Association of Southeast Asian Nations

Does my law firm need an Asian strategy?

Business Development image

I go to a lot of meetings at which the state of the Asian* legal market is discussed during the course of a year. At a lot of these meetings, it is taken as a given that the relevant/respective law firm “needs” to either be in Asia, have an Asian strategy, or both. But, as is the case with a lot of prospect mining in this industry, short consideration seems to be given to the pitfalls of getting involved, and the most important strategic question of the lot:


as in:

Why do we (as a firm) even want to be involved in the cutthroat market of Asia?

is all but glossed over.

Keep in mind that most law firms won’t make money in their first few years of involvement in the region (and I should know, I have first-hand experience helping with the success of a start-up law firm that later became part of Clifford Chance). Indeed, some firms have been active in Asia for over a decade and still haven’t made any real money (and now exist on the principal that they have “a lot invested in the region”). And with a number of firms saying they want to grow revenue by 30 or so per cent year-on-year, if you do decide to get involved in the region then your firm’s commitment can easily and quickly translate into millions of dollars.

With all of this in mind then, it is important that your strategic reasons for being involved are more than simply a partner’s desire to live somewhere a little more exotic than cold, windy [insert name of city] or because you heard on your train ride to work this morning that XYZ company may give you a job in Rangoon at some unspecified time in the future.

More specific questions your firm needs to be asking include:

  • does the firm have short-term, medium-term and long-term strategic goals in place that will help measure whether your foray into the market has been a success?
  • has the firm identified which of your existing client base is active in the region?
  • do any of your firm’s clients have strategic growth plans for the Asian market?
  • are your firm’s potential clients in the region growth prospects, or are they mature players whose account you need to keep?
  • is your firm pursuing an aggressive acquisition policy or more conservative rear-guard protectionist policy?
  • how are looking to grow in Asia – lateral hires in the markets we want to be in (preferred method for South East Asia)? Or are we relocating partners from elsewhere into the jurisdiction (favoured method in Korea for example)?
  • what performance related metrics has the firm put in place to encourage its partners to be actively involved in the strategy (for example, is there cross-referral profit points?)?
  • what local issues will the firm need to include? – For example, how many law firms send lawyers to Asia without sending them on a cultural awareness or language program (in the same way as government departments do)? Why is that I wonder?
  • what are your competition currently doing/likely to do in the near future in the region? Importantly, do they have a chequebook that is likely to cause me considerable pain?

These are just some of the issues your firm should be thinking through if it wants to get involved in the potentially lucrative Asian market.

And the pot of gold at the end of the rainbow?

  • The Asia-Pacific legal services market had total revenues of $80.4bn in 2013
  • The Asia-Pacific legal services market enjoyed compound annual growth rate (CAGR) of 5.9% between 2009 and 2013
  • The Asia-Pacific legal services market is forecast to enjoy an compound annual growth rate (CAGR) of 7% for the five-year period 2013 – 2018
  • The monetary value of the Asia-Pacific legal services market is forecast to be $112.9bn by the end of 2018

Unsurprisingly then, you won’t be alone. There were approximately half a million active lawyers in the Asia-Pacific legal services market 2013.


* It is critical, when looking at your “Asian” strategy, that you think of the whole of Asia – Indonesia; Korea; Myanmar; Malaysia; Philippines; Singapore; Thailand; Taiwan; Vietnam; as well as China. In other words, Asia is more than just China. If China is your market strategy, that’s fine but don’t call it an “Asian” strategy, call it a “China” strategy. Likewise, if ASEAN is your target market, call it an ASEAN strategy, not Asian.

What are Asia regional in-house lawyers looking for from their outside counsel?


Business Development image

The end of November saw Legal Week ( putting on the second of its Asia regional ‘Corporate Counsel Forum’ events in the Gallery Room of Singapore’s Grand Hyatt hotel.  Judging by the impressive collection of 220 regional in-house lawyers who attended, this event is likely now a firm fixture in the diaries of many in the industry. And rightly so. Events of this calibre are few and far between and should not only be welcomed, but encouraged.

Legal Week’s Elizabeth Broomhall wrote up a very succinct account of what took place at the Forum in a post on the Legal Week website on 5 December [2014].

