Reaching for Eastern ambitions

By Robert Sawhney, managing director, SRC Associates

There is a sense among the more forward thinking law firms in Asia that the continued entry of foreign law firms into Asia requires them to up the ante, whether those firms are local or of foreign origination. The recent merger of Norton Rose and Deacons (Australia), and the entry of Allen and Overy into Australia, prove how serious the bigger names in law are about the Asian market.

Whether through deliberations in strategy and practice management, international expansion, or lateral hires, firms here are making a greater impact both in this region and overseas. One of the prime examples is King and Wood from China. In sealing an alliance with Gilbert and Tobin (G&T) in Australia a couple of years ago, the COO of G&T spent some time in the mainland offices of King and Wood, helping that firm to modernise its practice management. King and Wood also has the only Western marketing director working for a Chinese law firm. It has also opened offices in the US, and it can practice Hong Kong law through the merger with Hong Kong law firm Arculli Fong and Ng.

The Singaporean law firm Central Chambers, meanwhile, has gone the alliance route to enhancing client value. A boutique firm of only 18 lawyers, this firm has formed a joint venture with China’s largest law firm Dacheng. The same alliance also has a ‘best friends’ relationship with Indian firm Vaish Associates Advocates, which creates the link for the Southeast Asian, Chinese, and Indian practices.

Azmi and Associates from Malaysia has done a little of everything. A firm of 10 partners, it established its International Law Division practice group, and appointed Michael Doyle as adviser (US Laws and Practice Development) to enhance its capabilities in assisting US and European investors with projects in Southeast Asia. Azmi also became the first Malaysian law firm to break into China via an alliance with Zhong Yin. It is also a member of the TerraLex alliance of independent law firms, which has members in 100 countries.

Breaking with tradition

Aside from these ‘newsworthy’ initiatives, I have also noticed a recent gradual shift in the perceptions of the many small and medium-sized firms in the region. Just last week the managing partner of Surana & Surana (a 65-person firm located in Chennai, India) was at my offices talking about what they are doing to boost their competitiveness. A PhD from LSE, Vinod Surana struck me as a visionary in an emerging market, well known for traditional thinking. Always on the look out for new ideas, the firm recently embarked on building an arbitration centre. and he himself looks for management concepts from divergent industries for inspiration. For example, he attended a tour of the Toyota factory in Japan to learn about that business’s processes.

New horizons

Meanwhile, Law Asia, which is an international organisation of lawyers’ associations, individual lawyers, judges, legal academics, and others (and focuses on the interests and concerns of the legal profession in the Asia Pacific region), has just set up a law management section to highlight key competitiveness issues facing firms for the first time. At the annual conference held in Vietnam in November 2009, it hosted a number of panels dealing with management. I was fortunate enough to be invited to sit on the panel dealing with changing client expectations, and it was clear that many firms in the region were grappling with similar issues (such as alternative fees), but were also very well informed of what was happening elsewhere. They also seemed determined to accept the new realities and do something about it.

In Hong Kong a number of the smaller firms have also started to take marketing and practice management more seriously. Some of them are going as far as to hire strategic planning directors for the first time (Oldham Lie and Nie being a good example). Such firms have started to realise that achieving client satisfaction in an increasingly competitive market takes more than just superficial adjustments. It takes a cultural shift and mindset change. Having said all this, local firms still have a long way to go.

It is hard to deny the draw of Asia, and given the gradual liberalisation of key markets such as Singapore and South Korea, as well as the continued influence of China trade, it would appear the influx of foreign firms into the region will continue. It should be noted that many of the markets here are very competitive, however, and even in places such as India (which is closed to foreign firms), half of all legal spend goes to foreign firms. In other words, Woody Allen was not quite right. 80 per cent of success is not just showing up! Market entry strategy and a coherent plan are vital too.

— bob@srchk.com