Partner ‘churn’ feeds firms’ constant appetite for top talent

Partners who make a change of firm are departing as teams in a trend aimed at making smooth landings and seamless transitions.

Roger Davies and Antonella Pacitti joined King & Wood Mallesons in Perth. The WA capital is seeing intense activity. Picture: Mark Flower

Flush with funds from a strong financial performance in 2021, law firms have been luring top-performing partners and teams of partners to fill perceived gaps and beef up specific practice areas.

The wash of talent through the sector has been constant over the past year, but only added up to a weighted average growth of 0.9 per cent of partner headcount for the 12 months to July 1 and a full-time equivalent partner number of 0.11 per cent.

Demand among firms was matched by enthusiasm on the supply side: apart from the obvious imperative for talented lawyers to get ahead by means other than internal promotion, those who change firms are often interested in extending or developing their own practice in some way.

“The major players in the last six to 12 months have been the larger firms who have the deepest pockets and are coming off record good results driven by a boom in mergers and acquisitions activity in Australia since the pandemic, with more than $85bn worth of deals announced to date,” Eaton Strategy + Search partner Dominic Peacock said. “Companies revised their post-pandemic strategies, looking for inorganic ways to accelerate growth.”

Some partners had “time for self-reflection, and realised they wanted a change of scenery”.

The largest transition was 15 partners to PwC, which bought tax firm Greenwood & Herbert Smith Freehills in February. Mergers and acquisitions and equity capital markets specialists were also in demand: Lander & Rogers recruited lawyers from KPMG Law, led by David Morris.

Another significant move was announced by King & Wood Mallesons in March, when it revealed Antonella Pacitti and Roger Davies would join its Perth office, adding to the October hires of resources and energy experts Lorenzo Pacitti and Peter Vaughan. All came from Ashurst. KWM stressed it was “investing in its vision for connecting WA to Asia”.

Mr Peacock said the trend towards team acquisitions shaped hiring activity. “Some of the most recent significant moves have involved a group of partners coming from one firm,” he said. It requires a big outlay, but the transition is made easier if people with well-established working relationships are brought in together. It also minimises disruption and preserves engagement with clients.

“While hiring strategically, firms have also been more focused on succession planning and filling gaps both at the senior lawyer level and from a practice group perspective,” Mr Peacock said.

Perth is a hot market right now. In a sample of 103 moves from the past six months (including the team of 15 as one move), 19 were in the WA capital, exceeding every capital but Sydney, which had 41 moves. Melbourne had 17, Brisbane, 11 and the ACT, one.

The excitement in Perth is partly explained by the activities of fast-growing Hamilton Locke, which launched its office there in February with equity capital markets and M & A practitioners Shaun Hardcastle, Deanna Carpenter, Jeremy Newman and Michael Boyce (also a specialist in mining and resources). All came from HWL Ebsworth, as did litigation partner Chris Hood, appointed in April.

Other hires included Tricia Moloney in Melbourne, Brett Heading and Trent Thorne (from McCullough Robertson) in Brisbane, where it also opened an office; and in Sydney, Grant Parker, Margot King and Erik Setio.

Resources and energy, and M & A and property were consistent themes, but firms also sought talent in another hot-button area – environment, social and governance (ESG) practice.

In February Gilbert + Tobin recruited Baker McKenzie’s former global head of the climate change practice, Ilona Millar. “Managing climate change will … be a critical issue for the Australian economy and for our clients,” G+T managing partner Danny Gilbert said.

Among those Ashurst picked up were three of Norton Rose Fulbright’s Perth partners, led by energy and resources specialist Paul Lingard; and Narelle Smythe from Clayton Utz, in financial regulation, another practice area expected to be in demand.