THE question of whether Australian law firms hold the key to Asia that firms such as Norton Rose and Clifford Chance thinks it does, has been raised by media in the United States.
Acknowledging that Australia is seeing the tide of outbound Chinese investment that the rest of the world still waits for, commentators say Australia provides lawyers with "sophisticated transactional skills" and considerably lower costs.
"The resource-rich" nation has become the "hottest" destination for Chinese state-owned enterprises with an insatiable appetite for Australian coal and iron ore, reports The American Lawyer.
It cites the Aluminum Corporation of China's (Chinalco's) failure in its $19.5 billion bid to acquire an 18 per cent stake in Rio Tinto, but says that over $12 billion in Chinese money flowed into Australia in the first half of 2009, quadruple the figure from a year before.
But dealing with such major deals points to the sophisticated transactional skills at Mallesons, Allens, Freehills, Minter Ellison, Clayton Utz, Blake Dawson and Deacons, it reports.
"That such capable lawyers, increasingly multicultural and multilingual to boot, are available in great quantity and at considerably lower cost than at large US and UK firms - Australian associate salaries start as low as $50,000 - points to a significant advantage in the region."
However, commentators are warning that geographic proximity is often overstated, and that Sydney is a longer flight from Beijing than London. Time zone proximity, however, is a genuine "plus".
According to reports, Australian firms are now at a "crossroads" between heading up against wealthy US and UK firms with massive investments in Asia, or staying closer to home and focusing on domestic work. They could venture in less competitive Southeast Asian markets such as Vietnam at the risk of falling behind globalising peers.
A firm like Mallesons has tackled Asia on its own, opening a Hong Kong office in 1989, becoming the first Australian firm to open a Beijing office in 1993, and then acquiring local Hong Kong firm Kwok & Yih in 2004. Mallesons' chief executive partner Robert Milliner is "bullish on China", The American Lawyer reports.
Meanwhile, Norton Rose and Deacon's recently announced merger is a sign of some faith in Australia's ability to access Asia. Peter Martyr, chief executive of Norton Rose, said the merger, which will come into effect on 1 January 2010, gives the firm "gravity" in Asia. It is a way for the UK firm to reposition it brand for a future where Asia is increasingly the center of the world economy.