Sydney-based legal business development professional Richard Smith (@RWS_01) has outlined in a blogpost this week. They discuss what Asia-Pacific Region In-House Lawyers are looking for from their outside counsel. Smith based his post on an article by “Legal Week’s Elizabeth Broomhall (@ELBroomhall) [who] wrote up a very succinct account of what took place at [Legal Week’s (legalweek.com) 2nd Annual Asia regional ‘Corporate Counsel Forum’ event in Singapore] in a post on the Legal Week website on 5 December .
As Smith outlines, the event brought together 220 regional in-house lawyers from throughout the Asia-Pacific Region and Broomhall’s “article highlights. 5 issues (among more) as issues in-house team in the region have identified as important when selecting outside counsel.” Here are those 5 issues as outlined by Smith:
1. Local or international?
Smith cites Julia Shtepa, managing director of legal for South Asia at Accenture as having told Broomhall that: “Sometimes Accenture will engage an international firm to play a ‘deal coaching’ role, she said. “Depending on the regulatory environment and the language constraints, it may be that the deal is led by an international firm and supported by a local firm”.” Smith responds that: “If you can afford it, then this seems to me to be a very clever approach to take.”
2. Panel or no panel?
Smith cites Broomhall as writing that: “An increasing number of companies, including Chinese state-owned organisations, have been moving in this direction in a bid to control costs” Historically, however, panels are not as much in-use in the Asia-Pacific Region because: “many regional counsel believe these [panels] remain difficult in Asia given the limited capacity foreign law firms have compared with in their home markets, the different practice restrictions on foreign law firms across jurisdictions, the high turnover of partners in the region and the fluidity of the markets.”, according to Broomhall.
Smith cites “two additional factors that mean panel arrangements are not, yet, as prevalent in Asia. Which are: (1) relationships still trump all when assigning work; and (2) the rise of procurement is still to come.”
3. What about Alternative Fee Arrangements (AFAs)?
Smith observes that: “Throughout my time in Asia, law firms are conscious of their cost-base as clients always value drivers. And with annual ROI profit margins of around 20% (which translates to probably the lowest ROI returns in the industry globally), many would say rightly so. However, I found myself in total agreement when it comes to innovative fee arrangements, Asia lags behind the West.” He sees an opportunity for “law firms [to] create opportunities to genuinely discuss the value exchange and AFAs with their clients have a massive opportunity to differentiate themselves in what is currently an extremely tight market.”
4. Secondments as a value add
Smith cites Siebert and Shtepa’s comment that:“secondments help lawyers in private practice gain a better understanding of their businesses. Indeed, they believe this is the key message to firms: get to know our business; understand our drivers.” He explains that AdventBalance is already doing this and that it is “one of the best ways to [add value is via] – a secondment.
5. A more diverse profession
Smith cites “an important note of hope from Siebert’s comment that: “We [Telstra] specifically look to see that they’re ensuring the best possible talent pool for us – not just white Anglo-Saxon males. We’ve got a very strong diversity policy. And so we expect that to be something that is also important to our panel firms.”
Richard Smith’s blogpost entitled: What are Asia Regional In-House Counsel Looking for from their Outside Counsel can be read here. Elizabeth Broomhall’s article entitled: The Asian Agenda: In-House Lawyers Reveal What They Expect from Law Firms in Asia. Read here (subscription required).