As we all brace ourselves to weather the fourth year of the global economic downturn, which does not appear to be easing any time soon, we are left to wonder what unexpected surprises lie ahead. One thing is certain: the world in which business is transacted today is a faded image of the buoyant economy of the pre-Lehman Brothers’ collapse, which has been identified by many renowned decision-makers of our time as the one pivotal historical marker that permanently altered the global economic landscape and ushered in the current era. Some are even prophesying that the world is enduring a modern-day version of the seven lean cows spectacularly depicted in the Biblical account of Egypt’s seven year famine during Pharaoh’s reign. So where is Joseph, one might ask?
And perhaps nowhere is this better sensed than in the way multinationals are conducting business. Corporations which in the past may have felt and behaved as though immune from the unpredictable swings in the economy are all now busy looking into ways of optimising both fixed overheads and costs of outside vendors including legal services. Unlike other service providers such as accounting, finance, tax and human capital, the legal industry has been slow to realise that their staple clients are on a mission to aggressively cut costs while trying to keep their jobs in the process. In their clients’ eyes, some of the larger traditional law firms did not appear to be taking proactive steps fast enough to show their empathy towards clients by implementing internal billing and cost reduction measures to match their clients’ “new” expectations.
This reality has proven fertile ground for a new generation of legal providers. In response to an emerging need in the market, comparatively smaller national law firms have aggressively beefed up their “full-service practice/multilingual capabilities” and are consistently delivering a level of quality comparable to the larger, franchise-based traditional competitors. Many of these national players have been regularly ranked by Chambers & Partners and other similarly accredited organisations as leading performers in their individual jurisdictions and are now vying for a broader slice of the market by enticing multinational clients (whom only a couple of years ago would not have given it a second thought) with their willingness to work under alternative, innovative billing arrangements such as lower blended hourly rates, caps on fees, fixed-budgets, reduced pre-paid retainers and up-side, no-cure/no pay agreements. It seems to be working. These firms in the past few years have developed such strong client following that many corporations are exiting their traditional service providers (in many cases of over 20+ years) and do not appear to be in a rush to return.
Yet, one question remains: are these national success stories rare and isolated cases in a handful of jurisdictions or is this trend pervasive in the market? And if this development is now the new norm, can these successful law firms be harnessed into a network with a single voice, a collective vision and a common brand - all to achieve synergies for the client? Networks of law firms are created by different groups for different purposes. But when a network of like-minded, compatible law firms band together like a flock of geese, to attain primarily the same goal - e.g., to become a household name for assisting in-house corporate counsel with their day-to-day cross-border requirements - the end result is compelling.
In my capacity as the founder of First Law International Network, I have been able to witness first hand over the course of the past ten years that the power unleashed when a law firm network reaches critical mass and crosses over the 50-country threshold is a force that transcends into real value to clients.
In a very real sense I believe that networks of law firms offer a viable alternative to clients looking for a well managed, single point of contact hub of leading law firms which can operate in a seamless, transparent and cost-effective manner to expedite the efficient delivery of legal services. I encourage the reader to wholeheartedly research which network is best suited for him or her in their in-house corporate practices.