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International Business Development

News and updates on international business developments from John Grimley

In Los Angeles, an AmLaw 200 law firm becomes a venture capital investor

By John Grimley on Posted in Legal Business Development, Venture Capital

In what is becoming a noticeable, albeit so far minor trend for law firms in a changed legal landscape – Los Angeles-based Manatt, Phelps & Phillips, LLP has established a new consulting practice.  Called Manatt Digital Media, the new initiative will focus on legal and business consulting to the digital media, entertainment and advertising sectors. Interestingly, the firm also plans to make digital media investments from its own venture capital fund.

Peter Csathy, the CEO of Manatt Digital Media, told Variety last week that “he is now “aggressively” looking at funding opportunities in digital media and entertainment companies ranging from content distribution and mobile to advertising and social media. Investments will run [the] gamut from early-stage startups to established companies.”

Continuing a Boggs family tradition

The new initiative is also being led by one of Manatt’s attorneys:  Hale Boggs – whose father Tom Boggs helped establish what is arguably the first and still one of the pre-eminent law firm consulting practices:  Washington, DC-based Patton Boggs LLP — focused on lobbying on behalf of (initially) foreign sovereign governments — more than 45 years ago.

Aligning commercial objectives of clients with their law firms

A law firm consulting practice is a business model that works exceptionally well as a business development tool for law firms.  As George Beaton,  professional services sector consultant in Australia has outlined in great detail: “most of these subsidiary businesses are as, or more, profitable than the parents” – yet on the whole law firms have been slow to adopt them – whereas the accounting profession has embraced them with enthusiasm.

What is so attractive about these consulting divisions is that they closely align the services offer of a law firm – with the commercial objectives of clients. I have spent many years selling the services of these hybrid practices (including those of Patton Boggs in Europe) in both domestic and international marketplaces. I can say from experience that any law firm seeking to adopt such a practice should do so – as a matter of first priority.

Who’s next?

George Beaton’s analysis – in the real world reality of generating new work for law firms – proves I believe that this hybrid offer is the best means by which to generate that revenue.  Indeed, the American Bar Association (ABA) last year brought together a panel of experts to outline the benefits of establishing just such a practice.  I expect we’ll continue to see more of these initiatives. As I outlined last month, international law firm Withers LLP recently established a consulting practice focused on private client advisement.  So who’ll be next?

How investment bankers can find needle-in-the-haystack deals

By John Grimley on Posted in Financial Services Business Development

Mid-market focused investment bankers everywhere are always seeking new deals.  Most investment bankers use traditional referral methods of deal sourcing:  Seek to build a referral network via in-person meetings and involvement with industry associations like the Association for Corporate Growth (ACG) and others.  Most however, leave social media on the table.

As I’ve outlined before, some mid-market investment bankers are already using social media (in particular, blogging) to secure new deal flow. Those already doing so should consider focusing on smaller niche areas to generate even more deal flow. Those bankers not using social media should start – as your competition is not only active on social media, but will – like those in law – begin focusing more narrowly.

Lawyers are building their business around niche-blogging

Kevin O’Keefe, CEO of Seattle-based LexBlog – recently outlined what he’d learned at a gathering of sophisticated lawyer-rainmakers that blog at a recent industry symposium:  ”Look for those industries and areas of the law that have more future than past.”  The lawyers at that symposium: “had a niche – and they dominated it.  When they knocked on doors people knew of the reputation of the firm and its lawyers. A reputation built by going after areas where there was no competition.”

“Far too many launch blogs covering areas of the law which all their competitors are covering, or will cover, in a blog. These lawyers would be better served by bucking the trend and being a maverick by going after a niche. Look for areas where this no competition. Where there is more future than past. There has never been a greater opportunity to do so than in the age of blogs and social media.”

