Pssst! Want good value for your money? Then you should check out Adelaide.
"Adelaide has the cheapest corporate rates in the mainland. Only Tasmania is cheaper nationally," claims Nigel McBride, managing partner of Minter Ellison's Adelaide office. "The charge out rate in Adelaide is about 50-60 per cent of the east coast rate. The range for a partner in Adelaide is $240-390 [per hour]."
For Sydneysiders accustomed to $500 plus hourly rates for partners in the top law firms, Adelaide is an absolute bargain.
"We're getting interstate work because of the rates," McBride reasons. "Clients are waking up to this. What was a weakness is becoming a strength. We do electricity and native title. We're even doing property work for Sydney."
Emphasising Adelaide's good value could be timely while the New South Wales legal profession is copping some bad publicity. "Crackdown on greedy lawyers," the front page headline of Sydney's Sun-Herald screamed out on February 15. The article was about a new government watchdog, The Legal Fees Review Panel, which will be investigating solicitors who overcharge. Earlier this year, New South Wales' Chief Justice Spigelman kicked off the new law term with a criticism of the high fees some law firms charge.
It's not so much about Sydney or Melbourne solicitors being greedier than their Adelaide counterparts. The legal market is simply tougher in Adelaide. "Adelaide partners have struggled to increase rates in the last three years," observes McBride.
Some Adelaide solicitors are uncomfortable about discussing the growth of the legal market in Adelaide but, after some prodding, the consensus that emerges is that it is either static or growing slowly.
Peter Slattery, managing partner of Johnson Winter & Slattery, remarks, "I won't comment on the legal market because our firm is very specialised." Then, later: "It's not over-serviced, but there are no more [new] commercial players emerging."
Juliet Brown, chief executive of Thomson Playford, questions what growth means. "Has the number of clients increased? Has the work increased? I'll take the latter perspective. I would say increased. There's more work in the past 12 months than before. But if you're talking about new clients, there is a continuing decrease in large corporate clients."
Amanda Turnill, partner-in-charge at Clayton Utz's new Adelaide office (and currently the only partner) may be excused for skirting around the issue because she has been working overseas for over a decade, returning to Adelaide a few months ago. "That's a difficult question," Turnill says. "It's not declining. Property and construction is certainly growing. It's hard to comment because I've only just arrived."
Despite the state of the market, McBride can boast about Minters' performance. "We averaged 16 per cent growth annually for the past three years. It's hard to sustain that in a static market." So how does Minters do it? He cuts to the chase. "We are growing radically, [by] taking work from others."
It's a strategy that McBride believes Clayton Utz will employ. "Clayton Utz is probably after Santos and Origin. They're trying to play the game. I was surprised they even came here."
Santos and Origin Energy are two major Australian energy companies with operations in South Australia. The core of Santos' business is in the Cooper/Eromanga Basins' oil and gas fields in central Australia. Origin Energy (formerly Boral Energy) also has assets in the Cooper Basin.
Turnill says that Clayton Utz seeks to "focus on top corporates."
It does seem inexplicable that Clayton Utz would open an office in Adelaide when so many Adelaide law firms wanting to drum up new business are doing the exact opposite - looking towards the east.
Why wait for the interstate clients to come to you? Adelaide-based law firms are opening up branches in Melbourne and Sydney.
Thomson Playford has two interstate offices: one in Sydney, and another in Melbourne which opened only in February 2004. Brown says that the firm's expansion is due to a combination of factors: "Before we started the Sydney office, we did a client survey. We found our clients expected us to have an office in Sydney.
"Also, the larger corporate clients are interstate - we're actively looking for business interstate."
Slattery agrees that moving east is a developing trend among Adelaide law firms. Johnson Winter & Slattery will open an office in Sydney in March 2004.
McBride observes, "Everybody's looking to bail out. Fishers is the only one not - the HIH commission work keeps them busy." (A legal team from Fisher Jeffries assisted the HIH Royal Commission with investigating and presenting evidence, and preparing legal advice.)