In summarising the day’s events, and following subsequent discussions with Lucy Siebert, international counsel at Australia’s Telstra, and Julia Shtepa, managing director of legal for South Asia at Accenture, Elizabeth’s article highlights the following 5 issues (among more) as issues in-house team in the region have identified as being important to them when selecting outside counsel.

1.  Local or International?

It would appear that in-house counsel in Asia are not immune to a discussion that is taking place on a more global level; namely:- should we be hiring local or international law firms?

On the one hand, there are many benefits to hiring an international law firm to act on your matters. On the other, particularly in the mixed legal landscape of Asia (where common and civil law sit side-by-side), there really is no substitute for – as Siebert calls it – “on the ground knowledge”.

I would wholeheartedly agree that there are complex issues in play here, as it is indisputable that there are very clever lawyers working with leading country and regional law firms. That’s why I was particularly drawn to Shtepa’s comment that:

“Sometimes Accenture will engage an international firm to play a ‘deal coaching’ role, she said. “Depending on the regulatory environment and the language constraints, it may be that the deal is led by an international firm and supported by a local firm”.”

If you can afford it, then this seems to me to be a very clever approach to take.

Alternatively, a case could be made that in-house counsel in Asia, as is the case in other parts of the world, look to instruct the lawyer and not the law firm.

2.  Panel or no panel?

Client legal panel arrangements are the bane of many a private practice lawyer and their marketing team. Many an hour is spent responding to these and Australia, the home of Telstra, has undoubtedly played a major role in the development of this arrangement. Indeed, many of the ASX 200 have both Australia and Asia legal panels in place. So I was surprised to see Broomhall write that:

“many regional counsel believe these [panels] remain difficult in Asia given the limited capacity foreign law firms have compared with in their home markets, the different practice restrictions on foreign law firms across jurisdictions, the high turnover of partners in the region and the fluidity of the markets.”

While each of these is valid in their own right, none are unique to the region – and certainly would not seem to me to be an impediment to implementing a panel arrangement if the desire was there to do so. No, I would contend that there are two additional factors that mean panel arrangements are not, yet, as prevalent in Asia, which are: (1) relationships still trump all when assigning work; and (2) the rise of procurement is still to come.

That said, as Broomhall herself says: “An increasing number of companies, including Chinese state-owned organisations, have been moving in this direction in a bid to control costs” – and given the number of tender writing jobs that require local/regional language skills (notably Mandarin) that I have seen advertised in the last 3 months, my guess is that this [implementing panel arrangements] will be one of the major growth areas in 2015. Indeed, I will be interested to see what the position on this issue is at the Forum in 2015!

3. Where are all the Alternative Fee Arrangements (AFAs)?

Throughout my time in Asia, law firms have had to be very conscious of their cost-base as clients have always been value drivers. And with annual ROI profit margins of around 20% (which translates to probably the lowest ROI returns in the industry globally), many would say rightly so.

Leaving this aside however, I found myself in total agreement with the comment that when it comes to innovative fee arrangements, Asia lags behind the West.

Actually, with my interest having been spiked in this issue I went online to try and see how many firms had ‘on the ground’ regional Pricing Directors (a role that has seen phenomenal growth in both Europe and America, and less so here in Australia) and I couldn’t find one law firm that had an on the ground head of pricing present in the region.

All of which screams: law firms who can create opportunities to genuinely discuss the value exchange and AFAs with their clients have a massive opportunity to differentiate themselves in what is currently an extremely tight market.

4.  Secondments and other value adds

It was interesting to note that both Siebert and Shtepa agreed that “secondments are also an opportunity to add value”.

In my experience, the staffing structure of law firms in Asia – which need to necessarily be tight because of the control on costs – has, historically, not leant itself to law firms offering secondments to corporate clients (historically, as part of a global offering, financial institutions have tended to fair better here).

Clearly, going forward, one of two things will happen: either law firms will need to revisit this discussion, or New Law providers –such as Lawyers on Demand and Riverview Law – are going to find a very nice gap in the market – indeed, many may argue that Advent is already taking advantage of this exact situation.

