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Big Six (law firms)

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The Big Six is a term that has traditionally referred to the six largest Australian law firms, as assessed by revenue and lawyer head count.[1][2] From the mid-1980s, the phrase was in regular use to distinguish the largest Australian firms, collectively, from their smaller competitors.[3] While informal, it was a widely-used descriptor, appearing in news items, industry commentary and scholarly articles.[4]

In 2012, four of the Big Six firms merged or formed association relationships with firms from other countries.[5] As the Australian legal scene has evolved since these changes, the term Big Six has become less applicable, although it is still in use in some media discussion.[6] Other terms, such as "top-tier law firm" are sometimes used in media coverage when the largest law firms in Australia, commonly a set of eight such firms,[a] are mentioned. Other labels used to refer to the largest, or most lucrative, law firms operating in Australia have been suggested, such as "global elite law firms" or "international business law firms".[7][8] The term "Big 8" has also made an appearance in business news coverage.[9]

History

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Until 1981, legal practices in Australia were restricted to operation within one state; they relied on affiliation between interstate practices to attend to legal matters outside their own state. Following implementation of the Commonwealth Companies Act 1981 and its nationally-adopted "cooperative" ownership regulations, Australian law firms were permitted to operate nationwide. In the transition from regional law firms to fully-integrated, national partnership practices, mergers of large state-based firms, reduced the number of very large law practices in Australia to six, while significantly increasing the size of the largest Australian firms. It was in this context that the term came into general usage.[3][10]

The six firms

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The following firms were generally seen as composing the Big Six (listed alphabetically):[11]

In 2012, three of these firms merged with, and one other began operating in association with, firms from other countries: United Kingdom firms in three cases, China in one.[5]

Following these major changes in the Australian legal scene, the Big Six term is sometimes viewed as less applicable;[citation needed] top-tier law firms is one descriptor used in its place[citation needed] on occasion, for the largest, most profitable, law firms in Australia.[7][failed verification][8][failed verification]

Historical size and rankings

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The majority of the six firms were among the 100 largest law firms globally. In terms of revenue these were:

Firm 2010 rank[12] 2011 rank[13] 2012 rank[14]
MinterEllison 83 67 82
Mallesons Stephen Jaques 87 75 70
Allens Arthur Robinson 90 73 72
Freehills 91 70 58
Clayton Utz 97 83 77

Several of these predecessor firms have also been leading firms in the Asia-Pacific region generally. In 2007, Allens Arthur Robinson, Clayton Utz, Freehills, and Mallesons Stephen Jaques were the top five firms in the Asia Pacific region in mergers and acquisitions transactions, ranking above Magic Circle firm Linklaters.[15]

The Business Review Weekly (BRW) listed these firms in its "Top 500 Private Companies" tables based on gross income:[16] In the 2011−2012 Australian financial year, the law firms with the highest revenue were as follows:[17]

Rank Firm Revenue
1 Freehills $565,000,000
2 Clayton Utz $455,400,000
3 Allens $440,000,000
4 King & Wood Mallesons $424,000,000
5 MinterEllison $419,203,000
6 Ashurst Australia $398,000,000

Until its closure, BRW awarded its Client Choice Awards in the "Best law firm, revenue over $200 million" category to a law firm judged to deliver the best client service. In 2012 that firm was King & Wood Mallesons.[18]

The Australian Financial Review took over as the media partner for the Client Choice Awards after it acquired BRW.[19]

In 2013 the finalists for the award were (listed alphabetically):[20]

  • Ashurst Australia
  • Herbert Smith Freehills
  • King & Wood Mallesons
  • Norton Rose

Continued globalisation

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From 1 March 2012, Blake Dawson traded as Ashurst Australia[21] until a full financial merger with Ashurst LLP on 1 November 2013; the full merger took place six months ahead of schedule.[22]

Mallesons Stephen Jaques operates as King & Wood Mallesons, after a merger and reorganisation with Chinese firm King & Wood, which has resulted in a Swiss association-structured association among what was the Australian and UK practice of Mallesons Stephen Jaques, a fully merged, combined Hong Kong practice, and a fully merged, combined mainland China practice consisting mainly of the existing King & Wood practice.[23] In 2013, King & Wood Mallesons further merged with London-headquartered Silver Circle law firm SJ Berwin,[24] although that practice ceased operations in 2017.[25][26][27]

Allens Arthur Robinson changed its name to Allens on 1 May 2012, and began to operate in association with the Magic Circle firm Linklaters. The association arrangements will see the firms operate with joint ventures in some parts of Asia, Allens practices merging into Linklaters practices in other parts, and the two firms operating jointly on certain matters.[28][29]

Freehills merged with London-headquartered Silver Circle law firm Herbert Smith, effective from 1 October 2012. The full financial merger created a single, global firm called Herbert Smith Freehills.[30][31]

Comparable terms in United Kingdom

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The Magic Circle is an informal term for UK-headquartered law firms with the largest revenues, the most international work and which consistently outperform the rest of the UK market on profitability. The Silver Circle is an informal term for perceived elite corporate law firms headquartered in the United Kingdom that are the main competitors for the magic circle.

