Two years ago, Jones Lang LaSalle reported that legal firms accounted for 35% of tenant demand in Sydney's mid-town district.

In the three years leading up to 2004, the legal industry continued to show a strong preference for space within the city centre or mid-town districts, with 20,600 sqm (51%) of new space leased by the legal sector in the Sydney city core and 16,900 sqm (42%) leased in mid town.

These figures demonstrate the demand by the legal industry for Sydney-based offices, and now, in 2006, it seems that Sydney is still as attractive to firms as it was two years ago.

Since 2001, there has been an ongoing high concentration of legal, accounting and business consultancy firms in Sydney, such services representing one of the fastest-growing sectors of the city economy. Over the past decade, employment in these sectors has increased by 81%, boosting Sydney to account for more than a quarter of Australia's total economic activity.

Centre of attention
The reasons for Sydney's appeal to firms are as varied and diverse as the city itself, but undoubtedly one of the city's most attractive traits is its position as Australia's commercial capital. And while this claim may give way to a few objections from Sydney's sister city (and close competitor), Melbourne, it seems for the moment Sydney has this title in the bag.

President of the Law Society of NSW, June McPhee agrees and says that one of the outstanding differences of Sydney and the abundance of lawyers in the city stems from its advantage as a commercial and business hub.

"The reasons for the attraction of working in the legal sector in Sydney are really multifold," she says. "If you're looking at chickens and eggs, what comes first? Lawyers want to work here because there are jobs here, because Sydney is the best place for lawyers to establish law firms. And it's the best place to establish law firms because this is where companies have their offices and their international offices." 

"I definitely think this is the biggest commercial centre in Australia," McPhee says. "Melbourne might argue about that, but I don't think there is any dispute that Sydney is by far and away the most popular place to establish business and it's because of the businesses here that there is an abundance of work, because that's how they employ solicitors. Sydney was really the first place in Australia to establish commercially and it's just grown from there."

Overall, according to the Australian Bureau of Statistics Business Register 2004, the largest number of businesses is found in the electorate of Sydney City. Combined with the nearby electorates of North Sydney, Wentworth, Bradfield, Warringah, Mackellar and Lowe, the seven urban Sydney electorates together account for almost 10% of all the businesses in Australia. Significantly, official City of Sydney figures also reveal that of the nation's top 100 companies 60% are headquartered in greater Sydney, most within the CBD itself.

An international affair
Compared with other cities in Australia, the concentration of major corporations in Sydney, and the assorted clientele and diversity of practice areas that this creates, also distinguishes Sydney from other regions around the country, acting as an incentive for young lawyers and overseas firms alike to set up in the region, adding a competitive edge.

"Sydney is Australia's international city," says Shane Barber, partner at Sydney-based firm Truman Hoyle. "New entrants to the market tend to be drawn to Sydney as the natural entry point. It is very satisfying for our lawyers to be involved with these new entrants, particularly from the US and the Asia Pacific region, bringing new ideas and businesses. And for young lawyers especially, Sydney is a very exciting place to be."

UK-based law firm Kennedys can certainly identify with Sydney's appeal, having recently chosen the city as the location for its first Australian office.

"We chose Sydney because we already had global clients based here," says Ric Martin, Kennedys CEO.

"It also offers strong international connections, particularly to Asia," adds Sumiya Basha, partner at Kennedys Sydney and who previously practised in Melbourne. "It has a diverse range of firms, many who have been around for a long time, but with a mix of new and young practices, and as a business district it's vibrant and busy - and I have to say, the coffee is better than in Melbourne!"

Legal life in Sydney
Coffee and commercial assets aside, the business culture and the characteristics of legal life in the city also set Sydney's legal industry apart.

"There's a bigger market here for both Australian and overseas firms, hence more variety of work, so it's faster paced, and specialised rather than providing general legal services," says Andrew Pavuk, partner of Wright Pavuk Lawyers, a Sydney-based firm. "There are specialist niche practices or very large practices with a considerable number of different practice areas."

According to McPhee, Sydney law firms tend to be more inclined to practise in specific areas and the ability to offer specialisation in a particular industry again stems from the fact that the city is home to a variety of businesses, thus increasing the number and type of fields available to lawyers. 

