Asia-Pacific law firms help their clients to think global

Asia-Pacific law firms are beginning to make life uncomfortable for the global giants headquartered in the UK and the US. Not only are they more culturally attuned to Asian clients, they are also a more cost-effective option than the Western law firms whose fee models do not translate easily into the Asian market.

Some Asia-Pacific firms, particularly in the competitive Australian market, have embraced innovation. Some have also stepped out of their regional role.

In its headline grabbing merger with UK firm SJ Berwin last year, King & Wood Mallesons has become the first global law firm headquartered in the Asia-Pacific region, espousing this overlap between regional and international.

The game-changing union combines the firm’s strong client bases with a global platform and capitalises on inbound and outbound investment in Asia.

“The best evidence is our rise in the regional and global mergers and acquisitions league tables for 2013 and the types of deals we are doing,” says Stuart Fuller, global managing partner at the firm.

“The clients are seeing us as global, awarding us with positions on global panels and then entrusting us with cross-border work for them.

“By merging firms across Australia, China, Hong Kong, Europe and the Middle East, we have created a firm that is headquartered in Asia, focused on connecting Asia to the world and the world to Asia.”

Bringing much needed intelligence on overseas entrepreneurial expansion is China Going Global (CGG), the country’s first think-tank on issues facing Chinese companies venturing overseas.

The aim of the think-tank, launched in March by four leading Chinese companies, CITIC Securities, ShineWing Certified Public Accountants, Zhong Lun Law Firm, and BlueFocus Communication Group, is to bring together different services from different industries to help entrepreneurs in China go global.

“There is a lot of talk about convergence of the professions,” says Robert Lewis, international managing partner at Zhong Lun. “But this is innovative – an investment bank, accounting firm and law firm working together.”

Chinese outward foreign direct investment is expected to weigh in at $150bn by 2015, but a substantial number of investments outside China fail because of inexperienced Chinese firms’ lack of understanding about foreign markets.

Mr Lewis says companies often do not go directly to international law firms if they do not have an office in the jurisdiction where the company wants to expand. High fees can also be a disincentive.

“There is one more element,” adds Mr Lewis. “ShineWing says that a lot of their clients have a preference to work with a Chinese organisation – a bit of patriotism, a bit of ‘trusted adviser’.”

Trusted adviser or not, clients are always looking at ways to cut their legal costs. And, as Mr Fuller points out: “Clients do not want to pay for advice about the law. They want the firm’s judgment, based on its experience, on what it means in business terms and what the client should do.”

To provide this, lawyers need specific skills. “[They] need to understand people and business and how to solve problems, and to have cultural fluency – an ability to deal with different types of people in a meaningful way and to bring a global perspective to local work,” Mr Fuller says.

Innovation in the Asia-Pacific region is not confined to international work, either.

Under Chew Seng Kok, regional managing partner, ZICOlaw has pursued a unique strategy to build a firm across the Association of South East Asian Nations (Asean) region, combining law with company secretarial, sharia advisory and other professional services.

“Each service is regulated,” says Mr Chew. “They are managed independently.”

But not all companies are benefiting from internationalisation fuelled by growth in Asia. “The harsher economic circumstances led many firms in the northern hemisphere to place hope in the Asian ‘economic engine’,” says John Denton, chief executive of Australian firm Corrs Chambers Westgarth. “But this has not brought the quantity or quality of new business they sought, for clients or for firms.

“This is not to say the Asian imperative is gone,” Mr Denton adds. “It is a very important aspect of the legal market, especially in this part of the world.”

The firm says its strategy includes striving to strengthen relationships with other firms around the world, and to build more.