CLIFFORD Chance officially opened its doors on Australian soil this week with the merger with Chang Pistilli & Simmons in Sydney and Perth firm Cochrane Lishman Carson Luscombe.
The double tie-up sees the magic circle firm create a 14-partner presence in Australia.
Mark Pistilli, the office managing partner of Clifford Chance in Sydney, said the firm's move into Australia proves that earlier calls that the Allen & Overy entry into the market was just an aberration were untrue.
Admitting there is a lot of competition at the top-end of the legal market here, Pistilli said there is still a very real appeal for firms like Clifford Chance to enter the Australian market. On the top of the list though, is the opportunity to practice on cross-border work from Australia.
"It will increase the number of competitors at the top level," he said in an interview with Boardroom Radio, published in The New Lawyer. "It will make the top tier area more competitive going forward."
"There is certain work where there is a lot of expertise in the market in an existing way, either in-house or within private practice firms. I think that is a well catered market. A lot of what firms like ours are trying to do is tap into new markets, particularly those that involve a lot more cross border work between Australia and Asia.
"As Australia integrates more and more into Asia, I think you'll find that is in fact an are where the kind of expertise we'll be offering as part of a network will be in much greater demand over time," Pistilli said.
From a profitability point of view, the rise of the Australian dollar has made Australian firms much more competitive and therefore integration is much more likely, said Pistilli.
"They're also much more positive targets for an offshore firm where you're trying to get profit alignment between jurisdictions."
The importance for an international network having a presence in Australia is actually two fold, said Pistilli.
"They're interested in the energy and resources boom in Australia, which is producing very big companies doing very big deals not just domestically but throughout the region. Those companies are more and more having an outward focus, so there is an opportunity for the network outside Australia to do work for these large Australian conglomerates," he said.
But also, for those law firms offering a global service, they need to be in certain key areas. "To offer the Asian piece of that global service, more and more you need to be in Australia," he said.
"If you want to offer complete legal services, you need an Australian service. That is main driver for firms entering the market," he said.
Clifford Chance had come very close to merging with Mallesons Stephen Jaques in December 2008, but the market conditions and expectations that some Australian partners would have to relocate or be demoted rendered the whole thing unworkable.
That merger would have given the UK law firm a full-service operation in Australia. But this week’s merger is something altogether different.
Clifford Chance Asia head Peter Charlton said at the time of the merger announcement: “The importance of Asia to the global economy and to our major clients has already resulted in substantial growth for our market-leading Asia operations.
“Any credible growth strategy for the Asian legal market can no longer ignore the importance of the Australian market to the region, both as a destination for, and a source of, investment. I’m pleased that in CP&S and CLCL we’ve found such a good solution for our clients, and I’m looking forward to welcoming the partners and staff of both firms to Clifford Chance.”
Allen & Overy, DLA Piper and Norton Rose have each moved into the Australian market in recent years, entering a market globally regarded as “overlawyered”. Clifford Chance has no intention of stepping on the toes of the big guns over here, focusing instead where it must to get better access to Asia.