The World
February 16, 2011 10:47 AM
Clifford Chance Expands in Merger with Australian Firms
Posted by Anthony Lin
This report is part of The American Lawyer's expanded coverage of the Asian legal market--which also includes a new weekly e-newsletter, The Asian Lawyer. Click here for more from The Asian Lawyer and to sign up for a free subscription.
In a move touted as part of a larger Asia strategy, Clifford Chance has announced plans to expand into Australia through the acquisition of two boutique corporate firms.
Clifford Chance partners have approved mergers with Sydney's 17-lawyer Chang, Pistilli & Simmons and Perth's 15-lawyer Cochrane Lishman Carson Luscombe, the Magic Circle firm said Wednesday. The new offices will operate as Clifford Chance when the mergers take effect on May 1.
The long-anticipated move makes Clifford Chance the latest international firm to target the Australian market. A year ago, Allen & Overy recruited 17 partners, mainly from Clayton Utz, to launch offices in Sydney and Perth. In 2009 U.K. firm Norton Rose merged with Australia's Deacons. More recently, DLA Piper last month announced plans to fully merge with DLA Phillips Fox, its Australian alliance partner.
Like those firms, Clifford Chance says its move is more about Asia than Australia. It describes the mergers as "the first steps in the delivery of an ambitious growth strategy for Asia" that will double revenue from the region within four years.
In an interview Wednesday, Peter Charlton, Clifford Chance's Hong Kong-based Asia head, says that given the flow of outbound investment from China in recent years, the firm decided it needed to make a move in Australia.
"If you think China is going to continue to grow, then the Australia growth story is going to continue," says Charlton. "Australia has everything China wants, from energy and resources to soft goods like food."
Chinese state-owned enterprises in particular have made Australia a top destination for strategic acquisitions of energy and mineral assets. Major international law firms have been eager to handle more of these transactions, as evidenced by the establishment of offices in Perth in Western Australia, the hub of the mining industry. (The American Lawyer reported on the Australia-Asia connection and its impact on the Australian legal market in this October 2009 feature.)
There also are expectations that increasingly multicultural and multilingual Australian lawyers could be a source of talent to staff offices across the region, Charlton says--an important secondary consideration. "Australia is known as a source of well-trained, clever lawyers that quite often want to work outside Australia," he says.
Clifford Chance decided to merge with the two boutiques in order to "hit the ground running," Charlton says. Recruiting partners from other firms, he notes, would take more time as those partners extricate themselves from their old firms. Moreover, there would be a risk that a lateral group might fail to gel.
Both Chang Pistilli and Cochrane Lishman focus on mergers and acquisitions transactions as well as complex litigation. Backed by Clifford Chance's brand and network, the Australia group should become a formidable player in cross-border and cross-Australia deals, Charlton says.
Chang Pistilli managing partner Mark Pistilli, in a statement, said, "The merger will build on [Chang Pistilli's] existing success while giving our well-respected partners and lawyers exposure to global clients and top-tier international work through Clifford Chance's offices."
Ian Cochrane, the senior partner of Cochrane Lishman, said: "By bringing together our firms’ established reputations...we can provide a truly global service to Australian inbound and outbound investors in energy and resources."
The move by Clifford Chance had been widely rumored in the Australian legal market. The firm had previously signaled its interest in Australia with previous merger discussions, including talks in 2008 with 1,000-lawyer Mallesons Stephen Jaques, one of Australia's leading firms.
Charlton acknowledged the previous talks. "We've had a 12-year flirtation with Australia," he says. But Mallesons, he says, was just too big a merger partner for Clifford Chance. "We would have had 180 out of 700 partners based in Australia," he says. "It wouldn't have made any sense."
The mergers announced Wednesday will likely spark a round of soul-searching among Australian firms about their own global ambitions. With a population of only 22 million, the country has several firms approaching 1,000 lawyers in size, making the domestic legal market ultracompetitive.
Some Australian firms, like Mallesons, have looked abroad to Asia for growth and sought to build significant Asia practices of their own. Others, like Freehills, have mostly stayed at home, wary of competing directly against wealthier British and American firms.
Photo: iStockphoto
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