Corrs Chambers Partner Attrition Continues

Ben Thomson, LawFuel Big Law editor

The ongoing departures from Corrs Chambers Westgarth has highlighted the issue of inter-firm movement (ie lateral hires) that has become more aggressive in recent years in major jurisdictions, including Australia. And the response from law firms has been to alter remuneration levels for incoming partners, best exemplified by firms like Paul Weiss in their London expansion and the massive payday deal offered to Neel Sachdev.

The departures from Corrs have accelerated following the controversial extension of CEO Gavin MacLaren’s contract, one of Australia’s highest-paid lawyers, who has put a positive spin on the Corrs exiting partners, saying it is an opportunity for lawyers to fine more suitable placements and creating an overall buoyant scene for the law profession.

1. Alexandra Peace, a well regarded property expert, has become the tenth partner to leave the firm since MacLaren’s contract extension, the Australian Financial Review reports.
3. This departure is particularly noteworthy given Peace’s expertise in property capital transactions and her work with high-profile clients such as Charter Hall and Goldman Sachs.
5. Earlier this year, the Corrs board initiated a partner vote to extend MacLaren’s contract to 2033, five years before its scheduled expiration. The approved extension ties MacLaren’s compensation (exceeding $7.5 million last year) to the firm’s highest earner for the next decade.
7. The firm had cited improving gender equality as one rationale for MacLaren’s contract extension. However, this claim has been undermined by the departure of Felicity Healy, the gender equality partner, who made pointed remarks about the firm’s culture upon leaving.
9. The departures have affected key practice areas, including workplace and employment law, where several partners who opposed the contract extension have left en masse.
11. MacLaren has adopted an aggressive lateral hiring approach, offering premium compensation to new partners recruited from other firms, common among many large overseas firms like the Paul Weiss moves in London and New York and Cleary Gottlieb in the United States. The ‘partner poaching’ moves by major firms continue to increase also.
13. Last year, Corrs partners approved a proposal to extend restraints on departing colleagues. The new provisions increase the notice period and gardening leave for equity partners to up to six months, including those leaving in groups.
15. Despite MacLaren’s views on the departures, his perspective has been met with skepticism within the legal community.

What the Corrs Departures Mean

The ongoing partner attrition at Corrs Chambers Westgarth raises several important questions for law firm management and governance, including the question of how long-term leadership contracts impact firm stability and partner retention?

2. There are other questions, too, such as the implications of aggressive lateral hiring strategies on firm culture and integration and the effectiveness of non-compete agreements in retaining top legal talent.
4. There is also an issue as to the role of gender equality and diversity play in modern law firm management, and how firms can effectively address these issues?

The situation at Corrs Chambers Westgarth serves as a case study for law firms grappling with several of these complex issues in an increasingly competitive market for legal talent.