And law firms who doubt this should note Siebert and Shtepa’s comment that:

“secondments help lawyers in private practice gain a better understanding of their businesses. Indeed, they believe this is the key overall message to get out to firms: get to know our business; understand our drivers.”

and one of the best ways to do that – a secondment.

5.  A more diverse profession

I wanted to finish this post on what I consider to be an important note of hope from Siebert’s comment that:

“We [Telstra] specifically look to see that they’re ensuring the best possible talent pool for us – not just white Anglo-Saxon males. We’ve got a very strong diversity policy and so we expect that to be something that is also important to our panel firms.”

If you haven’t already read Elizabeth’s article, I would like to strongly recommend that you wander on over there now…

Coming of Age in Asia

Business Development image

2014 is slowing to drawing to a close, and with it a notable milestone in my career:-

2014 constitutes 18 years since I started working in the Asia-Pacific region; hence, the year I consider myself as coming of age in Asia.

If I’m completely honest, the start of my career in Asia was more of an accident than a plan. Having backpacked my way through South East Asia (SEA) in 1991, I had returned for a “brief” visit to see friends before moving on to live in Australia for a while. While there, I met a group of young lawyers who were looking to set up their own firm. They were full of vigour and had a zest for life I found infectious and, as luck would have it, it would be another 12 years (and several coup d’états) before I made it to the shores of Australia!

And so, in a reflective mood of nostalgia, I have decided to write down 10 things that remind me of those times to see how far, as a profession, we have progressed.

1. There was a financial crisis

I had hardly got my feet under the table when the Asian Financial Crisis (AFC) would hit in 1997.

What’s more, I was squarely in the epicentre of this crisis – later to be called the Tom Yum Goong effect (following the forced float of the Thai Baht) – and a whole bunch of lawyers in the region would find themselves retraining from being project finance, M&A and capital markets lawyers to bankruptcy and restructuring lawyers tout de suite.

The “internet” (pre-Google) was our new best friend and Chapter 11 was the new buzzword!

Not that I knew it then, but the AFC would play a major role in my career for many years to come.

(NB: I was later to arrive in Australia in 2007, a few months prior to the Global Financial Crisis (GFC))

2. International law firms were in expansion mode

International law firms operating in SEA in 1996 largely consisted of Baker & McKenzie and Freshfields. A number of others did have “best friend” status with local firms, but they had not made the move to hanging their own shingle on the door just yet. The operating strategy of the day was still “fly-in, fly-out” from Singapore or Hong Kong.

The considerable upswing in workout work following the AFC would fundamentally change this approach and it would not be long before Allen & Overy, Clifford Chance and Linklaters would all have local operations. Norton Rose would follow later. Coudert Brothers and White & Case would also operate locally (Coudert Brothers on the back of Freshfields closing down its operations).

Unlike later expansions undertaken by these firms however, all flew-in international partners (a number, including Linklaters, would later reduce or eliminate their “international partners” from on the ground in SEA for a “local partner” strategic approach), and all cited “assisting global clients locally” as the rationale for opening locally.

(NB: It is worth noting that a number of international law firms would continue to offer services in Indonesia and the Philippines on a “fly-in, fly-out” basis).

3. India and China were the future

Everyone you ran into in those days talked about the future being India and/or China (it would be some time before I would hear of the acronym “BRIC”, but accept it may have been in use then). The only problem at the time was that (a) India’s market was regulated, and (b) China’s market was very embolic – in those days, not too long after Mao, it was extremely difficult to find a mainland Chinese qualified lawyer who spoke English. Add to that the restrictions in place on mainland qualified lawyers and foreign firms acting on the ground in mainland China, and it was rare to find an international firm who had such an offering.

As would transpire, our approach to India would arguably prove to be the blueprint to the “sector” approach that would become all the rage in years to come. In India’s case, practices were set up in Singapore and Dubai (for proximity purposes) with “India desks” in London, Hong Kong and New York (at that time, most capital raisings being undertaken by India companies were NY-based 144a deals and if I was to be paid a $1 for every time I heard a NY qualified lawyer complain about direct flights between HK and Mumbai I would never have to work again!). The notable thing about these Indian practices? – they included capital markets, corporate and commercial, and finance lawyers sitting together in the same space.

18 years later and India and China are still the future. Meanwhile, a generation of lawyers have passed through the system.