The case for financial services blogging

As Stephanie Sammons recently outlined in WiredAdvisor: “Currently, less than 20% of financial advisors are blogging, but that number is going to grow as more firms open up to it from a regulatory perspective, and as more advisors realize that they need to be self-publishing to attract and retain clients in the digital age.”  According to [a] Technorati Digital Influence Report, 86% of influencers blog.  You may think of yourself as being influential, but if you’re not blogging in the digital age, you’re likely not going to be influencing anyone online.”

Carve out a digital niche

Middle-market focused investment bankers are well-positioned to secure new deal flow in highly specialized niche-areas by blogging. Whether it’s based on the geography, revenue, sector or ownership structure of the companies you serve – or the market niche you’ve carved out in your financial services business. ESOPS a specialty?  Mid-market agri-business in California’s central Valley? Dentistry? Precision-manufacturing?

All of these topics and many, many more lend themselves to helping mid-market focused investment bankers build a wide-following in a hyper-specialized niche.  Few if any are doing it now.  But this form of engagement will likely be the prime method of on-line engagement between bankers and ideal mid-market C-suite executives in the future.

In legal business development, good things sometimes take time

By John Grimley on Posted in Legal Business Development

In 1987′s blockbuster film Wall Street, Hal Holbrook plays Lou Mannheim, a stockbroker who’s lived through the ups and downs of the market.  He consistently advises Bud Fox – an ambitious broker played by Charlie Sheen – not to cut corners in his quest for financial success.  Mannheim tells Bud early in the film (referring to the growth of IBM and Hilton): “good things sometimes take time”. Regrettably, Fox didn’t take Mannheim’s advice.

The lesson applies to today’s law firms

This lesson most certainly also applies to the law firms of today.  Matthew Huisman’s fascinating profile of Washington, DC’s Wiley Rein LLP in yesterday’s Legal Times is a lesson in how to build a law firm the right way.  Huisman interviewed the firms two founders – Richard Wiley and Bert Rein – who founded the firm 30 years ago with 37 attorneys.  In that time the firm has grown to become one of Washington’s largest – with 275 attorneys.

Something to emulate

In their story is I believe a lesson for all law firms and lawyers to emulate.  Here are the key ingredients to Wiley Rein’s success – as outlined by the firm’s founders:

Grow organically:  Bert Rein told Huisman that:  Organic growth is “[the] kind of growth that makes the most sense. You want to grow gradually as you link up your practices so everybody feels they can add value across the board.”

Specialize: As Richard Wiley told Huisman: “We have a specialty practice focused on Washington, D.C. and the federal government. Our practice is national and international, but right from here, and [it] basically encompasses regulation, litigation and transaction.”

Be Efficient: Wiley told Huisman the firm is efficient and is sometimes able to pass those efficiences on to their clients.

Embrace Diversity:  Rein told Huisman that the firm has embraced diversity and it’s been a very good thing.

Mergers don’t produce safety:  Thinking like a start-up does. As Rein told Huisman, the firm had a start-up mentality from the beginning and rejected an offer to merge from Dewey and Lebeouf.

Focus on IT and business development: Wiley told Huisman that the firm has increasingly spent more money on IT and business development. And the firm has had the same administrator since 1983.

Shortcuts won’t produce success

Huisman’s profile of  Wiley Rein is both an inspiration and a veritable check-list of what firms can do to thrive in both good and bad economic times. Rein and Wiley are in good company.  As Warren Buffett recently said: “taking shortcuts is not the pathway to achieving sustainable competitive advantage, nor is it an avenue toward satisfying customers”.

US law firms set their sights on Asia

By John Grimley on Posted in AsiaLawPortal, Asian Market, Legal Business Development, Legal Market Liberalization

From Tokyo

Phil Bolton of Global Atlanta reported yesterday that “With its acquisition of a California firm completed and the opening of a new office in Korea, the law firm of McKenna Long & Aldridge LLP will be increasingly committed to international work and focusing even more intently on China, [according to] firm chairman Jeffrey Haidet.”

Haidet told Bolton: “He expects that the firm will be even more involved internationally.  There’s lots of international outbound and inbound work to be done.  The U.S.-Korea Free Trade Agreement provided a staged opening of Korea’s legal services market to U.S. law firms, and McKenna Long plans to be at the front of these opportunities as they emerge.”

