Q&A: Sarah Cappello – “Mistakes happen and everyone's human, but it’s about how you react to those mistakes and whether you do them again.”

In short:

• Hunt & Hunt Lawyers believes key synergies with Hicksons Lawyers will contribute to a successful merger between the two firms.
• For Sarah Cappello and her team, tapping into Hicksons’ advanced AI strategies is one of the most compelling reasons for partnering with the firm.
• In the face of two key crises at Hunt & Hunt – a cyber-attack and an embezzlement case – Cappello says the takeaway lessons have been clear. Partners must turn to each other and work cohesively; and the focus must be on taking steps to ensure that the mistakes are not repeated.

Sarah, let’s start by asking how you got into the law and about your journey from setting up your own firm, Cappello Rowe Lawyers, to becoming managing partner of Hunt & Hunt Lawyers.

For as long as I can remember, I have wanted to be a lawyer and I don’t know why – my mother tells me it's because of the TV show Ally McBeal, which I really enjoyed watching when I was young. Going through the HSC, I didn’t think I’d get the right marks for law, so I also picked commerce as I’ve always had an acumen for business. I did end up getting the right marks, though, so I went straight into law-commerce. The commerce degree came a lot easier than the law degree, and that was relevant when I started my own business, Cappello Rowe, at a very young age with my business partner at the time, Andrew Rowe. I worked with Andrew as a summer intern when I was doing my law degree and, as soon as I finished my degree, Andrew called me and offered me a job that was too good to refuse. That took me back to my hometown of Griffith and within about 12 months we started the firm. I was a non-legal director of an incorporated legal practice for a number of years because I couldn't be a legal director. I was unsupervised. I don't know what motivated Andrew to start a business with somebody so inexperienced, but from my perspective I was young and naive and didn't think it through. If I went back in time, I probably would be a little bit nervous about the risks associated with it, but we had a great practice.

Cappello Rowe ultimately expanded into Sydney and made its name in litigation and areas such as commercial, employment and family law before merging with Hunt & Hunt in 2020. What attracted you to the idea of a merger?

Well, we’d grown the firm to 30 people within 10 years and then, during COVID-19, Andrew decided he didn't want to be part of a law firm anymore. The business was going well and we were on a pretty strong growth trajectory, but for personal reasons Andrew just decided that he needed a break*. That led me to a broker, which helped me find Hunt & Hunt, and it fit the mold for me. We had a few other offers, but they were from other firms that were fixated on me being a woman and I seemed to tick a box for them. With Hunt & Hunt, that wasn't the case. They were genuinely interested in our firm and they were genuinely interested in me and how I could contribute to the partnership. It was quite unique in that I was offered equity right off the bat. So, I came into Hunts as an equity partner, which is not something that most partnerships readily do.

What are the challenges you've faced as a leader?

About two years ago, Hunts went through a transformation after a few bad things happened. We had a cyber-attack, which is every law firm's worst nightmare, we had a staff member who embezzled money, and then we had some management changes. Those things led to a really difficult time for us, and I'm very open and transparent about such things. Some people would cringe that I'm being honest about these issues, but I think being honest is really important, particularly among managing partners. We are through the tough times and we've moved forward.

How did the firm deal with those two confronting challenges – the cyber-attack and the embezzlement case?

They happened before I became managing partner, but they were really huge events that caused significant stress and exposure within Hunts. You feel very vulnerable when you're in that position as a partner. We're a traditional partnership, not an incorporated legal practice, so the stress of putting my family at risk financially is what kept me up at night. I know it was the same for the other partners. There can be a downward spiral whereby you're so overwhelmed by what's occurring that you lose focus on your practice, you lose focus on the team, and it becomes hard to get out of that downward spiral. A change in management at the time was the boost that we needed to realign. I am very sympathetic to the former managing partner – it was a heavy burden that faced and he did the job alone. Whereas, we changed tack with Hasti Kalarostaghi and I doing the managing partner role together. It was the reset that we needed to get through the problems.

What was your strategy to overcome the crises?

When you’re faced with such challenges, the answer is to look to your partners and work together. With the cyber incident, we have a great partner, Andrew Campbell, who is experienced in privacy matters and he really helped guide us through our obligations. We were lucky in that the attack was really contained; it wasn't to our system and it wasn’t a ransomware attack. But it did cost us hundreds of thousands of dollars, and it demonstrated that you can get complacent with insurance. The big thing to remember is that mistakes happen and everyone's human, but it’s about how you react to those mistakes and whether you do them again. Law firms, in particular, are susceptible to cyber-attacks because of the information we hold. Once you realise there are bad actors out there and that you must have robust systems, it changes your mindset in terms of the investment that you'll make, the insurance that you have, and the time, dedication and money you're going to be putting into your firm.

What about your management style – how would you describe it?

