Page 5 International Feature
Against the shifting sands of global economic turmoil, strong international links, especially with emerging markets, could prove the key to weathering the financial storms that look set to dominate 2009. While the UK is moving into recession, some other economies are holding firm, prompting the Law Society to encourage law firms of whatever size to focus on building up balanced international and domestic practices. Alison Hook, head of the Society’s International Division, says: ‘Developing an international perspective and capability will not only shore up fee income in the short term but also, longer term, help firms emerge in a stronger and more competitive position when the economy picks up.
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Law firms around the world are certainly keen to forge links with UK practices and share expertise. There is the potential to form relationships with international clients at home as the UK becomes an increasingly attractive location for foreign direct investment as sterling-priced assets become cheaper. At the same time, developments in international legal markets hold out an array of opportunities for UK firms seeking to widen their reach. However, how firms plan their international strategy is widely varied, from opening offices or setting up ‘best-friend’ networks, to secondments and sector-specific alliances. US giant Baker & Mackenzie has 69 offices worldwide. Clifford Chance has 30 offices in 21 countries,
while fellow magic circle firm Slaughter and May has offices in just four countries, choosing to develop its global reach through non-exclusive ‘best-friend’ relationships with the eading firms in different jurisdictions. A conference organised by the Law Society’s international department, with leading partners from 25 jurisdictions, identified quality standards and ethics as critical to the success of any of these routes, which require due diligence, an understanding of the insurance position and transparency. Relationships must be client-focused and not based on some notion of payback in terms of referrals or generated business, while building up personal relationships and trust are essential.
City-based commercial practice Berwin Leighton Paisner’s strategy has been to build up a panel of more than 130 firms in over 65 countries, only opening offices in four countries where it felt it needed a physical presence, the latest being in Abu Dhabi. John Taylor, BLP’s international director, says: ‘We are creating a panel of firms which we consider safe pairs of hands for our clients. We don’t seek any formal commitment that they will refer work back to us. All we ask is that they take the time to get to know us and, as they get to know our capability, we hope work will flow back to us. In the context of the current economic downturn, you need to broaden the base from where you seek new work.’ For other firms, membership of Lex Mundi, the leading association of international law firms, has provided a network of 160 independent practices. Firms are invited to join, with one selected per jurisdiction. Chair-emeritus Michael Walker, former managing partner and now consultant with Maclay Murray & Spens, says his firm has been a member since 2000. ‘It was not for us to do a Clifford Chance and set up offices everywhere,’he says.
‘Lex Mundi provides us with very valuable relationships around the world with indigenous firms that understand how their countries work, while membership is recognised as a badge of excellence.’
Boma Ozobia, senior partner at three-partner boutique firm Sterling Partnership in London, describes the relationship between her practice and its affiliate firms in Ghana, Nigeria and France thus: ‘We are separate legal entities in each jurisdiction. London has recently shrunk to eight fee-earners as a result of the credit crunch and its impact on a previously thriving property law department, while Nigeria has expanded to 20 fee-earners across two offices in Abuja and Lagos.’ She says it is vital to have a presence in all these locations. ‘Our target clientele are multinationals operating in a truly global village,’ she says. ‘We have to understand their requirements in multiple jurisdictions and provide the necessary solutions to attract and retain these clients.’ She has found there has been more work flowing from Nigeria into London than vice versa. ‘There are several Nigerian law firms which have worked with us on cross-border transactions requiring UK expertise,’ she says.
‘We are also beginning to get instructions from UK firms wishing to conduct legal and other due diligence checks on Nigerian entities on behalf of clients. We are finding that some are engaging us to serve process in Nigeria in litigation matters.’
For some firms, it is pressure from clients that prompts the decision to open an office in a particular country. The traditionally cautious City firm Herbert Smith had taken the view that it could have a strong Middle East practice without having a presence in the region. However, it soon became clear that both regional and international clients expected it to have offices in the Gulf so it opened in Dubai in 2007 and in Abu Dhabi last June. It also formed an exclusive association with Saudi law firm Al Ghazzawi Professional Association. Neil Brimson, head of Herbert Smith’s Middle East practice, says: ‘A few years ago we were instructed on a major petrochemical project in Saudi Arabia. We had 50 people working on it in London. It is quite clear that today you would not be on the radar screen for that sort of project without a presence here.’ However, developing international links can also be done on a much smaller scale. John Kilmister, solicitor with Bristol-based Pattinson & Brewer’s personal injury
team, set up the firm’s Hungarian unit last September, specialising in personal injury claims for people whose first language is Hungarian. He has also been establishing links with Hungarian law firms, which are keen to set up arrangements with UK practices.
Eyes on UK
MGAP, a Russian boutique law firm offering services to companies and private clients, has its headquarters in Moscow and an office in London. It has formed a close relationship with Simmons & Simmons and Burton Copeland. It is keen to develop further associations with UK firms. Partner Tatiana Menshenina says: ‘This will allow us to gain more experience of the UK market, extend our client base and provide access to the Russian market for our UK partners, as well as expert legal advice for the clients they represent.’ Surana & Surana, a leading family-owned multi-disciplinary law firm in Chennai, India, has a ‘no alcohol, no tobacco, no meat, no gambling, no corruption’ policy and does not do any work that conflicts with that policy. Its key practice areas include arbitration, corporate, IP, litigation, real estate and taxation. It wants to develop close links with two or three UK top-25 firms, on a non-exclusive basis, to cross-refer work and share knowledge, internships and secondments.
Managing partner Vinod Surana says selecting a partner firm is like selecting a life partner. ‘They will be relationships based on shared values, common culture and mutual respect – not marriages of convenience,’ he says. Leading South African firm Bowman Gilfillan, one of the country’s largest firms with 100 partners, has offices in Johannesburg and Cape Town, as well as a small office in London. It recently set up a new association with two-partner firm Coulson Harney in Nairobi in Kenya. Jonathan Lang, head of the firm’s Africa group, says it plans to use the Kenyan association as a model for developing a referral network across the continent. Its relationships with major UK and US firms stretch back years, while being Lex Mundi’s South African member
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