Allens sees partnership shrink by more than a quarter in five years since Linklaters alliance

Linklaters’ Australian ally Allens has shrunk its partnership by more than a quarter in the five years since forging an alliance with the UK firm in 2012, it has emerged.

The Australian firm had 180 partners and an office network across Asia when it went into its exclusive alliance deal with Linklaters in 2012. Five years later, its partnership has shrunk by 27% to 131 partners, while the firm also has shut down most of its Asia network to instead rely on the magic circle firm’s offering in the region.

The firm has closed offices in Beijing, Shanghai, Hong Kong, Singapore and Cambodia, as well as terminating an alliance in Thailand.

The profit-sharing joint venture between the two firms in Indonesia has been absorbed by Linklaters, and while the official line is that the energy joint venture they established in 2012 is still in operation, former partners say it has been wound up, and Allens concedes that there is no longer a need for a regional energy JV “as the energy market is now genuinely global”.

One former Allens partner said: “If you look back at when it started out, I don’t think the Allens partnership would have expected that five years later they would be an almost entirely domestic firm.”

Many of the Asia exits happened within two years of the alliance being signed; however, the departures have continued in recent years.

Some Allens Asia partners, including Rio Tinto relationship partner and energy JV head Nic Tole, have returned to Australia. Others have left for international firms, including oil and gas partners Darren Murphy and disputes partner Matthew Skinner, who joined Jones Day in Singapore in 2012; Gavin MacLaren, who joined Freshfields Bruckhaus Deringer in 2012; and Anthony Patten, who joined Shearman & Sterling in 2014.

Others have moved over to Linklaters, including former corporate head Niranjan Arasaratnam, who joined the magic circle firm in Singapore earlier this year.

One former partner said the alliance gave Allens a convenient way to wind down its struggling Asian network and focus instead on its domestic operations.

“It was a really convenient way for Allens to exit Asia, which had been incredibly unprofitable and a drain on the Australian partnership,” they said.

Allens managing partner Richard Spurio added: “There was a point where we had a broader Asian footprint, but we decided that it was not really right for us; Indonesia is a good example of where it made more sense for that team to sit within Linklaters’ network.”

The firm does not reveal its financial results, but former partners and management rivals have said that Allens’ profitability has increased following its withdrawal from Asia.

Allens pointed to research carried out by The Australian Financial Review, which found that other independent and international firms in Australia had also shrunk their partnerships during the past five years in response to market demands.

Linklaters struck its alliance deal with Allens in 2012 and South African firm Webber Wentzel in 2013. The referral arrangements see Allens and Webbers collaborate on deals and use Linklaters’ branding, but do not include any profit or revenue sharing.

The three firms have used the milestones of their five-year anniversaries to review the alliances.

Linklaters managing partner Gideon Moore said: “Five years is a good time to reflect and think [about] what has gone well and less well.”

Moore said that following the review he wants to increase the number of secondments between the firms and further develop the sharing of ideas around areas like training and career development.