The West Australian legal market remains of interest to east coast and international law firms, despite a slowdown in the energy and resources sector. “We continue to get inquiries from Eastern firms that want a presence in Perth. There are also three or four American firms who are interested in having a Perth office and continue to look,” said Lavan Legal’s Greg Gaunt.
Similarly, Allion Legal principal Philip Lucas said that there had been four domestic firms knocking on his firm’s door in the past six months. “One of them we met with, because we have a relationship with them, but the other three we said ‘we appreciate the interest but we are not interested’,” he said. “They [east coast firms] need to find growth, and where else are they going to find growth other than in new markets or through picking up individual teams from other law firms?”
One of the key reasons Allion is not interested in talking to east coast firms is that they are instead looking to establish themselves in the east. “We want to expand our business and we are looking at opportunities in Sydney,” Lucas told ALB. “We are going to do that, and we are on track to do that.”
In the past 18 months a number of new firms have entered the Perth legal market including Gilbert + Tobin, Squire Sanders and HopgoodGanim. “We are still seeing new names pop up in our market and I don’t believe that this influx has come to an end,” said John McLean, chief executive officer at Jackson McDonald. “Clearly this adds to the competitive pressures around people, pricing and clients.”
However, since the arrival of those firms, projects have been delayed or put on hold, the price of minerals has dropped and overall there has been a decline in business confidence across the market. “I think there has been a shaking of the WA market,” said Lucas. “I think some people got into the WA legal market, because the market was doing so well, and I think now it has been shaken up by the changes in the economy.”
Gaunt is also of the view that the drop in iron ore prices has had a dampening effect generally. “It’s hard to be confident with the general lack of confidence in the business community more generally,’ he said.
McLean has also seen an increased level of concern and uncertainty. “These concerns are shaped by our resources sector, which has issued warnings about cost pressures on major projects and about the impact of softening commodity prices,” he said. “These concerns have rippled through to legal service providers and I’m sure we are all monitoring the market very closely.”
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