Michael Tinkler is an experienced commercial and real estate lawyer at Burton Partners, the ILN’s member for New Zealand. In this episode, Lindsay and Michael discuss the hot property market in New Zealand, the challenges of finding good talent, and the things that unite us.
You can listen to the podcast here, or we’ve provided a transcript of the highlights below.
Lindsay: Hello and welcome to the Law Firm Intelligence podcast. I’m your host, Lindsay Griffiths, executive director of the International Lawyers Network. Our guest this week is Michael Tinkler, from Burton Partners in New Zealand. Michael, we’re so happy to have you with us.
Michael: Great to be here, Lindsay. You’re looking well. Good to speak after all this time.
Lindsay: It has been a long time. Why don’t you tell us a little bit about yourself, the firm, and your practice to kick this off?
Michael: I’ve met a number of people in the network over the last 10 years, so you’ll be familiar with us. Burton Partners is a real estate and corporate specialist firm. We’re based in Auckland. We have six partners, four of whom are specialist real estate lawyers, and two of whom are corporate lawyers. We have another 15 lawyers. We predominantly act on large-scale residential and commercial developments. We do work across the board in the real estate industry and also do some corporate work as well. We do work all around New Zealand.
Until the last couple of years, because of COVID, tourism has been a huge driver for the real estate business in New Zealand. We’ve been actively involved in a number of hospitality-type projects, hotel developments, and large-scale subdivisions around the holiday hotspots in New Zealand, including Queenstown, predominantly in Auckland.
That’s who we are. We’ve been around for close to 30 years, now. The firm was established by Nigel Burton back in… When was it? Would’ve been 1991. That’s when Nigel started to practice. He brought Jeremy Carr with him, they practiced together for a few years. Then, Tony joined in early 2000s. I joined in 2010.
Nigel and Jeremy have since left the firm, although Jeremy’s still on as a consultant. Now, we’ve got four younger guys who we’ve brought on to carry the firm forward for the next few years. I think you may have met some of them, Lindsay, over the last year or two.
Lindsay: I think, for us, it’s interesting always to see firms in that transition period of moving from the more senior partners who founded the firm, and then you do start to take on that first-level transition. That’s been really interesting. I know this isn’t necessarily one of the questions I usually ask, but I’m curious to get your perspective on how that has been going during the lockdowns and engaging with some of your younger lawyers and associates, as you’re trying to bring them on as more senior people in the firm and have that transition.
Michael: It’s worked really well. One thing I should say about our office, is we tend not to have junior lawyers. Predominantly, the lawyers we have, including the staff, are all quite senior. The most junior lawyer we might have might be three or four years post-qualified. The reason why I raise that is everyone’s pretty self-sufficient. Everyone’s pretty mature. Seeing that the COVID outbreak was about to hit New Zealand and we were about to be locked down, we got three days’ notice we were going to a lockdown. We horribly went out and got everyone set up to work from home within about a week.
For the first lockdown, back in 2020, it was a bit of a struggle, but because we’ve got a good senior mature staff, pretty much people just got on with it and got into it. In the first lockdown, there were a couple of weeks of working around what this all meant. Was this the end of the world? Well, what it actually meant for us, personally, were we going to make any money? Were clients going to pay us? That was probably the biggest worry we had. As it transpired, after the first couple of weeks, everyone just got on with business. People were in the middle of developments. They couldn’t actually get anything done because we were locked down.
Once we came out of lockdown, the productivity picked up with quite a bit of Gusto. It just meant that everyone with us had to get involved and work hard, whether it was from home or from the office. Since then, what I would say to you, is we’re pretty much… I work from the office all the time. Apart from this morning, I’m working from home, because it would be easier to talk to you and working from home. Pretty much, I’ll work from the office most days.
