This perspective is in contrast to other firms such as Kelly & Co, who report extremely buoyant conditions across all practice areas – in fact CEO Stuart Price told ALB that his firm had recently experienced the strongest month ever in its 94 year history. In markets such as Sydney one might assume that this difference in outlook is due to the different client bases – one might expect, for example, a firm such as Minters to have a very different revenue story from an SME firm such as Macpherson + Kelley. But in Adelaide, there is less premium work available and all firms to an extent are converging upon the same SME client base – a market which, in McBride’s view, is still not out of the woods.
“The SME space is doing it tough,” he says. “Even good private businesses aren’t borrowing. They’re hanging onto cash and adopting a “wait and see” attitude. Retailing is down, people are saving more so the retail and manufacturing sectors are hard hit. Commercial property remains depressed and you’ve got these good businesses who are taking a more conservative cash-oriented view.”
But whatever the economic conditions, firms can still navigate their way into smoother conditions through good management. One Adelaide firm which is an interesting case study for lawyers around Australia is Fox Tucker Lawyers, the firm which was created when a group of ex-DLA Phillips Fox lawyers joined forces with local firm Rankine Tucker last year. Fox Tucker is an example of the advantages of operating as an independent outfit – since the merger, the firm has boosted revenues by 15% and improved profitability from 24% (on the Phillips Fox side of the equation) in 2008 to 39% this year. Thus is the benefit of removing the burden of paying national overheads.“We took out a whole lot of overhead we weren’t using and it went straight to the bottom line. Profit margin went up substantially,” observes managing partner Joseph DeRuvo.
Adelaide private practice lawyers are feeling aggrieved about government work – or to be more precise, they are aggrieved about the absence of government briefs in their workflow. There is a perception that the South Australian government performs an unusually high percentage, by national standards, of legal work in-house. “It’s very hard to get legal work out of government,” says Nigel McBride. “There’s no real opportunity to get core government work as you would in other states. There is a very large Crown Solicitor’s office here, maybe even bigger than us. That’s a major competitor doing government work – if you imagine the same thing in the other markets such as Victoria, you’d take millions and millions of legal spend out of the private sector.”
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