Pay rent and go broke, Auckland lawyers told

Independent Auckland lawyers won’t survive because they are not “financially viable” and don’t pay rent on a multi-million dollar CBD headquarters they own freehold.

By not paying rent their business operation is “not an earner,” and is running at a net loss, which means their future is not as good as some folk present it.

This extraordinary fighting talk came from New Zealand Law Society (NZLS) president Jonathan Temm in a tirade against claims the Auckland District Law Society Inc (ADLSI) was under pressure to surrender a $20 million “golden goose” of assets to the NZLS for nothing.

Mr Temm told NBR the ADLSI building was only worth about $8 or $10 million, it was a heritage building needing maintenance, not fully tenanted, not good office space and ADLSI effectively fudged its profitability by not paying rent.

This is contrary to ADLSI figures, which indicate the 3500-member Auckland society is on track to show an annual surplus of between $400,000 and $500,000.

Mr Temm’s view of the Auckland accounts was “they are not going to survive into the future…they are not a financially viable organisation…”

“If you take out the cost of rental for their business units they are running at a loss,” he said.

“We don’t want the building on the current conditions and in terms of the rest of their operation they are not paying any cost of capital, not paying rental or anything else because they are living in the building.”

Mr Temm – who recently urged lawyers to take up selling real estate as a money earner - said the ADLSI council was agreeable to resolving an impasse with NZLS “with the exception of a small group who are absolutely ideologically opposed to any accommodation…”

Lawyers are so bitterly divided over festering rivalry between the commercially independent and asset-rich ADLSI and asset-skint NZLS it has become an incendiary issue in the election of the next president of ADLSI – the outcome of which will be known on Friday.

As NBR reported online last week ADLSI pro-independence lawyers accused Mr Temm of taking a threatening and unprofessional stance over the continued separation of NZLS and its commercial cousin ADLSI.

Some lawyers were outraged by a recent suggestion by Mr Temm that if ADLSI did not capitulate, it would face the full force of NZLS’s competition from next year.

What’s at stake depends on who you listen to.

Auckland’s pro-independence movement reckoned NZLS wanted its hands on – and to sell - ADLSI’s freehold headquarters in Auckland CBD – said to be worth about $14 million, plus other assets and income said to be worth about another $6 million.

A clearly agitated Mr Temm told NBR that in all its discussions with ADLSI council members the NZLS had “never indicated we are taking the building…”

Mr Temm said it was “never suggested we would take the building.”

“It will remain with ADLSI or a trust or some other vehicle they create,” he said.

“It is not an asset that will come across to NZLS.”

Which does not mean NZLS does not want the building.

NZLS says it does not want the building because – as Mr Temm admitted – the Aucklanders wanted “a whole lot of conditions on how it could come across.”

“They say it’s an asset they are very attached to, they have owned it for 21 years, and they are very fond of it.”

“They say they will give it to NZLS but we can never sell it, we can’t do anything with it, NZLS has to live in it and ADLSI will stay there rent free,” Mr Temm said.

He said the building could not be given to the NZLS with such conditions attached.

“They [ADLSI council] offered it to us and we said no thanks. They can keep it and do what they want with it. That’s the end of it,” Mr Temm said.

He said there was “unseemly scrapping” in Auckland between two different organisations claiming to represent lawyers, which was “very untidy” and created a “confused market place.”