4. Fee pressure was immense

Fee pressure was immense following the AFC – period!

99 per cent of the work assigned to lawyers went out on a competitive tender basis and, in many cases, firms would tender to do the work on a loss leading basis. Often the reason cited for this was “to keep our lawyers busy”.

Needless to say, those firms who didn’t smarten up to the tendering process and how to price work profitably were pretty quickly destined not to hang around.

(NB: so prevalent was competitive bidding at the time, that I heard of one occasion – unverified – where a firm ended up bidding against itself.)

5. Alternative fee arrangement (AFAs) were the rage!

The first AFA I ever saw was an agreement to do the legal work on an IPO in exchange for shares in the listing company (a practice that would later be prohibited by the regulators). I would soon see a “success fee” arrangement for a competitive bid of bankrupt assets and more “fixed fees” for loan workouts and debt repayment applications than you can poke a stick at.

All of these pre-dated the GFC in 2008.

So when I say to people there is absolutely nothing new with AFAs, I mean I can actually cite examples dating back to 1997 where we used alternatives to the hourly rate on a daily, if not hourly (pun intended), basis.

(NB: a firm I worked with had an annual retainer for a client in place in 1998)

6. Technology

Anyone remember the Y2K bug?

Oh what fun we had with that one! I don’t think I ever did work out how much we must have spent making sure we didn’t lose all of our clients’ records overnight. In a day when most of our computers weren’t even networked, technology was something we thought about constantly.

7. Outsourcing

A debate was taking place in the business at the time as to whether or not support services should be outsourced and lawyers should “concentrate on lawyering”.

At least one firm I know went down this path and outsourced its accounting and secretarial services (and later, marketing would also be outsourced). That firm is still operating on that basis to this day.

Another firm I know spun off its support services function into a limited liability company and then charged back the support services to the firm on an “as needs basis”. Unlike the previous example, this practice became too contentious and, as far as I am aware, the support service was brought back into the mainfold of the firm (but it is worth noting that a number of in-house legal teams would operate on very similar structures down the road).

8. Support services became its own business

Prior to 2000, most lawyers I knew did their own marketing, wrote their own tenders and were in charge of their own knowledge management and client updates.

A significant increase in global panel tendering for financial institutions and corporates, together with project based pitching, changed this approach. Add into the equation the rise of corporate events and directory listings (at that time, Martindale Hubble was the only real regional directory listing but Chambers and APL500 were just about to take off) meant a business case could now be put forward for specific support services.

Likewise, the need for precedent documents to help keep costs down when pricing for work, as well corporate intelligence on clients (used in things such as client meetings and tenders), client legal updates, and more general information management saw the development of the “professional support lawyer” / knowledge management role.

In sum, between 1998 and 2005, in my part of the world, support services rapidly became a business in its own right. Which is probably just as well for me.

9. Relationships trumped all

The relationship between a lawyer and their client trumped all – and it was as simple as that.

There was no such thing as “commercial” and “legal” conflicts, because there was a complete understanding that you would never act against the interests of your client. This was ingrained culturally. In times that pre-dated key account management, global account management, etc. lawyers knew everything about their client. They spoke with the client frequently and often met informally.

There were, however, two prevailing problems with this approach: (1) many client relationships were not that profitable and (2) we hadn’t yet worked that out yet!

This would change with time, and while I would argue that relationships still trump all in Asia, the level of sophistication surrounding the profitability of a relationship has improved significantly since those days.

10. It was fun!

Last, but not least, we had a lot of fun!

Yes, we worked long hours. But, we were young. And, we grew up together. Many of us went to each other’s weddings. We celebrated each other’s children being born. And we went to significant other events in each other’s lives.

(p.s., in days before the Asian Financial Crisis there was a restaurant in the old Stock Exchange of Thailand (SET) building on Wireless Road that would set its lunchtime buffet price according to the [lunchtime] closing bell. It occurred to me when writing this post that it’s probably only now, 18 years later, that they would be able to get away with doing that again – if they still existed)

Can a falling A$ make selling Australian legal services easier overseas?