Asia legal market to double by 2017

McKenna Long’s Asia initiative could not have come at a more opportune time – as Asia’s legal market is set to double by 2017, becoming the second largest legal market in the world by that time.  And Korea is not the only liberalized market in Asia American law firms can focus on. Liberalized markets, double digit growth – all beckon US law firms seeking growth.  Too, America became the largest recipient of Chinese foreign direct investment in 2011 — and Japan is undergoing a renaissance in outbound foreign direct investment focused on energy and M&A.  Just what McKenna Long is seeking to secure from the region.

US lawyers cautious

But as Staci Zaretsky of Above the Law outlined recently: “Due to modest attorney headcount [in Asia] at most U.S. [law] firms, it appears that [US lawyers] still view the Asian market with caution; only global giants haven taken the lead.”

It won’t be easy

Professionals in the legal services market tell me that there is a perception here that US firms are not prepared to make the long term commitment to the region, or spend the money necessary to compete with long term entrenched incumbent law firms.  Incumbent law firm leaders have told me they are generally confident they can carve out domestic niches which cannot be accessed by US law firms as a result of their lack of long term commitment.

Do US law firms have the staying power?

Given the growth in the market – time will tell as to whether US law firms are prepared to work to establish themselves and remain long term in the market. A US base of operations with Asia satellite offices (as McKenna Long’s Haidet envisions) may not be sufficient for success given on-the-ground realities here.

Law firms a potential winner in UAE state visit to UK

By John Grimley on Posted in AsiaLawPortal, GCC Member States, Legal Business Development, United Arab Emirates, United Kingdom

Sheikh Khalifa bin Zayed Al Nahyan, President of the United Arab Emirates (UAE) just completed a two day state visit to the UK – where the focus was on expanding the bilateral trade relationship the two countries enjoy.

Law firms observing

Niall O’Toole, managing partner at Clyde and Co in Abu Dhabi told the Gulf News that the trade relationship between the two countries can “create opportunities for investments” and “lead to more business opportunities” in both countries.

Bilateral trade increasing

Today, as Gulf News outlined, bilateral trade between the two countries totals about 16 Billion USD. In 2009, the two nations set a target to increase mutual trade to 18 billion USD by 2015.  Sectoral standouts range from shipping and tourism to energy and construction.

Queen Elizabeth underscored trade-ties

Queen Elizabeth hosted a lunch for the UAE’s sovereign where, as the BBC reported, she stated : “The UAE is one of our largest trading partners in the Gulf region, and we have welcomed Emirati investments in the United Kingdom in many areas from the construction of the largest port facilities in the UK to the Emirates Skyline, the spectacular cable-car crossing over the Thames and, of course, Manchester City.”

India-UK effort last February

Last February British Prime Minister David Cameron led a trade delegation composed of UK lawyers to India to help bolster bilateral economic activity between the two countries.

Without effective follow up – there’s no business

As is the case with any trade efforts similar to these two – the hard part for lawyers begins once the pomp and pageantry is over – and the hard work must begin in an effort to generate revenue from these goodwill meetings.  Most law firms don’t effectively follow up on these initiatives, however – leaving opportunities on the table where their governments have already laid the basic groundwork.

Is the Hong Kong legal market about to get even more competitive?

By John Grimley on Posted in AsiaLawPortal, Asian Market, Hong Kong, Legal Business Development

LegalWeek.com reported this week that Australia-based fixed-fee law firm AdventBalance “has brought its unconventional business model to Hong Kong with the opening of an office in the city”.

The firm “seconds senior lawyers to clients’ offices for specific projects and transactions; agreeing a fixed payable amount for the period and hours involved”.  As Legalweek.com reported: [AdventBalance] “Managers believe their firm is growing quickly while traditional firms are struggling due to the decline of hourly rates and the rigidity of traditional partnerships.”

