Cameron Miranda
Australia's legal industry is dominated by a group of firms known as the Big Six, which represent the largest and most influential players in the sector. The term has been in use since the mid-1980s to distinguish the biggest Australian firms from their smaller competitors. The Big Six law firms have established themselves through their extensive expertise, global reach, and ability to handle complex legal matters for clients across various sectors. While the composition of the Big Six may vary depending on factors such as revenue and market share, the following firms are often included in this category: Clayton Utz, Herbert Smith Freehills, Ashurst Australia, King & Wood Mallesons, MinterEllison, and Allens.
| Characteristics | Values |
|---|---|
| Number of law firms in the Big Six | Six |
| Number of solicitors in Australia | 90,329 |
| Percentage increase in solicitors since 2011 | 57% |
| Growth of the government legal sector since 2011 | 108% |
| Growth of the corporate legal sector since 2011 | 104% |
| Growth of private practice since 2011 | 40% |
| Number of partners in Clayton Utz | 200 |
| Number of offices Clayton Utz has in Australia | 6 |
| Number of offices Ashurst Australia has globally | 24 |
| Number of partners in Ashurst Australia | 400 |
| Number of lawyers in Ashurst Australia | 1,700 |
| Number of offices MinterEllison has in Australia | 6 |
| Number of offices MinterEllison has globally | 8 |
| Number of offices King & Wood Mallesons has globally | 30 |
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What You'll Learn
The 'Big Six'
The Big Six is a term traditionally used to refer to the six largest Australian law firms, based on revenue and lawyer headcount. The phrase was commonly used from the mid-1980s to distinguish the largest Australian firms from their smaller competitors. However, following mergers and association arrangements in 2012 and 2013, the term has become less applicable, with other terms like "top-tier law firms" being used instead.
Clayton Utz
Clayton Utz is one of the oldest law firms in Australia, with around 200 partners across six offices in the country. The firm ranks highly in capital markets, including debt, equity, structured finance, and securitisation.
Herbert Smith Freehills (HSF)
HSF is a prominent law firm that was formed through the merger of Melbourne-founded Freehills and UK-based Herbert Smith in 2012. The firm excels in various practice areas, including banking, capital markets, project development, and mergers and acquisitions (M&A). HSF has received multiple accolades, including being named an Employer of Choice for Australia by Australasian Lawyer in 2019.
Ashurst Australia
Ashurst Australia is the Australian branch of Ashurst LLP, an international law firm headquartered in London. Previously known as Blake Dawson, Ashurst Australia has a strong presence in capital markets, project development in the transportation sector, and restructuring and insolvency. The firm has won awards for its work, including the Australasian Law Award for Infrastructure & Projects Deal of the Year.
Mallesons Stephen Jaques/King & Wood Mallesons (KWM)
Mallesons Stephen Jaques, now operating as KWM, is a leading law firm that merged with Chinese firm King & Wood in 2012, expanding its global reach. KWM has offices in Sydney, Melbourne, Brisbane, Perth, Canberra, and 28 other locations worldwide. The firm is highly proficient in corporate law, finance and banking, mergers and acquisitions, and dispute resolution. KWM has received several honours, including the Chambers Asia-Pacific "Law Firm of the Year" title in Australia.
Allens/Allens Arthur Robinson
Allens, previously known as Allens Arthur Robinson, has been providing legal services in Australia for over 180 years and has a strong presence in Asia. The firm offers a comprehensive legal network and works with clients on domestic and international matters. Allens has recently forged an alliance with Linklaters LLP, a London-based firm, to further enhance its global presence.
MinterEllison
MinterEllison is one of the oldest and largest full-service law firms in the Asia-Pacific region. With offices across Australia and overseas operations in Asia and the UK, the firm provides a broad range of legal services, including real estate, banking and finance, corporate law, mergers and acquisitions, and dispute resolution. MinterEllison has won multiple awards, including the Financial Times Asia-Pacific Innovative Lawyers Awards' "Most Innovative Law Firm" title.
