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A key to growth in a minor market

A key to growth in a minor market

NEW ZEALAND law firms are keen not to upset important referral partners by being seen to compete with Australian law firms, but some are finding ways to grow beyond their tight market by working…

NEW ZEALAND law firms are keen not to upset important referral partners by being seen to compete with Australian law firms, but some are finding ways to grow beyond their tight market by working offshore without big expansion budgets.

Several years ago when general counsel in Australia started really making noises about Australian law firm bills, some said they were heading across the Tasman to take advantage of lower charge-out rates.

In the end it came to little as New Zealand firms were shy of upsetting their important referral partners in Australia, and for professional liability reasons.

“Our take on that was that it was more that the Australian in-house counsel were just trying to drive the price down from Australian [law firms],” says David Quigg at New Zealand firm Quigg Partners.

But that doesn’t mean New Zealand firms would knock back an approach from a potential client across the ditch.

Like Australia, New Zealand is a mature legal market, and opportunities for growth are slim with perhaps even more competition for a small pool of work among local firms, none of which have an offshore presence — not in bricks and mortar anyway.

“From the New Zealand law firms’ perspective, the view would be that there are already existing valuable relationships and referral networks that they have with Australian law firms,” says Stephen Macliver, chief executive of Bell Gully. “And they don’t want to be seen to be competing in their patch to jeopardise those relationships.”

Having said that, he says: “I think the quality and commerciality of advice in client service provided by the best New Zealand lawyers … is on a par with the leading firms around the world, and Australia.

“We’re not looking to compete with Australian law firms. [But] we will respond if there is a client of the firm, wherever they may be based, looking for our advice.”

His firm now has several offshore clients around the world for which Bell Gully will advise on a certain aspect of the work where they have good expertise and can provide competitive rates.

Macliver says his firm is presently “scoping” taking on part of the work of a London law firm for an “energy” client in South America, and talking to another UK law firm about taking on some of their work for a client in Asia.

“This is the ability to provide expert cost-effective capacity on parts or discrete parts of transactions that are not so jurisdictional specific. In areas where we have expertise — and of course a lot of our people are trained or experienced in English law and US law — so that’s certainly something that we are exploring,” he says.

“Through the relationships that we have around the world, it is exploring with those firms in jurisdictions where they’re finding themselves resource-constrained; … the opportunity for us, with the capacity that we’ve got, and the expertise that we’ve got and the significantly lower cost base and charge-out rates, which makes it cost effective for us to provide the capacity that they’re lacking.”

See the NZ Report this issue

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