Business Development image

As regular readers will know, I have written a fair amount in the past (see here and here) about how a depreciating Australian Dollar (A$) is likely to be unkind to the Australia-based partners of international law firms operating here. It was, therefore, pleasing to see a post ( ‘Will international firms still call Australia home?’) on the Australasian Lawyer website yesterday that largely echoed many of the comments I had previously made.

So, with (1) the Australian legal press and a number of eminent managing partners echoing my views, and (2) an A$ hovering around the 87c on the US$ mark, a new question now comes to mind:

Can a falling A$ make selling Australian legal services easier overseas?

The answer here will depend on your law firm, its culture and client base. But, assuming that your firm actively encourages cross-border collaboration (and there is a whole different post there), the short answer should be yes.

If that’s the case, then some of things you need to be considering include:

  • How recently did I update my website profile/CV? Are all my deals Australian-based? Am I showing regional experience? Indeed, am I using regional keywords in my website profile or only local Australian used ones?
  • What sectors in Australia are likely to benefit from a falling A$ (tourism?)? Do I have expertise or a story to sell here?
  • A falling A$ should make assets in Australia more attractive to international purchasers (case in point: pension funds looking at real estate?). What am I and my colleagues doing about this?
  • What is the Australian Government’s current policy towards a falling A$ and foreign direct investment (FDI)? Is there a story to tell here (and there most likely is if you look closely enough)?
  • Are there regional developments that I could take advantage of (for example, development of arbitration courts in Singapore and HK?)?
  • Are there any free trade agreements (FTAs) in pace that make the falling A$ attractive (export markets?)?
  • When was the last time I talked with my clients to see how they were being affected by market/currency fluctuations and what steps they are putting in place to get the most out of this (manufacturing/FMCG?)?
  • Is there any way I can help my clients out with the current environment (put them in contact with clients in Asia?)? Maybe I can/should attend a regional trade or industry conference.
  • How often am I communicating with my colleagues in Asia, US and Europe to discuss work opportunities (including the chance to work in US$s?)? [time differences may have put this off before; but if I can bill in US$s, suddenly 2am conference calls don’t look so bad!]
  • What local or regional opportunities (tenders, capability statements, etc) are my business development team working on? Is there any way I can get in on this?
  • What regional panels are my firm on and can I look to develop these? If so, who is the relationship partner?
  • Should I be considering a secondment to another office in our firm network or to a client outside Australia (Asia, Europe, US) [especially if I can charge US$ for it!]?

Clearly you will need to make sure that you are meeting your clients’ expectations. You will also need to make sure you have in place a fee mechanism that is considerate of the exchange rate, while being beneficial to you and your firm, and also allowing everyone to prosper from the situation.

But, at 87c on the US$, the value proposition of an Australian lawyer active outside of Australia (such as in Asia) should have become a lot easier to communicate today than it was a year ago.

Now for a word of caution:

if you have been billing a client (especially one outside Australia) for several years in A$s, now is not the time to suddenly, and without notice, start billing that same client in US$s.

Strange as it may seem, clients will quickly see through this move. So make sure you give this issue careful consideration (as clients have also been known to talk with each other!).

Which ‘top’ Australian law firms are struggling to enter Asia?

Business Development image

The headline of the lead-off item in Friday’s (8/8/2014) Global Legal Post was:

Top Australian firms struggle to enter Asia

Pretty strong stuff, made all the more so by the first line of the post, which reads:

“BigLaw Australia has been ‘bitterly disappointed’ at its limited success in entering Asian markets, according to business consultant Dr George Beaton.”

The post left me wondering:

  • which ‘top’ Australian law firms are they referring to?, and
  • is it fair to say that “BigLaw Australia” has been ‘bitterly disappointed’ at its limited success in entering the Asian markets?

So, over the weekend I decided to take a look at this more closely. And, for the purposes of the remainder of this post I have limited my research to:

  • independent ‘Australian’ law firms (i.e., not international firms with an Australian presence),
  • with a presence on the ground in Asia (i.e., not looking at firms’ informal or formal referral arrangements – such as Advoc Asia, Lex Mundi or PRAC, which will likely be the subject of a future post).

Also, in undertaking this I have used the most recent ‘Top 10 Independent Australian Law Firms by Revenue’ list I could find – in this case, complied by the excellent Yun Kriegler (aka @TheLawyerAsia) in her 30 June 2014 analysts post for The LawyerAustralia: medium pace’.

