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Chinese firms prioritise prestige
Proximity to clients is the top consideration for law firms in the Asia-Pacific when choosing an office location, except in China, where an impressive address is more important, a new report has found.
Stephanie Quine
Proximity to clients is the top consideration for law firms in the Asia-Pacific when choosing an office location, except in China, where an impressive address is more important, a new report has found.
Senior partners involved in property and workplace decisions were interviewed to determine motivations for law firm office location and strategy.
“Proximity to clients” came top of the list overall for office location considerations, especially in Singapore and Sydney, while “cost” of office location was not seen as a primary concern anywhere except in Shanghai and Hong Kong.
However, Alex Hill, head of Global Corporate Services (Asia-Pacific), said: “Ongoing uncertainty in the world economy is leading to firms becoming more cost conscious.”
For law firms that were opening for the first time in a country, a prestigious address was seen as important in introducing the firm’s brand, the report found.
While all firms surveyed were located in the CBD (or equivalent), those in China listed “prestige” ahead of “proximity to clients” as the most important consideration for office location.
A number of interviewees in China had chosen to reside in iconic ‘Grade A’ office buildings.
With many international firms setting up in the region, lifestyle could be a consideration, whether it is schools for children, air quality or activities, although it was rated as least important by the firms surveyed.
Law firms are looking to reduce costs by outsourcing finance, IT, or storage solutions, but in certain jurisdictions like Hong Kong interviewees claimed that Law Society restrictions were preventing them pursuing some of these outsourcing possibilities.
The option of moving out of the CBD was dismissed by the large majority, but respondents from Australia and Singapore were the most open to the idea.
The most progressive law firms are now looking to split prime client-facing fee earners in the CBD and support staff on the city fringe to reduce operational costs, the report claimed.
Expansion plans
China was top of the list as the place partners were looking to expand into, with second-tier Chinese cities like Chengdu noted as possible expansion points in future.
“As more foreign firms move into the tier-two cities there’s a need for that legal service to be brought into those locations as well,” said Linda Zhu, associate director at Global Corporate Services.
Korea, which has already seen a significant number of firms opening offices since trade agreements with the EU and US relaxed to allow foreign law firms to operate, was also part of the expansion strategy of a number of firms.
Australia, Indonesia, Japan and then Mongolia were listed as the next most attractive destinations.
“Mongolia is remote and has always been remote and there is now a lot of resources projects in that region,” said Zhu, adding that wherever there’s foreign investment there’s the need for foreign law firms because investors feel safer working with law firms they are familiar with.