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Mergers and acquisitions
In 2012, four of the Big Six firms underwent significant changes, merging or forming associations with foreign firms. This included Freehills, which merged with the UK-based Herbert Smith to become Herbert Smith Freehills (HSF), and Blake Dawson, which was acquired by Ashurst LLP, becoming Ashurst Australia. Mallesons Stephen Jaques also underwent a merger and reorganisation with Chinese firm King & Wood, resulting in a complex multi-jurisdictional structure. These developments led to a shift in the traditional understanding of the "Big Six", with terms like "top-tier law firms" being used more frequently to describe the largest and most profitable firms in Australia.
Despite these changes, the Australian legal market continues to thrive, with law firms expanding in terms of revenue, expertise, and other factors. The legal profession in Australia has seen significant growth across all practice sectors since 2011, with the number of solicitors increasing by 57% during this period.
M&A transactions are a key aspect of the legal services provided by many Australian law firms. For example, Herbert Smith Freehills, a member of the Big Six, excels in mergers and acquisitions, providing advisory services in this area. Other firms, such as HopgoodGanim Lawyers, have partners with expertise in M&A, capital raisings, due diligence, takeovers, and joint ventures.
Gilbert + Tobin is another law firm with a dedicated M&A practice, assisting public and private companies in various aspects of M&A, including takeover bids, merger schemes, and cross-border transactions. Their notable deals include the $39 billion acquisition of Afterpay by Square, Inc., the largest M&A deal in Australian history at the time.
Additionally, individual lawyers within firms also play a crucial role in M&A transactions. For instance, Michael, a partner at HopgoodGanim Lawyers, specialises in cross-border transactions, focusing on Asia-based clients investing in Australian corporations. Similarly, Melanie at Thomson Geer has expertise in international law, specialising in cross-border M&A, joint ventures, and corporate finance.
The Australian legal market is dynamic, with firms adapting to the evolving business landscape. The country's top firms have expanded their capabilities and expertise, solidifying their position in the competitive legal arena.
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Revenue and market share
The Australian legal market is dominated by the 'Big Six' law firms, which represent the largest and most influential players in the industry. These firms have established themselves through their extensive expertise, global reach, and ability to handle complex legal matters for clients across various sectors. While the composition of the Big Six may vary, it typically includes Ashurst Australia, Clayton Utz, King & Wood Mallesons (KWM), Herbert Smith Freehills (HSF), and Allens.
These top-tier firms have significant international ties, with many having merged with or formed strategic partnerships with composite firms in Asia and Europe. They have a strong presence in major cities like Sydney, Melbourne, Brisbane, Perth, and Canberra, and their revenue streams are diverse, spanning multiple practice areas.
The Big Six law firms in Australia generate substantial revenue, with figures ranging from $1 billion to $2.6 billion. For instance, Ashurst Australia, one of the branches of the global firm Ashurst LLP, reported gross revenue of $1.087 billion. Similarly, King & Wood Mallesons (KWM), formed after the 2012 merger of King & Wood PRC Lawyers and Mallesons Stephen Jaques, boasts gross revenue of $1.3 billion. Another member of the Big Six, Herbert Smith Freehills (HSF), previously known as Freehills before its merger with Herbert Smith in 2012, records gross revenue of $1.46 billion.
These revenue figures reflect the diverse and extensive legal services offered by these firms. King & Wood Mallesons (KWM) has top-ranking practice areas, including capital markets, mergers and acquisitions (M&A), project development in the energy sector, and project finance. The firm has advised on significant transactions, such as Square Inc.'s acquisition of Afterpay Ltd., valued at $39 billion. Meanwhile, Herbert Smith Freehills (HSF) excels in banking, capital markets, project development, and M&As. The firm has been recognised for its company culture and commitment to gender equality, receiving accolades like the Workplace Gender Equality Agency Employer of Choice for Gender Equality award.
Beyond the Big Six, other law firms in Australia also contribute significantly to the industry's revenue. For example, Dentons Australia advised on the sale of the Australian brand Akubra to Tattarang and Newmont Corporation's acquisition of shares in Newcrest Mining Limited, valued at $26 billion.
