AI to replace billable model ⏳

G’day.  

Welcome to Point Blank – How was your morning coffee? 

 💼 Practice Points

• Since 2012, global instances of greenwashing have surged sixfold, fuelled by rapid adoption of ESG messaging and growing investor demand. Greenwashing comes hand in hand with regulatory action—ASIC fined Mercer $11 million, and the SEC fined DIMA $24 million for misleading environmental claims. 

• Tax experts, this one’s for you: Chalmers is eyeing change to the research & development tax credits system, which currently lets the gambling industry use R&D credits to fund poker machines and gaming app development.

• Do you or your clients use labour hire? Labor’s IR reforms mandate that labour hire workers receive the same pay as the company’s employees. Mining giants like BHP have heavily criticised these laws, saying it will cost the company more than $1.3b in costs, while Albanese denies that the reforms will “wreck the economy”.

 📢 Talking Points

• Could the billable hour be hindering legal innovation? 52% of in-house professionals say yes. Thomson Reuters puts the AI shake-up as a considerable challenge for law firms to navigate. Growing friction arises with the overlay of efficiency gains from AI (ie, reduced time spent) on legal tasks that ordinarily would be marked as billable work. Legal tech will continue to eat away at a larger slice of the legal market unless firms optimise their billing model. The tension could even sway up the attractiveness of a value-based billing model as the default.

• In case you missed it, Japan’s ruling coalition lost its majority in the lower house for the first time since 2009 – a historic blow. Voters delivered a “severe judgment” on the long-dominant Liberal Democratic Party, says PM Ishiba Shigeru. While the opposition did better than expected, they still fell short of a majority, which leaves Japan politically fragmented. PM Shigeru has since promised to restore political stability in a bid for power.

• Albanese is under fire to explain his relationship with Qantas. During Albo’s tenure as transport minister, he failed to declare thousands of dollars worth of business class upgrades gifted to his ex-wife by Qantas and Empires. Bill Shorten defends Albanese’s actions while the Coalition tosses up a Senate inquiry that would order former Qantas CEO Alan Joyce to explain whether Albanese solicited free upgrades. 

• NATO confirms that North Korean troops have been deployed to help Russia in its almost 3-year war against Ukraine, calling it a “dangerous expansion of Russia’s wars”.

 🏦 The Treasury

• In securities, 169 S&P 500 companies are scheduled to release earnings reports any day now, with the bulk of the Magnificent Seven tech group included. The ASX 200 futures points to a 0.6% rise at the open this Tuesday morning.

• Bitcoin maintains its green highs, up a staggering 64.38% YTD. Oil plunged sharply yesterday following Israel’s strikes on Iran, which avoided crude oil facilities.

• Stay tuned for inflation data tomorrow.

 🤝 Deal Room

• Myer announces it will acquire Soloman Lew’s Premier Investment’s apparel brands business in Australia and New Zealand, which includes household names like Jay Jays, Portmans and Dotti – a throwback Tuesday. Myer will issue 890.5 million new Myer shares to Premier, plus a $82m sweetener as part of the (more-or-less) merger.

• As ASX listings slump to their lowest levels since 2012, ASX has no concrete plans to ensure Australia remains an attractive IPO destination.

• Following the AFR leak, Siren Gold confirms the Federation Mining NBIO, with the Siren board rejecting the offer due to concerns that it is “highly-conditional” (aka subject to the usual DD conditions).

• We’re just 2 weeks out from binding offers for Anglo American’s QLD coal assets. However, Anglo is reportedly withholding key details on the impact of the Grosvenor underground fire—like the expected restart date and potential earnings hits—so bidders must take a leap of faith. 

• While Regal prepares its improved offer for Platinum, Platinum’s board was in the trenches on Friday, calling an emergency meeting to evaluate potential suitors aiming to outbid Regal.

🧠 Brain Teasers

• Judges find animals leaving a point (3) - Answer: Bar

• Perhaps just a contract, though incomplete and mostly imagined (5) - Answer: Quasi

• Under pressure initially, reduced to strength (12, 15) - Answer: Proportional / Proportionality

Debating an explanation? Hit reply, and we’ll adjudicate ☝️

🏗 Sector Specific

Diggers

• Equinox is set to challenge the WA government's decision after being denied approval to continue drilling on its mining lease due to Aboriginal heritage concerns. Equinox CEO Zac Komur criticized the decision, calling it a “dangerous precedent”. WGAC CEO Aaron Rayner refuted the stance, stating that WGAC regularly collaborates with major mining companies like Fortescue and Rio Tinto without issues, suggesting Equinox’s tactics differed. This challenge joins the rising tide of similar decisions in the resources sector following recent controversies with Regis’ McPhillamys and ERA’s Jabiluka. 

• MinRes reveals that the investigation into Ellison’s tax evasion has broadened to include new information that contradicts the company’s understanding of the situation. As the board grapples with these inconsistencies, Ellison reassures major investors that he’s not going anywhere. 

• ACCR accuses Santos of misleading investors with its emissions strategy of net zero by 2040, described as a shaky promise built on speculation over substance.   

Fin

• As scandals erase billions off WiseTech and MinRes, Big Super demands more accountability from major companies, suggesting that boards should answer questionnaires to expose cultural issues. 

• ASX shareholders are fed up, hitting the company with its first strike against ASX’s executive pay, with 26.15% voting down the remuneration report after a controversial plan to boost the CEO’s bonuses by $1.7m.

Tech

• Indonesia just blocked Apple from selling the iPhone 16, saying it hasn’t hit the local content quotas for smartphones and tablets.

• James Packer goes $600m up in time for Christmas (it also happens to be the 30th anniversary of the smash hit ‘All I Want for Christmas is You’ by Packer’s ex Mariah Carey – just FYI) with a strong portfolio of tech picks (Nvidia, Meta and Taiwan Semiconductor account for almost $1.3bn of the $1.4bn).

Retail & Real Estate

• Dexus ditches its $3m CEO incentive plan as the office landlord giant strikes out again on its remuneration and incentive structure. Dexus is now back on the drawing board after receiving fierce backlash from major investors and proxy advisers for a misaligned plan.

• Goldman Sachs has refinanced Pallas Capital’s Sydney-based $500m private commercial real estate fund.

• Boeing is set to raise an easy US$15 billion. Since mid-September, about 33,000 factory workers—around a fifth of Boeing’s workforce—have been on strike, costing the company around US$2 billion each month. Just last week, they turned down a new contract offer, pushing for higher pay.

• Mosaic Brands, the retailer behind Australian fashion brands Rivers, Katies and Noni B, has entered voluntary administration, putting 3000 jobs at risk. 

🏘️ Word on the Street 

• Remember DPP Sally Downing SC from yesterday’s edition of PointBlank? Well, now her office is being investigated by WorkSafe for allegations of bullying, censorship and maladministration. Employees claim a culture of punishing solicitors for providing cautious legal advice and dismissing mental health concerns, while the ODPP categorically denies all complaints. 

• HSF adds 2 new projects and energy partners to its Sydney office. Cassandra Wee joins from Ashurst and Amit Jois from Johnson Winter Slattery.