting in ASX-listed Slater & Gordon, AIM-listed Quindell Portfolio and Irwin Mitchell all being active. And in the USA Jacoby & Myers, another large personal injury firm, is suing to be allowed to raise external capital while the New York state bar has re-opened the question of non-lawyer ownership. These regulatory changes are upending decades of stability in the industry.
Second, Slater & Gordon is a 75 year-old law firm with strong social values, it is listed and has a proven M&A and post-acquisition integration capability. These factors combine to make S&G unique; it is not just another entrepreneurial acquirer using the strong Aussie dollar to advantage. [ Read more ]