The Australian legal industry has demonstrated resilience and strong fundamentals. Despite turbulent business conditions and slowing demand, the 2022 financial year saw record rate growth, pushing revenue growth to 10.0%. The industry has continued to experience strong demand, and market size is projected to grow over the next five years, with firms anticipating new regulations and incorporating sustainability clauses into contracts.
However, it is important to note that the legal market in Australia also faces challenges. There is a relatively high talent turnover, with a significant proportion of associates leaving their firms. Additionally, partners in Australian law firms face the pressure of evolving roles, requiring them to master not only legal expertise but also technological advancements and leadership skills.
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Commercial law
The size of a law firm in Australia can vary, and there is no one-size-fits-all definition as to how big a law firm can be. This is especially true for commercial law firms, which can range from small, specialised boutiques to large, full-service firms with a global presence.
Small commercial law firms may consist of a handful of partners and associates, focusing on a specific niche area of commercial law, such as contract law, employment law, or intellectual property. These boutique firms offer specialised services to a targeted client base, often including small- to medium-sized enterprises (SMEs) and start-ups. The advantage of smaller firms is their ability to provide tailored, personalised services to their clients, fostering close working relationships and offering cost-effective solutions.
On the other hand, large commercial law firms can employ dozens or even hundreds of lawyers and support staff across multiple offices, both domestically and internationally. These firms tend to offer a full range of legal services to their clients, including mergers and acquisitions, corporate restructuring, taxation, competition law, and dispute resolution. They often work with large, multinational corporations, financial institutions, and government bodies, handling complex and high-value transactions. Large firms are able to provide comprehensive support to their clients across various industries and jurisdictions, leveraging their extensive resources, expertise, and global reach.
The size of a commercial law firm is often dictated by market demand, the complexity of legal services required, and the nature of their client base. While small firms may thrive by catering to a specific legal niche, larger firms can provide a broader scope of services, often across multiple practice areas and jurisdictions.
Ultimately, the size of a commercial law firm in Australia is determined by its strategic focus and the needs of its clients. Both small and large firms play a crucial role in the legal landscape, offering specialised or comprehensive services, respectively, to support businesses of all sizes in navigating the complexities of commercial law.
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Global elite law firms
The Australian legal market has traditionally been dominated by the "Big Six" law firms, which are the six largest Australian law firms as assessed by revenue and lawyer headcount. However, in recent years, four of the Big Six firms merged or formed associations with firms from other countries, blurring the lines of what constitutes a "global elite law firm" in Australia.
The original Big Six firms were:
- Allens Arthur Robinson (now Allens, which operates in association with Linklaters LLP)
- Blake Dawson (now Ashurst Australia, part of British-based multinational firm Ashurst LLP)
- Clayton Utz
- Freehills (which merged with UK-based Herbert Smith to become Herbert Smith Freehills)
- Mallesons Stephen Jaques (which merged with Chinese firm King & Wood to become King & Wood Mallesons)
- One source also mentions Gilbert + Tobin as part of the Big Six.
These firms have a strong presence in Australia and are among the largest law firms globally. They have expanded not just based on revenue but also based on expertise and other factors. The majority of the predecessor firms were also leading firms in the Asia-Pacific region for mergers and acquisitions transactions.
In addition to the Big Six, there are other global law firms with a significant presence in Australia, including:
- Norton Rose Fulbright
- Clifford Chance
- Allen & Overy
- Baker McKenzie
- DLA Piper
- White & Case
- Corrs Chambers Westgarth
These firms have been recognised for their international capabilities, cross-border expertise, and strong relationships with top-tier firms in the US and UK. They have vast networks of offices spanning multiple continents and are well-equipped to handle matters involving multiple jurisdictions.
While the term "Big Six" is still used in some media discussions, other terms such as "top-tier law firm" or "global elite law firm" are increasingly used to refer to the largest and most lucrative law firms operating in Australia.
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