Board report shows there are money issues at the top Australian law firm
There’s some trouble at mill for top Australian law firm Minters, fresh from their difficulties over the email firestorm leading to the departure of former CEO Annette Kimmitt, and it involves partner pay.
The firm has long regarded itself as part of the top tier, but the pay packets for its
partners suggest otherwise according to a recent AFR report from legal editor Michael Pelly.
The column suggests there is a ‘serious disconnect’ between partner billings and their take home remuneration, compared to the firms major competitors in the heavyweight banking, transactional, equity work areas. The suggestion in the Pelly article is that the ‘touchy feelie’ aspects to Minters’ approach has impacted their remuneration and put them behind their major legal competitors.
These include firms like Clayton Utz, Corrs Chambers Westgarth and Ashurt who can receive considerably more than the $1.4 million top level take home pay – by up to $1 million or more.
That doesn’t sit well with the top fee-generating Minters partners.
Or some of those ambitious ankle-biting aspiring top earners who eye the bounty received by competitors over the street.
For example, when partner revenue hits about $6 million at those firms, the pay can be about
$2.3 million to $2.5 million, depending on the margins involved. (And for more on how law firm remuneration is made up, you may wish to look at the recent LawFuel article here).
Even Clayton Utz, Corrs Chambers Westgarth and Ashurst are in the $2 million zone.
HWL Ebsworth – one of the leading examples of the eat-what-you-kill model –
isn’t that far behind and about $200,000 in front of the Minters partners.
A briefing paper that was for the Minters board last year and which showed what he described the ‘disconnect’ between pay and performance for partners generating fees more than the $4 million level.
Once that heady height is reached the problems start, according to that report.
At that level the partners are earning around $1.4 – $1.5 million.
But the revenues at three of the top competitors, Gilbert + Tobin, King Wood Mallesons
show they share a greater revenue for top earning partners.
At a $6 million fee level at those firms, partners can expect to take home around
$2.3 – $2.5 million, depending on margins involved in the remuneration make-up.
The Minters flatlining has seen those holding the maximum 100 points earning a further
30 points, lifting their remuneration to $1.8 million.
And therein lies (another) problem for Minters because those who were missing out on that invitation are casting their eyes elsewhere with lateral moves ahead and some hard thinking about hard money to be made by the Minters management team, post Kimmitt.
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