"When you're in Sydney, you've got a moderately large law firm and they have sections, so if you're interested in that area of work as a lawyer, you join those sections and that's what you do 10 hours a day. Comparatively, when you move away from that concentrated menu of work and you enter into a smaller practice, everyone's got to do a bit of something else," says McPhee.

"Day to day differences include the ability of good firms to provide the correct solicitor for the correct task sought by the client, thereby enabling the junior solicitor to do the more routine lower expertise work and the higher expertise work to be carried out by the partner," says Pavuk.

"If you're looking at what makes Sydney different, it's also a population centre," says McPhee. "It's an international, cosmopolitan city whereas Melbourne and Brisbane aren't; you've got a wonderful harbour; it is quite expensive; it's a good place to live; it's got good resources with regards to libraries and art galleries; and it has a very good and sound court structure to support it."

"You can find great lawyers in every state and territory," says Barber, "but a key characteristic for Sydney lawyers is their ability not only to understand the commercial context in which the client is operating, but also to understand both the architecture of the technology and the regulatory framework. This adds a real dynamism to the way lawyers practise here. The mere fact that a highly focused boutique firm such as Truman Hoyle can not only exist but flourish in the Sydney market is a testament to the maturity of the legal and commercial market in Sydney," he says.

"Law firms in Sydney are just dynamic, pro-active and internationally focused," adds Basha of Kennedys.

Cream of the crop
The strengths of the NSW workforce lie in its high levels of tertiary education, vocational education and training. Overall, Australia offers one of the highest sources of skilled labour in the world, and has been ranked fifth in the world on the overall availability of skilled labour in the IMD World Competitiveness Yearbook 2001. In addition, according to UNESCO, Australia had a greater proportion of residents undertaking tertiary study per 100,000 people - 72% of the relevant age group - than the United States, most Asian countries and European countries such as France, the United Kingdom and Germany.

Notably, the level of participation in education in Sydney is even higher than the national average, and there are also five universities within the Sydney metropolitan area, three of which - the University of Sydney, the University of Technology Sydney and the University of New South Wales - are world-class institutions, and are located close to the city centre.

As a result, Sydney's legal minds are top notch and, with a combination of high profile clients and no shortage of firms to offer their services, competition within the legal field is a major factor in the careers of Sydney's legal eagles when compared with those in other jurisdictions.

"The practice of law in Sydney is vibrant, it's ever-changing, and it's an exciting area to be in because this is where it's happening. The standards in Sydney are high and they have to be high because it is competitive, and you've got to meet the market," says McPhee.

"In meeting that market you've got to strive to be perfect and you've got to be the best person available to offer the services in that area for your clients, otherwise you don't get them. So survival in the city means that there are challenges, both intellectual and personal to meet the market. And that's a great driver in terms of job satisfaction and personal improvement and career development."

Research conducted by the City of Sydney, which found that Sydney rates among the top 10 world cities for the provision of finance, accounting, legal and marketing services, suggests those challenges are being met.

"There is a great client and lawyer talent pool in the Sydney market," says Barber, "and while it is true that a lot of legal talent - particularly between three and five years post-admission - does want to experiment for a time with the overseas market, when they do come back, in our experience they tend to be attracted to Sydney." 

"Perhaps it is because they are now used to living in a faster pace environment," he adds.

The competitive nature of Sydney's legal sector can, however, also be a problem, says Tom Boyce of Cutler Hughes and Harris. "The problem for many firms entering the Sydney market is that it's really competitive, both for work and for talent. If you haven't got a client base that is clamouring for you to be here, the likelihood of making a reasonable dollar is limited," he says.

Nevertheless, Sydney's existing firms have risen to the challenge. "Sydney firms have demonstrated that you don't have to be national to be doing some of the best work around," says Boyce. "A number of Sydney-only firms compete on the same playing field as the top tier, especially where they have niche areas of expertise. We've got particular specialty in health, for example, and often find ourselves over the other side of the table from the mega firms."

Sydney's work-life balance
Legal life and work in Sydney generally mimic the city's overall vibe - busy, bustling and diverse. "The pace of life is frenetic," says Pavuk. "There are long hours, and sometimes irregular long hours if you have overseas clients."

Yet one of the main attractions and differences for lawyers in Sydney is the quality and style of their work/life balance and the recreational advantages of living in the largest coastal city in Australia.

"Sydney is definitely work hard/play hard, but many firms take work/life balance very seriously. We like to recruit lawyers who have a life outside the law and that means letting them out of the office at a reasonable time," says Boyce.

