Global law firms may find their Australian ambitions are a waste of time, according to the leaders of some local law firms.
This was the view expressed by some participants at a LexisNexis* law firm management roundtable on Wednesday (18 May). Others said the Australian legal market is not big enough to accommodate a large number of global law firms.
Ian Robertson, managing partner at Holding Redlich, even questioned the presence of Magic Circle law firms such as Allen & Overy and Clifford Chance in Australia.
"I think they'll find that they have entered a market that's not that big," he said. "The English firms may collectively take the view that the likely profitability is not worth the pain."
Robertson said general counsel are now more inclined to "cherry-pick" the best lawyers in each territory, rather than seek blanket coverage from law firms. "I think there is a good future for firms that operate only in one territory," he said.
Katrina Johnson, director of legal affairs at eBay Australia and New Zealand said that although a global firm can assist eBay - which operates in 47 markets - to streamline their legal spend, price is ultimately more important than coverage.
"If you can have the one law firm where you can bulk the bills [then that helps]," she said. "But for clients, a lot of firms are interchangeable... Price becomes the differential rather than the brand."
Henry Davis York managing partner Sharon Cook said that with the continued arrival of global law firms in Australia, the market can expect to see a number fail to achieve their Australian ambitions.
"There's clearly a role for global law firms in Australia, but no room for mediocre global law firms ... just like there's no room for mediocre mid-tier firms," she said.
But Nick Abraham, a managing partner at Norton Rose, said clients are seeing the benefit of global law firms and that Australia has room for at least 20 foreign law firms, considering some will operate on a single, small-office basis like US firm Skadden.
He pointed to Deacons' situation prior to the Norton Rose merger, when the firm faced difficulties securing sufficient resources to grow its offering in Asia - a situation that was quickly resolved following the official tie-up on 1 January 2010.
* LexisNexis is also the publisher of Lawyers Weekly. For more on the management roundtable, see next week's edition of the magazine.