Stepping off the carousel

As firms indulge in a merger frenzy, the path of the independent firm can be a lonely one. Now that the dust from the most recent merger – that between Freehills (led by Gavin Bell) and Herbert Smith – there are now four major independent firms left standing: Clayton Utz, Gilbert + Tobin, Corrs Chambers Westgarth and Minter Ellison.

One of the first perceptions these firms have to fight is that they are truly independent, rather than wallflowers who have yet to find a partner. The latter would be perceived as a weakness and the firm’s partners bombarded by lateral offers.

Danny Gilbert, the forthright managing partner and founder of Gilbert + Tobin, expounds that the firm is pursing an independent strategy. “We have worked hard to build this firm,” he says. “We’ve come from nowhere to be a significant player at the top end of the market.” However, he does concede that much of his independent strategy is driven by the reality that “the right partner is incredibly scarce commodity”. That’s the other risk of remaining independent – that if a merger becomes inevitable, the best partners may already have been taken.

At Minter Ellison, chief executive partner John Weber is pursing a strategy of an independent network of offices across Australia and Asia.

The firm is not actively looking for a merger, instead “the next logical step for us is to have a foreign law office in Singapore to service the south-east Asian market”. But at the same time, he admits to having been in discussions with lots of firms. “Do we discount [merging] absolutely? No, but we’d only pursue that type of opportunity if it would serve the partners and the clients of the firm.”

The real issue is how many top-level independent firms a small jurisdiction such as Australia can sustain. In the UK, there’s only one top level independent firm, Slaughter & May.

In the US, the depth of Wall Street supports a larger number of independent firms, such as Wachtell, Lipton, Rosen & Katz, but even so it’s a limited number.

BRW’s estimate is that from the four, only two will be independent this time next year. Which two remains to be seen.

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