Note: this article is excerpted from the July/August 2008 issues of ABA Law Practice Management magazine, “Bloom Where You’re Planted” by E. Leigh Dance . For the complete article go to : http://www.eldinternational.com/Downloads/PDF/1220527476.pdf
There are so many questions to be answered in global law firm expansion: which markets and what practice mix? Multinational client targets or local targets? Buy or build? US law, local law, third-country law? What support infrastructure? Law firm expansion is a lot to manage, yet for all its complexity, law firm growth internationally inevitably comes down to some basic rules and practices.
Successful global law firm expansion can bring huge value to your firm in terms of lawyer retention, lateral hiring, competitive distinction and client development. It is difficult to measure, yet in hindsight very apparent (think of the super globals such as Linklaters who struggled with law firm expansion in the mid to late 90s) and now thrive.
A sort of Farmer’s Almanac could be useful to collect all the global law firm expansion lessons. We see successes and failure with global law firm expansion efforts, and an almanac of these lessons would help.
Imagine law firms as big plantations or gardens-- with partners as the farmers. These experienced farmers start with basic questions, and partners addressing global law firm expansion should ask the same:
What can we grow most successfully?
What are the crops in greatest demand?
How can we learn to grow more of the crops that are in demand?
Where else can the crops that are most successful for us be cultivated?
What are the environmental conditions we need for a plentiful harvest?
What can we realistically take on this season, from cultivation to harvest?
Like successful gardening, successful global law firm expansion requires information, perseverance, resources, stamina, some luck… and a plan. The rewards can be great, as we can all see from the client rosters and profits per equity partner of many global law international firms. Here are a few tips to approaching global law firm expansion so that your international offices bloom wherever they are planted.
1) Make sure you have a global law firm expansion plan. If you want successful law firm growth, you need to know who you are, why you want to expand and how you intend to succeed with your new offices. Planning ahead seems so obvious, and law firm management may think the vision and objectives are crystal clear—but often they are not.
2) Global law firm expansion should start with your strengths. Wherever you go, focus on what your firm does best. Any new office capability should be reasonably consistent with the firm’s overall practice and industry expertise. Buyers of legal services around the world seek expertise and experience more than ever, and studies continually show that this expertise is the motivation for them to try your firm’s lawyers in a new location. After all, you’re not building new out-posts, you’re building bridges for your clients. The firm’s strengths are the foundation of those bridges.
Much of the effort (and the pay-off) of global law firm expansion comes only after it is integrated effectively with the rest of the firm. To clients, the new office must have a viable connection to the firm’s value proposition.
3) Do your homework: due diligence and competitive analysis. Employ these business disciplines to evaluate the economics of opening an office in a foreign location. One of the biggest challenges for global law firm expansion is determining scale of the local offices. Can firms with a limited presence take business from premier local firms for major transactions? Often they cannot. The most successful global law firms have thought this through, and possess either a well-defined target market and niche expertise to make them a formidable competitor in a selected area, or they have established loyal clients at home who agree to retain them in the new market.
4) Pay attention to the typical issues of launching an international office. Whether in Beijing or Berlin, global law firm expansion must address specific local issues. This is not rocket science, but if you are a novice, it is easy to get it wrong. You will undoubtedly make mistakes, but learn how how to avoid the typical areas where global law firms continually trip up, such as:
5) Get ready for a major time commitment. Be realistic about the leadership attention and management focus required global law firm expansion, and dedicate what it takes. Because of the pressure to for law firm growth internationally, many firms overlook the substantial time and attention needed to be successful in each new market. Without the right oversight, problems typically arise, it is harder to get the talent or clients it needs to gain momentum, and law firm performance eventually suffers. Institutional assets may begin walking out the door.
6) Keep your eye on the local ball. - Avoid the cultural pitfalls. Local offices of law firms, whether in Abu Dhabi or Amsterdam, must be prepared to understand and address many different and very market-specific issues. Every international firm is wise to have consistent processes and steps for opening international offices, so that the wheel isn’t reinvented each time. But every country is different (to put it mildly), the law is different and local adaptation and flexibility is always required in certain areas. The issues can range from complex approval processes and bar regulations for the new office, to widely diverse approaches to serving international corporate clients, to different traditions and mores for client entertainment.
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