Insurance specialist Kennedys is continuing to invest in its international operations by expanding into Melbourne through what is its seventh international office opening and eighth lateral hire this year.
The firm’s second Australian base will be led by Michael Kavanagh from local firm Lander & Rogers, where he was a partner.
Kennedys Australia’s managing partner Matt Andrews said the insurance-focused firm is aiming more closely with a number of its ‘local and global clients’ based in Melbourne.
The second Australian opening after the Sydney office in 2006 follows that of five US offices as part of the merger with Carroll McNulty & Kullin May and one in Mexico City in January. The firm now has 28 offices, 10 in the UK and 18 worldwide.
Kavanagh headed the casualty team at Lander & Rogers, where he spent 16 years advising on claims for insurers, brokers, insureds and loss adjusters. Two senior associates, Emily Unger and Uki Murphy, and lawyer Angela Woodward also join from Lander & Rogers.
Senior partner Nick Thomas told Legal Business that organic growth, laterals and international expansion had been the firm’s strategy for some time: ‘It has involved a lot of investment, but fortunately we are seeing the results. The fact that we are in different geographic areas means that we can win more clients.’
Special counsel Nicholas Blackmore will also join the Melbourne practice, transferring from Kennedys’ Hong Kong office, where he advised on IT, commercial and regulatory matters for insurers and large corporates.
Kennedys’ revenues grew by 8% to £149.9m in 2016/17, boosted by a strong western European and South American performance. Disputes accounted for 91% of fee income.
However, the recent international expansion and investment in new technology has meant that profit per equity partner (PEP) stalled at £406,000. The firm increased its lawyer headcount by 13% to 785 in one year and has also put about £3m a year into technological innovation since 2013.
Kennedys is part of a group of top-50 insurance and shipping specialists whose significant top-line growth has not translated into a rise in profitability in the last financial year. Firms focused on the insurance sector are investing to keep up with the increasing need for international coverage, product specialisation and technological innovation to improve efficiency in an increasingly competitive market.
‘Firms doing more traditional stuff are struggling,’ said Thomas. ‘But then again: why are these firms struggling? Because they don’t innovate.’