Across the firm, it’s 50-50. We’ve got 50% of the people in the office, 50% working from home. There’s no hard and fast rule. We just say, “As long as you are doing your work, you’re getting into your work, and you’re communicating with us.” We all communicate regularly. Then, we’re with it. We’re trying to encourage people to come back to the office as much as possible, because that’s where you get your work. The junior people get to work from the senior people and it’s easier for everyone to discuss issues. It’s a much better place for ideas and knowledge to flow if we’re all working together. We’re encouraging people to come to the office.
Right at the moment, we are in the middle of the Omicron outbreak. We’re under relatively tough restrictions at the moment. If you get it, you’ve got to isolate for seven days. If someone in your house gets it, you have to isolate for seven days. We’re struggling with it at the moment, with people not being in the office because either a household contact or they have Omicron. What we have seen though, by and large, no one’s been seriously affected by it. We’ve had people who’ve just carried on working. God forbid, we certainly don’t make them work. They’re encouraged to rest, but the team’s very resilient, very mature.
It’s a credit to the person who drove the regeneration of this firm. If I can say that, it was Jeremy. Jeremy got to the stage where he thought, “Well, I’m 64, 65. I’m not going to be here forever. We need to bring in the next batch of people to take this firm forward for the next 10 to 20 years.” Jeremy started that process two or three years ago. At that time, it was Nigel Jeremy, myself, and Tony. Nigel left. Jeremy said, “We need to bring on a couple of these younger people.” We did. Jeremy then got ill and left. Now, it’s Tony, me, and four other relatively young partners. When I say young, they’re all either late thirties or early forties. They’re not really young, but they’re mature and very experienced. That has been great.
Selfishly from a financial perspective, I thought, “Well, how’s this going to affect me?” We’ve got more people sharing in the pie. What it actually does, is that when these people come into partnership and they develop their own practices and their own brands, they actually bring a whole lot of other work into the firm. That’s what’s happened and it’s got to the stage where we’re probably performing better than we ever have. And that’s because we’ve got young, talented, energetic people are very keen to get out there and create a successful career. That’s actually pushing people like Tony and myself, to get more energized and work a bit harder. It’s been great, but it’s come back to the fact that everyone that works with us, and by and large, you’ll find this with people involved in the legal industry. They’re pretty much self-starter because you had to go through university, work hard to get your law degree, and then get a job. You’re not going to sit around and do nothing.
Pretty much, everyone’s been able to work largely by themselves. We talk over Microsoft Teams and then pretty much people in the office. It’s been great. Last year, I think I mentioned to you, was probably the busiest year that we’ve had as a firm. When you’re busy, you’ve got no option. You just have to get on and get the work done.
Michael: It has been very good.
Lindsay: That’s great. You’re right. Lawyers do have a high degree of individualism, which is why I think they’re so good at what they do. Sometimes, we need a little more collaboration, but that’s okay. Given that things are going so well, despite everything that’s going on, what would you say is your biggest challenge at the moment, then?
Michael: Well, two challenges.
One is actually trying to get everyone back into the office. That’s not going to be achievable, for probably four or five weeks, until we get through this Omicron wave. Everyone wants to come back into the office. Even though I said that people can pretty much work from home and do work well from home, it’s not as good as being together in the office. I think everyone appreciates that.
The second issue is actually securing talent. It’s difficult to find good lawyers. The good lawyers here get snapped up by our bigger competitors. I think what’s going to happen, it’s going to be more of an issue for us because we’ve been locked down. The border’s been shut for two years. The border is opening right now. We’re going to see quite an influx of people from New Zealand.
The big concern is a lot of junior people or younger people will go to Australia. When you’ve [inaudible 00:10:17] either Australia to live and work permanently, because they’re perceived to be more opportunities as a bigger market. Also, you’ll know Lindsay, with two to three-year-old lawyers in New Zealand, always want to go to the UK to work for a couple of years. That has been stopped for two years. I expect that we will see, probably in the next six months to a year, a massive outflow of talent, which will cause us an issue.