The London-headquartered Magic Circle firms with operations in Australia, Clifford Chance and Allen & Overy, are not considered to be part of the same group as the Australian top tier law firms.

Following the mergers and association arrangements announced in 2012 and 2013, Freehills and Blake Dawson have become parts of UK-headquartered Silver Circle firms, while Allens is now in an association arrangement with a Magic Circle law firm.

See also

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Notes

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  1. ^ The law firms frequently designated as "top tier", or by similar terms such as the Big 8, are:[7][failed verification][32][33][34][35]

References

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  1. ^ See sources:
    • Harvard Law School (2011). "The Australian Legal Profession" (PDF).
    • Michaela McNamara (29 July 2010). "The Big Six: Australia's Top Commercial Law Firms". Business Review Australia. Archived from the original on 23 July 2012.
    • Kenneth Nguyen (22 May 2007). "Stags in Slater & Gordon share some class action - a 40% win". The Sydney Morning Herald. p. 21. Though Slater & Gordon is a well-known law firm, its market capitalisation of $151 million would be dwarfed if any of Australia's "big six" law firms - Allens Arthur Robinson, Blake Dawson Waldron, Clayton Utz, Freehills, Mallesons Stephen Jaques and Minter Ellison - decided to float.
  2. ^ Michael Kirby (7 March 2002). Law Firms and Justice in Australia. Australian Law Awards. Westin Hotel, Sydney: High Court of Australia. Remarks by The Hon Justice Michael Kirby, AC CMG, at the 2002 Australian Law Awards function. Retrieved 13 August 2011. Now they are said to be intensifying a push into the Asia-Pacific region to boost their revenue base. This move offshore is not explained as bringing high standards, new techniques and justice to other countries. It is explained on the basis that "the top six are punching each other up". Apparently you have to move offshore if you are going to increase market share. Today the major law firms in Australia employ thousands of personnel. The top six each have between 500 and 1,000 lawyers working for them.
  3. ^ a b Wakeling, Adam (2015). "Asia: Opportunities and challenges" (PDF). LIV Young Lawyers Journal. Vol. 60, no. 20. Law Institute Victoria. pp. 10–11. [VicYngLawyersJl]. Archived from the original on 16 May 2017.
  4. ^ For examples, see:
  5. ^ a b Margaret Simons (4 August 2002). "Justice Inc". The Sunday Age. p. 1. Today, almost all this has changed. The top 20 law firms in Australia account for 80 per cent of the nation's market for commercial legal services. At the beginning of the new century they earned more than $2.5 billion in fees, which is small beer by international standards. Now the top six, each of which has up to 1,000 lawyers working for them, are moving into the Asia-Pacific region in a quest for market share.
  6. ^ For examples of use of Big Six, post 2012, see:
  7. ^ a b c Wootton, Hannah; Pelly, Michael (5 December 2019). "Worker bees keep top-tier law firms ticking over". Australian Financial Review. Archived from the original on 4 August 2022.
  8. ^ a b Dobrjanski, Jarek (31 October 2012). "An obituary for the term 'Big 6' law firms in Australia". Beaton Research + Consulting. Archived from the original on 7 November 2012. Retrieved 14 November 2012. As the Australian legal industry reaches its globalisation tipping point, the term 'Big 6' is longer an accurate way of categorising these major players in a landscape being shaped by the forces of globalisation. Increasingly, these firms will be better classified as part of the 'global elite' or the 'international business law firm' groupings.
  9. ^ Pelly, Michael (30 June 2022). "Hiring spree at Big 8 of the legal industry". Australian Financial Review. Archived from the original on 17 July 2022. Retrieved 17 July 2022. The Big 8 are MinterEllison (1113), Allens (1007), HWL Ebsworth (975), Clayton Utz (923), King & Wood Mallesons (892), Herbert Smith Freehills (873), Corrs Chambers Westgarth (749) and Ashurst (738).
  10. ^ Aronson, Bruce E. (May 2007). "Elite Law Firm Mergers and Reputational Competition". Vanderbilt Journal of Transnational Law. 40 (3): 763–832. Article 5. Archived from the original on 20 June 2023.
  11. ^ Cummins, Carolyn (9 July 2010). "Law firms compete for CBD space". The Sydney Morning Herald. p. 18. Archived from the original on 8 March 2023. 'The Australian market appears mature and advanced enough to warrant outside players to the existing big six law firms of Allens, Blakes, Clayton Utz, Freehills, Mallesons and Minters,' Mr Berriman said.
  12. ^ "The Global 100 2010: The World's Highest Grossing Law Firms". The American Lawyer. Retrieved 6 September 2011.
  13. ^ "The Global 100 2011: The World's Highest Grossing Law Firms". The American Lawyer. Retrieved 15 March 2012.
  14. ^ "The Global 100 2012: The World's Highest Grossing Law Firms". The American Lawyer. Retrieved 1 October 2012.
  15. ^ "Freehills has firm grip on top spot in league tables". Lawyers Weekly Online. 16 October 2007. Archived from the original on 25 March 2008. Retrieved 15 May 2008.
  16. ^ "Codes and definitions", "Private sector shows resilience", "Top 500 private companies" Business Review Weekly, 25 August 2011 [special issue], p. 50.
  17. ^ "Australia's Top Law Firms Revealed". Business Review Weekly. 1 August 2012.
  18. ^ Kate Mills (1 March 2012). "BRW-Beaton Client Choice Awards: And the winners are..." Business Review Weekly. Archived from the original on 20 March 2012. Retrieved 3 July 2013.
  19. ^ Tadros, Edmund (8 March 2017). "Client Choice Awards 2017". Australian Financial Review. Archived from the original on 29 February 2020. Retrieved 16 July 2019.
  20. ^ "BRW Client Choice Awards Finalists 2013" (PDF). Australian Financial Review. 30 January 2013. Retrieved 3 July 2013.
  21. ^ "Blake Dawson Services Pty Ltd" (entry in database) in Company360 Archived 30 March 2012 at the Wayback Machine, Dun & Bradstreet (Australia) Pty Ltd., accessed 2 March 2012; "Ashurst (formerly Blake Dawson Services) is a collaboration between former Australian commercial law firm Blake Dawson, and global firm Ashurst. Effective 1 March 2012, Blake Dawson will re-brand as Ashurst; a full financial merger is planned for 2014."
  22. ^ Ashurst (26 September 2013). "Ashurst's partners vote for full financial integration" (Press release). Ashurst today announces that the full financial integration of Ashurst LLP and Ashurst Australia has been overwhelmingly approved by both partnerships and will take effect on 1 November 2013.
  23. ^ Chris Merritt, "Big three not worried by new arrivals", The Australian, 24 February 2012, p. 33:

