CHAPTER 1
SLATER AND GORDON
"Lawyers are Just One Piece of the Puzzle"
For years, I've been interested — my friends would say "obsessed" — with Australia's regulatory regime: one that permits law firms to be owned and operated by persons without legal training. A regime that allows law firms to be publicly traded on the Australian Securities Exchange, giving the average Aussie a piece of the legal meat pie.
To most people, however, such a regulatory environment looks rather mundane and boring. And so my excitement would often be met with blank stares and a patronizing, "Sure, OK mate." But to a multitude of lawyers around the world, the idea of allowing anyone other than lawyers to own or operate a law firm is catastrophic, akin to global nuclear war wrapped up in a super nova.
Not surprisingly then, it was the federal government, not lawyers, that instituted change in Australia; it saw little reason for lawyers to be exempt from competition rules that governed all other Australian businesses. And while the government agreed that lawyer self-regulation was important, self-regulation should not restrict competition unless (i) the objectives of self-regulation could only be achieved by restricting competition, and (ii) the benefits of such restrictions outweighed the costs. In short, the legal profession was no longer able to hide behind the facade of self-regulation in order to keep out those without law degrees.
In the mid-1990s, legislative changes were soon enacted across Australian states to allow regular people to own up to 49 percent of a new professional structure called multi-disciplinary practices (MDPs); the new structure also allowed lawyers to mix their practices with those of other professionals, such as accountants. But this was merely a warm-up, as by decade's end another national competition policy review advocated for even further liberalization: that there be no restriction whatsoever on those who could manage or own law firms. Legislators accepted the recommendation and so, on July 1, 2001, New South Wales became the first Australian state, and the first jurisdiction in the world, to allow lawyers to structure themselves as Incorporated Legal Practices (ILPs) without any restriction on share ownership. Other states quickly followed with similar legislation, including the state of Victoria, with its capital city of Melbourne.
Melbourne's Slater and Gordon soon took full advantage of these legislative changes to embark upon the most extreme makeover that any law firm could ever undertake: morphing from a small partnership of seven equity partners into a publicly-traded law corporation in the space of six years.
That firm's journey was the reason for my visit to what's known as the Sports Capital of Australia. My wife and I had arrived in Melbourne two days before and we were staying in a loft-style boutique hotel along Flinders Lane, a location that was just steps away from a stop for the City Circle Tram that would take me to Slater and Gordon.
The City Circle Tram is a well-preserved antique tram that winds its way through Melbourne's historic city core, lined with magnificent pieces of historic architecture steeped in Victorian grandeur: the Parliament House, the Treasury Building, and the Windsor Hotel; all of which reinforced my preconceived notion of "oldness" that I expected at my 10 a.m. meeting with the Slater and Gordon team. After all, "Slaters," as it's known in Australia, could trace its roots back to the early part of the last century.
As the tram waited for its required jog onto La Trobe Street, I paged through Michael Cannon's book, That Disreputable Firm ...: the Inside Story of Slater & Gordon, hoping to get a sense of what I could expect. William, or "Bill," Slater volunteered to join the 10th Australian Field Ambulance during the First World War, then afterwards decided on a career in law. He clerked with Maurice Blackburn (whose firm of the same name remains among Australia's most respected law firms), and after being admitted to practice law in 1922, Bill became partners with Blackburn under the name Blackburn & Slater in Melbourne. Less than a year later, however, Slater struck out on his own and opened his own office in the city on the top floor of Unity Hall.
Soon, however, Slater's love of politics superseded his love of practicing law. In the summer of 1924, the 35-year-old lawyer was chosen as Attorney General for the State of Victoria and for the next eleven years, Slater remained in politics. But in 1935, he decided to revive his old law practice with his brother-in-law, Hugh Lyons Gordon; the new firm would be called Slater and Gordon.
Unfortunately, the partnership was short-lived. Hugh joined the Royal Australian Air Force in 1941 and was killed in action in 1943. Despite Hugh's death, Bill Slater retained the firm name and continued building Slater and Gordon as a personal injury law firm that "assisted the underdog and provided legal services to the disadvantaged" until his death in 1960.
I was reading about the firm's financial difficulties in the mid-1980s — financial difficulties that nearly destroyed it — when the tram started up again and hit the noisy jog in the tracks bringing it onto La Trobe Street. I put my book away and concentrated on the view of the old Courts and caught a brief glimpse of the old Melbourne Gaol where Australia's most famous outlaw, Ned Kelly, was hanged in 1880. Some writers have suggested that poor Ned was an early victim of what we now call the access-to- justice crisis: he couldn't afford an experienced lawyer and had to make do with a cheaper, less experienced one — ultimately to his demise.
At Flagstaff Gardens, I disembarked and walked across the street to a modern, shiny office building that housed the head office of Slater and Gordon, a mere five-minute walk from Unity Hall where Bill Slater had started his practice in the early 1920s. Bill and Hugh likely walked past this site many times, never dreaming that it would one day house Australia's largest consumer law firm, employing over 1,200 people across 54 offices; and another 3,130 people in 27 offices across the United Kingdom. Now Slaters offers much more than personal injury legal services to everyday Australians; its large menu of offerings includes: family law, conveyancing, wills, estate planning and probate, as well as business litigation services, professional negligence litigation, class or group actions, and criminal defence work, among other services.
Entering into Slaters was a far different experience from the one I had imagined while on the tram. Slaters clearly understands the retail legal services sector and has created...
