Net Lawyers too Busy to Laugh

SAN FRANCISCO (03/23/2000) - Legal rib-ticklers (Why don't sharks attack lawyers? Professional courtesy.) are trotted out on site after site set up solely to take the mickey out of lawyers.

But lawyers are enjoying the last laugh. Paid to grease the IPOs, acquisitions and mergers, joint ventures, startups, content licensing deals, ad contracts and web development agreements that spin the wheels of ecommerce, they are chortling all the way to the bank. Predictions that total web transactions will hit one trillion dollars by 2004 only make their smiles wider. Transactions, after all, involve contracts, and contracts involve legal fees.

In Australia, some major law firms seized on the rich pickings promised by the information economy earlier or with more vigour than others. It has led relatively small firms to achieve a prominence in the ebusiness legal space out of proportion to their size. Conversely, some establishment players who qualify as 800-pound gorillas in the traditional full service legal market are having ecommerce sand kicked in their face like they were 50-pound weaklings.

Looking at the ratio of internet commerce specialists to total legal practitioners in each firm is one way to tell who's on top from who's not.

Another is to ask a sampling of ecommerce lawyers for their own perception of the pecking order. When you combine both approaches, a list emerges that is led by two firms: Mallesons Stephens Jaques, and Gilbert and Tobin.

Mallesons, a huge full service group, deploys 90 lawyers in its ecommerce group and another 25 who specialise in electronic banking. It does massive amounts of work for Telstra Corp., plays across the broad spectrum of ecommerce work and boasts that it employs more experts across more fields than any other law firm in the country.

Gilbert and Tobin employs 150 lawyers, making it a niche firm compared with Malleson. But its primary focus is in the technology area and 35 of its lawyers work in its telecommunications, media and information technology group.

Behind the two leaders is a second tier of companies which, arranged roughly in descending order, include Minter Ellison, Baker & McKenzie, Blake Dawson and Waldrons, Freehills Hollingdale and Page, and Phillips Fox.

A third tier holds companies like Clayton Utz and Allen Allen & Hemsley which are mentioned less frequently by their peer group but boast individual stars or are making efforts to recover lost ground.

Until recently, law firms in pursuit of maximum returns provided corporate clients with services that stretched across all major areas of law. The older firms prospered from a full service approach to clients in areas like insurance, commercial law, banking and finance. The strategy of focusing on traditional areas made them slower than younger firms to develop strong specialty teams in emerging areas like the digital economy.

But pacesetters such as Gilbert and Tobin partner Simon Pollard acknowledge many of the traditional firms are now catching up by forming teams which have deep knowledge of digital economy issues. "We are entering an era where the market is maturing and firms will either have to be the biggest or the best to survive," Pollard predicts. "Middle ranking firms that either don't have the scale or the deep specialisation will be crushed. They will lose either clients or staff and the one leads inexorably to the other."

The internet commerce groups of the major legal firms now primarily focus on startup dot-com initiatives and existing corporate clients who are making ecommerce moves. There is a growing trend for them to offer advisory services outside their core legal functions, including advice on business strategies and opportunities in evolving areas. These value-added services can either be offered by in-house staff or in association with other professional groups.

Blake Dawson and Waldrons' newly minted alliance with banker Rothschild Australia and management consultants Booz Allen and Hamilton is an example of the trend.

The following is an outline of the most active players in net law:

Mallesons Stephen Jaques

Total lawyers: 928

Ecommerce practice: 90 (headed by Philip Argy)Clients include Telstra, Microsoft Network Works in all areas Gilbert and TobinTotal: 150Ecommerce: 35 (head is Simon Pollard)Clients: C&W Otpus, UunetBroad focus on technology-related business Minter EllisonTotal: 765Ecommerce: 40 (head is Louise Herron)Clients: Fairfax, OptusPrides itself on joint venture skillsBaker & McKenzieTotal: 200Ecommerce: 30 (leading partner is Patrick Fair)A global law firm whose Australian presence is concentrated mainly in Sydney and MelbourneBlake Dawson and WaldronTotal: 750Ecommerce: 30 (headed by Elizabeth Broderick)Clients: dot-com companies and corporates launching dot-com subsidiariesNow recasting itself to deliver its own services onlineFreehill Hollingdale and PageTotal: 700Ecommerce: 40Clients: CBA, AustarFocuses on content and joint venture areasPhillips FoxTotal: 600 Ecommerce: 30 (head Andrew Chalet)Clients: Internet Society of Australia, strength in content licensing dealsAllen Allen & HemsleyTotal: 230Ecommerce: 20-plus (head Ian McGill)Clients: Foxtel, News CorpSpeciality is convergent media work

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More about Baker and McKenzieBaker and McKenzieClayton UtzCommonwealth Bank of AustraliaFoxtelFreehillsGilbert and TobinMallesons Stephen JaquesMicrosoftMinter EllisonMinter EllisonPhillips FoxPhillips FoxStrategy&Telstra Corporation

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