Robert C Bata
WarwickPlace Legal, New York
rbata@warwickplace.com

It was not very long ago that the idea of an international law practice, much less that of an international law firm, was, if not a completely bizarre notion, certainly most unusual. Indeed, there was a time when, if you said ‘international law firm’, you would have been talking about the Franco-American law firm Coudert Brothers (or Coudert Frères), now vanished into the mists of history; and maybe Baker & McKenzie, the Dentons of the mid-century legal world. And that was it.

Sure, there were some Wall Street firms, like my former firm, Sullivan & Cromwell, which maintained some very small outposts in London and Paris, and even Berlin before the Second World War, but these were practices advising on US law as it related to the issuance and distribution of sovereign debt securities. Not really what we would call an international practice today.

What has happened since those days? The world has changed in innumerable ways over the past three or four decades, and so has the movement of capital, supply chains, labour, automation, means of communication and even the perception of the role of lawyers in the business world.

The greatest changes came as a result of China’s adoption of ‘socialism with Chinese characteristics’, which could also be described as ‘capitalism with a nod to Mao’; and the fall of the Berlin Wall, soon followed by the collapse of the Soviet Union. As command economies were gradually replaced by entrepreneurial spirit, Western investors took note of the opportunities to conduct business in lower-cost jurisdictions with highly educated populations. And their lawyers followed them, to Prague, Budapest, Bucharest, Warsaw, Shanghai and points in between.

At the same time, London became an important destination for US law firms seeking to be near sources of financing projects in the European Union and the new Member States joining from the former Eastern Bloc countries, but also to acquire English law capability that would help them attract transaction and disputes work around the globe. The Big Bang of financial deregulation in the United Kingdom drew more firms. In the meantime, major UK firms had already been positioning themselves in continental Europe and in China, Hong Kong and elsewhere in Asia.

China’s rise as an economic competitor of the West also meant that Chinese law firms began to seek footholds in Europe and the United States, although these were mostly small representative offices, with the exception being King & Wood affiliating with Australia’s Mallesons. (Although this combination ultimately failed to break into Europe, King & Wood Mallesons now has a referral relationship with the US/UK firm Eversheds Sutherland, allowing each firm’s clientele to be served by the other firm in their respective geographies.)

And speaking of transatlantic combinations, while scores of US firms have opened offices in London, only a relatively few UK firms have so far succeeded in the US market. The ‘Magic Circle’ firms have made barely tangible strides, other than some lateral acquisitions. But this is expected to change radically with the merger of Allen & Overy and Shearman & Sterling, which will probably be followed by more aggressive and strategically sound efforts by other major UK firms.

The rest of the world has not been forgotten. Singapore, other locations in Southeast Asia, such as Vietnam and Indonesia; Europe, particularly Brussels, Luxembourg, the Nordics, Poland and, of course, France, Germany, Italy and Spain, have all been sought-after destinations for law firm expansion. The same is true for locations in the Middle East (particularly the Gulf States), Latin America (with much recent focus on Mexico) and Africa.

And what has been the driver for all this expansion? Globalisation of course. Globalisation is more than trade and supply chains. Law firms are essential components of the value chain, which represents all of the activities needed to propel a product or a service to fulfill its intended function. Today nearly all sophisticated businesses are global in some way, given the irrepressible movement of private and public capital. For lawyers, this means the challenge and opportunity to serve their clients and acquire market share in their areas of expertise, wherever such practices are required.

Does this mean that law firms must all ‘go global’ to succeed? Of course not. But what it does mean is that law firms, whatever their size or location, must realise, as so many now do, that the law is a global profession, requiring global solutions and, therefore, the ability to gain access to capability anywhere in the world. How that is done, be it mergers or greenfield market entry, or simply through developing relationships such as made possible by the International Bar Association, is a function of the given law firm’s traditions, culture and strategic vision.