McBride continues, "Normans, Thomson Palyford, Slattery - they're all finding extra work somewhere else." On the upside, McBride thinks that those law firms' experience in the competitive Adelaide market should give them an advantage against Sydney and Melbourne law firms: "Adelaide law firms have learned to be lean, mean and clean."
For all of the movement eastwards, there's still plenty of activity within South Australia itself.
Johnson Winter & Slattery's major project in 2003 was working on the SEA Gas (South East Australia Gas) pipeline project. "It runs from West Victoria to Adelaide. It's a very large project, now complete. We acted exclusively for SEA Gas," Slattery comments.
For Thomson Playford, which claims to have the largest construction and property development team in Adelaide, the real estate boom keeps them busy. "The last twelve months have been frantic. It's a longer-lasting boom here than in Sydney," says Brown. There is currently close to $1 billion of developments planned for Adelaide's CBD.
One of the more high profile developments in Adelaide is News Corp's new building, which McBride describes as "like a piece of New York." Minters is acting for News on the development.
McBride predicts that Minters will be busiest in the following areas in 2004: "Energy - a lot of work in electricity. Also, commercial litigation. Commercial property will continue to be very strong. There may also be an oil and gas boom out of the Cooper basin."
"Energy and resources will continue to be busy," Slattery forecasts for 2004.
Any predictions about the legal market in Adelaide must rely primarily on how the South Australian economy is tracking. The economic indicators provided by the Australian Bureau of Statistics are a mixed bag. Exports fell by 8.2 per cent - from $9.1 billion in 2001-02 to $8.4 billion in 2002-03. Meanwhile, private new capital expenditure in South Australia increased by 28.5 per cent during 2002-03.
The hot topic in economic circles, the Free Trade Agreement negotiations between Australia and the United States, has also captured the attention of legal minds.
McBride comments, "Most people recognise the pragmatic approach [of the FTA]. It's better to be in it than not. I'm hoping that it will work better for the defence industry and our exports - cars. The early blush is that it appears to be good news. For everybody from aquaculture to wine and defence, it has to be good news."
"I think it's great for Australia," says Slattery. "It's a step in the right direction. It's good news for manufacturing. And it has to be good for the legal profession."
One thing is for certain at the moment in Adelaide - it's still a buyer's legal market out there. Interstate clients should keep that in mind.
ADELAIDE LAW FIRMS - where else are they?
Firm Other offices
Clayton Utz Brisbane, Canberra, Darwin, Melbourne, Perth, Sydney
Finlaysons None
Fisher Jeffries None
Hunt & Hunt(formerly Ward & Partners) Sydney, Eastwood (NSW), Newcastle (NSW), Melbourne, Brisbane, Perth, Darwin, Hobart
Johnson Winter & Slattery Sydney office opening in March 2004
Kelly & Co. None
Minter Ellison Sydney, Melbourne, Brisbane, Gold Coast, Canberra, Perth, Darwin
Norman Waterhouse Sydney
Phillips Fox Sydney, Melbourne, Brisbane, Canberra, Perth
Piper Alderman Sydney, Melbourne
Thomson Playford Sydney;Melbourne office opened in February 2004
SOUTH AUSTRALIA INDUSTRY SECTORS
SECTOR FAST FACTS % OF TOTAL GROSS STATE PRODUCT 2000-01
Services This sector includes tourism, the arts and business services.Adelaide is the "back office" for a growing number of companies, including Origin Energy and Malaysia Airlines. The term "back office" means a consolidated service, data and administration operations centre. 59.2
Manufacturing The manufacturing facilities of Holden and Mitsubishi Motors Australia are based in South Australia. During the 1999-2000 financial year, the auto industry's turnover was valued at around $5.3 billion, representing almost a quarter of the state's manufacturing turnover. 13.6
Agriculture Major exports are seafood, fruit and vegetables and wines. 4.5
Mining South Australia's Cooper Basin is the largest onshore oil and gas field in Australia. 2.4
Other 20.3
Source: http://www.southaustralia.biz, the South Australian government's business portal.
