When talking about the rise of Mills Oakley, it’s easy to become fixated on the numbers.
Ten years ago, Mills Oakley was a single-state firm with approximately 70 staff and $12m in fees. Fast-forward through 10 consecutive years of double-digit growth, and the firm now has more than 350 staff and has generated $77m in fees during the 2013/14 financial year, all of which was achieved without a merger. The firm has also expanded north, opening offices in Sydney in 2006 and Brisbane in 2007.
But for the man who has led Mills Oakley’s transformation from a modest Melbourne firm to a national legal brand, the numbers aren’t the only success story.
Despite all of the impressive statistics, CEO John Nerurker says he’s proudest of the “tight- knit” partnership the firm has assembled.
“There’s no doubt in my mind that we are fielding the strongest ever [partnership] in Mills Oakley’s history,” he says. And it’s no surprise why. A significant proportion of the current partnership are alumni of top-tier firms.
But how did a previously little-known firm attract so much top-tier talent?
“One thing we have done well is learn from some other firms’ mistakes,” Nerurker says. “During the course of our lateral- hire strategy, we realised there were a few consistent reasons why senior practitioners were looking to leave their firms.”
One of the key problems in his eyes was the lack of clear criteria about how partner appointments were decided.
“I meet so many very capable practitioners from competitor firms who have no idea what they’re expected to do because they’re told they have the support of their partners and colleagues but it’s a decision that’s made overseas, or there are people in the queue ahead and they’ve been with the firm longer. I’ve heard all of these positions and they lack merit and transparency,” he says. “We openly articulate a career map for all our staff and they know what they need to achieve to be considered for promotion to the next level.”
Mills Oakley also adapted other aspects of its practice: “We threw out the lock-step into our equity ranks; we articulated very clear thresholds; we didn’t move the goalposts on people when they got to achieve them. As a result of that, I believe we have become a haven for high-performing partners who back themselves.”
According to Nerurker, the firm is now reaping the rewards of this strategy. New partners have helped to grow the firm’s capability and, more importantly, brought new clients to the firm.
“It’s possible for any firm to emulate what we’ve done. Perhaps the reason most don’t is because the people who need to vote in support of more equity partners are going to be worst affected by those changes. As long as that happens, Mills Oakley will continue to prosper and hire talented practitioners.”
An accountant by training, Nerurker has a track record of helping to transform organisations. After working for the management consulting arm of PricewaterhouseCoopers, he spent five years as the COO at Slater & Gordon, played a role in the firm’s transition from partnership to incorporated legal practice, and helped to grow the practice into a national firm.
While Mills Oakley owes much of its recent success to its lateral-hire strategy, Nerurker also attributes the firm’s growth to the arrival of inter- national law firms in Australia and says the inter- nationalisation of the Australian legal market has been a boon for some local firms.
“What’s probably catapulted us forward has been the globalisation of the Australian legal profession … we are a firm that’s focused on a domestic client base and we’ve certainly experienced that several domestic clients feel jaded about large global cost infrastructures. These big firms that have tied up have been very focused on bedding down global mergers. Work that’s coming to us is work that only a few short years ago would have gone to top-tier firms.”
While the firm now represents ASX200 companies, financial institutions and government clients, Nerurker says Mills Oakley has retained many of its traditional clients (typically SMEs, high net worth individuals and family-owned businesses).
Last year the firm launched its private advisory team to provide tailored corporate, commercial, taxation, estate planning and asset protection advice to the firm’s smaller clients.
Perhaps surprisingly for someone who trained as an accountant, Nerurker says the firm does not have financial targets as such.
“Sure, our lawyers have fee budgets and we intend to become larger, but how much larger is an open question. For example, we don’t have a particular objective to be 100 partners strong, or to make $200m in fees. Our goal is sustainable growth and so we will keep an open mind about where that takes us.”
Nerurker says Canberra would probably be Mills Oakley’s next location as the firm works to build its government client base, but adds: “There’s still a lot more room for us to grow before we have to look at new geographies to expand our market share.”
Would a merger be on the cards? As Nerurker points out, firms can grow in three ways: organically or through lateral hires or mergers.
“Astute firms would consider all three, and we like to consider ourselves an astute firm,” he says. “A lot of firms seem to merge in the mid-tier space with distressed partnerships. In my view, that’s a little counter- intuitive, joining forces with partners who for whatever reason aren’t viable in their own right…we want to be the leading domestic law firm in Australia and break out from the mid-tier, and we’re working really hard to do that.”
This article appeared in Australasian Lawyer’s latest magazine edition 1.3. Subscribe for more articles and detailed legal features