They're big, influential and positioning themselves for a changing global market place. They are the super-sized law firms and they're looking to dot all corners of the globe with their presence. Angela Priestley reports.
The large law firms of today carry thousands of lawyers, wield incredible influence, and sport numerous offices across multiple continents.
More importantly, they cross borders, cultures and jurisdictions. Some are on every continent - with the exception of Antarctica - while others dominate from power bases in London and New York. All are taking advantage of a global market place, with most now positioning themselves to seek out opportunity in resource-rich locations.
The last 12 months have seen some significant super-sized marriages via transatlantic mergers, including the joining of Hogan & Hartson and Lovells to create Hogan Lovells, and Sonnenschein and Denton Wilde to create SNR Denton. More recently, the partnership of US firm Squire, Sanders & Dempsey and UK firm Hammonds has firmly cemented the trend of trans-continental law firm mergers and expansions.
Australia is not immune to such "super size me" antics, despite us not fitting in the realm of the transatlantic space. Instead, Australia forms a base for another corner of the world: we're the continent that connects the dots of the US and UK to the opportunities of Asia and beyond.
Norton Rose has just connected these dots in a big way. While the UK giant had already made Australia home by joining with Deacons earlier this year, last week it went one step further and secured a presence in the Americas by joining with Canadian firm Ogilvy Renault, and extended out to Africa via the South African-based Deneys Reitz.
The mergers, to be completed midway through next year, will make the Norton Rose Group one of the largest law firms in the world, in terms of staff numbers (it will carry 2500 lawyers), and a significant player in the global transactional space.
That has obviously been the goal for Norton Rose for some time now, with Australia forming a vital component of such ambitions. "Emerging countries want resources and plenty of them," said Don Boyd, group deputy chief executive for Norton Rose Group, on the latest additions. "There are only a few nations in the world that can deliver resources on the scale required by Asian, and particularly Chinese, companies alone which puts resource-rich nations like Australia, Africa and Canada in powerful positions and which influences how legal services are going to be delivered."
The latest Canadian and South African additions allow Norton Rose to put the finishing touches on what has become a network of offices - and one that captures the key resource-rich jurisdictions of the globe.
And it doesn't stop there. As Boyd told Lawyers Weekly, Norton Rose firmly has its sights set on other emerging markets - in particular South America. There are no concrete plans to "join" with any firm in the region just yet, but Boyd did note that "we obviously, in the course of our work, meet a whole lot of people".
But what's really telling is the current missing ingredient in Norton Rose's network of offices - that being the United States.
While that may change in the future, it does show that a US base has not been an essential ingredient for Norton Rose in strategically aligning itself for the new world. Canada was seen as more strategically important for the times, and the firm clearly believes it does not need a direct US presence to prove its global credentials in servicing resource-rich locations.
Allen & Overy took a different approach to Norton Rose in building its capability in the Asia Pacific region. Rather than extend its reach via an acquisition or merger, the firm landed in Australia and sought to extend its cross-border Asia capacity by simply opening two offices here and snapping up some local talent in the process.
Upon landing in Australia, Allen & Overy global managing partner Wim Dejonghe told Lawyers Weekly that their unique proposition to clients, in competing with local firms in Australia, would be their global coverage. He noted that Allen & Overy had "many more offices in Asia, and in terms of sheer number of people, many more lawyers across Asia" when compared to Australian law firms.
The appeal of blanketing previously untapped parts of the world with lawyers and offices is certainly feeding the "super size me" diet, but the question is, can law firms sustain enough large-scale and global transactional work to make their beefed-up presence worthwhile?
With specific strategies to target resource-rich and, in some cases, untapped regions of the world, it certainly looks possible.
Distributing a law firm's expertise around the world makes global M&A and resources work a little more palatable to clients, especially when they can use the services of their existing and familiar law firms in relatively unknown and perhaps unstable parts of the world. It's the clients that are driving demand for global super players. They want swift, fast and trustworthy access to their lawyers all around the world. As such, the presence of a global player with a network of offices must surely be appealing.
While 2009 was the year for bunkering down and surviving the slowdown of legal services, 2010 is closing as the year that saw the rise of the super-sized players and the need to appropriately service resource-rich jurisdictions. It seems 2011 will be the period that tests just how healthy the "super size me" diet actually is.