Bullying backlash

Myer-Premier deal trouble, KPMG takes on BigLaw

January 14, 2025

👋 G’day

Today’s brief:

  • Dentons accused of trying to bury bullying claims

  • Myer-Premier deal under pressure with profit warnings and share price drop

  • AI reshapes junior lawyer training, warns Thomson Reuters

Enjoy that fresh brew ☕️

PRACTICE POINTS

Blockchain gets property status in Aus

  • The Victorian Supreme Court is the first Australian court to recognise blockchain as property, aligning Australia with the UK, NZ, HK, and Singapore common law. The Court found blockchain met the Ainsworth test, meeting all 4 elements of being:

    • Identifiable by subject matter

    • Identifiable by third parties

    • Capable of assumption by third parties

    • Having some degree of permanence or stability

  • Cash is still king in 2025. While cheques are being phased out, the Albanese government will require businesses to accept cash for essential items like groceries and fuel (with some exemptions for small businesses).

  • The NSW Supreme Court has dismissed a claim from a plaintiff whose co-working space licence was terminated for sleeping on the premises. The plaintiff argued the no-sleeping prohibition was an unfair contract term, but Pike J found no reasonable cause of action. Guess it’s true—you snooze, you lose. A timely reminder for landlords: always test your standard contracts against the unfair contract regime.

WORD ON THE STREET

Dentons buries bullying claims

  • Sweep, sweep 🧹 The world’s largest law firm, Dentons, allegedly tried to bury bullying claims made by former partner Guy Albeck against senior partner Kon Tsiakis to save Tsiakis’ reputation. Now, Albeck’s fighting back, suing the firm for forcing his resignation after he blew the whistle. Read the full story here.

  • Speaking of Dentons, Gilbert + Tobin has snapped up Rachel Walker from Dentons to boost its financial services bench. Known for advising major banks and private credit players, Walker’s expertise spans regulatory compliance, lending ops, and product strategy. 🍾

  • KPMG is looking to offer legal services in the US and is applying for an alternative business licence in Arizona. Is this the end of Big Law’s monopoly on legal services?

TALKING POINTS

AI reshapes junior lawyer training

  • With AI automating more junior lawyer tasks, Thomson Reuters warns this could leave a gap in training. Their solution? Throw junior lawyers in the deep end with more complex work earlier, backed by increased supervision and mentorship by senior lawyers.

  • Bonus boost for bankers: Morgan Stanley’s Aussie bankers are toasting fatter bonuses—up 50% for top performers, and 10%-15% for most. After flat payouts last year, the $4bn investment banking haul (+11%) shows deals, IPOs, and equity raises are back in the game, despite high rates and a weak Aussie dollar.

  • Say hello to faster internet. Albo has dedicated $3bn to upgrade hundreds of thousands of NBN connections and speed up the internet.

  • It’s official—2024 is now the hottest year on record, marking the first calendar year with the Earth more than 1.5°C warmer than pre-industrial levels. This number matters because, under the Paris Agreement, countries agreed to "pursue efforts" to limit warming to 1.5°C above pre-industrial times. Safe to say, we’re not exactly on track.

TREASURY

ASX as at market close. Commodities and crypto in US dollars.

DEAL ROOM

Myer-Premier deal in trouble?

  • We're a week out from the shareholder vote on Myer’s acquisition of several Premier-owned brands (think Just Jeans, Portmans and Jay Jays). And Myer and Premier have issued profit warnings after a lacklustre Christmas and Boxing Day. Myer’s shares have now dropped below the threshold that the Independent Expert considered “fair”. Still, Myer’s sticking to its guns, insisting it strongly supports the deal.

  • Major investment banks raked in US$2.5bn (A$4bn) in fees in Australia last year, up 11% from 2023 but still a far cry from the 2021/22 boom. That said, dealmakers like Morgan Stanley are bullish on 2024, banking on a pro-growth US economy, pent-up M&A demand, and attractive interest rates to drive a rebound.

  • In the US, Bill Ackman sets his eyes on a “modern-day Berkshire Hathaway” by merging a subsidiary of his Pershing Square Capital Management with NYSE-listed Howard Hughes Holdings.

  • Japan has raised alarms over a foreign takeover of 7-Eleven, calling it a national security issue. Meanwhile, the company has reported a sharp profit drop in its latest quarter, adding pressure as it fends off a $47bn buyout offer from Canada’s Alimentation Couche-Tard.

SECTOR SPECIFIC

Tech giants axe diversity policies

🚜 DIGGERS

  • Julie Bishop joins the rare earths play. The former minister has signed on as an advisor to Energy Transition Minerals (ASX: ETM), tackling the political and legal hurdles of its Kvanefjeld rare earths project in Greenland.

  • The Aussie coal price has slumped to a 3.5-year low as supply surges. The price drop will squeeze coal company profit margins and erode Treasury tax revenue from corporate profits, an income stream that helped sustain federal budget surpluses in the last 2 years.

  • New geological discoveries have boosted China’s share of the world’s known lithium reserves to 16.5%, up from 6%, making it the second-largest holder, surpassing Australia. With reduced reliance on lithium imports, China’s discovery could add downward pressure on lithium prices.

🏦 FIN

  • Macquarie Asset Management has snagged Gabriel Ho as its new MD to drive its Southeast Asia expansion. The ex-Dymon Asia PE partner is set to lead the charge in one of the region's hottest markets.

  • BOQ’s head of business banking, Chris Queen, quietly resigned over the Christmas period, leaving the bank to scramble — one of its key strategies was to grow his division and now it’s left without a leader.

  • BDO is on the hunt. The fifth-largest accounting firm by revenue is in talks with dozens of Big Four staff after growing its partnership to a record 304. Meanwhile, the Big Four are shrinking in both revenue and partners.

  • Big Super’s got a new mandate. With mandatory climate reporting now in play, super funds are pushing companies to step up their climate action. But that’s not all. They're also targeting boards on workplace safety and culture.

📱 TECH

  • Meta and Amazon are scaling back their diversity programs and policies ahead of Trump’s inauguration, reversing years of efforts to promote inclusivity.

  • Apple is losing its grip. Global iPhone sales dipped 5% in Q4 2024 as lacklustre upgrades and rising competition in China took a bite. Market share is down to 18%, per Counterpoint Research.

  • Ex-Linktree employee Nicola Proud is suing the company, accusing it of sacking her after she raised concerns about an employee getting special treatment due to a close friendship with the CEO.

🏡 RETAIL & REAL ESTATE

  • A mysterious Macau-based investor has emerged as a substantial shareholder in Star Entertainment Group just days after analysts warned the cash-strapped casino operator was close to collapse. Shares jumped 14% yesterday, but administration odds still loom.

  • Shein factory workers have revealed gruelling shifts from 8am to well past 10pm, seven days a week while earning less than a dollar per garment.

  • AustralianSuper just swept up a 50% stake in a €840m (A$1.4bn) European warehouse portfolio from Oxford Properties. With this move, its European real estate investments now top €6b.

PS.

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