THE STATE OF THE ECONOMY -- South Australian Economic Indicators
· The value of South Australian merchandise exports (in original terms) for the month of November 2003 was $527.6m. This was 35.5% less than the value of exports in November 2002 ($818.6m).
· The value of South Australian merchandise imports (in original terms) for November 2003 was $408.1m. This was 22.0% less than the November 2002 figure of $523.0m.
· In the twelve months to November 2003, retail turnover increased by 3.8% to $1,124.6m.
· December 2003 saw a total of 5,234 new motor vehicle sales - 12.6% higher than the 4,650 vehicles recorded in December 2002.
· Private new capital expenditure in the September quarter was $1,102m, an increase of 23.8% on the September quarter 2002.
· The all groups consumer price index in Adelaide for the September quarter 2003 was 145.4, an increase of 3.6% on the level recorded for the September 2002 quarter.
· The estimate of the unemployment rate for South Australia was 6.4% in December 2003 and was higher than the December 2002 estimate of 6.0%.
· The value of secured housing finance commitments (excluding alterations and additions) was $691.7m in November 2003. This was 37.9% over the value of commitments in November 2002 ($501.5m).
Source: Australian Bureau of Statistics
COST OF HOUSING
Adelaide solicitors may charge cheaper hourly rates, but remember that living in Adelaide is also cheaper. As of June 2003, the median cost of a home in Adelaide was $221,700, compared with $359,000 in Melbourne and $465,000 in Sydney.
Source: http://www.southaustralia.biz, the South Australian government's business portal.
Giving a new meaning to sports law
Minter Ellison has gained a unique point of difference in a tough market with the recruitment of Wayne Jackson as a consultant at the Adelaide office.
"AFL isn't a sport here, it's a religion. And Wayne Jackson is legendary," gushes Nigel McBride, the Managing Partner at Minter Ellison Adelaide.
As CEO of the Australian Football League from 1997-2003, Wayne Jackson is a valuable personality to have on side. There is plenty of substance behind the A-list status, too - Jackson was Managing Director of the SA Brewing Company from 1993-96, and of Thomas Hardy and Sons from 1981-92. He then became Business Development Manager for BRL Hardy. A degree in Economics sits alongside his footy-playing and coaching abilities in his list of qualifications.
"Wayne's role is twofold," McBride explains. "He helps internally with strategy - he's a non-legal pair of eyes." Jackson also lends his expertise to Minters' clients. "A number of clients have asked him about how to present their brand, how to network. Also about internal management issues, thought leadership and change of management. He's seen as a guy who's attractive to high level boards."
In addition, Wayne Jackson will be the guest footy tipper for Minters' footy tipping competition.
Round-the-world trip from Adelaide ELEANOR - Note that this should probably be taken out, as it's old news - she started there last year!
Clayton Utz is set to make a splash in the Adelaide market with the appointment of Amanda Turnill as the frontwoman of its new Adelaide office.
And she's a local Adelaide girl to boot. Turnill began her legal career as an associate to Justice Matheson at the Supreme Court of South Australia. After a stint at Clayton Utz in Melbourne, she moved to London where she has spent a decade at the commercial litigation sector of Lovells, a firm with offices across 17 European, US and Asian countries.
One of the highlights of Turnill's career is defending a US pharmaceutical company in a class action involving the measles, mumps and rubella ("MMR") vaccine. Several hundred plaintiffs allege experiencing health problems after having the MMR vaccine. The British media predict that this case will become one of the biggest class actions ever in the UK.
Turnill arrived in Adelaide in October last year. Asked about the pace in her home town, Turnill says, "Because of the launch of the new office, it's busy and challenging... Of course, it's not quite as fast as London."