So, here goes:

Top 10 Independent Australian Law Firm by revenue

Offices in Asia

1. Clayton Utz* None
2. Allens** Beijing, Hanoi, Ho Chi Minh City, Hong Kong, Jakarta, Port Moresby, Singapore, Ulaanbaatar
3. Minter Ellison*** Beijing, Hong Kong, Shanghai, Ulaanbaatar
4. Corrs Chambers Westgarth None
5. Gadens Singapore, Port Moresby
6. Gilbert & Tobin None
7. HWL Ebsworth None
8. Maddocks None
9. Sparke Helmore None
10. McCullough Robertson None

* Clayton Utz hit the headlines earlier this year for scratching it’s HK association with Haley & Co. but I’m not sure this one incident is enough to warrant a headline like that above.

** Given Allens tie-up with Linklaters, it’s questionable how ‘independent’ the firm remains.

*** as far as I can see, Minter Ellison’s Asian offices are not financial integrated with the Australian operations.



  • 7 out of the Top 10 Independent Australian Law Firms by revenue have no on the ground presence in Asia at all,
  • for 2 out of the 3 that do have on the ground presence in Asia, it is questionable how financially linked their Asian offices are to the Australian operations, and
  • out of the 7 that currently have no on the ground presence, only Clayton Utz looks like it has attempted to create any on the ground presence in the past few years.

Which essentially leaves Gadens, listed at #5 on the list, as the only independent Australian law firm with any on the ground representation in mainland Asia itself (Singapore, where it doesn’t appear to have a local Qualifying Foreign Law Practice (QFLP) licence).

Overall then I think it is fair to say that that top Australian laws firms have not struggled to enter Asia – because they are simply not there in the first place and many of them have not even made an attempt to be there!

Is it also fair to say then that:

“BigLaw Australia has been ‘bitterly disappointed’ at its limited success in entering Asian markets”?

I’m not sure, because when you look at the published strategy of leading independent Australian law firms there appears to be three different approaches being adopted:

  • First, firms who are aligning with referral groups, such as Lex Mundi mentioned above,
  • Second, firms who are working off informal referral arrangements with firms operating in the Region, and
  • Third, firms who have decided to stay 100% Australian and are not looking at Asia in any great way for future development.

And so the honest answer is that this will take further analysis.

Now, if we were looking at how happy global firms with an Australian presence were with their Asian operations, then this would be a completely different post!


‘Mark Brandon: UK law is focusing too much on the wrong things’ – A response from Australasia

Business Development image

Over the last weekend I (@RWS_01) got into a tweet exchange with the author of a recent good analysis post on the – ‘UK law is focusing too much on the wrong things‘ – Mark Brandon (@MotiveLegal). As part of the exchange, I promised Mark a response to his article.

First off, as it has been some time since I worked directly in UK law, my reply to Mark’s post should be read from an Australasian perspective.

Second, in my reply I have used the same numbering and headings as Mark used in his original post.

So, here goes.

1. The mega-consolidators will struggle

I partially agree with Mark on this one.

If, as I think Mark suggests, law firms are merging simply to ‘purchase’ market share, then I generally agree with him. Likewise, if by ‘conglomerate’, Mark means ‘full service’, then I would also agree.

However, as someone who lives and works in an environment (#Auslaw) where there are roughly:

  • 30 law firms,
  • who earn in excess of A$50 million per year in revenue,
  • with a population of approximately 23 million people,

then I have to say that the trend of consolidation seen in the sector over the past two to three years here will, and needs to, continue.

Will some of these mergers/consolidations result in regional (Asia-wide) mega-firms? Yes, I believe they will [and indeed, with the likes of King & Wood Mallesons, have].

Will these firms struggle? Some yes (most likely those who, as Mark suggests, have consolidated solely to purchase market share), but those who have the right strategy and culture in place, ie where the consolidation is done in consultation with clients, resulting in a more efficient and better service to the client – rather than solely for the financial benefit of the partners of the firms involved, will likely thrive.

Finally, I have to say that I disagree with Mark’s comment that:

“When it comes to law firms, there is such a thing as ‘too big’.”

2. Vereins are over (more…)