It was a serious misstep made by large law firms who quickly claimed their subsidies from the Government for the Covid-19 losses they expected to sustain.
We reported the issue with raised eyebrows, particularly given the large returns the larger firms have been onto as the economy continued its robust performance up until China exported its latest creation.
And, unlike many businesses, lawyers are particularly suited to undertake their work from remote locations, particularly in this age of remote working technology.
National Party leader Simon Bridges called out the firms for making the wage subsidy claim, attracting further attention to that already being levelled at the firms by the media.
“Big law firms, like I used to work for, don’t need this money. Small shopkeepers, tourist operators, some of those players who are not only struggling, but could well go out of business, they need it,” Bridges said.
On Wednesday Simpson Grierson repaid its money – a handy $2.3 million – saying its April was ‘stronger than expected’.
It was a surprising claim given what we reported at the time with law firms achieving high profit margins and would have considerable difficult establising a one-third drop in their substantial income.
Bell Gully received almost $1.8 million but according to CEO Anna Buchly (left), there is no current commitment to repay the funds. [Note the article update, below. Bell Gully have repaid the subsidy.] As a top-earning Big Three law firm and the only of the kiwi ‘Golden Triangle’ firms to receive the subsidy it is particularly surprising that the top-earning firm would see the need to take the money.
“We believe that the application for the subsidy was in the best interests of our staff given the significant risks that Covid-19, the lockdown and the associated consequences created for our firm,” said Ms Buchly.
And yesterday MinterEllisonRuddWatts, with another $2 million claim, said it had repaid the money saying that an analysis conducted this week “indicates that the firm is performing better than originally forecast” and would not see the drop in revenue it expected.
The Herald reported that Meredith Connell CEO Kylie Mooney indicated their repayment was likely coming soon, saying taking the taxpayer money had provided a guarantee to ‘the team’, noting that the funds had been kept in trust in true legal tradition. The downturn for April was not as bad as the firm had anticipated the previous month, she said.
Duncan Cotterill have given no indication of repayment, having received almost $1.5 million. The decision would depend upon the firm’s performance, the firm’s business development head Malcolm Harrington said.
Bell Gully have also repaid their subsidy following a statement from Anna Buchly in early May saying that the firm’s board had met and determined that they were in a position to repay the subsidy while still m eeting their commitments to their staff.
Read More on LawFuel
- Mai Chen ‘Sacks Herself’ to Start New Chambers, Closing ChenPalmerProfile lawyer and Power List member Mai Chen has apparently …
- The Finlayson Trilogy and Legal Life After PoliticsBankside Chambers, the Chambers-of-choice for former Attorney General Chris Finlayson …
- Morrison Kent Culture Report Kept Behind Closed DoorsThe NZ Herald report that the report into Morrison Kent’s …
- Why Don’t We Know What Is Behind The NZ Law Society ‘Workplace Culture’ Issue?John Bowie* Fresh from its various PR pronouncements and public …
- The New Zealand Law Business Booms Despite The HeadwindsNew Zealand law business booms
- Class Action Against ANZ & ASB An ‘Opt Out’ Action, High Court RulesThe High Court has given the class action claimants in …
- NZ Law Society President Lethbridge in Eye of StormRecently anointed Law Society President Jacqui Lethbridge has found herself …