Tag Archives: Law firms

The Globalization of Law Trickles Down

Posted on August 2, 2012 by | 1 Comment

The globalization of the legal market (driven in large part by increased prominence of financial hubs outside the U.S.) is starting to have a serious impact on the demand for lawyers and legal education.  Multi-lingual lawyers have long had an obvious advantage for top jobs at global firms – a Cantonese-speaking attorney is a major asset for firms that do a lot of business, or have offices, in Hong Kong.  Demand for foreign language skills, however, has expanded beyond the top tier of jobs.  The Wall Street Journal reports this week that law firms are increasingly seeking temporary attorneys fluent in foreign languages:

The rise of the global economy—and the tilt toward Asia—has increased demand for lawyers who are fluent in Asian languages or who can help translate on deals or disputes in emerging economies, such as Brazil or India, said Belina Anderson, a commercial litigator whose practice includes French comparative law and legal translations.

But even the biggest law firms typically can’t afford to retain an army of bilingual lawyers just in case litigation pops up in one country or another.

So they often turn to staffing agencies. Fluent temp attorneys and document reviewers can help winnow down mounds of foreign-language material during trial preparation, flagging the relevant files for the firm’s senior litigators.

Multi-lingual contract attorneys are highly sought not only for their language skills, but for their price.  As Michael Reichwald (president of legal staffing agency Yorkson Legal) notes, “For legal matters, translators and attorneys with foreign-language skills are probably in the same price range – you get more bang for your buck.”

The development may be good news for law firms and their clients, who are increasingly engaged in cross-border transactions and transnational litigation and are looking for cost-effective ways to address those needs.  The contract lawyers, however, are less fortunate.  In the boom years of the early aughts, these attorneys’ language skills might have helped them land high-paying, permanent positions within law firms and legal departments.  Now, with the market for lawyers flooded with highly qualified candidates, those same assets simply enable them to obtain short-term document review jobs.

The market could potentially become even more competitive if the American Bar Association votes in favor of offering ABA accreditation to foreign law schools, such as Peking University School of Transnational Law.  According to the National Law Journal, the vote, which has been twice delayed amid controversy, comes up again on August 3rd, at the ABA’s annual meeting.  Opponents include students and recent graduates of U.S. law schools, who fear that accrediting foreign schools will only make an already difficult market more challenging.  Opponents also contend that foreign accreditation raises oversight issues while drawing attention away from legal education in the U.S.

For its part, Peking University (which was founded in 2007 by former University of Michigan Law School dean Jeffrey Lehman) dismisses these concerns, and contends that accreditation of foreign law schools would help to export the American style of legal education to the rest of the world.

Posted by Emily Fisher

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The Business Development Conundrum: Cross-selling and Convergence

Posted on July 3, 2012 by | 1 Comment

Susan Hackett, CEO of Legal Executive Leadership and the former senior vice president and general counsel of the Association of Corporate Counsel (ACC) offers some excellent business development advice for lawyers and firms in the ABA’s The New Normal section this week.  Hackett has a number of sensible recommendations, including a reminder that if you want to know what your clients think of you, ask.  But she also goes beyond the common wisdom to offer advice that could be valuable for lawyers and law firms looking to step up their business development efforts.

One important point Hackett makes is to not overemphasize cross-selling for current clients:

[T]he fact that you do the client’s employment law work does not necessarily mean that the client will value or want to meet your partners who do tax.  When cross-selling opportunities arise “organically,” that’s great!  But you’re missing my point if cross selling your firm is how you think that current clients will help you generate new business.

Instead, Hackett explains that rather than viewing current clients as a well from which to draw more and more work, firms should emphasize referrals.  She recommends asking current clients what it would take to move to the top of their referral lists.  Unlike making a cross-sell pitch, this tactic has benefits for all parties – the client gets a higher, more specialized level of service, and the firm gets a reliable referral for the future.

Hackett also addresses the trend of convergence, in which large law departments decrease the number of outside firms upon which they rely.  For law firms, this results in an uncomfortable reality:

…the vast majority of firms CURRENTLY representing clients and enjoying at least a satisfactory relationship will be more likely than not to lose good current client relationship over the next few years in a convergence exercise, if they haven’t lost them already.

The idea of losing an otherwise satisfied client may seem counterintuitive, but as Hackett points out, “satisfied” might not be enough to hold on to a client.  In order to survive convergence, firms must be more than merely reliable – they must be excellent.

The through-line in Hackett’s article is an emphasis on high quality work and client service.  Conversations about business development often focus on marketing, exposure, and brand.  But as Hackett points out, to get referrals and retain existing clients down the road, firms must begin by doing first-rate work today.

