More foreign law firms entering the Malaysian market
As a recent report in FMT News details, Herbert Smith Freehills (HSF) is now the second foreign law firm to enter Malaysia. The Malaysian Bar Council recently issued HSF with a qualified foreign law firm (QFLF) license. Introduced in 2014, QFLF permits foreign law firms to practice foreign law in Malaysia.
Trowers & Hamilton received the first QFLF license in 2015. FMT cites The Lawyer as detailing Malaysia’s 2014 move to liberalize its legal services market. Under QFLF, foreign firms can also form international partnerships with Malaysian law firms where they may own up to a 40% equity stake.
According to The Lawyer, interest from foreign firms is growing. In 2016, DAC Beachcroft submitted an application to Malaysia’s Bar Council to form a joint venture.
3 questions for Malaysia’s lawyers facing new competition
Faced with new competition from foreign law firms, Malaysian lawyer may wish to consider 3 questions about how they might remain competitive:
How is your firm improving business development and marketing?
Most law firms rely primarily on a website and in-person generation of referrals from other firms and existing clients to generate new business. Foreign law firms will possess substantial marketing and business development initiatives which can pose a significant competitive threat. Overall, firms should seek to develop robust new business pipelines working in tandem with sophisticated digital publishing and social media efforts to expand the scope of existing efforts and meet the competitive threat head-on. Also of importance when competing against large foreign law firms is optimizing new client development from within international law alliances.
Is your firm utilizing alternative fee arrangements (AFA’s)?
Many of the most competitive law firms in the world are now utilizing alternative fee arrangements (AFA’s) to more effectively compete for work. Richard Burcher, consultant to law firms on pricing strategy explained on the LegalTrek blog that providing clients with a choice of pricing options is the best means by which to create optimal client relationships. Burcher indicated that most firms are taking a reactive instead of proactive stance in relation to AFA’s, however. This is certainly one area where Malaysia’s law firms can meet or exceed international competition.
Is your firm adopting legal project management and the technology to support it?
Many of the most competitive law firms in the world are adopting legal project management (LPM) and the often cloud-based technology that supports it — as a means to optimally manage client-law firm relationships and increase profitability. As LegalTrek’s blog details, clients are requiring their law firms “to prove they know how to manage projects before they..decide to engage them”. LPM provides another option for Malaysia’s law firms to distinguish themselves in the face of new competition.