Lindsay: That’s really interesting. I wouldn’t have thought that but now that you’re saying that, I can see exactly why that would happen. I know New Zealand has been touted as an attractive place to live. Even with all of your lockdowns, I know it’s been talked about by a lot of people that they would consider moving there. I know it’s not exactly easy to get residency in New Zealand, but do you think you might see some inflow of talent in some cases? Or, is the market really just very small?
Michael: We would like to see some inflow of talent. The inflow of talent you tend to get though, is actually people who are a bit more advanced in their age. You want to come here for the latter part of your life, not the earlier part of your life. Although, we do get some young people coming down here. There’ll be more of an outflow of younger people leaving, I think because they want to go and see the world.
You can certainly understand that you want to go. You want to go to Britain because you can get around Europe, although Europe’s tough at the moment. You want to go to the states. Or, you want to go and work in Sydney or Melbourne, which are big international cities and offer a lot, in terms of lifestyle, for a younger person. The people we tend to get coming here, you get the odd person in a more junior age, coming to work here permanently. They tend to come with a partner and they want to start a family here and live here, which is great. Then, the other inflow from America and Europe tends to be someone more advanced in the years, who’s wanting to come down here. They see it as a better place to live. Generally, they bring capital, which they use, which is great. Then, of course, we get a lot of inflow from Southeast Asia, which we haven’t had for two years. It’ll be interesting to see what the government does about all of this.
Before the pandemic, we were getting a net inflow of about 130,000 people a year, predominantly settling in Auckland. Since the pandemic, there’s been nothing. In fact, there’s been a bit of an outflow of maybe 3,000 or 4,000 people, which these are small numbers to you guys in the states and in Europe. That’s actually quite a big number for us when you think our population’s only five million.
Lindsay: That’s a big difference.
What would you say has been the biggest surprise for you, over the last several months?
Michael: Pretty much how resilient people are. We’ve been through a complete upheaval, in terms of how we live. And how much involvement we’ve had from the government and our lives, in terms of telling us we can’t go out, we can’t do things. How that’s affecting people’s businesses and livelihoods. By and large, I think I mentioned it to you before, there are big sectors of the economy that are suffering and there are big sectors that are doing really well. Even though we’ve been through this quite tough time with severe restrictions, people, by and large, have just got on with it and have thought, “Well, look, we’ve got to get on with our lives. We’ve got to make our business work, otherwise, we’ve got nothing.” It’s the resilience of people that have surprised me, that have just got on and carried on with their business as if nothing’s happened, pretty much.
Lindsay: It is really interesting because I’ve seen a couple of things that have said almost every area of our lives has been affected, but we’ve all still gone to work. I think that’s really true. As you say, we really have just gotten on with it, in a lot of cases.
Michael: You’ve still got to get out there and pay the bills. In the property space, property’s been very active because money’s never been cheaper here, although that is changing now. In fact, it’s been so cheap, that we’ve had massive inflation because people have gone out and bought a whole bunch of assets. Now, the government’s panicking and they’re trying to tighten the screws. We’re putting interest rates up, so that will have an immediate impact on the economy here. After two years of significant growth, we’ve had huge growth and property prices here at least 30, 40% in the last 12 months alone.
Massive. That’s all now coming home to roost, because the inflation pressures that it has caused with all this cheap money, means the government’s got to turn the tap off, which they’re doing now. We are going to have, in the next six or seven months, people tip-up, people not being able to actually settle on properties they signed up to buy a couple of months ago. It’ll be interesting to see how that all plays out, but that will present some headwinds for us. People on getting on and doing what they can, but I can certainly see that there are some incoming.
This won’t be any different from what’s happening anywhere else in the world, I expect.
Lindsay: No, but I imagine that in a market of your size, even the smallest fluctuations make a big difference.
Michael: Yeah, it does. If a developer can’t turn up and settle a transaction, that means the person who was expecting him or her to buy her property, they don’t have the money to go and repay the bank or do what they need to do. It all filters through.