Posted by Emily Fisher

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Turkey in the spotlight

Posted on November 15, 2011 by | 2 Comments

For the past few weeks, the Hildebrandt Institute Blog has been taking a closer look at certain emerging markets and their impact on the global legal industry. Previously, we looked at the market indicators driving law firms to Brazil the increasing significance of Asia in law firm growth strategies, and the competition for top legal talent in Hong Kong.  Today, we turn our attention to Turkey and the economic drivers which are attracting a growing number of international firms.

Several economic factors are contributing to an increased interest in Turkey by international law firms. Unlike a number of its European neighbors, Turkey fared reasonably well during the global economic crisis with the country’s banking system managing to avoid a government-funded bailout. After negative growth in 2009, the economy bounced back well in 2010, recording the third-fastest growth rate among G20 countries last year, with an impressive 9% rise in GDP.

Growing interest by foreign firms

In 2009, there were just five foreign law firms operating in the market (White & Case, SNR Denton, Gide Loyrette Nouel , Salans and Curtis, Mallet-Prevost) with White & Case by far the most prominent. The US firm has affiliations with two market-leading local firms: Akol Avukatlik Bürosu in Istanbul, and Çakmak Avukatlik Bürosu in Ankara.

This has more than doubled in the past 12-18 months. 2010 and early 2011 saw the arrival of four new foreign firms: two global powerhouses, DLA Piper and Clifford Chance, who continued their investment in emerging market economies, as well as a number of Central & Eastern Europe-based firms, including Kinstellar (Linklaters’ CEE spin-off) and Austria’s Schoenherr.

Three further firms have recently announced their entry into the market; German firm Graf von Westphalen, the U.S.’s Chadbourne & Parke and most recently, Baker & McKenzie. It formed an exclusive relationship with leading Turkish law firm Esin Attorney Partnership, as well as opening its own foreign office in Istanbul (in Esin’s office space).

The moves have been in response to growing client interest and activity in Turkey, with Baker & McKenzie’s EMEA Chair, Koen Vanhaerents, stating “It has become increasingly clear that Turkey is rapidly growing in importance for our clients”.

Although the presence on the ground of these newly entered firms remains relatively small, a number of the associations formed have the potential to have a strong market impact. Other firms are expected to follow suit, with the CMS alliance recently announcing that it was looking to add a Turkish member to its exclusive alliance network.

High-growth economy

Turkey’s economic buoyancy in the midst of a global financial crisis is to an extent a result of its own crisis in 2001. A combination of factors, including a poorly executed devaluation program, led to a number of banks failing and a deep recession. What followed was a restructuring of the banking industry with more stringent capital ratios, which better positioned its banks to weather the current global financial crisis.

Western banks have also showing interest in the market; ING, Citi and Deutsche Bank have already established a presence, while in 2010, Spanish bank BBVA acquired a 24.9% stake in Istanbul-based Turkiye Garanti Bankasi. The deal was worth more than $5.5 billion, ranking it the largest M&A deal involving a Turkish company for the year.

There are reports of significant interest from foreign investors in the country, which has been a key driver of economic growth. Private equity investors have begun to target the region, there are increasing levels of M&A activity (with many of the largest being in the energy & power sector), and ongoing privatizations. Additionally, 2011 has seen a rising number of infrastructure projects and financing announcements, particularly in healthcare and renewable energy areas. The latter is viewed as increasingly important with the country facing a possible shortfall of energy between demand and supply in the medium term.

Regulatory hurdles

Strict Turkish bar rules prevent foreign law firms from opening local offices that practice Turkish law. Foreign firms can however establish a presence on the ground and practice Turkish law via formal associations with local firms. In some cases the local partnerships may, in essence, form part of the international firm. However, in order not to break Turkish bar rules, the international and Turkish firms continue to structure and market themselves as separate entities.

Notes of caution

As with most emerging markets, although rewards may be high, they do not come without their risks. There are concerns among economists that Turkey’s economy may be overheating particularly in light of its increasing current account deficit and rising inflation levels. Freedom of expression is also an issue with and EU report indicating high rates of journalists in jail. Although Turkey itself is enjoying a stable political climate, its geographic location means that geopolitical issues abound, and internally, ongoing discord between the government and the Kurdish population have resulted in renewed arrests, including a number of political leaders, which has heightened tensions further.

This week, the Hildebrandt Institute and West LegalEdcenter will host a panel discussion as part of the 16th Annual Law Firm Leaders Forum, on competitive opportunities for law firms in emerging markets.  You can learn more about the forum here. 

Posted by Tricia Pelton

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