Would Your Clients Follow You To A New Firm?

November 13, 2022 Sue-Ella Prodonovich

If you left your firm would your clients follow you to a new one?* If you don’t know then your probably don’t know your clients well enough.

Back in 2016, I wrote about what general counsel looked like based on The Legal 500 General Counsel Powerlist for Australia and New Zealand, and it turned out to be one of my best-rating articles ever. The story was intended for law firms but if clicks are anything to go by, it seems a lot of us are pretty interested in knowing what buyers of professional services look like.

Six years later, I thought it was worth revisiting the latest Powerlist to see what’s changed and what’s stayed the same.

With that in mind, this is what I noticed based on my own LinkedIn research. Just be aware that this year the Powerlist list focuses only on Australia and doesn’t include NZ.

1. SYDNEY HAS BECOME A BIGGER CENTRE OF POWER

When it comes to demographics, the last decade may all have been about the growing importance of Melbourne. But when it comes to General Counsel, there’s little doubt Sydney rules the roost. No fewer than 60% of all powerlisters are based in the Harbour City - up from 42% in 2016. Melbourne trails well behind at 21%, and it’s followed by Brisbane (11%), Adelaide (4%) and Perth (4%).

Last time around 20% of powerlisters were Kiwis (as I said they’re not on it this time around). But even allowing for that, Perth’s position on the list has slipped (11% of Powerlisters came from Perth last time) while Brisbane’s has become a much bigger centre of influence.

2. REAL ESTATE AND INFRASTRUCTURE OVERTAKE MINING AND MANUFACTURING

One reason for Perth’s decline is that the relative importance of mining companies has also fallen. Last time around, it was finance that provided the most powerlisters (24%), followed by mining (12%) and manufacturing (12%). This time around, finance strill rules the roost (20% - hello Sydney), with real estate and transport & infrastructure tying for second at 11%.

3. The number of powerful female GCs has grown (slightly)

A positive trend back in 2016 was that 44% of the most powerful GCs were female compared with just over 20% of the most senior lawyers in private practice. This time around, as many as 46% of powerlisters are female, so the number has grown further still. That means there’s a roughly 50% chance your client will be a woman. (what did I say about the old school-style of rainmaker dying again?).

4. Big firms provide lawyers to the big corporates

Perhaps it shouldn’t come as any surprise that the big firms also tend to provide the big corporate GCs. Of the 99 whose career history is listed publicly on LinkedIn, I calculated that 71% had experience at King & Wood Mallesons, Herbert Smith Freehills, Allens, Clayton Utz or Minter Ellison.

5. Senior Associate (or even earlier) is the time to go

It seems that there’s often no point waiting to be made partner before then taking the leap to in-house. Thirty-eight of the list left private practice for corporate life while they were Senior Associates. Another 27 left private practice for in-house teams when they were even more junior. Only 15 moved across from a partnership position (and just one as managing partner.)

6. They’re a lot more loyal than you might think

As many as 37 of the powerlisters have been with their current company for more than a decade. That’s pretty impressive when you consider the average length of time an Australian holds a job is now just 3.3 years.

What’s more, 33 of the GCs on the list had never worked anywhere since leaving private practice other than for their current employer. Of these, ex-HSF (5) and KWM (4) lawyers were the least likely to move on.

7. Twelve years is a charm

To make the list, it seems you want a bit of in-house time behind you. 2010 was the most popular year for powerlisters to leave private practice (12%), followed by 2008 (9%). One-third had been out of private practice for more than 15 years.

WHY CLIENTS WON’T FOLLOW YOU (AND HOW TO CHANGE THAT)

* For the record, here’s what GC’s have told me about following partners to a new firm:

They’re wary of individual partner moves because they wonder why no one else went with you (i.e. is the problem with you and not with your old firm?)
They’re most likely to engage you if you move to a firm they already use. If you don’t, they’ll adopt a ‘wait and see’ approach.
They want to know the real, unvarnished reason you left (And, trust me, they’ll find out.) Was it the culture of the new firm, critical mass, support, infrastructure or just good old-fashioned coin?
They want to know what authority you have on pricing and resources beyond any initial ‘honeymoon’ period when you match the fees of your old firm. This is especially true if you go from a local firm to a global one.
They will use tools like the Kraljic Matrix to assess how important your smarts are to their business’s competitive advantage. This will go some way to determining how soon they’ll engage you, and whether they engage you at all.

And, if you’d like more about how to get clients to follow you to a new firm, read this (it’s my most viewed article, ever).

That’s my snapshot of the 2022 Powerlist, but you can read it for yourself right here or get in touch.

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