Hong Kong an excellent target for disruption

Hong Kong is the transshipment point for two-thirds of foreign direct investment in and out of China. Yet, almost all traditional partnership firms in the region are not active in social media – a key component of business development in the modern legal services market.  The market is “insanely-competitive” as Peter Brien of Slaughter in May in Hong Kong stated at the Inter-Pacific Bar Association Annual Meeting in Seoul a few weeks ago. Yet most law firms in the region take a cautious approach to social media as Deacons then Executive Partner Jeremy Lam outlined last year.  While by no means the only measure of what law firms need to deploy to be successful in the new legal normal climate of competition among legal services providers – social media engagement is a barometer of how active a firm is in attempting to adapt.

Will local firms adapt to new competition?

Time will tell as to whether Hong Kong law firms will adapt to increased competition by disruptive new legal services business models. As Nicole Black outlined in MyCase blog last year: “Legal futurists like Richard Susskind and Mitch Kowalski have long predicted that value-based billing is the wave of the future for the legal profession–in part because corporate clients are beginning to demand it.”

We’re about to see whether Hong Kong’s long-term incumbent law firms will seek to compete with the new market entrants on the block and adopt flat fees for some work. The reticence about adoption of social media seems to reflect it might not.

Chinese law firm Yingke enters the Israeli legal market – what’s next?

By John Grimley on Posted in AsiaLawPortal, Israel, Legal Business Development, Legal Market Liberalization

The Lawyer magazine (UK) has reported that one of China’s largest law firms, Yingke – has entered the newly liberalized Israeli legal market.

The Lawyer reported that Yingke “merged with Israeli boutique firm Eyal Khayat Zolty, Neiger & Co, for its first step into the jurisdiction. The local firm has rebranded itself as Yingke Israel and will co-operate closely with Yingke’s 20 offices in China as well as the firm’s 16 overseas offices and alliances. It is understood that the merger is a brand merger without full financial integration.”

Israel’s high-tech sector was one major motivator for the merger. An area of speciality for Eyal Khayat Zolty, Neiger & Co.  ”Since 2010, Chinese companies, both state-owned and private enterprises have increasingly invested in Israel’s technology sectors”

Legal market liberalization the catalyst

Israel’s legal market was recently liberalized and there has been significant interest on the part of foreign law firms. Like other markets that have experienced recent legal market liberalization – incumbent domestic law firms face increased competition from overseas firms — as well as potential opportunities — as this recent China-Israeli law alliance exemplifies.

What’s next?

The Israel Bar Association will conduct a full-day conference in Tel-Aviv on June 27 to discuss these and other developments related to the liberalization of the Israeli legal market.  Originally scheduled for January but postponed due to adverse weather conditions – the conference will be attended by senior foreign law firms operating in Israel along with Israel’s senior law firms operating abroad.

Zohar Fisher, CEO of Robus Legal Marketing will be the Academic Organizer and Moderator for the event.  Zohar told me that:  ”If there was a doubt about the influence of the foreign attorneys reform in Israel (allowing foreign law firms to open offices and actively represent in Israel) – this conference and the massive participation of foreign law firms from around the world, show that this reform has the ability to change and regulate the Israeli legal sector. More than 20 (!) foreign law firms, from the US, Germany, South America, France, UK, international law firms and others will participate “.

Given the recent entry into the market by Yingke – and the potential opportunities available for firms who enter the market – this conference should be a very interesting insight into what the future may hold.

What lawyers can learn about marketing from Korea’s pop stars

By John Grimley on Posted in Legal Business Development, Social Media

Korean Pop – or “KPOP” as it is most well known – is a multi-billion dollar industry in Korea focused on developing, nurturing and producing likable pop songs and the stars that sing them.  Perhaps the most well known among them is a pop star named Psy – whose YouTube video Gangnam Style – is the most successful video in the history of YouTube.

A legal conference featuring both lawyers and KPOP stars

Last week – the Inter-Pacific Bar Association held it’s annual conference in Seoul, Korea – which I attended.  This is most certainly an august body of fascinating lawyers with a wealth of knowledge and information to share.  Panel discussions on Asian legal market growth and legal market liberalization in the region — were fascinating.

