The partnership at Johnson Winter & Slattery (JWS) will welcome Julia Gillard’s rise to power in Canberra – and not just because both the firm and the new Prime Minister of Australia have grown out of the city of Adelaide to become successful players on a national stage.

JWS launched a new office in Brisbane in June, and the firm is now facing what managing partner Peter Slattery calls “a reasonably sized practice development exercise” – or in other words, time, investment and hard work – in developing a competitive local presence built primarily around a firm-wide core strength - energy and resources. This effort will not be made any easier by uncertainty surrounding the proposed resources profits tax (RSPT). When interviewed by ALB prior to Gillard’s leadership coup, Peter Slattery expressed concern over the tax’s effect. “The tax as originally announced will certainly have an impact on a segment of our client base,” he said at the time. “The uncertainty that clouds the issue at the moment is of the greatest concern – in the grand scheme of things we are a very small player, so we just hope that good sense prevails.”

Though dismissed as scaremongering by unions, a Queensland Resources Council (QRC) survey of members in June found the mining tax could see A$25bn in planned investments scrapped, which amounts to half of all proposed expansions and start-ups in the state. The flow-on effect for law firms could be very real, according to McCullough Robertson resources head Damien Clarke. “The super profits tax will have some impact on decision making,” he said. If the tax is introduced in its original form, Clarke argues it will dampen activity in the sector, and that inbound investment in particular will not be as fluid.

Brisbane-based Clayton Utz partner Keira Brennan has already noticed this investment sentiment shift. She said the firm is no longer receiving phone calls from hopeful Indian and Chinese investors prospecting for mining assets, and while existing project and M&A work continues - not having reached investment decision making point - new investors are being cautious amid uncertainty.
Now Gillard is promising to reopen negotiations with the nation’s miners over the finer details of the RSPT, abandoning former Prime Minister Kevin Rudd’s “crash through or crash” approach, the outlook for Brisbane law firms in the sector will improve. If some measure of certainty is reached, JWS will get the chance to focus on the business at hand – taking on a highly competitive market.

This will be no small challenge, as Slattery admits. “It is obviously a mature legal market, and from everything I can see, it is well serviced,” Slattery said. However, the firm has achieved success opening offices across the nation in recent years, expanding out of Adelaide first into Sydney and Melbourne, then into Perth in 2008. In Brisbane, the firm will leverage work for key client Origin Energy on the Gladstone LNG Project, and target growth in major projects, property and litigation. “It’s a case of putting ourselves in a position where we are better able to pursue those opportunities that we think will become available,” Slattery said. “Our projects lawyers have been making forays into Queensland for some time but there is a limit on how far you can take that practice without a local presence.”

Slattery said the key to Brisbane success will be the firm’s model, which offers clients a low leverage, partner-led approach to top-end work. Three of those partners are already in place: Gordon Radford, who has flown in from the firm’s Adelaide head office; Paul Kasmer, a banking and finance lawyer formerly of Freehills; and ex-Mallesons’ David Colenso, boasting a property and infrastructure bent. “In the practice areas we are focusing on, we offer relevant expertise and effective practitioners, working with a low leverage approach to yield a high value outcome,” Slattery said.

The firm will need to leverage heavily off its existing offices and client base if it is to be as successful in Brisbane as it has been in other state capitals. Clarke said the market is “well serviced”, with “all major law firms here in a significant way”, as well as having “strong local firms”. “To break into the Queensland market will be a bit of a challenge,” he said. However Brennan argues that growth in the sector in Brisbane allows room for new players, while extra top-end lawyers will ease the problem of conflict – often a problem in Brisbane when it comes to bigger deals and projects.

Slattery is confident the venture will be successful for JWS. “It’s a well-tried and tested business model, and it has its place, particularly for major businesses on complex, non-routine legal matters,” he said. “It’s not a one size fits all approach, but it will be attractive for certain clients.”