"But without question, lifestyle is the main attraction for lawyers to work in Sydney. It's one of the few cities where you can leave work and be surfing 30 minutes later! It's also cosmopolitan, diverse and there is enough quality work to interest lawyers with ambition," he says.

Barber of Truman Hoyle agrees: "One of the attractions for law firms setting up in Sydney is the sheer quality of life you can enjoy in this city. We tend to either take it for granted or to talk it down. Culturally and physically though, whether you are comparing Sydney nationally or internationally, it doesn't really get any better than this."

Firm Profile: Promises, Promises... meet the law firm that delivers a real partnership opportunity
Cutler Hughes & Harris is a firm on a mission - to attract and retain the best partner talent in the Sydney market.  "We want the whole package," says executive partner, Tom Boyce "Academics are just the start. We're looking for the all round business developers and people managers. Lawyers who are prepared to get their heads around the numbers and understand what it means to run a successful and profitable business."

Senior talent is a critical issue for all firms, especially in a market as competitive as Sydney.  But Cutlers has a number of young guns that are reshaping the term 'partner' and bringing a fresh approach to staff and client relationships alike.

Working with the best
Lucinda Smith has worked for Cutlers for most of her professional career and was appointed to the partnership in 2004. Specialising in health and aged care, Lucinda's strategy is to provide quality legal support to participants in the industry that baulk at top tier fees and service. "We recently acquired over $45m in assets from Ramsay for one of the largest health and aged care providers in the country. There is no doubt that we have the expertise and the depth to handle the big ticket work.

"We've got the longevity of brand, the market reputation and the solid client base as one of the oldest firms in Sydney and that can be both a help and a hindrance when you are trying to build a practice - clients can pigeon hole the firm. But that is part of the challenge I enjoy - showing the big boys that we can handle it."

Managing a business, not being managed by it
Cutlers is a fairly unique environment for younger partners. Lucinda takes an active role in the business: "I've had input into the overall firm strategy, staff mentoring programs, our parental leave policy...You feel like you are actually running a business."

Focusing on what you really want to do
Brendan Wyhoon joined Cutlers from a Queensland firm, initially as a special counsel, and also made partner in 2004.  He's been with the firm for almost four years.  Brendan is rapidly making a name for himself as the new kid on the block for insolvency, but it hasn't come without work. "Anyone considering taking on partnership shouldn't underestimate the amount of time you have to spend marketing to build a practice.  I've been knocking on doors for the last three years or so and it's only now that we're starting to get real traction."

But the payoff is on its way. Brendan has had a big year in a tough market and is gaining momentum. "As a mid-tier, one state firm, you can still generate some cut through if you are tenacious and stick to your message. We've been saying for three years we only want the complex, specialised work and saying no to the rats and mice. Saying no to work is hard but we've gradually proved ourselves and we're seeing the results."

Charmian Barton moved to Cutlers from Mallesons in 2003 and also made partner a year later.  "Contaminated land is a fairly specialised area, but we have a client base where these issues come up regularly," Charmian says.  "It's allowed me to build up very practical expertise."  Now, as one of Sydney's premier specialists in remediation issues associated with contaminated land, Charmian gets referrals from a range of developers and other lawyers who lack that expertise. "It shows that picking a niche and sticking to it really works."

Building your own practice
John Driscoll joined the firm as a partner returning to private practice after holding several key senior in-house legal positions. "I've got the opportunity here to really build something of my own," says John.  With a formidable cv in the banking sector, John has brought a number of clients with him and is looking to build a strong banking and finance practice.  "Having a gun tax department is unusual for a firm of this size and it's really helping in terms of attracting new clients from this sector."

Bermard Tan is another lawyer who has seen the opportunity at Cutlers and recently made the move after seven years at Maddocks.  "Cutlers' practice and my practice were a good fit," Bernard explains. "Cutlers has strong a strong health care and property team. When I came across I was very impressed by the calibre of the client base - it is essentially a mid-tier firm with top tier clients. That presents me with a great platform to grow my practice in property trusts, syndicates and property investment schemes.
While Bernard has joined as a special counsel, there is a clear path to partnership after an initial 'prove yourself' period.  "I know the offer is there - there are no politics or potential blocks."