    "THREE big national law firms have shrugged off the arrival of giant international competitors and have entrenched their position as the unchallenged home of the nation's elite lawyers. The lead of the big three over their international rivals has been identified by Chambers and Partners in the latest edition of its authoritative guide to the profession, Chambers Asia-Pacific. The guide shows that those practice groups that operate at an elite, or 'band one', level are concentrated in three firms: Freehills, Allens Arthur Robinson and Mallesons Stephen Jaques." [...]

    "From next week, Mallesons will enter a Swiss-style verein with China's King & Wood and become King & Wood Mallesons; Freehills is in the first stages of talks about a link with global giant Herbert Smith; and fourth-ranked Blake Dawson will next week adopt the name of its international alliance partner, Ashurst."
  24. ^ Mallesons (31 July 2013). "King & Wood Mallesons and SJ Berwin Combine to Create First Global Law Firm Headquartered in Asia" (Press release). Archived from the original on 28 March 2014. Retrieved 27 March 2014.
  25. ^ Coade, Melissa (27 December 2016). "King & Wood Mallesons Europe arm severed". Lawyers Weekly. Retrieved 11 January 2017.
  26. ^ "KWM - King & Wood Mallesons' plans for UK, Europe and the Middle East". King & Wood Mallesons.
  27. ^ "KWM - Deutschland". King & Wood Mallesons-Europe.com.
  28. ^ Allens Arthur Robinson. "Allens and Linklaters form integrated alliance".
  29. ^ Seah, Jessica (23 April 2012). "Linklaters, Allens Arthur Seal U.K.-Aussie Alliance". The American Lawyer.
  30. ^ Suzi Ring (28 June 2012). "Herbert Smith Freehills to go live as partners vote through merger". Legal Week. Retrieved 28 June 2012.
  31. ^ Wong, Douglas (28 June 2012). "Herbert Smith to Merge With Freehills, Open in New York". Bloomberg. Retrieved 28 June 2012.
  32. ^ Sources:
  33. ^ "The perfect storm inside top law firms". Australian Financial Review. 23 January 2020. Archived from the original on 31 December 2022. Retrieved 18 April 2021. An abundant reserve of replacement labour meant high turnover at the junior levels was a sustainable practice for many top-tier firms.
  34. ^ "big 8 firms Archives". TR - Legal Insight Australia. Retrieved 18 April 2021.
  35. ^ Pelly, Michael (8 April 2021). "Minters: When a $1.4m salary isn't enough". Australian Financial Review. Archived from the original on 29 November 2022. Retrieved 16 July 2021. The firm has long regarded itself as part of the top tier..." ... "It also feeds into the market perception that Minters is masquerading as a top-tier firm, aside from some pockets of excellence.
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