WHILE at least one magic circle law firm has now launched its brand in the Australian market as a gateway into the Asia Pacific region, others are considering how to develop their Asia Practice directly into Asian countries like Singapore, Hong Kong and China.

With the increasing number of Australian companies doing business in the Asia Pacific region and the phenomenal growth of China’s GDP, it is inevitable that having a regional presence will become the norm if practitioners are to remain competitive and effective in their legal offering. However, it is no longer simply a matter of forming alliances with other law firms or even adopting an international brand in order to tap into the growth corridor of the Asia Pacific region. It is a question of how to engage and manoeuvre within a culturally diverse set of values and behaviour.

Creating tomorrow’s revenue streams today from a regional practice requires more than just setting up shop in a strategic Asian country and sending teams of lawyers on a fly-in, fly-out basis. It requires practitioners to understand and develop cultural intelligence to break through the western and eastern divide.

The starting point in developing a successful Asia Practice in the Asia Pacific region (that is, getting Asian corporate or business clients and servicing them in Australia or in their home country) is to invest the time cultivating the right strategic relationships. Identifying and using the right person as the rain-maker is a crucial step in this process.

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From a practice area perspective, however, it is important to resist providing a full service offering at the outset but to focus on three key areas of growth – IPO listing; retirement village or ageing sector; and commercial negotiation and arbitration practice with Eastern based strategies as opposed to Western-based getting to yes concepts.

Having expertise in Islamic Finance would also be a distinct advantage, particularly in Malaysia as a gateway to the Middle East countries but in reality, Australia has had little experience compared to its Asian counterparts.

Australia, however, is regarded as the most developed financial services market in the region. This gives law firms with banking and finance expertise a distinct advantage but it will only be effective if practitioners are collaborating with the right people. Islamic banking expertise is, without a doubt, becoming increasingly relevant particularly when a majority of users in the Asia Pacific region of Islamic banking products are non-Muslims.

The hurdle for most law firms is to understand that doing business successfully in the Asia Pacific region requires more than having the breadth and width of legal expertise. It really requires an understanding of cultural intelligence that cannot be learnt in isolation or by learning to speak an Asian language.

Most Westerners doing business in China, for example, would be advised to have a list of etiquette how-tos and what not to say or do. Even a simple process of handing out a business card could be a deal stopper if you do not know the correct etiquette in doing so.

Few, however, would be guided as to the intricacies of understanding concepts like guanxi (translated as personal connections); mianzi (translated as face) or zhongjian ren (translated as intermediary) when dealing with the Chinese whether they are from Malaysia, Singapore, Indonesia, Taiwan, Hong Kong or China.

Most people understand the importance of networking. The Chinese guanxi is not just about having networks or contacts. It is about an individual’s social capital that includes their family, extended family, friends, close associates and allies. It encapsulates the concept of understanding about favours and obligations. One would hear the old adage: “It is not what you know that counts but who you know.” Guanxi goes further to include it is also about who knows who.

Understanding the WKW factor would help practitioners understand the importance of using intermediaries to open doors and connect the dots by effectively linking these personal connections.

Australian practitioners often under-estimate the kind of cultural intelligence required to succeed in the Asia Pacific region. In future editions of The New Lawyer, I will discuss further aspects of cultural intelligence and how not just to do things right but how to do the right things.

William Lye is a member of the Victorian Bar. He is racially Chinese and culturally Malaysian Australian. View his profile at http://www.commbar.com.au/profile/35/6/william-lye/