Posted by Robert Half Legal on Tuesday, April 8, 2014 - 00:00 | Follow me
To serve corporate clients more effectively and earn new business in emerging international markets, many law firms are “globalizing” their approach to law practice management -- from cross-border mergers and strategic alliances to the addition of new offices.
Stiff competition for commercial business on the domestic front has prompted an increasing number of firms in North America to weigh the potential of establishing or further expanding their global footprint. And as they grow their international capability, demand for specialized talent is expected to increase, too. Research conducted by Robert Half Legal for its annual Future Law Office project found that globalization is already driving the need for legal counsel who understand the potential impact of local laws, cultural factors and events on clients’ business operations in other countries.
When interviewed for the Future Law Office project, Charles A. Volkert, executive director of Robert Half Legal, observed that many firms want to be a "one-stop shop for clients with international interests and fulfill the need for legal services regardless of the market," noting that clients are helping to drive this change. “Working with one law firm that can provide a wider range of solutions and legal expertise is typically more efficient and cost-effective than engaging a number of different firms,” he added.
Developing Strategic Alliances and Global Networks
Other legal experts we interviewed for the Future Law Office project also feel the influence of globalization on the way their law firms conduct business. Audra A. Dial, a patent and technology litigation attorney and partner at Kilpatrick Townsend & Stockton LLP in Atlanta, noted that firms have to be prepared to help clients wherever they operate. “We try to make the world a little smaller for them,” she said. “That’s why we’ve developed strong alliances with other law firms that have a presence in places we don’t. I expect this strategy to expand further as our clients’ businesses and business relationships become even more global.”
Brett C. Bartlett, a partner at Seyfarth Shaw LLP and chair of the firm’s labor and employment department in Atlanta, echoed these sentiments, noting that Seyfarth's global clients expect their firms to have international capacity. "Seyfarth’s international labor and employment team is very robust, and maintains contacts around the world. As soon as I know of a client with a need in a global market such as Africa, China, or South America, I know exactly whom to contact in our firm,” he added.
Steven D. Wingert, CLM, executive director, Marshall, Gerstein & Borun LLP, and the past president of the Association of Legal Administrators, observed that globalization is "pushing firms to look closely at what they do and how they do it, and decide whether they can do that work best inside the firm, or should look to other more efficient and/or cost-effective resources. Our firm conducts business all over the world on behalf of our clients, working through our foreign associate network, and directly with our clients. We continually evaluate our relationships with foreign law firms, as well as the resources and processes that will best serve our clients.”
Managing Back-Office Functions Offsite
The trend toward “globalizing” legal services doesn’t mean law firms won’t also grow domestic operations to support international activities. San Francisco-based Orrick, Herrington & Sutcliffe, ranked by Law360 as one of the Global 20 leading firms, is among several international firms that have changed their law firm management strategies by opening operations centers in areas away from corporate headquarters as a means to manage back-office functions offsite and reduce administrative costs. It maintains a global operations center for its 25 offices in Wheeling, W. Va., that houses staff who handle much of the firm’s day-to-day administrative duties, such as law office technology and human resources -- and the presence of the law firm management facility has helped to revitalize the local economy.
These trends also are taking hold in Canada. Harley L. Winger, founding partner of Burstall Winger Zammit LLP in Calgary, Alberta, said, “Globalization has our firm dealing with bigger and more sophisticated clients with diverse needs, which means we must be able to provide a wider range of services. This will only become more of an expectation. So, I think a boutique firm like ours eventually may need to expand, grow grassroots in other markets, or merge with another firm.”
For many managing partners, mergers make sense as a way to “quickly grow a firm’s ability to serve more clients in more geographic areas,” according to Legal Executive Insights (formerly the Hildebrandt blog) which recently reported that the legal profession witnessed a record number of law firm mergers and acquisitions in 2013 -- a total of 78 mergers, up from the record of 70 set back in 2008.
With competitive pressures mounting, these globalization trends, including an uptick in M&A activity, should continue throughout 2014.
How has your law firm changed its approach to serving an increasingly global clientele? Do you think M&A activity will increase in 2014 as a strategy for law firms to expand their geographic footprints and serve more clients in different areas? Please add your thoughts in the comment box below.