As the Philadelphia Enquirer reported last month, US law firm White & Williams LLP and Chinese law firm Winners “formalized an alliance to help each other’s clients” last month in Tianjin, China. The work to form an alliance began three years ago when “Gary Biehn, a partner with White & Williams, [began seeking a law firm alliance partner to] expand his firm’s reach to this port city in northern China, an economic powerhouse that gets special attention from the country’s central planners.”
The firm already had a business tie to [Xue Law Firm] in Shanghai and saw benefits to connecting with Chinese lawyers in Tianjin.”
“We have clients who need legal assistance in the United States,” said Bai Xianyu, an Oxford-educated lawyer with Winners. “Our firm has been reaching out into international markets, and the most efficient way is through strategic alliances” reported the Enquirer.
The driving force behind China-US law firm alliances
As Yun Kriegler reported in The Lawyer last year: “As the world looks east, Chinese law firms are increasingly looking west. The convergence between Western firms and their Chinese counterparts has begun. And as organizers of the U.S. – China Legal Summit, scheduled to take place on March 4, 2013 in Hong Kong recently outlined: “China and the United States are parties to the most important bilateral relationship in the world today, that between the largest advanced economy on earth and the largest and fastest-growing developing one.”
Foreign Direct Investment: China and the US
The United States is the world’s largest recipient of global FDI, totalling $194 billion in 2010, according to Wikipedia. During the the first half of 2012, foreign investment by China climbed more strongly than in 2011, and the U.S. led all countries in receiving new Chinese investment during that period. The current total value of Chinese investment into the US is estimated to be $42 Billion USD, according to a newly released report authored by Derek Scissors of the Heritage Foundation. Conversely, FDI into China has increased considerably in the last decade and reached $59.1 billion in the first six months of 2012.
Other markets ideal for US-international law alliances
While China’s investment in the United States is substantial and growing, other markets account for a significantly greater amount of FDI into the US. Any US law firm seeking to secure work from overseas markets should also consider a focus on those countries investing most in the US.
America’s biggest investor nations
According to a paper by James K. Jackson published last October by the Congressional Research Service, the United Kingdom ($441 Billion) is the single largest foreign direct investor into the United States, followed by Japan ($289 Billion), the Netherlands ($240 Billion), Germany ($215 Billion), Switzerland ($212 Billion), Canada ($211 Billion), France ($199 Billion) and Luxembourg ($190 Billion).
What can US law firms do to build a Chinese or other foreign client base?
As I outlined in detail last July, US law firms with an interest in building a Chinese client base should now effectively employ the following initiatives, which also apply to other foreign markets:
- Develop effective referral relationships with independent overseas law firms
- Identify and communicate opportunities in the US market of interest to companies in specific overseas markets
- Open an overseas representative business development office
- Establish a country-specific focused social media initiative
Importance of international law alliances is increasing
The EU-US trade relationship, the world’s largest bilateral trading relationship, increases tenfold each decade – and as the NY Times reported recently – is poised to pick up steam. Emerging market expansion is also continuing apace. Law firm leaders everywhere should carefully assess the sources of foreign direct investment into their jurisdiction, and consider establishing a comprehensive business development initiative focused on securing new work from those markets.
Interested in improving your law firm’s business development efforts? Contact John Grimley, Editor & Publisher of Asia Law Portal, for a discussion: