At a workshop at Oxford University, HLS Prof. David Wilkins has convened the managing partners of some of the world’s leading law firms. Ted Burke of Freshfields, Simon Davies of Linklaters, Wim Dejonghe of Allen & Overy, Neville Eisenberg og Berwin Leighton Paisner, and Cyril Shroff of India’s Amarchand & Mangaldas are being interviewed by HLS Prof. Ashish Nanda, Wilkins’ partner at the Program on the Legal Profession at HLS. Nanda is asking them about the impact of the financial crisis on the marketplace for global legal services. There wasn’t complete agreement on all fronts, but some take-aways from the managing partners on which they seemed more or less agreed:
- Competition for clients and the best talent in lawyers (especially new, young ones) is getting increasingly fierce.
- This competition will lead to a drop-off by the “low-end of the global firms.” The cost structure will make it too hard for some of the recent-arrivals to the global marketplace to compete. These firms will retreat to smaller practices or fail.
- This competition will also lead law firms to explore a broader range of strategies and business models than ever before.
- The ecology of types of firms will get increasingly mixed.
- A truly consistently first-class firm — the law firm equivalent, they say, of the Four Seasons in the hotel business — will continue to be able to charge a premium and will succeed. If you can’t be consistently first-class across all offices, don’t try it.
Areas of some disagreement:
- One view is that US firms will have to adopt a “more internationalist approach” as business continues to head East. Without an Asia strategy (China and India in particular), no firm can have a leading global practice over the next 10 to 15 years. The big challenge will be integration of cultures in global practices. One challenge: developing international skills and dropping the baggage of a colonial past. But others note that the litigation business is much higher for the US firms than for big European firms; and litigation can be huge in the local US market. There is less need to fish in other ponds for big US firms as there is for European firms, for instance. Without something cataclysmic happening, the fancy New York firms that focus primarily on the US (“the Cravaths of the world”) are unlikely to change their models any time soon.
- What it means to be a “global law firm” is an elastic definition some say. Others have a clearer sense of what’s required in terms of presence and skill sets to be truly “global” and a “firm” in the coming years (i.e., the need for an Asia strategy, diverse practice areas, and so forth). The group also disagreed somewhat on what it will take for a firm to compete successfully in emerging markets.