The Asian legal market is set to double by 2017, making it the world’s second largest regional market. That’s what delegates from around the world attending the Inter-Pacific Bar Association’s (IPBA) 23rd Annual Conference in Seoul were told today (Wed April 18, 2013) by Alan Hodgart, a London-based consultant to the profession.
On the tide of 6-7% growth over the next 7-8 years, demand for legal services in Asia is projected to grow along with it. And this growth will alter the shape and structure of the global legal market, Hodgart predicted.
Hodgart noted that “North America and Western Europe (including UK) ha[d] 69% of the market in 2012 – [which will] fall to 61% by 2017 and will continue falling for some years after that. Asia Pacific will be[come] the second largest regional market –increasing from $109 bill in 2012 to $215 bill in 2017.”
Hodgart outlined these statistics at an IPBA Conference Panel composed of managing partners from law firms in Asia, the US, Europe and the Middle East – the focus of which was opportunities and challenges in the global legal marketplace.
Consensus around new market realities
A general consensus among the panelists existed around what are generally acknowledged new market realities facing law firms in a globalized legal market – and the need to take proactive action to solidify and expand revenue and profit. While Hodgart asserted the new legal marketplace is a radical departure from the past – Mark Leddy, Managing Partner of Cleary Gottlieb Steen & Hamilton and Francesco Gianni of Giannia Origni Grippo Capelli Partners in Italy both outlined why they believe the market is in the process of a readjustment and not “turmoil” – as Hodgart stated.
US firms at risk
Hodgart contends US firms are at risk due to Asia legal market expansion and their underexposure to the market here. He outlined that sustaining competitiveness in the future will require high quality leadership and management, including:
- “High levels of performance in financial, governance and management structures.
- Implementation of systems to ensure work is done efficiently.
- The development of very effective, structured and disciplined business development and client relationship programs.
- Developing appropriate economic structures for each practice group.
- Articulating and managing a set of acceptable behavioural standards; and
- Ensuring there is a strong international capability available to clients”
At what stage of sophistication is business development?
The panel discussion ended and the floor was opened to questions. I posed the question to Hodgart: “When discussions of law firm competitiveness take place – internal efficiencies tend to take precedence over top-line revenue producing business development initiatives. Given your emphasis on the importance of sophisticated business development being put in place by law firms – on a scale of 1 to 10 – where would you rate international law firms today?” Hodgart responded: “I’d give them a 5. We’re half way there. Years ago the term marketing was not as accepted as it is now. Now – further professionalization is needed.”
The future is now
Given the new hyper-competitive realities in the Asia market as well as other market realities law firms now face – the need to establish business development systems that go far beyond the 5 Hodgart applies to current efforts appears self-evident.