A long-standing client wants to hire the firm for a deal in a far-off jurisdiction, and now you have to find local lawyers. But having no experience with overseas transactions, much less foreign law firms, you risk sending the client into the arms of rival firms with more international savvy.
It’s a scenario that plays out with increasing frequency at small and medium-sized commercial law firms: one of your partners rushes into your office with good news and bad news. A long-standing client wants to hire the firm for a deal in a far-off jurisdiction, and now you have to find local lawyers. Being able to work on the deal and project-manage the foreign aspects would cement the firm’s relationship with the client for years to come. That’s the good news. But having no experience with overseas transactions, much less foreign law firms, you risk sending the client into the arms of rival firms with more international savvy.
You call some of your law school friends now practicing at big firms to see if they know any law firms in the relevant countries. You get your marketing coordinator or maybe a young associate with time on their hands to do some research. If you’re fairly up to date, you get on the web and see what Chambers or Legal 500 have to say about the local talent.
One way or the other, you get a few names but they mean nothing to you. How do you vet them? You call them, one by one, you struggle through the language barrier, you ask for representative transactions lists, you listen to war stories, you do your best to make a choice that would best serve your client. Then you hear about local bar rules and engagement letters and unusual fee arrangements and you think: ‘there has to be an easier way’. And in the meantime, you have a client impatient to get your partner working on the deal.
In the end, you did find a firm. Maybe your partner’s deal got done with no problems, or even with spectacular results. Or maybe it was a disaster and an embarrassment to you and it may even have cost your firm the client relationship. Whatever the outcome, you are likely to come to the realisation that you should join a network, some kind of law firm alliance that will give you quick and easy access to names and contact details, so that when that next call comes in with an overseas matter, you can say: ‘of course we can handle it – I’ll just call my people in…’.
The trouble is that at last count there were 134 law firm alliances in the world, and that’s just the most prominent ones. They are not all the same. Some have stricter requirements for membership than others. Many charge hefty admission and membership fees. Some, like Geneva Group International and Mackrell International, also include accounting firms. Others, like CMS or MWE International Tax Panel, are really just extensions of a particular law firm. Others still are specialists in relatively narrow fields, such as the Food Lawyers Network, ALEXIA (shipping and maritime) and EuroCollectNetwork (debt recovery); or geographic regions, like the Bomchil Group (Latin America), Juris East Africa and East Legal Team (five East European countries). Many are relatively informal, while others are run through professional managers, with a board of directors and extensive bylaws.
Choosing the right alliance very much depends on your firm’s needs and ambitions. Fundamentally, alliance memberships are passive: you make use of them on an as-needed basis, when you need that Lithuanian legal opinion, or a quick explanation of the Ghana Mining Sector Support Programme. They help you to respond to situations that arise perhaps once in a blue moon but when it happens, and you get the answer, your client goodwill gets a tremendous boost.
Law firm alliances can of course be proactive too. Quite a few groups have annual or quarterly meetings, often with extensive programmes for presentations and networking. These are great occasions for member firms to solidify relationships, learn about legal topics of interest and even to identify business-generating initiatives. For many firms, especially in smaller jurisdictions, these kinds of events are invaluable as means for forging links with the world beyond their borders, and also for projecting an international image. (It would be remiss of me not to mention one other, extraordinary alliance of law firms, a tremendous networking and educational organisation and highly effective referral network: the International Bar Association).
In our consultancy, what we most commonly hear – at least from our medium-sized law firm clients – is that while alliances work well, they are not a substitute for the hard work of building an international practice. These firms have clients with regular, recurring cross-border needs; and these firms want to anticipate not only where those needs will be in the future, but also who the next generation of clients will be, who in turn will require cross-border services.
For our law firm clients with international ambitions but no desire to open foreign offices or to merge with foreign firms, we strongly encourage membership in alliances that fit their needs, whether geographically, or through practice concentrations or otherwise. We also advise them, however, to identify a small handful of like-minded independent firms, in jurisdictions most relevant to their principal clients’ activities, and to create a mini-alliance – what we call a ‘select partnership’ – with those firms.
These select partnerships are designed to build on shared strengths, so that they can not only seamlessly handle cross-border assignments, but also jointly market to existing and prospective clients (with agreed budgets), share technology, engage in mutual secondments of lawyers, and in many other ways function like a multi-jurisdictional firm, without the investment and risk of full-scale law firm mergers. Select partnerships can be structured in a variety of ways, from joint venture-type arrangements to Swiss vereins; they can add on or spin off members with ease; and they can be terminated without material financial consequences.
Given the spate of mega-firm mergers we are witnessing, and will likely continue to see, select partnerships are a significant supplement to law firm alliances, allowing independent firms to project their abilities beyond their borders and to preserve and enhance their most valuable client relationships. They are also effective vehicles for identifying opportunities for new projects and new clients in our increasingly interconnected world.