Why law firms should go global - but not virtual
Law is undergoing the greatest geographic shift in perhaps the last 30 years. Business that used to be conducted in London or New York now takes place anywhere around the globe: across borders and across time zones. Anywhere, in fact, as long as clients feel they are getting a good service.
It makes sense. Global firms want to cut costs, operate more efficiently across international time zones and provide tip-top client service. Consequently, the focus has shifted to how, rather than where, the best work is done.
Elia Montorio, a corporate partner at DLA Piper, attributes that shift to the greater connectivity enabled by an increasingly online world. “While law firms have continued to grow both locally and globally, technology has made the business world a smaller place,” she says. And that smaller world, she points out, provides greater opportunities for lawyers to work as part of international teams, and enables firms to offer more flexibility in terms of resourcing and pricing to their clients.
According to Alexandrine Armstrong-Cerfontaine, head of the Luxembourg office at King & Wood Mallesons, working without borders and across international jurisdictions is possible not just because of technology but also because the “key principles of the mechanics” of deals and associated documents have become standardised. “There are local differences of course, but the main concepts are universally agreed, so it has become less important that you remain in a particular jurisdiction to practice,” she says. “As a result, it’s really not that unusual for clients in one jurisdiction to never actually meet their lawyers who are operating in another.”
But while jurisdictional boundaries may be of declining importance, the firm believes in exposing its lawyers to various worldwide locations through cultural and transfer programmes. “This gives our lawyers added value – understanding a market means you have to be in that market for a time,” says Armstrong-Cerfontaine. “It’s a real asset.”
Most of the lawyers in Armstrong-Cerfontaine’s office speak at least three languages, and it offers language lessons to all lawyers, including Mandarin for the boss at 7.30 in the morning. “Practising in a more virtual, cross-border world requires a change in mindset and greater flexibility on the part of lawyers,” she says. “But the effect on them is generally thought to be positive and leaves the lawyers’ sense of self undiminished and even bolstered.”
The rise of nearshoring
It is clear that the looser geographical way of working alters the organisation of firms. Montorio, who is based in Manchester, explains that her firm “markets its services by sector, not geography or practice group”, with its UK offices “seamlessly operating as a single team from which the lawyers with the most appropriate skills for each matter are selected.
“There are some specific situations where a deal needs to be led out of London, but that is increasingly unusual these days,” she says, stressing that big deals no longer have to be done in the main global financial centres such as London or New York, and citing a recent €7.2bn deal for Vodafone that the firm acted on which was led from its office in Madrid. “For someone like me, based outside of London, the firm’s approach has a really positive effect,” she says. “You recognise yourself as being part of a global law firm, providing first-rate service to multi-national clients wherever in the world they happen to be based, not just focused on your immediate local area.”
Of course this greater “relocationism” is nothing new. The reduction of geographical restrictions resulted first of all in offshoring, farming out back-office services and routine, as well as commoditised work, to foreign shores, led by the likes of the City firms Lovells (now Hogan Lovells), Clifford Chance and Allen & Overy. Work was outsourced or offshored to countries as far afield as India, New Zealand, the Philippines and South Africa, either to legal outsourcing providers or firms’ own offshore centres.
After that came “near” or “north” shoring – either bringing work and services back from overseas to the UK or shifting it out of the expensive capital and south-east to northern cities such as Birmingham, Manchester, Glasgow and Northern Ireland’s Belfast – or, in the case of top-50 national firm Mills & Reeve, Norwich.
Kicking off the nearshoring trend were Herbert Smith Freehills (HSF) and Allen & Overy, who both opened offices in Belfast in 2011. According to Libby Jackson, global head of alternative legal services at HSF, nearshore has proved a great way to demonstrate to clients that they think creatively about their needs. “By unpacking the legal work and the processes involved using the nearshore model, we can ensure that the right work is done in the right place, with the right combination of legal experience and skills – together delivering a high quality service at the right price.”
Jackson believes that globalisation is the next step in the evolution of this part of the legal market. “Thinking globally in this space is now inevitable. This is driven by the need to ensure the legal products and services that we offer are relevant to all the markets around the world that our clients operate in.”
Beware the virtual world
However, while firms – and lawyers – see the benefits of cutting the ties of geography, many caution against descending into a purely virtual world, where lawyers interact with others only by means of various technological wizardry. “There has definitely been a shift in how law is practised, but I wouldn’t want it to go further than it has done already,” says Bridget Barker, head of the investment management team at Macfarlanes.
Strong teams have long been at the heart of outstanding law, and beyond a certain size, collaboration across virtual teams is notoriously hard to manage. “It would be disastrous if people just spent all their time staring at a computer screen and never got to see colleagues or clients,” Barker says.
It is not simply a management issue. Barker says that a virtual world may hinder the development of people skills; vital in a good lawyer.
“One of the sad things about how law is practised now is the large number of conference calls and volume of email traffic, instead of face-to-face chats and meetings,” she says. “Email is quite a blunt instrument – you can pick up an awful lot through body language and facial expression. It is important to have a core at the office and have the opportunity to talk to each other and relate to each other – to exchange ideas and discuss issues that may be common to everyone.”
But what do clients think of all this? Lawyers generally agree that so long as the work is done to the same high quality and that clients are able to get hold of the lawyers and receive a swift response from them, the lawyer’s location is unimportant.
As Montorio puts it: “For clients, expertise and cost are king, and in my experience they are not overly concerned about where their lawyers are based. Of far greater importance is that they are provided with high quality advice that is completed on time, done well and is cost effective.”