The demand for legal services is continuing to globalize, according to a recent report published by Managing Partner Forum and coauthored by Citi Private Bank and Hildebrandt Consulting.
“The more global nature of legal work has particularly aided Am Law 50 firms”, the report concludes, “even if they haven’t extensively added physical offices outside of the US. Others have chosen to expand by opening offices offshore and relocating US-based partners and hiring laterals from the local market. Some have preferred mergers. Smaller firms…have chosen alliances, networks and referrals in order to address the increasingly global nature of the legal services market.”
Global demand for legal services will grow
The report concludes that: “The global demand for legal services will grow, based on the emergence of middle class societies in emerging markets and the complex nature of business, as it becomes increasingly global. Notably, the World Trade Organization (WTO) recently detailed how global economic trade activity would grow at a rate of 4% in 2016. That growth, the report concludes, will not just benefit large corporations, but also middle market businesses, who are indeed the bread and butter [for] a large majority of law firms around the world. [emphasis added]
Further, [that] jurisdictions around the world will continue to open up to foreign law firms. [As] seen recently in South Korea and Singapore. The US remains the largest legal market, and not every law firm will practice in global markets, but business is increasingly global and the most successful law firms follow businesses around the world.” [emphasis added].
What lies ahead
Nigel Knowles, global co-chief executive partner at international law firm DLA Piper recently wrote that: “Commercial law is a $300bn global industry – [but] no single firm has more than 1 per cent of the market.” He expects to see increased consolidation and specialization – in an effort to most effectively compete for market share.
Knowles argues that “Successful law firms are run increasingly like any other major corporation and those wishing for a place in the top league will need to streamline their management structures and employ managing partners specialising in running [a] business, rather than dispensing legal counsel.”
Statistics show an increasing diversification of global foreign direct investment, a growth in NewLaw business models, and a rise in boutique law firms. One can credibly argue that it won’t just be the large global law firms that do well in the future global legal climate. As the Managing Partner study points out, competition from NewLaw and other business models is something BigLaw is increasingly facing.
Whatever business model or size of firm you may work in – there is no doubt there is work to be found and secured in the growing global economy. I agree with Nigels Knowles that it will be those firms that seize the opportunity (whether large or small) with the right professionals (and business development processes) in place – who’ll be the most successful going forward.