Capital markets

China, #Auslaw firms, and the $400 billion lost opportunity

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Last week I blogged that Australian law firms were missing out on a massive opportunity by not being better at selling Australian law, and Australia more broadly, as an alternative venue to London and New York. One of the things that I commented on in the post was how Australian law firms were falling short on their ability to sell venues such as the National Stock Exchange (NSX) and Australian Stock Exchange (ASX) as alternative venues on which Asian, and Chinese in particular, companies could look to to raise capital.

It could not have been more timely then that later in the same week Reserve Bank of Australia (RBA) Governor Glenn Stevens added a monetary value to the opportunity being missed here – $400 billion.

Yeap, Stevens is quoted in this article as saying:

“…capital markets should prepare for a world where China invests $400 billion a year offshore.”

So, the question I asked in my blog last week remains:

“What is your law firm doing to capitalize on this opportunity?”

Because there is absolutely no doubt in my mind that while we ponder this question others in the region are touting the benefits of Singapore, Hong Kong or a whole raft of other suitable offshore venues.

Demand for legal services in Australia is flat – so what can I do about it?

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Yesterday’s [4 July 2014] Australian newspaper Legal Affairs section published an article – “Top-tier firms axe hundreds of jobs” (subscription required if you wish to read the full article) – that opened with the following paragraph:

THE nation’s biggest law firms are in the midst of an employment shake-out with hundreds of jobs disappearing as the firms slash costs in the face of flat demand and intense competition.

The point of this post is not to opine on whether or not demand for legal services in Australia is truly flat, nor whether indeed demand among, so-called, ‘top-tier’ firms is intense, which I’ll leave for another day, but rather to comment on whether or not such flat demand, and indeed intense competition, should lead to the loss of hundred of jobs.

First off, anyone who has a memory even slightly longer than a gold fish, will recall that most (if not all) international firms (of whom most make up this so-called ‘top-tier’ level here in Australia) who entered the Australian market post the GFC cited “flat demand” in their domestic jurisdictions, and the need to grow revenue from other jurisdictions, as a strategic reason for doing such.