Last Friday this author made a presentation to the Clyde & Co Asia-Pacific Conference in Hong Kong on the subject: The Asia-Pacific Legal Markets 2014: Opportunities and Challenges. The presentation was based on excerpts from my new book entitled: A Comprehensive Guide to the Asia-Pacific Legal Markets. Here’s the outline of that presentation:
Asia-Pacific Legal Markets projected to double in next few years
On April 18, 2013, Alan Hodgart, London-based management consultant to the legal profession, predicted that legal marketing in Asia would double in size between 2012 and 2017. Mr Hodgart made this prediction in Seoul at the annual conference of the Inter-Pacific Bar Association (IPBA). George Beaton, Partner at Melbourne-based Beaton Capital and management consultant to professional services firms takes a somewhat different view. Beaton outlines why a doubling of the market would not occur by 2017, but rather by approximately 2022. Whether the Asia-Pacific legal market doubles by 2017, 2022 or later – it will in the estimation of many observers of the global legal profession be one of the most, if not the most important legal markets in the world in the not-too-distant future.
What is the Asia-Pacific region?
The Asia-Pacific region is an expression frequently in use, yet, what does it mean precisely? The Asia-Pacific region covers an extensive geographic area comprising some 2.8 billion hectares of land or roughly 22% of the global land area. It stretches from the perimeters of China-Mongolia in the north to the southern tip of Australia and New Zealand to the south.
Australia plays an important role in the Asia-Pacific legal market
Asia-Pacific regional integration has been brought about by many years of national and regional collaborative initiatives and strengthened by increasing cross-border trade, financial integration, improvement in mechanisms of human interaction, shifts in technology and transfer of skills. Australia has been an integral part of this integration. Since 2004, Australian commerce has carried out more trade with Asia than with the rest of the world combined and that trade is on the rise more than four times faster as before. Three of Australia’s five prime trading partners – China,
Moreover, Japan and the Republic of Korea – are in Asia. Together with the ASEAN group, these nations account for approximately half of Australia’s overall international trade activities.
Emerging trends impacting legal services in the region
A number of major factors are influencing the legal services sector globally and in the Asia-Pacific market in 2014. They include: Increased competition; Commoditization hastened by new technology; Novel forms of rivalry from new service providers; A change in the role of in-house general counsel; Globalization; Changing foreign direct investment trends; Economic growth; A shift from a seller’s market to a buyer’s market; More decisions being made by clients; The appeal of Asian markets to western law firms; Legal market liberalization; The rise of the Internet economy; Price Competition; Intra-Asian law firm growth; Law firm mergers and Alternative Business Structures.
Altogether, the key for law firms in the region going forward will include addressing all the above issues, including:
- What is the future of NewLaw in Asia?
- How is technology impacting the practice of law?
- How is Generational Marketing Becoming More Important for Law Firms?
What are the most important legal markets in the region and why they are important? — Plus a look at some of the developing and less recognized nations and their potential in the future.
India; China; South Korea; Japan; Australia, Myanmar and Indonesia
Asia-Pacific Region Legal Market Growth: The impact on US and European firms
According to the Lawyer Asia-Pacific 150 published in June, 2014, the Asia-Pacific region has become the new home of international law firms. In January 2013, Asian Lawyer, however, sized up the international competition in the region. They discovered that global giants based in the U.S. were taking the lead in legal marketing in Asia. As for the European firms, U.K. based firms dominate the market despite their dwindling headcount.
What are the major opportunities available to US and European firms?
Nick Seddon, Partner with Beaton Capital and former head of Asia for DLA Piper and Eversheds, sees four main opportunities available to US and European firms in Asia. These are:
- Market liberalization
- Economic Growth
- Outbound foreign direct investment and
- Inbound foreign direct investment
What are the major sectoral growth areas?
Basically, reports reflect that the Asia-Pacific is one of the fastest-growing economic regions in the world. GDP in the Asia-Pacific region is projected to rise at 6.4% per year between 2011 and 2020, compared to 2.5% in the US and just 1.3% in the Eurozone. Therefore, 5 key industry sectors will drive growth:
- Energy, Machinery and
- Transport Equipment
The global impact of the Asia-Pacific legal markets
Certainly, George Beaton and Eric Chin of Beaton Capital in Australia see regional macro-environment forces and the legal services industry life cycle accelerating the pace of change for indigenous law firms:
- Five major reasons why the world is now in the Asian Century;
- How economic changes are impacting local law firms in key markets within the region;
- The state of the legal services industry life cycle across the Asia-Pacific region;
- Will Asia foreign direct investment soon lead the world?
Finally: The Asia-Pacific region has demonstrated high-growth in both inbound and outbound foreign direct investment flows. The region has also demonstrated remarkable flexibility in a challenging global economic atmosphere. The Asia-Pacific region is, therefore, poised to lead the world in the future. It’ll be in both inbound and outbound foreign direct investment.
A Comprehensive Guide to the Asia-Pacific Legal Markets. was recently reviewed in Beaton Capital blog by Xinyu Zhang, who wrote: “Written in an articulate style, the book presents comprehensive and detailed information that will allow law firms to create strategic future plans. However, it makes it a must-read for legal practitioners who are considering entering into the Asia-Pacific markets or seeking to expand their practices within the region.”