Emerging markets across the globe are not only growing significantly but they’re becoming increasingly sophisticated, which is driving demand for legal services.
India, for example, has seen a surge in activity both nationally and internationally, which has led to the development of a burgeoning legal sector.
Currently, foreign law firms are not allowed to operate within India. However, an increasing number of foreign multinational companies are looking to enter the Indian market. Many Indian firms have been pleased to enter into cross-border transactions with such companies, which is putting pressure on the Indian government to make its lucrative legal services market more accessible for foreign firms.
Of course, this demand for improved legal services is also prominent in the growing super-power that is China. The formation of the Legal Service Centre for Foreign Individuals (LSCFI), which has been set up to meet the growing demand for legal services for expats, demonstrates the rising demand for foreign affairs.
Additionally, Chinese lawyers are now required to have not just extensive knowledge of legal affairs but also to specialise in a foreign language and be able to communicate effectively with clients from a range of cultural backgrounds.
Some African countries are enjoying high levels of foreign investment as well as a surge in infrastructure, commodity projects and manufacturing plant deals, all of which are encouraging law firms to venture into the continent.
Over the past two to three years lawyers are said to have made more money advising clients in Africa on investments than they have in the Middle East, according to the Financial Times.
Law firm mergers
One notable consequence of the impact of emerging markets is the number of law firm mergers taking place. According to Altman Weil, the first half of 2015 saw a record number of merger announcements at a remarkable 48. There are five principal reasons behind this: going global, going national, entering new markets, practice expansion, and financial pressures, according to Chambers Student.
International forerunner in the legal industry Dentons merged with Chinese law giant Dacheng earlier this year. Together, the new company boasts the world’s largest law firm, employing in excess of 6500 lawyers in 125 offices across more than 50 countries.
This merge embodies the global wave of consolidation which is taking place in the legal services industry. It perhaps also indicates a rising desire on the part of Chinese officials to encourage their fast-growing businesses to extend operations into the western market.
Dentons will certainly reap advantages from the deal; for decades western lawyers have been prohibited from appearing in court or before the Chinese government, meaning that western firms such as Dentons were often obliged to obtain the services of local counsel to handle issues within China. A merger of this kind will allow the company to fully operate in China without having to seek the assistance of any third parties.
Dentons is itself the product of several past mergers, and owes its success at least in part to its international background. The firm was created in 2013 when UK and US based firm SNR Denton merged with Paris-based Salans and Canadian firm Fraser Milner Casgrain.
Morgan Lewis Stamford
Another significant merge announced towards the beginning of 2015 was that between Morgan Lewis & Bockius, America’s largest law firm, and Singapore-based Stamford Law. The new company has been named Morgan Lewis Stamford and has been formed for a number of reasons on both fronts.
Singapore is home to a booming legal market, but has tight restrictions on foreign companies operating in the country. This merger allows Morgan Lewis to enter into that market whilst avoiding any obstacles such restrictions may cause.
Stamford Law can claim the title of the first Singaporean firm to fully integrate with a global law firm. The Singapore office will be fully incorporated into Morgan Lewis’ established chain of 28 offices around the world, and is expected to provide legal services both in foreign law and Singapore law.
King & Wood Mallesons
Rewind a little further and we come across the 2012 merger between Chinese firm King & Wood and Mallesons Stephen Jacques, one of Australia’s Big Six leading law firms. The company is now known as King & Wood Mallesons, and London firm SJ Berwin has also merged into the empire, which prides itself on being the largest law firm headquartered outside of the United States or European Union.
King & Wood Mallesons is headquartered in Beijing and has offices worldwide. The company boasts its status as an integrated global law firm brand, enabling it to practise Chinese, Australian, Hong Kong, English, US and a significant range of European laws, which no other firm is able to do single-handedly.
Aside from these significant mergers, a plethora of other legal services providers are taking different approaches to expanding overseas.
Successful law firm Eversheds has offices in 28 countries, all of which are members of Eversheds International Limited. The firm made the announcement of 32 promotions in 2015, over a third of which took place in international offices.
Interestingly enough, Eversheds is also itself the product of several mergers from within the UK, and has recently made the decision to merge with German company Heisse Kursawe Eversheds; a longstanding member of Eversheds International Limited operating in Berlin, Munich and Hamburg.
Another major player in the industry is DLA Piper, which operates in over 30 countries throughout the Americas, Asia Pacific, Europe and the Middle East. Again, the firm has undergone several mergers since its 19th Century origins, but it seems mainly focused on opening offices abroad and entering into alliances with oversees firms. In 2010-11 DLA Piper formed alliances with companies in Turkey, Brazil and Venezuela.
What are the consequences?
Most legal services firms are the product of previous mergers and a plethora of large companies are looking to expand into foreign markets in order to keep up with the rapid globalisation which is sweeping all industries.
Sustaining healthy and successful international relationships is crucial to such a vast and important industry, and so naturally it requires a deal of hard work. The importance of foreign language skills, multi-lingual material and in-depth cultural understanding of all involved nations is set to grow as long as the legal services industry continues to expand.