I've always been really fixated on transparency, to the point where I get told I almost give out too much information. Being transparent and honest, though, also allows me to be authentic. I am not for everybody, but you need to be authentic to yourself and not present an image of someone who you're not. The focus when Hasti and I became managing partners was to be honest about where we were as a firm and not try to pretend to the team that things were going remarkably well because they weren't at the time. You don't want to scare people into thinking that it's doom and gloom because it wasn't doom and gloom. But we were honest and told everyone that we had a plan. We worked through the situation and said, ‘This is how we think we can see our way out of it’. To me, leadership is about honesty, but also being a calming presence and a reassuring presence – being reliable and doing what you say and being accountable. I'm very focused on that among the partnership now. We keep each other accountable, but at the same time we are there for each other.

Tell us about the merger with Hicksons and why it’s the right move.

At Hunts, we’ve always been receptive to growth. Obviously, Hunts merged with my firm Cappello Rowe a few years ago and we've had ongoing discussions with other fantastic firms about a merger that haven't come to fruition for various reasons. After we were approached by Cameron Leaver, Hicksons’ managing partner, it became apparent to us that it would be a really, really good fit. We bring a robust Commonwealth practice and they're very strong in insurance. Hunts really started almost 100 years ago in the insurance space, so it's nice to come back to those roots. They have incredible partners and a fantastic practice that is really focused on innovation. David Fischl is one of the partners at Hicksons who is an expert on AI and how technology can improve workflows for lawyers to improve clients' deliveries and also to make it more cost-effective in the long run for clients. That was hugely attractive to us. They're well in front of Hunts in terms of AI. A lot of firms can't afford to create an AI offering. We certainly can't at Hunts. The top-tier firms seem to be taking that space and creating their own systems, and we feel like there’s a risk of falling further and further behind. At Hicksons, they’re mid-size in terms of where they're positioned, but they're really competing with the top tiers with their AI offering. So, we’ve been hugely impressed by the work that David and his team do in that sense. Beyond the technology, the cultural fit between Hunts and Hicksons was also a big factor for us, both in terms of their staff and how they treat clients. I'm so excited to get this merger happening to offer our clients the additional services that they have and also to work with some incredible new partners. I mean, we’ve already got fantastic partners at Hunts, but just having another 30 partners who I can share the experience with is something that is really attractive to me.

What sort of practical ways do you think AI might be able to help law firms such as yours in coming years?

I can only speak to my practice. AI will help reduce the time I spend on trying to understand a client's needs, including before I'm even engaged. The other key benefit is managing the huge volume of documents that we have. Again, there are instances where we'll need to do some quick searches, so using AI to get an overview and a summary for briefing counsel would be hugely beneficial.

Just back on the merger again, which we understand is slated to come into effect in July 2025. You have been through a merger before with Cappello Rowe, so we’re interested in the lessons you have picked up on handling a merger that may be informative for our readers.

It’s a good question. Being open to different ways of doing things is important and not being fixated on ‘my way’s better’. Both sides need to recognise that they each have strengths and play to those respective strengths. Really understanding the impact that the merger process is having on the team is key, too. As the merger with Hicksons nears, I’m getting very bogged down in high-level meetings, and we’re talking about banks, trust accounts, insurance and big-picture things. You can sometimes forget that there's a human on the other end of it who's coming along with their journey and they've not been involved in the decision, but they're suffering the consequences. As a result, in a lot of these meetings the team is really at the forefront of our minds as we ask, ‘How is this going to impact them?’. Being people-led with decisions is going to give us the best merger outcome, as well as communicating constantly with the team and being available. I got some great advice from Hicksons’ chair, Wayne Spanner, who said, ‘Try not to get stuck in the weeds’. We've got a lot of people who are really good at their jobs, so we should let them do it. I’m trying to focus on the big picture and not get stuck in the minutia.

What is your hope for the future of the newly merged firm?

In five years, we would love for the two firms to be fully integrated so there's no distinction between a Hunts person and a Hicksons person – we want us all to be together in this. I think that’s going to happen because we went to a partners’ retreat recently and the energy in the room about how we can collaborate was incredible and there's a really strong desire for this to be successful. I expect to see some clearly integrated teams that have a mix of people across the two current firms who are working together as one. We should always be looking for opportunities to help each other out to make sure we succeed as a whole. That's the definition of success – wanting to do the right thing by our colleagues and trying to bring our colleagues up.

What else would you like to convey to fellow law firm leaders?

I've really enjoyed, while being managing partner, the relationships that I've been developing with other managing partners. Getting to know them and how their teams works and the challenges they face is incredibly valuable. We've gone through a couple of due-diligence processes with different firms, too, which has given me an insight into how they operate. That's always interesting because we can get stuck in our own lanes. So, we need to be constantly learning and be curious and help each other succeed. The message to fellow leaders is to be open to conversations and be honest about them.

www.hunthunt.com.au

* Andrew Rowe has returned to practice law and is a principal at Hunt & Hunt Lawyers.