Ashurst has spun out its entire Canberra office to Australian law firm Thomson Geer in a move it has put down to a decision to reduce its work for the Australian government. 

The office is set to become part of Thomson Geer by early July. It includes seven partners, who together have decades of experience working for the federal government, alongside around 20 further lawyers and consultants. 

Ashurst said it had decided to step back from advising the federal government as a member of the Whole of Australian Government (WoAG) legal services panel. 

Lea Constantine, Ashurst’s head of region for Australia, said: “As a consequence of a review of our strategic priorities, Ashurst has decided to wind down its work for the Commonwealth under one of its panel arrangements.

“Once we reached this decision, we were pleased to connect with Thomson Geer, a major Australian law firm that has a commitment to high quality and cultural standards. 

“This will ensure the Commonwealth Government will continue to receive the very best legal advice and services, as they have come to expect from our Canberra team. Meanwhile, we are confident that all our people moving to Thomson Geer will continue to have the very best career opportunities.”

The spinout comes amid a broader reduction in spending on external advisers by the federal government. Australian news publisher Financial Review reported the government expects to cut expenditure on external consultants, lawyers and contractors by  AU$4.7bn compared with 2022 levels. 

Australian legal news publisher Lawyers Weekly reported that Thomson Geer has been growing its state government practices across Australia, but until now had not been working with the federal government. 

Financial Review reported last August that a number of Australia’s largest law firms were still in negotiations for a place on the WoAG panel that began at the start of last July, due to price bargaining, with some reducing their rates by up to 40%. Competition for government tenders is understandably strong, given that they offer a reliable source of work and are only available every three to five years. 

Ashurst had been among the big winners on the WoAG panel, according to the Australian government legal services expenditure reports. The latest report, covering  2022-23, shows the firm sharing 54% of the $606.5m total spend with eight other firms: Clayton Utz, Sparke Helmore, MinterEllison, King and Wood Mallesons, Norton Rose Fulbright, HWL Ebsworth, Maddocks and lawyerbank. Ashurst's share that year stood at 5.9%, roughly $35.8m. Thomson Geer was among the 150 other providers sharing just under 20% of that spend, with the remainder being paid to the Australian Government Solicitor. 

Adrian Tembel, chief executive partner of 700-strong Thomson Geer, said the move reflected the next stage of the Australian legal services market. 

“Ashurst has built an outstanding Commonwealth Government legal practice,” he said. “I congratulate them on what they have created. We will build on their success and invest further to ensure that this practice continues to be the ‘go-to’ team for complex Commonwealth Government legal work across all areas of the Whole of Australian Government legal services panel.”

Ashurst told Lawyers Weekly it would continue to provide services to the federal government on matters that sit outside of the WoAG panel arrangements. 

“Our work for state governments is not affected by these changes and will continue,” the firm said. 

Last August, Clayton Utz significantly boosted the senior ranks of its Canberra office with the hire of four partners from MinterEllison, including its office managing partner. A month earlier, national firm Gadens agreed to merge with Canberra-based firm Trinity Law.