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International Markets
Continued from page 6
Mauritius, for instance, is a vibrant market and there is no better platform for clients looking to go into Africa, says local attorney Sivakumaren Mardemootoo. ‘Most law firms have preferred relationships with Mauritian law firms. It is a jurisdiction of substance and has a lot to offer.’
While financial problems in Dubai at the end of 2009 sent shock waves through markets around the world, the Middle East still offers wide-ranging opportunities.
Jane Kang Thorpe, chief legal officer with the Qatar Financial Centre Authority, says that the ‘global ambitions’ of Qatar and its ‘Q companies’, including Qatar Holdings, the corporate arm of Qatar Investment Authority, the country’s sovereign wealth fund, mean that there is a need for sophisticated legal advice on capital raising, debt issuance and financial investments.
She says the government is intent on importing the highest standards of law, governance and technology, and is considering establishing a single financial services regulator that will operate to international standards.
So while international law firms planning to establish in Qatar to advise local institutions on local law will probably need to rethink their business plans, it is increasingly becoming clear that the market for sophisticated legal advice in Qatar will increase, she says.
In Qatar, long-term relationships of trust and the concept of mutual benefit and mutual risk are important.
‘Firms which get in early will have a head start in establishing the right relationships with the Q companies and other clients,’ says Kang Thorpe. ‘Firms that are currently doing business with these clients from London may find themselves losing future business to those law firms that made early decisions to establish a base of operations in Qatar. No one expects all work to be conducted from the Qatar office but there are early signs that one factor in the decision of the Q companies and others in selecting legal service providers is whether the firm has a presence in Qatar.’
Closer to home, the Crown dependencies of Jersey, Guernsey and the Isle of Man offer many opportunities to reach new markets, according to Clive Boothman, London representative of Jersey Finance.
What is crucial, he says, is to understand the different areas of expertise offered by the offshore centres. ‘Over the last few years, they have been positioning themselves according to how transparent they are, and there has been a flight to quality. [But] some centres have slipped on banana skins and you don’t want your clients reading reports of scurrilous goings on and questioning why you put them there.’
So the first step, he says, is to build relationships with local lawyers and with intermediary, trade, promotional and regulatory bodies. ‘Once you have decided on a centre, don’t sit in London – go and visit, so when you are ready to form your fund or establish your trust, you have met the main players and can add genuine value to your clients.
‘There is a strong symbiotic relationship between London and the Crown dependencies. But what is also happening is that there is a lot of interest from mainland Chinese and offshore Chinese in Hong Kong to do things through Jersey into London – a quarter of all Chinese firms listing on AIM have come through Jersey. So you can be part of a much more complex relationship that facilitates international business.’
However, while the opportunities are there to be taken, Jeremy Marshall, head of Irwin Mitchell’s commercial litigation department
in London, stresses that any international strategy needs to revolve around the requirements of clients or potential clients rather than the law firm’s own aspirations. ‘Just turning up and saying “I now have an office in this or that offshore centre or major financial market” may mean you come unstuck.
‘You have to be sensitive to the local culture and community and the best option is to start by developing relationships with
local firms, possibly by way of secondments, so you get to know the jurisdiction back to front,’
he says.
‘Lawyers are followers rather than leaders – someone opens up an office and others follow. Several are now closing those offices. Building an international strategy should be a long-term game rather than short-term expediency.’ n
Grania Langdon-Down is a freelance journalist
In-house advice
‘Every client thinks they are the only client in the world,’ says leading general counsel Deepak Malhotra (pictured). ‘It is a ludicrous perspective, but it is a fact of life.’
So at a time when clients are chopping and changing panels and driving down fees, what advice can three experienced in-house counsel give law firms seeking to win new clients and retain existing ones?
Malhotra is senior vice-president and general counsel for the European arm of Constellation, the largest wine company in the world. He also chairs the thinktank of Global Leaders in Law.
He works with a panel of five UK law firms. ‘Chemistry is important in choosing a firm. I also attach a lot of importance to references from people who have worked with the firm and individual lawyers. I want a firm that matches our drive and innovation and comes up with ideas. Then I want predictability around fees. I am not a fan of the billable hour. What I want is billing based on the value of the legal services and the project.’
Abhijit Mukhopadhyay is group general counsel for the global Hinduja Group, which has its headquarters in London. ‘We do not have a panel of firms – I keep a virtual one in my head. When we are making an acquisition, we look for a local mid-sized firm which is solid in terms of intellectual outputs but charges reasonable fees,’ he explains. ‘The only rider to that is if we are setting up a big venture with foreign partners, they may want the comfort of a big-name law firm.’
Some businesses ask their panel firms to work collaboratively. Malhotra admits it can be awkward for firms. ‘It won’t work for routine, volume-based transactional work because it is too competitive. However, knowledge-sharing where it involves commercial advice – with a clear understanding that it goes no further – is valuable, although the incentive to share ideas will reduce if counsel is fickle about promising work or swapping panel members.’
When it comes to global reach, do they look for a firm with offices around the world or a network of preferred relationships? Dirk Winkhaus, who now runs his own law firm, has held international legal roles in the IT, automotive and heavy machinery industries. He says: ‘I looked for a single point of contact and consistent level of service. How the firm achieved that is up to them.’
Five years ago Malhotra would have gone for the global law firm; now he agrees with Winkhaus. ‘The critical issue is that the firm provides consistent advice across continents and practice groups. Never underestimate, for instance, the power of setting communication standards, such as response times to queries.’
All three agree that the biggest challenge for law firms is how to get closer to their clients. Winkhaus says there is a growing trend among law firms to hire in-house counsel to tap into their knowledge of corporate structures and politics, while Mukhopadhyay says: ‘You need to come and sit with me and find out about the business I am engaging you for.’
Overall, Malhotra says the pressure on law firms has never been greater: ‘Law firms shouldn’t underestimate just how sophisticated general counsel have become in purchasing legal services.’
Legal Services Directory 2010
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