Peter Kalis, Chairman and Global Managing Partner of K&L Gates, cited the “enormous investment flow” from the United States to Australia as one primary motivating factor behind the firms recent merger with Australia’s Middletons. Resources – and a variety of other sectors account for this investment flow – as Kalis outlined.
Kalis’ comments were made during a joint interview with K&L Gates Australia Managing Partner Nick Nichola in March of this year. Nichola cited globalization and consolidation as a driving force behind Middletons decision to join forces with K&L Gates. Kalis stated that this merger brings to 11 the total number of offices K&L Gates now maintains in the Asia-Pacific market.
Kalis’ reasoning behind the merger is most certainly borne-out by the facts – both in Australia and the Asia-Pacific region as a whole. Much of the Asia-Pacific region is experiencing double-digit economic growth – and while Australia is currently not performing as well – proposed governmental changes to export policy should see GDP expand beyond the current approximate 2.5%. Either way, Australian growth is outpacing both the US and Europe.
Asia-Pacific legal market growth
Kalis’ reasoning behind K&L Gates decision to expand in the Asia-Pacific region was underscored last April when at the Inter-Pacific Bar Association Annual Meeting, London-based legal sector consultant Alan Hodgart outlined that the Asia-Pacific Legal Market is set to double in size by 2017.
Fueling Australia’s growth is the mining sector followed by agriculture — and products from both sectors are exported to East Asia markets. While prices for Australian resources exports to China have decreased in recent months and unemployment is up – Australian Prime Minister Kevin Rudd plans to attempt to diversify the economy and its exposure to other Asia region growth markets like Indonesia. Australia’s current approximate 2.5% economic growth rate may increase with this new expanded regional exposure.
According to the Australian Department of Foreign Affairs and Trade, the United States is Australia’s most important trading partner. Indeed, the US accounts for one-fifth Australia’s merchandise export market and is its most important market for services.
Many opportunities for US firms
As a result of the 2004 Australia-US Free-Trade Agreement — Australian companies have full access to the US federal government procurement market, worth at least US$535 billion annually. This is one of a plethora of examples of why expansion into Australia by US law firms should, if business development initiatives are properly designed and implemented – result in an uptick in inbound US domestic revenue. Mr Kalis and K&L Gates were wise to have focused on the Asia-Pacific market in general, and Australia in particular.