And yes – scores more people do prefer KPOP to legal market liberalization.  Indeed, it’s a bit odd to write about a passion for legal market liberalization in the context of KPOP.  But I do have a passion for it – and it does have a direct economic impact on the lives of many people.

The highlight of the conference was not, however, discussions about the changes to the regional legal market. The highlight was – the Gala Dinner on the final night of the conference – which featured a KPOP concert broadcast on Korean television.  A blog about Seattle-based KPOP singer Jay Park – who performed at the concert — provides a good synopsis of the event.

A stark contrast in visibility

And this brings me to what lawyers need to learn from KPOP stars. The KPOP stars performing that night and others like Psy – actively promote their songs. In fact, one can I believe credibly argue – the promotion is the main driver behind creating the popularity.  Just being out there creates attention which leads to people liking the music.

Juxtapose that against the lawyers gathered for the dinner. They are collectively a group of fascinating individuals, with much to say not only about law – but about the future of the Asian economy.  But they’re not promoting themselves in any way near what they should be. Lawyers whom I heard discuss some of the most fascinating things about their respective domestic economies – are in some cases virtually not find-able via LinkedIn.  Their website might consist of only a single page – or in some cases – no website exists. Others granted do maintain sophisticated websites. But few if any among them are blogging.

You should be heard

My point is simple: Lawyers that attended IPBA 2013 are not just practitioners but an often remarkable window into their domestic economies.  Having served in senior levels of government, advised multinational companies, government and non-governmental organizations on domestic and regional economic issues — their voices frankly ought to be heard more loudly – beyond the strictly financial incentive to generating new business. I for one would love to read regular blogposts by many of the practitioners I had the privilege to listen to and in some cases meet last week.

As was outlined with precision this week by Kevin O’Keefe, CEO of LexBlog — those practitioners – and indeed lawyers around the world – would do well to dip a toe into social media as a starter. Place a picture on your LinkedIn profile.  Create a Twitter profile – even if just to follow and connect to others. Love to write?  Consider blogging. Your views would be well received and a meaningful contribution to the future of your respective economic regions.

Even small steps will help

KPOP stars and their management teams aggressively promote their songs as they know they must in order to gain the attention necessary to simply get noticed and hope a song becomes a hit. Lawyers would do well to emulate these efforts even by a tiny fraction – and use readily available and widely accepted means by which to get noticed. Linkedin.  Twitter.  Blogging. Let people know who you are. It’s not too difficult.  And you and the audience you cultivate will both be the better for it.

Why the AmLaw 100 rankings are not credible

By John Grimley on Posted in Law Firm Mergers, Legal Business Development

The AmLaw 100 rankings for 2013 were released yesterday.  The annual report, which purports to identify the highest-grossing American law firms by American Lawyer, is widely regarded as the benchmark guide for what are the premier law firms in the United States.

The rankings however, are not credible as they include within them co-branded, separate law firms under what is called a Swiss-Verein merger arrangement.  In 2011 “K&L Gates chairman and global managing partner Peter Kalis “sa[id]” the magazine is improperly grouping financial numbers from law firms associated with each other through a Swiss verein” as Debra Cassens Weiss reported in the ABA Journal in 2011.

“There is no question that the Am Law 100 ranking works well when it compares single law firms,” Kalis writes. “But if, through the device of a verein, two or more law firms are permitted to report results on a consolidated basis, the ranking is distorted, and the value of The Am Law 100 is undermined.”

Swiss Vereins should not be included

Mr Kalis is correct. In a 2011 AmLaw Daily post entitled The Am Law 100: Grand Illusion, Mr Kalis correctly outlined: “It can’t be that a common brand alone is sufficient, or The Am Law 100 would include another international referral society, Lex Mundi. Extending this logic further, law firms pursuing a “best friends” arrangement could simply slap a label on their cooperative structure and create a new brand, thereby vaulting up the Am Law 100′s gross revenue rankings. Once The American Lawyer permits inclusion of vereins and other confederations that do not share a single profit pool, it’s difficult to discern a coherent limiting principle. The American Lawyer offers none.”

