Business of law: Battle for market share sharpens bolder skills

For the first time since the end of the second world war, Slaughter and May, the elite UK law firm, has hired a partner from outside its ranks. John Moore, a US securities lawyer in his 40s, joined the partnership last year in Hong Kong.

For the firm, this momentous break with its policy of promoting only homegrown talent into its equity is a reflection of the challenge that international law firms face in building and maintaining their businesses in Asia-Pacific.

While the region is full of opportunity for lawyers, the lines of competition between international law firms have been redrawn.

Slaughter and May’s decision to hire a US securities lawyer was because of the American firms with which it used to partner on capital markets work building their own UK-Hong Kong law practices. The firm faced a choice: either to quit capital markets work in the region or to build a consolidated practice that included US law capability. It chose the latter.

Christopher Saul, the firm’s senior partner, says, “The market moved in a different direction, which meant we had a pressing practice need.”

Mr Saul is keen to stress that Mr Moore is not evidence of a turning point in the firm’s overall strategic approach, but the hire was driven by the particular needs of running a successful mergers and acquisitions practice in Asia.

However, the battle for market share does mean that lawyers working in the region often find themselves embracing strategic initiatives that might meet resistance in their home jurisdictions.

The majority of submissions in this category reveal international firms honing their business development activities in a way that is often sharper, speedier and bolder than in Europe or North America. They need to.

While the competition between US and UK law firms has deepened, there are also new lines between incumbent firms whose regional roots go back decades and upstart firms keen to make their mark.

Eversheds, which increased its presence in the region only six years ago, could be considered one such upstart. Under pressure to differentiate itself, the firm sought to export its single law firm supplier model that it pioneered with Tyco in Europe.

The first company to sign up is Goldwind, a privately owned Chinese company and international wind turbine producer.

The Goldwind arrangement follows the principles of the Tyco model if not the detail.

Instead of a fixed annual fee for services, there are capped fees and agreed budgets. Importantly though, the principle of a company having a sole law firm adviser has been adopted — this is unusual in the Chinese market where relationships between clients and law firms are not fixed.

For most international law firms, incumbent or upstart, building a presence in the region is about sharing knowledge and expertise with clients in a bespoke but continual way. Differentiation lies in their content and increasingly the way in which that content reaches the client.

While Eversheds can ride into the region with a new service delivery model, firms with a more established presence such as Baker & McKenzie or Latham & Watkins have adopted a repackaging approach to integrate and invigorate their cross-region know-how and expertise.

Baker & McKenzie’s pharmaceutical and healthcare MapApp is an example of a good marriage of content and technology. The tool, which is a round-up of commercial and legal updates in the life science industries, allows the firm’s clients to access this information in real-time and on the go. It also has a jurisdiction filter and can push notices to clients.

The firm says the MapApp has secured new business for the firm and ensured its continued hegemony in this market segment.

Asia-Pacific Innovative Lawyers 2015

Business of Law: Internationally headquartered firms

Gaining the upper hand in the knowledge-sharing game is about more than having great content and using technology to deliver it. For leading firms, it is also being ahead of legislation. Freshfields Bruckhaus Deringer’s road map to Hong Kong’s competition rules saw it prepare its clients for the incoming new regime two years before the legislation was enacted.

What underpins many of the law firm initiatives in the FT ranking is the ability to cross cultures, to bring ideas that may have germinated in western jurisdictions and adapt them to Asian ones.

Having said that, many of the initiatives have taken on new twists that may not have been possible in a law firm’s headquarters. The competition between lawyers working in the region is so intense that a process of “exaptation” is beginning, which means in this instance that tried-and-tested strategies are evolving to look different in the Asia-Pacific crucible.

Mr Saul at Slaughter and May called the lateral hire of Mr Moore a “pragmatic, modest evolution” of the firm’s overall strategy.

As Stephen Kitts, the Eversheds regional managing partner says: “We are using techniques we use elsewhere in the business, but here we get the chance to be seen as more radical.”