Vietnam-based Laurent Tam NGUYEN has more than twenty-five years’ experience leading marketing and business development operations in b2b professional services, e-business and commercial property. His experience includes heading regional communications and marketing initiatives for leading ASEAN-region legal services organizations including ZICO Group and DFDL.
In addition, he is the General Manager & Founder of Digital Mekong. In this interview with Asia Law Portal, NGUYEN details what inspired his career path, what opportunities exist for law firms in the ASEAN region, and what strategies they might deploy to achieve their regional objectives.
What inspired you to become focused on the legal services sector in the ASEAN region?
I settled down in Vietnam in 2007 right after WTO at a time where marketing for services in most of ASEAN markets barely existed. I set up my own consulting practice in marketing and business development and naturally happened to meet ASEAN headquartered law firms that wanted to expand beyond their historical boundaries.
My past experience at Arthur Andersen as marketing manager when the firm was the global leader in advisory services certainly played in my favour. Over there, I learned the fundamentals of successful professional service providers in a global organization: the immense power of a well-structured brand, instilled on every touch point of an organization and culture, the multi-disciplinary approach, global client development programs and great execution and delivery.
After more than 10 years in Southeast Asia, witnessing the growth of ASEAN economies, ASEAN 50th anniversary, having the opportunity to celebrate the achievements of regional law firms like ZICO (30 years) and DFDL (20 years), contributing to build sustainable ASEAN brands is really a thrilling experience every day.
What opportunities and challenges do you see facing law firms in the ASEAN region?
ASEAN is today the 5th global economy according to IMF and the 3rd largest labour workforce population. Over the recent years, the ASEAN economic growth has consistently been surpassing any other world region and there is still more potential ahead.
ASEAN countries’s GDP* are expected to grow 3-8% over the next five years with a Compound Annual Growth Rate (CAGR) of 5.1% from 2017 to 2021 collectively. More granular estimates indicate +7% CAGR for the emerging markets (Cambodia, Laos and Myanmar) while the developing markets (Indonesia, Malaysia, Philippines and Vietnam) are projected to generate a steady 5-6% CAGR.
With more than half of the population of over 600 million under the age of 30, a rising middle class eager for consumer products (notably education, health, travel), huge needs for infrastructure (estimated at US$110b per annum until 2025), a rising appetite for new technology and new industrial revolution added to a willingness from member states to develop over the long run a better single integrated market (AEC in 2015), virtually, there are immense opportunities for every economic activity.
For law firms, this offers tremendous prospects. The Asia-Pacific legal industry is a $90.6 billion market that is growing at 5% CAGR and projected to grow to $111.1 billion by 2020**. Law firms can leverage on a few mega trends:
- With Intra-ASEAN investment rising steadily to unprecedented levels ($24 billion in 2016), M.A.C.s (Multi ASEAN Corporations) are blossoming. Regionalization is accelerating. More local champions are expanding. In 2017, the largest M&A transaction in Vietnam was a Thai company acquiring a VN brewer as example.
- Entrepreneur mindset and family oriented businesses fuel the development of SMEs in the ASEAN economies (96% businesses in member states). They represent a huge source of legal work, provided legal pricing is not perceived as an obstacle. The powerful momentum into startups and tech business offers even wider opportunities to take advantage of.
- The infrastructure deficit: in addition to structural infrastructure needs, China, notably through OBOR (One Belt and One Road) Initiative, is opening other opportunities in infrastructure and project financing, not just in roads, transportation and ports, but also utilities such as water and electricity and communications.
- Other Asian countries (Japan, Korea…) continue to invest heavily in ASEAN with a multi-industry focus approach. We witness everyday these business communities grow on the ground in all ASEAN countries.
Building competitiveness, accessing new markets, natural resources and strategic assets are powerful drivers for the “ASEANization.”
According to Acritas APAC Law Firm Brand Index 2018 report, “Asia Pacific legal buyers spend an average of 40% of their budget on resources outside their home country, and the pace of spending is expected to accelerate with growth in the region.”
But even if ASEAN is often described as an economic block, it still remain a mosaic of 10 countries with very different stages of development (including education), contrasted markets and business environments, various legal systems and a wide range of local sensitivities. Acritas’s report describes the region as “incredibly diverse”. It also points out: “law firms that succeed in this part of the world understand and account for these nuances in buyer behavior. How to compete and align to local market needs and expectations, which can be vastly different for each country in the region” is a major challenge.
In addition, building consistent legal practices across SEA countries, recruiting, retaining and developing talents, dealing with buying patterns highly sensitive to pricing are everyday struggles, not even mention the challenge to build a robust brand across the 10 jurisdictions.
Last but not least, Southeast Asia is a fast-changing region and competition is getting fiercer everyday. Even if large law firms may still trust the largest transactions, local/independent firms are gaining credibility, size and regional footprint establishing their own networks and they are emerging as strong competitors. Big 4 are also investing heavily in the region and Legal Tech starts to offer alternatives to traditional law firms.
Sources
* ASEAN Investment report 2017 ASEAN Secretariat and the United Nations Conference on Trade and Development (UNCTAD),
**Competitive forces shaping APAC legal industry 2018, Eric Chin
What types of approaches to the region would you advise domestic and foreign firms to adopt to succeed in the future?
At a time where technology is shaking the legal industry, I would recommend first to make sure some basic fundamentals are addressed and on par with international standards:
- A explicit branding that clearly states the positioning and value proposition of the firm,
- A minimum viable online presence that supports the credibility of the firm and allow quality touch points with targeted markets
- A clear strategy depending on your expertise and potential target markets
- A smart usage of technology: not to fear technology but leverage on it to gain efficiency and to improve business relationships quality with their business community.
Succeeding in the region goes through addressing some of the challenges described earlier. Successful law firms in the region have notably:
- Adjusted their organization and teams to the mosaic of local markets, both culturally and in terms of business environment by bringing on board local experts well connected to the local decision making communities.
- Positioned their practice to offer a full/one stop solution addressing the wide range of local legal needs (from incorporation to more and more sophisticated deals) and at the same time be able to bring a solution at regional level whether through building or joining a network of best friends… local knowledge with regional capabilities has become a must…
- Implemented appropriate desks or dedicated client service coordinators to address the specific needs of investors coming from Western countries (good command of English) and Asian jurisdictions (China, Japan, Korea and India…)
- Implemented systematic client development and coordination programs to follow their clients’ cross jurisdictional growth at regional level, bringing their clients experience to new levels.
- Invested heavily in their people, helping their teams to develop real regional knowledge (exposure to international deals, secondment programs, office swap… ) but also to gain critical soft skills such as leadership, management, interpersonal communication, personal development….
Last, the most successful law ASEAN firms have demonstrated a high entrepreneurial spirit with a significant level of risk acceptance at partner and management level which is often not the norm in such a traditional industry sector.
Agility, entrepreneur mindset, client focus, long term vision and robust branding have proven to be essential ingredients for success in SEA. Adopting these values in their operating mode will help law firms to grab the huge opportunities offered by ASEAN.
