29 March, 2016
On March 16, 2016, managing partners, COOs, and legal professionals from top law firms across Asia gathered together at the 3rd Legal Leaders Forum (“LLF”) at the Intercontinental Hotel in Hong Kong to hash out the realities of today’s evolving legal climate, to learn how their industry counterparts are responding and adapting to new market drivers affecting the business of law, and how law firms can stay relevant and competitive. Among the headlining topics were Dentons takeover of the Pacific Rim to become the largest global firm, the importance of China in today’s legal market, King & Wood Malleson’s secret to success in China, and a close examination of what BigLaw is doing to ‘keep up with the new Jones,’ aka NewLaw.
The forum, hosted by Chilli IQ, featured prominent speakers such as Nick Seddon, Partner at Beaton Capital; Hayden Flinn, Co-Chief Executive at King & Wood Mallesons (“KWM”); Marie McDermott, Global Projects Director at Dentons; Stephen Malloy, Director at Zico Holdings Inc.; Chew Seng Kok, Managing Director of Zico Holdings Inc.; and Kyle Wombolt, Partner and Global Head of Corporate Crime & Investigations at Herbert Smith Freehills, just to name a few.
Market Drivers
“Clients are driving changes to firms’ human capital strategies,” said Nick Seddon, who kicked off the forum with a candid discussion of the current market drivers and what firms need to be doing in order to stay relevant and competitive, a key theme of the conference.
The millennial generation, driven by social media, has entered the work force, and they are not only the new young lawyers, but also today’s clients. As cause and the ‘millennial effect’ goes, they along with the global economy and NewLaw have affected how law firms manage talent and human capital, how firms define themselves, and how they choose to compete for the legal work.
Embracing Paradigm Innovation
As NewLaw (law firms or legal companies working within a nontraditional business model) continues to encroach upon the business that previously belonged to BigLaw firms (traditional law firms), BigLaw firm have had to take a moment to reassess their competitive strategy. Paradigm innovation gave birth to the NewLaw movement, and in response to its success, some BigLaw firms have embraced NewLaw by fashioning synergetic partnerships with them. Take for example, Allen & Overy’s new relationship with Advent Balance.
While some have gone the way of partnering with NewLaw, other BigLaw firms have simply mimicked NewLaw by entering the Legal Process Outsourcing market themselves. Cooley GO, who now offers free legal services such as document review on their site for startup companies in the U.S., is a good example of this.
A Leader in the NewLaw Movement
Among those leading the charge in NewLaw, Mr. Chew Seng Kok can be seen at the front and center of it in Asia. There is much interest in ZICO since it has realized success in Asia and is seen as one of the few firms or rather ‘legal companies’ in the world to be listed on a stock exchange, having listed on the Singapore Stock Exchange in 2014. However, in demystifying ZICOLaw and ZICO Holdings, Inc., Mr. Chew Seng Kok clarifies “ZICO is not a listed law firm, we are a listed company that offers a whole range of legal services. The law firms are our clients.”
In explaining what makes NewLaw successful, he points to how they are addressing client demands by working within the new “sharing economy,” which includes businesses such as DragonLaw, Air BnB, and Uber, just to name a few.
The sharing economy, according to Mr. Chew Seng Kok, matches and at the same time creates supply and demand, and it has impacted everyone, including law firms. “The context in which businesses have transformed affects all of us lawyers,” states Mr. Chew Seng Kok at the LLF. BigLaw can either stay the course or join the sharing economy. “They can stick with a diminishing market or combine it with alternative innovative models and stay competitive,” he further adds.
Dentons Pacific Rim Domination
In addition to NewLaw being a key theme of discussion, the LLF featured a highly anticipated segment on Dentons pivot to the Pacific Rim. This has been a hot topic in the legal industry since mid-2015 as they are now a dominant competitor poised to take significant business away from other top firms. Speaking on behalf of the firm, Marie McDermott gave the audience more than a small glimpse of the growth strategy the firm undertook, but rather a detail look inside the playbook that made them the largest law firm in the world.
“All the growth began by listening to our clients” and “our clients want more lawyers in more places who understand local culture,” states Ms. McDermott. To this effect, Dentons follows a “polycentric” approach, which means “anywhere we are in the world, we like to be local.” Hence, Dentons preference to hire local lawyers in each office.
In following a 3-prong strategy to grow, integrate, and reinvent, Dentons first started its mission with China by merging with Dacheng, which was one of the largest partnership firms in China. According to Ms. Dermott, China was a “no-brainer” and served as the “lynchpin” for further expansion. Recognizing that 57% of the world’s GDP comes from the Pacific Rim countries, they then set their sights on the remaining key countries in the region. Even though Dentons moved swiftly, they did so with a view to having a “whole-law firm presence.” Therefore, they only agreed to law firm combinations rather than any other structure such as a foreign law alliance or joint venture, for example.
Dentons quest for total Pacific Rim domination has resulted in it becoming the largest global firm with approximately 125 offices in 50+ countries and over 7,000 lawyers. What’s next for Dentons? “We joke about Mars as being the next site for an office,” jests Ms. McDermott.
The China Market and More
Another theme echoed throughout the LLF was the important role that China plays in the legal market. China was not only a key part of Denton’s growth plan as noted above, but has been equally as important to KWM. As KWM’s Hayden Flinn explained their secret to success in breaking into the China Market, he illuminated upon how KWM has been able to overcome the east meets west cultural differences and create a thriving firm with a large presence in China that can offer local depth, but on a global platform.
While Mr. Flinn focused on how to succeed in China, Kyle Wombolt of Herbert Smith Freehills described the operational challenges businesses such as law firms face in China, the importance of understanding the local environment and the risks it presents.
The LLF served as a platform to discuss the main issues affecting the business of law today. The millennial generation, NewLaw, new competition from Dentons, and China were just a few of the relevant concerns that were highlighted at the forum. We look forward to next year’s LLF, where we hope to hear from more of the legal industry’s trailblazers and leaders covering the top issues in all things legal in Asia.