On the tourism side, because there’s been no tourism, the tourism operators here have been hanging on for grim death, waiting for the borders to reopen. The borders are going to reopen in the next couple of weeks, but no one’s expecting a massive influx of tourism from Europe or from Southeast Asia. We used to have a lot of tourism from China. China’s closed and it’ll be closed for some time, so there is going to be no quick fix. It’s going to be a very hard, long road back to recovery for the tourism industry. And what you can see, the savvy operators are going to do, they’re going to change from the mass tourism model to the more bespoke higher range model, if they can, to try and make more money out of higher-end tourism coming down this way, which is probably the smart thing to do.
Lindsay: I think that makes a lot of sense, too. As you said, people are hesitant to travel, even when the borders are open now. Especially, a destination like yours, that’s a little bit out of the way, should I say. That’s going to make things challenging for people to immediately want to get back there.
Michael: You don’t want to come down here, get it, and have to stay down here for another week or two because you’ve tested positive for it. Guess that’s probably the main issue for people coming from Europe and the states.
Lindsay: What would you say is something that people misunderstand about your area of practice?
Michael: My area of practice, specifically real estate. What I would say in the New Zealand market, people… A lot of non-real estate lawyers, to a certain extent, think it’s easy. They think real estate law is probably the easiest part of the practice of law that you can be involved in because everyone does it. By and large, that is true. 80% of the firms in New Zealand would be involved in some form of real estate work. Most of its small firms have small general practice firms doing residential conveyance for their clients. The general population, lawyers, bigger firms, and the corporate area, always look around at real estate law thinking it’s still the poor cousin of the legal landscape and it’s probably one of the easy areas to practice.
I would say that it’s actually the converse of that is true. It’s actually one of the more difficult areas to practice them because it’s highly technical. There are a number of statutes that intersect over property transactions. You also have a convergence of contract law sitting over property contracts, as well as you could pull common interests in land, which all meet together and have to work out together. An example is a lease, for instance, which by and large, is just a contract.
If you come to a turnover lease because there’s a breach, you’ll have the written clause that says you can terminate. Then, there’s a right for the lessee to seek relief against forfeiture, if a landlord tries to reenter. That is a common or equitable principle that’s been brought. It’s actually now into statute, which basically contradicts what’s in the contract. You can cancel, but then someone can come along and actually defeat you from canceling. It’s a complex area. If you cocked things up in property, you know about your mistake immediately, because you’re trying to get something registered and you can’t get it registered, because you’ve missed something or you haven’t quite understood something. It’s a very technical area of law that people misunderstand. 70% of negligence cases in New Zealand relate to property transactions.
It’s fraught with risk.
In our particular area, we are dealing in a more corporate, larger-scale area. We specialize in it, we practice in it. We know pretty much get across most issues. Touch wood, we don’t see a lot of issues in our office, but we have them.
Lindsay: I would imagine that a big part of your role as an advisor is to help prevent a lot of those issues, as opposed to just you, with them as they arise. It’s more to be that counselor to your clients.
Michael: True. What we’ve faced though in the last 24 months is the market’s been so hot, that you actually have to turn up with an unconditional contract to get a property. When you turn up and there are six or seven bids for a property, there is no room to negotiate. The purchaser, your client, is getting there, buying sight unseen, and then coming to you after the contract’s being signed. Then, you go, “Actually, have you thought about this? Have you thought about that? What about that issue there? You haven’t got access here. You need resource consent for that. You won’t get resource consent for that. You’re not going to be able to develop the property.” That’s what we’ve faced. The big risk we had is if you were too slow, giving them advice, or you tried to hold a deal back, your client would miss out.
Lindsay: I can imagine how that would be when it’s so fast-paced and cheap, as you said. That is really challenging. I’m imagining that it keeps you all very busy.
Michael: It does. It’s changing now, though. As I mentioned, the money tips have been turned off here. People are now taking a long time to look at contracts. We’re getting the position where we’re able to do a much better job. We’ve got more time to look at stuff because the market’s just not so hot and it’s not so fierce.
Lindsay: That’s a nice thing to do, too, to be able to have that time. What would you say is the most important lesson you’ve learned over the course of your career?
