Pay wars down under?

👋 G’day

Yesterday, we featured two ex-KWM lawyers who are shaking up Legal Tech with DD Loop—a platform that’s turning due diligence on its head.

And with the AI boom, we’ve noticed more and more lawyers are ditching the courtroom for coding. Especially when (let’s face it..) law has plenty of monotonous tasks that can be automated.

Take Harvey AI. Founded by an ex-litigation associate at O’Melveny, the AI legal assistant is now in talks for a $300m funding round, valuing the startup at $3bn.

Then there’s Safe Sign Technologies, created by an ex-A&O trainee and recently snapped up by Thomson Reuters for a price tag beyond seven figures.

What’s next in the Legal Tech revolution?

Today’s brief:

• There’s a lawyer pay war brewing, London-style.

• Albo bets $2bn on Aussie aluminium revival.

• Defamation duel: Alleged Hells Angels boss v News Corp.

Let’s go 👇

PRACTICE POINTS

Albo’s $2bn aluminium bet

• Albo’s going all-in on aluminium, with a $2bn bet on the industry. The Labor government is rolling out a new Green Aluminium Production Credit, giving a leg-up to Aussie smelters that switch to renewable energy by 2036. The goal of the credit is to alleviate concerns around aluminium smelters investing in renewables and to bolster the aluminium workforce.

• NSW Land and Environment Court issued a practice notice banning the use of Gen AI in affidavits and witness statements—effective 3 Feb. Looks like they’re joining the trend. Courts like the NSW Supreme Court and Vic Supreme Court have already started putting similar restrictions in place.

• And guess what? The NSW Chief J has just fine-tuned his AI Practice Note, with updates kicking in on 3 February. The changes split former paragraph 9 into two and made minor tweaks to paragraphs 6, 10, and 17. Small edits, big implications? Time will tell.

• FIRB finally says goodbye to the ‘80s. That’s goodbye to long-form cover letters and hello to an online portal for lodging and processing FIRB applications. The new system promises a streamlined process with a standardised application. It’s set to go live in March/April of this year.

WORD ON THE STREET

Japan’s Big Law expands West

• Japan’s top law firms are making moves in Europe and the UK, setting up shop to support a surge in deals and investment from their clients in the region. But they're not trying to compete with the Magic Circle. The goal is to team up with established Western firms to offer local advice and assist with local deals in Europe.

• Clayton Utz pockets real estate partner from Ashurst. Vicki Aron spent seven years at Ashurst before making the return. We say return because she was previously an SA at Clayton Utz about 15 years ago. Vicki also spent time at KWM, G+T and K&L Gates.

• Former Labor frontbencher (and lawyer) Bill Shorten has doubled his money by landing an $860k gig as vice-chancellor of the University of Canberra. Neat.

TALKING POINTS

Law firm pay war coming to Aus?

• The managing partner at UK firm Simmons & Simmons is sounding the alarm on London’s lawyer pay surge, calling it unsustainable. Salaries for both partners and juniors have skyrocketed, largely thanks to US firms and the boom in PE work. Here in Aus, graduate pay is also on the rise, with top-tier grads now pulling in over $100k. Ashurst grads, for example, saw their pay jump from $80k in 2019 to $112k in 2024. But unlike the pay wars in London, Australia’s market has been a bit more subdued— there are firms like G+T and A&O offering $115k, but Big 3 firms HSF and KWM are sticking around the $105k mark. No bidding wars here—yet.

• Alleged Hells Angels boss Angelo Pandeli is in a defamation battle against News Corp. He claims its reports labelled him a “cocaine kingpin”, which cost him his UAE bank accounts, visa, and more. Pandeli is bringing out the big guns for the fight, including high-profile silk Sue Chrysanthou SC. He alleges the media giant ran a “coordinated campaign” without seeking his comment. With high-stakes claims of reputational and financial damage, this case could set the defamation tone for 2025.

• DeepSeek is everywhere—try finding a news outlet that doesn’t have a story on it. But not everyone’s excited. Security analysts are sounding the alarm, urging Albanese to impose strict controls on Chinese-developed AI. Why? Strategic Analysis Australia’s Michael Shoebridge says China's growing use of AI in the military could give the People’s Liberation Army a serious edge, especially as global tensions heat up. Then there’s the data risk around giving China’s AI models access to proprietary, confidential, or otherwise closed data. Shoebridge even suggests banning Chinese AI in Australia for now until it’s better understood.

