John Bowie – A growing number of law firms – including some of the biggest and richest in the country – are applying for the Government subsidy package, which may send observer eyeballs into orbit given their million dollar earnings.
The Government subsidy is there to protect jobS, which is all well and good (although when the subsidies and jobs disappear the Government will be facing a sea of bloodshot looks from an angry electorate), but it is surprising that some of the largest law firms need to “shore up their balance sheets” as BusinessDesk described it.
These are firms that work on healthy margins, generate substantial earnings and service the largest organisations in New Zealand. They are also professionally managed with substantial levels of executive support as befits successful business operations anywhere.
They are also able to aggressively cut costs to preserve their margins and many are working to do so.
It is therefore surprising that their balance sheets need “shoring up” in such short order. And the ‘shoring’ has been a shade under $12 million for the largest eight firms listed below.
More significantly perhaps, how many of these major firms (and there are a growing list of mid-sized and small firms clamouring for the subsidy also) need to be able to see a 30 per cent drop in income. Moreso with some firms seeing an increase in their April-to-April figures.
One firm CEO told us that the applications are surprising from a number of the applicants – Simpson Grierson, Bell Gully, Minter Ellison and Duncan Cotterill being among them – “and seems to fly in the face of the purpose and spirit” of the subsidy,” as he said.
After all, the legal business achieve 30-45 per cent profit margins with reduced costs so where is the dramatic one-third falloff?
“These firms are doing it on projections and I’m not sure how they get to that.”
“When we apply April numbers to May (so comparing a poor month with one of our best) we are still down less than 20 per cent – not great but not 30 per cent.”
The notable firms with payouts to date include Simpson Grierson ($2,335,108.80); Minter Ellison ($2,069,265.60); Bell Gully ($1,810,718.40); Meredith Connell ($1,639,178.40); Duncan Cotterill ($1,488,727.20); Lane Neave ($1,116,158.40); Anthony Harper ($896,870.40); Wynn Williams ($731,078.40);
Among the smaller firms are Morrison Kent ($567,938.40); Gibson Sheat ($435,746.40); Sharp Tudhope ($314,872.80); MDS Law ( $210,888.00); Rainey Collins ($198,110.40); Willis Legal ($250,236.00); Webb Farry ($196,828.80); Downie Stewart ($184,140.00); The Law Shop ($77,325.60);
Legal Aid List
And included in the list is Legal Aid gold star winner in the LawFuel Legal Aid ‘Power List’, Sonja Cooper ($108,184.80); Tamaki Legal ($127,903.20); Thomas Dewar ($222,117.60); Gowing & Co ($77,325.60).
The High Trust Scheme
None of this is to say the monies paid are paid incorrectly or under some wrong pretense, rather that so many law firms have been so quick to rely upon it in a manner suggesting a financial fragility that surely eludes many who have gone through some of the best times in the Country’s history with resounding partner returns.
As Bell Gully, one of the Big Law recipients, wrote in one of their recent COVID firm updates, “the scheme continues to be described as a “high trust” model, and employers need to be careful to ensure that they can satisfy all of the criteria.”
Ever ready to provide their Covid updates on subsidies, employment and related legal issues, it is very apparent that lawyers are also equally fast in recognising a sense of perceived entitlement for their own operations, too.
Recently on LawFuel
- Australia’s Most Female-Friendly Law FirmMoray & Agnew the most female-friendly law firm in Australia according to a report in the […]
- How The Disintegrating Law Firm Hired By Rudy Giuliani Has Spawned Its YoungDan Garner – Breaking up, as law firm Pierce Bainbridge Beck Price & […]
- Less Money For NQ Lawyers in London . . But There Is A Silver LiningSad but true. Newly qualified lawyers in the UK are up for more […]
- Boies Law Firm Upheaval Continues With 4 Partner Defection to King & SpaldingThe turmoil at Boies Schiller Flexner has continued with four litigators leaving for […]
- The Delicate but Essential Business of Legal PR: Six Things CEOs Need to KnowKate Alexander* In the course of nearly 30 years of crisis work and […]
- Pandemic Hits NZ Law Firms as Major Firms Shed StaffThe COVID crisis has bitten law firms hard in some areas with two […]
- Law Firm Ordered To Pay Half Million Dollars & Costs In Negligence ClaimBlenheim law firm Gascoigne Wicks has been ordered to pay half a million […]