Michael: As a young lawyer at one of the large corporate firms earlier in my career, the biggest lesson I’ve learned, is to own up to mistakes very quickly and deal with them. If you’ve made a mistake, tell everyone. Or, talk to someone, bring it out. The sooner people know about it, the more likely they can deal with it. If you don’t deal with a mistake, they only get worse.
That’s one thing I learned very early on in my legal practice. It’s one thing I tell everyone that works with me, any juniors that come to the office. No one is perfect. People make mistakes. Don’t make the same mistake twice. If you have cocked something up, let us know about it. The sooner we know about it, the more likely we can deal with it.
Lindsay: No, I think that’s great advice and not just in the practice of law, but just in life, in general.
Michael: And life in general, yeah. Problems never go away. You’ve got to confront them. You’ve got to deal with them.
Lindsay: Right. They just compound if you ignore them.
Lindsay: What would you say is something that’s interesting about you, that most people don’t know?
Michael: I was thinking about this. I was thinking, “Am I that interesting?”
Lindsay: Of course.
Michael: I’m a bit of an outdoors person. Down this part of the world, we have a lot of opportunities to get into the outdoors. For a while there, one of my great hobbies was pheasant shooting, which is a big English tradition and pastime, where you dress up in tweed jackets, ties, and fancy shotguns. You go out and shoot pheasants that are driven towards you, by local green keepers and beaters. I’ve been doing that for a couple of years. That probably is not everyone’s cup of tea. I could imagine there’d be a few people that would be appalled by me talking about this. That is one of the great passions I have at the moment.
I do enjoy the outdoors. In addition to that, I do a lot of hiking and walking through the countryside. I like getting on a road cycle and cycle two or three times a week. I’m always out doing something.
Lindsay: That’s great.
Michael: But, I thought people might be interested in the pheasant shooting angle.
Lindsay: Yes, which is something I knew about you, but I know it’s probably something most people don’t.
As we start to wrap up here, what would you say being part of the ILN mean to you?
Michael: The biggest thing we get out of the ILN, is the ability to connect with everyone around… The constituent members, whether it be in Europe, in the states, or Australia. We do have quite a bit more interaction with the people in Aussie, but we certainly enjoy it when we get up and meet with you guys in Europe and in the states. It’s basically finding out what people are doing. What ideas do people have about the practice of law, how they practice law under different restrictions, and what drives them?
One thing I have picked up, Lindsay, is that pretty much when you get all of us in a room together, the thing that sticks out for me, is how similar everyone is. Notwithstanding, we might be talking to someone from Sweden. We might be talking to someone from the Czech Republic or someone from the state. We’re all very similar in our outlook on life, whether that’s a good thing or a bad thing. Our hopes, dreams, desires, and how we want to live life, all seem to be relatively similar. That’s the thing that strikes me, is that even though we are quite far apart, in terms of where we live and where we practice, we’re all very similar in how we do things and what our outlook on life is.
In terms of how we interact with the ILN, every now and then, we’ll get a decent, if not a very good instruction from someone out of Europe. I think we had some great instructions out of the Swiss firm, over a couple of years, which generated significant business for us. I hate to say it, it was actually a Russian oligarch at the time. Anyway, that was about 10 years ago, but that was a great stream of work. Occasionally, we were able to reciprocate. Occasionally, we have the odd high-net-worth New Zealander or business person looking to establish overseas, so it gives us great confidence that we can go to basically anywhere in the world and talk to a competent lawyer quickly, and get them engaged to help our clients out.
The other thing that we’ve done, we’ve looked after a couple of lawyers from other firms, from Europe. We had someone down from the [inaudible 00:27:13] firm out of Copenhagen, a few years ago. I can’t remember the lawyer’s name who came to work for us, but she was a contested lawyer, great to have around the office. Again came from a different jurisdiction and different training as a lawyer, but picked up the job very quickly. And turned out to be a very good lawyer, worked, and fitted well with us very quickly.
