The 14 Clayton Utz partners that left the firm to join Allen & Overy’s Australian venture are expected to receive a significant boost to their annual salary as a result. A Sydney barrister estimated that their annual salaries would increase by A$750,000 to almost A$2m. However, other sources indicated that the monetary incentive was in fact much lower than that and that the new Allen & Overy partners had signed an agreement that boosted their base pay by just 10%, fixed for three years.
Whatever the actual figures turn out to be, the partners will have to wait until 8 May, the date their resignations take effect, to start receiving their new salary. This will hamper Allen & Overy’s strategy, which was to launch its offices in Sydney and Perth on 1 March. In fact, Meredith Campion, Geoff Simpson and Peter Wilkes – who will staff the Perth office – will still be working for Clutz when Allen & Overy officially opens its doors.
Over the next three months, as the partners work their notice period, Clutz is expected to lobby clients to remain with the firm after the defection. It is unclear exactly how much work Clayton Utz will lose as a result of the mass defection but managing partner David Fagan has said he hopes to retain a “significant part” of that work. It will be interesting to see what role hourly rates play in the process.
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