Interested?
Cutlers is currently looking for lawyers with the smarts, the energy and partner potential to help us build the law firm of the future. If you are a senior lawyer and you are interested in talking to us confidentially, please contact Lisa Donohoe T +61 2 9020 5763.

Firm Profile: Truman Hoyle focuses on new economy and Asia
From its Sydney base, this award-winning boutique firm is building new markets for Australian legal services

When Percy Truman and Roscoe Hoyle first commenced legal practice in Sydney nearly 80 years ago, neither would have contemplated that the firm which now bears their name would be at the forefront of providing legal services for the new economy in Australia and the Asia Pacific Region.

Truman Hoyle has steadily built a leading reputation in the complex and dynamic areas of communications law and regulation, technology and intellectual property law, energy law and regulation, corporate law, industrial law and infrastructure law.

With eight partners and 40 staff based in Sydney, the firm is currently attracting significant client work from the Asia Pacific region and as far afield as the Middle East, with clients attracted to the competitive rates and technical expertise offered by Australian firms when compared to their US and European counterparts.

New economy focus
Truman Hoyle's managing partner, Shane Barber, says the firm's early focus on a handful of related specialised areas has paid dividends in terms of attracting high quality work. "Many of our partners spent many years working in-house at communications, energy and technology firms. As former buyers of legal services, it was clear to us that, for high-end work, boards and in-house counsel generally prefer to use either the big six firms or quality specialised boutique firms."

Barber says that the firm set about building its team in the new economy space several years ago. "Over that time, we have built strong client relationships with many A-list companies, as well as with many smaller businesses looking not only for cost effectiveness, but the technical and regulatory knowledge that their industries demand."

The firm is also increasingly acting for bio-technology and energy companies, and companies dealing with recycling and resource efficiency. "The new economy is not just about the generation and protection of information and ideas, but increasingly it is about the efficient use of limited resources," said Steven Goodman, Truman Hoyle energy partner and former corporate counsel with AGL.

In 2004, the firm was enlarged by two partners and their teams specialising in industrial law. "We found that the intellectual intensity of the work undertaken by our clients meant that they were constantly requiring industrial law advice to secure the best talent, to protect their intellectual property, and to manage staff change," Barber said. "We have found the industrial practice has an excellent synergy with our new economy focus."

Asia Pacific
As well as advising a number of prominent Australian telecommunications carriers and industry groups, Truman Hoyle has recently been advising telecommunications carriers in New Zealand and the Middle East, particularly in relation to competition issues.

Truman Hoyle's lawyers having advised on 14 network rollouts around the world, clients in other countries have sought the firm's expertise in relation to issues such as co-location and network roaming.

A prime example of the firm's role in this area has been recent advice provided on competition and co-location issues to a new telecommunications industry entrant in New Zealand and assisting the Telecommunications Carriers Forum there develop a co-location code.

"We are also advising clients in relation to the establishment of businesses in China, Korea and Japan," Barber said. "Australian-based clients not only seem happy to use an Australian law firm for this work, but positively encourage it given the greater visibility to, and control by, them."

Commencing in September, a team of Truman Hoyle lawyers led by technology and intellectual property law partner, Mark Vincent, will be delivering a number of seminars throughout South-east Asia on intellectual property management issues, with the first being held in Kuala Lumpur.

"We have found both AusTrade and the Australian Embassy in Malaysia to be very helpful in assisting us maximize the benefits of our visit to Malaysia," Vincent said. "They have gone out of their way to organise meetings for the firm's lawyers with a number of potential clients seeking to do business in Australia."

Public policy
In addition to providing commercial legal services, the firm actively encourages its lawyers to participate in the public policy debate in the firm's areas of expertise.

The firm's lawyers not only edit legal journals and contribute articles and media comment; members of the firm also sit on a number of task forces dealing with public policy issues.

"Providing advice to, and participating in, forums organised by organisations such as the Mobile Carriers Forum in Australia and, to a lesser extent, the Telecommunications Carriers Forum in New Zealand assists our lawyers to make a contribution to good public policy outside the results of fee driven work," Barber said.

Sydney based
Truman Hoyle is happy to join that group of prominent firms based in one city. "While we have close relationships with firms around Australia and around the world, we don't plan to open any further offices at this stage," Barber said. "We also don't intend to be a large firm and we remain convinced that highly focused, quality boutique firms have a real future in the changing legal environment."