Lindsay: Those secondment opportunities, I think, are one of the things that really is a benefit of the ILN and the ability for lawyers to be able to go and practice with a firm in another part of the world, that they may not have met before. At the same time, as you say, there are so many similarities, even when the type of law is different, even when the system of law is different between all of us, that people are able to slot in quite well.
Michael: To be honest, a contract’s, a contract. They’re not hugely different. They all start the same things and end the same things. It’s what goes in the middle, which is generally where it differs a little bit.
That’s one thing that I would strongly promote around the network, it would be great to get our young people traveling around and working in member firms for a period. It’d be a great experience with them and actually for the network because it would create bigger contacts, so bigger connections.
Lindsay: Exactly. Now that things are opening up, I think we can get back to that a little bit. When we first went into lockdown, we actually had two lawyers who were stuck at their firms. One in Italy and one in Brazil, who had spent a little more time in the countries than they thought they were going to.
I think now that things are starting to hopefully open up and borders are a little bit back to normal, we’ll see more of that happening.
Lindsay: What’s one piece of advice you would give to law firm leaders at the moment, who are managing their firms, just dealing with the day-to-day experiences of practicing law?
Michael: Look after your clients. Our practice and our business are all driven by who we get instructions from. Look after your clients, and be closer to them than you’ve ever been close to them. Understand what they want, help them through the good times, and help them through the tough times. I’ve had one client with who I’ve worked for over 20 years. A very loyal client who used to be a major high flyer in New Zealand got caught in the GFC, so I had the good years and I had some bad years. He’s that particular person’s coming back. The lesson here is to stick with your clients. Look after them, do as good a job as you can, understand what they need and what they want, and try and help them through what they’re trying to get through.
Lindsay: That’s great advice. Totally separate from everything going on with business and the world at the moment, which is a heavy place. What’s something that you’re really enjoying?
Michael: What am I really enjoying at the moment? I’m actually enjoying getting home at a reasonable hour because we can work from home. In the office, I tend to… I’ve changed my focus on what time I go to the office. I don’t go to the office at 7:30 any longer. I go to the office about 9:00 after I’ve had a bit of a cycle in the morning. Or, I’ve had a bit of a workout and I’m doing that most days. I come home at 6:00 and I’ll do some work after I’ve had dinner. I’m just enjoying the difference that has been brought by the fact that you can work from the home, work from the office, and not take things too seriously.
Lindsay: No, I agree with you. Being able to make it seamless and just easier to move between the two places, I think, has made a big change in people’s quality of life.
Michael: I think it’s for the better. It’s killing our CBDs. Auckland CBD is dead. It’s a ghost town, but it’s because hardly anyone’s in the office. It’s made for a better work-life balance for people in our field.
Lindsay: I think that’s true across the world because we’re seeing that in a lot of cities here too, in the U.S.
With any major shift in the world, we see new opportunities and new changes come along that we never expected before, too. I’m curious to see how that will look over the next several years.
Michael: Absolutely. Who knows what that will be, but this has certainly shaken everybody up, in terms of how we actually work and carry out our daily lives. My daily commute is 20 minutes. It used to be 45 minutes, but it’s because no one’s driving into the city.
Everything’s just a lot easier. On the downside, something’s got to suffer. Our CBD sare dead. Our CBD is a place you wouldn’t go now because it’s just not safe and there’s no one there. Businesses are all folded up and they’ve been the casualty of all of this, but then your neighborhood centers are thriving. Well, hopefully, we get up to see you guys sometimes soon. Yeah, I’d like to be on a plane to Europe, probably this time next year. That’s what I’m thinking, maybe not till then. It’s still a little bit uncertain in this part of the world, but that’s what we are thinking around our office. Again, we’re probably six months behind the world, in terms of how we look at these things.
Lindsay: In the meantime, it’s great that we can chat over a nice Zoom call and at least have some interaction.
Thanks to all of our listeners, as well. We’ll be back next week with another guest.
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