Briefcase – John Bowie
Last week’s comments about salaried partners drew a range of reactions from lawyers and their minders and rose the ire too of Kensington Swan’s deservedly well regarded Chief Executive Alastair Carruthers.
Alastair Carruthers advised that the firm had done away with salaried partners by Deed in 2010. Although the overall increase in their number within both large and small firms has grown, he says that it is not the position with Kensington Swan. What the firm does have, in common with many other firms using labels to describe non-equity participants, are the Counsel, Principals, Senior Associates, Special Counsel and Consultants.
The reality is that the leverage ratios of law firms has changed significantly in recent years, as established by Law Society figures. The ratio of principals who can share in equity to assistant solicitors has gone from 1:1 to 1:2. I had quoted law firm consultant Ashley Balls, who consults to many firms both here and in Britain, who says the driver of this change is demographics and with a profession that is growing at around 4 per cent per annum the changes have been necessary to maintain owners’ incomes which would otherwise have fallen”.
Alastair Carruthers points out that gender might also be an issue that might be “in the list of possible disadvantages” if one were to study New Zealand and Australian firms. He correctly points out that Kensington Swan has the highest percentage of women partners of any large New Zealand firm, all of whom are equity partners. I have complemented Kensington Swan on their gender initiatives previously.
Kensington Swan’s KPMG Experiment
Another issue taken is my assertion that the firm’s KPMG merger was costly. To quote him: “Numerous benefits flowed from that association, and I was struck by them as soon as I joined as Chief Executive in early 2013. They include the systems and reporting standards of an international accounting firm to an IFRS level, shared premises (in Auckland) and a JV client hospitality and service company which both firms continue to own. Clients of each firm receive flawless and inexpensive hospitality from one team. It’s innovative and efficient.”
Kensington Swan’s Mid-East Experiment
The Mid-East office opening was another issue that was taken up, with the Abu Dhabi office being run for two years evidently to service the needs of a major client. “When that work stream diminished the firm withdrew. It was good business to enter and good business to exit.” Hmm. maybe. As Ashley Balls says, opening a Middle East office for two years and then closing it is somewhat counter intuitive.
“A more usual response to meeting this kind of need would be to request one or more lawyers on secondment. I have been in this game a very long time and have seen some fairly unusual requests and behaviors. For now I retain the view that the office was opened in the expectation of obtaining other work in addition and it did not eventuate in the quantities required.”
We can but speculate. However Mr Carruthers does agree with me that his firm is “one to watch” and watch we will.
The Missing Silks
What has happened to the spanking new QCs? We were due to have an announcement in May I thought and yet here we are still waiting after all these months. There must be so much palpable angst among Chambers and lonely rooms in the Queen City and elsewhere as those ladies (of whom we can expect several) and men (of whom we can expect some) seeking silk, their anxious fingers poised over the thrumming iphones on the mahogany, hoping it is the call from the Attorney General. But no, he has been busy at the Royal Wellington sinking birdies – like his two in recent weeks. All of which is, after all, much more important than appointing a few more silks.
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