LawFirmStrategiesinAsia
KennethTung
[email protected]
BillNovomisle
[email protected]
WhereWillYourFirmFitintheMarketof2020?
Themarketplaceforlegalservicesisundergoinga
fundamentaltransformationdrivenbythreemain
factors
Thebiggestbusinessesintheworldareincreasingly
locatedintheAsia-Pacificregion
TheinfluencesofNorthAmericanandU.K.corporatelegal
departmentsisspreadingthroughouttheglobe
Purchasersoflegalservicesarerequiringa“Demand-Side”
modelfromtheirlawfirmsandarewillingtoshoparound
tofindit
Howwillyour firmrespondtotheopportunities
thesetrendspresent?
2
TheGlobal500isDominatedbyAsia-Pacific
Number of Fortune Global 500 Companies (by revenue) per Region
Year
Change from 2005 to 2012
Region
2005
2008
2012
Count
%
North America
189
167
143
-46
-24%
Europe
178
190
161
-17
-10%
Asia Pacific
127
132
181
54
43%
Latin America
5
10
13
8
160%
Middle East
1
1
2
1
100%
Total
500
500
500
0
In2005,16Chinese companies wererepresented ontheFortune Global
500.Thisnumber grewto89by2012.
3
TheNorthAmericanModelisSpreading
Asaresultofknowledgesharingandincreasinginteraction
with multinationalcorporations,corporatelegaldepartmentsacross
Asia(particularlyChinaandIndia,albeitunevenly)areexercising
increasingcontroloverpurchasingdecisionsregardingoutside
counsel
Asianin-houselegaldepartmentsaredemandingalternativefee
arrangements,risksharing,valuebasedbilling,andotherformsof
discountsandcontrolsovertheiroutsidecounsel– tothepoint
wheremanymultinationallawfirmscannotoperateprofitablyinAsia
Wearebeginningtoseelawfirmsacrosstheglobeshiftingtheir
mentalityfroma“Supply-Side”modeltoa“Demand-Side”model
Thesupplysidemodelischaracterizedbyworktypesandservicemodels
beingdevelopedinitiallyfromthelawfirmperspectiveandthenlater
appliedtoclientrequirements
Thedemandsidemodelstartswithadeepunderstandingofclientneeds
andonlythenareworktypesandprocessesdeveloped
4
ADemand-SideModelRequiresTransformation
InaSupply-SideModel
InaDemand-Side Model
Servicingandseekingoutanyandall
clients
Astrategybasedonmarketsegmentation
Revenueisgeneratedbyhumanlabor
(time)
Revenueisalsogeneratedthrough
investmentsinsystemsandtechnology
Maximizingshort-termdistributions
Client-focusedproductdevelopmentfunded
byearnings
Hourlypricing
Alternativefeearrangements, predictability
&legalprocessmanagement
Clientbearsthelegalortransactionalrisk
Clientandfirmshareopportunities andrisk
Bespokeworkproductcreatedanewfor
everyclient
Processoptimizationandknowledge
management
Punishingandavoidingmistakes
Cultureofinnovation
5
TheDemand-SideSkillsforFirmsin2020
Knowledge
Management
Alternative
Fee
Arrangements
Leadership
Profitability
Analysis
LegalProcess
Management
Strategyand
Value
Proposition
Change
Management
Business
Development
Associate
Development
6
LeadershipDevelopmentforaDemand-SideModel
Team
Leadership
Substantive
Lawyering
Skills
Client
Relationships
Strategic
Skills
Today’slawyeristrainedinfourmainskillareas
bywatchingandworkingformoresenior
lawyers(apprenticeship)
Substantive
LegalProjectManagement
Team
Lawyering
Skills
LegalTechnology
Leadership
KnowledgeManagement
Client
Relationships
Strategic
Skills
DataDrivenDecision Making
ADemand-Sidelawyer-leaderwillneedall
thoseskillsandmoretoattractandretain
clients.Howeverthisposesachallengeforlaw
firms:Howcanafirmadaptits(nonchargeable)trainingprogram toexpand
beyondtheskillsthatitcurrentlyteachesvia
apprenticeship?
7
SignificantPlayersareMakingtheChange
“Wehavemadeabetthattheprice
ofalllegalservices willbedriven
downoverthenextdecade. Hence
allofourworkprocesses need to
optimizeefficiency.”
Wim Dejonghe, ManagingPartner
“[Clients] expect ustobepaying
attentiontothesignsofdisruption.
Certainty.Quality.Proactivity.…
Localmarkets require localexpertise
...thatistrainedtoanexacting
globalstandard.”
EduardoLeite, GlobalChair
[Baker & McKenzie has hired or is actively
seeking to hire over 20 full-time legal project
managers globally, including professionals
based in China, Singapore and Hong Kong.]
8
WhoWeAre
KennyhaspracticedlawinNewYorkand
workedasanassociate inChinabefore
leadingChinaandAsiain-houselegal
functionsforcompanies suchasKodak,
Honeywell,Goodyear,PepsiCoand
Geely.Inaddition toIn-GearLegalytics,
Kennyalsoactsasadhoc GCto
multinational companies operatingin
Asia.
KennyTung
[email protected]
Bill Novomisle
[email protected]
www.iglegalytics.com
BillisaUS-qualified lawyerwholitigated
inNewYorkforShearman&Sterlingand
PaulHastingsandhasprovidedlegal
management advisoryservices across
theUSandCanadaforcompanies such
asPepsiCo,TDBankGroup,Stikeman
Elliott andGilbert’s.
9