TREASURY

DEAL ROOM

CC Capital: bid or bluff?

• Is CC Capital a genuine bidder for Insignia, or just a Dorothy Dixer? Some are wondering if they’ve been nudged by Insignia’s bankers to jump into the ring, driving up Bain’s offer. Insignia’s boss, Scott Hartley, used to work at CC, which only adds to the intrigue.

• The ACCC has hit pause on its February decision for Vocus Group’s proposed acquisition of TPG Telecom’s fixed-line and fibre assets. The regulator is seeking more info from both sides, with a new decision date pending. Vocus, owned by Macquarie Asset Management and Aware Super, is eyeing TPG’s infrastructure to expand its fibre footprint. The ACCC’s informal review, launched in November, will determine if the $6.3bn deal passes muster.

• Twiggy’s making moves with an off-market bid to snap up Red Hawk, a single-asset junior that owns a key iron ore deposit near Fortescue’s Pilbara mines. The deal’s valued at up to $254m, and it’s structured for speed—shareholders can pocket $1.05 a share, or $1.20 if the bid hits 75%, with hopes of major shareholders cashing out quickly.

• Everyone’s after Ravenswood. And that’s in addition to Australia’s Regis, Gold Road, Evolution Mining, and China’s Zhaojin and Chifeng. Indonesian suitors Salim and United Tractors are now lining up to bid for the Queensland gold mine. 

• Chem Warehouse is making a grand entrance on the ASX, backed by $5bn in sales for the last six months of 2024. Brokers are already predicting a spot in the S&P/ASX 50 when it starts trading next month. Post-Sigma merger, the company’s eyes are on offshore growth, with two new stores already up and running in Dubai.

SECTOR SPECIFIC

Visa & Mastercard fee standoff

🚜 DIGGERS

• Fortescue is making history as the first major industrial company to back the Fossil Fuel Non-Proliferation Treaty, which lays out strict deadlines for phasing out fossil fuels worldwide. This move aligns with Fortescue’s Real Zero 2030 target, which aims to eliminate fossil fuels entirely—no reliance on carbon offsets or carbon capture.

• Back in February 2024, Newmont made it clear: anything not a “Tier 1” asset was on the chopping block. With the sale of the Porcupine gold operation in Ontario, Canada, to Discovery Silver Corp, Newmont’s divestment spree has come to an end. 

🏦 FIN

• Mastercard and Visa are pushing back hard against the RBA’s bid to force them to reveal the processing fees they charge banks on their privately owned networks. Given its fees are “highly commercially sensitive” info, Visa says disclosing its fees is anti-competitive. AMEX, Visa, and Mastercard rake in $1.8bn every year for processing transactions in Australia.

• Dutch bank ING is pulling out of Russia, selling its Russian business to a Moscow-based company and effectively shutting down all operations in the market. The deal is expected to have a negative effect of ~€700m (A$1.2bn) on ING's post-tax results.

🏡 RETAIL & REAL ESTATE

• Coles, Woolies, and other major retailers are teaming up to push for a more relaxed industry award. Proposed changes include exempting senior staff from key award entitlements (like overtime and evening and weekend rates) if they’re paid 25% above the base rate.

• The AFL is in talks with major gambling companies like Tabcorp and Sportsbet to boost its slice of the betting pie. The AFL wants to increase its AFL’s cut from 0.9% to 1.5%, and even up to 2.5% for finals and multi-bets. If the deal goes through, the AFL stands to make 25% more per year.

📱 TECH

• With all the buzz around DeepSeek, it's not just US tech that's feeling the pinch. Australia's tech stocks are taking a hit too. Case in point: e-discovery giant Nuix, opened at $3.30 yesterday, down from Friday's $5.41 close.

• Speaking of DeepSeek, Meta’s Llama could be the “DeepSeek of the West,” says Deepwater Asset Management’s Gene Munster, as the Chinese AI startup validates Meta’s open-source playbook.

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