Inaccuracy encourages irresponsibility

According to American Lawyers logic – Star Alliance airline partners could claim global revenue for their aviation alliance. Logically, so could all NBA teams under the NBA brand.  A national alliance of co-branded lemonade stands could do the same and enter the capital markets seeking equity, debt or other financing far beyond what unbranded lemonade stands could seek to secure without that brand name – and so on and so on.  Frankly, this is beginning to sound like the triple-A ratings bad debt was accorded before being sold in derivative form before the 2008 financial crisis.

If a brand now defines what is an entity worthy of claiming combined revenue – then law firms seeking to establish financial credibility among lenders, vendors, clients and others – is undermined – and responsibility for their performance diluted - to the detriment of everyone.  The legal services sector should be moving toward – not away from – accurate analysis of law firm revenue.  The American Lawyer, by claiming a Swiss-Verein merger alliance is a law firm – helps bad decision making by those entities to be buried under an illusory global revenue report.

The theater of the absurd

Given that in 2013 The American Lawyer is continuing to publish these reports purporting to reflect Swiss Verein co-branded alliances as reflecting revenue of a law firm – it’s time to stop taking the AmLaw 100 rankings seriously.

Impact of Asian legal market liberalization outlined at Seoul conference

By John Grimley on Posted in AsiaLawPortal, Asian Market, Legal Business Development, Legal Market Liberalization

The impact of legal market liberalization upon specific legal jurisdictions in Asia was the subject of a panel discussion last week at the Inter-Pacific Bar Association Annual Conference in Seoul, Korea.

Lawyers in the midst of these changes which are bringing new competitive pressures upon regional domestic markets highlighted the unique circumstances their respective markets face. Lawyers practicing in India, Singapore, Malaysia, Hong Kong and Korea made presentations on each of those markets.

Charandeep Kaur, a partner in the Delhi Office of Trilegal represented India.  Christopher Leong, Managing Partner of Chooi & Company addressed Malaysia.  Francis Xavier or Rajah & Tann addressed Singapore’s recent market liberalization, while Peter Brien of Slaughter & May outlined the current situation in Hong Kong.  Finally, Hee-Chul Kang, a founding parter of Yulchon and Yong Guk Lee, a partner with Cleary Gottlieb Stein & Hamilton, both addressed the current situation in Korea.  The panel was moderated by Mark Stinson, a partner with Canada’s Fasken Martineau DuMoulin.

From a toe-in-the-water to the insanely competitive

While each market is unique (India in particular has not yet technically liberalized its market) the overall consensus was that liberalization – broadly speaking — opens domestic markets up to foreign competition and poses a threat to incumbent practices.  The impact in each market, however, varies.  From “insanely-competitive” as Peter Brien described the Hong Kong market on one-side — to currently minimally open India (allowing “fly-in fly-out” consultations with India-based clients by foreign lawyers, as Charandeep Kaur outlined).  Singapore and Malaysia would I believe represent middle-ground liberalized markets moving toward increased liberalization.

Korea appears potentially hyper-competitive

Korea is a market arguably on the brink of a hyper-competitive new age.  Hee-Chul Kang described the Korean market as moving toward a situation where “no area of practice, [even domestic law], will be ring-fenced” as against foreign competition.  He also described his surprise that so many foreign firms had already entered or plan to enter the market (25 to date).

Increased competition appears inevitable

Irrespective of where each domestic market is along the path of liberalization – it appears clear that competition for market share will increase at various levels in each market over time. And as was also outlined at the conference – Asia’s legal market will double in size by 2017 – becoming the world’s second largest legal market in the world behind the United States.

Given the increase in growth of the market coupled with increasing ease by which foreign competitors will enter liberalized Asian legal markets – domestic firms will need to make choices as to how aggressively they will compete in the future for business against these new market entrants.