With a growing number of law firms able to offer seamless global services, Claire Chaffey examines whether global associations of independent law firms still have a place in the market.

A law firm with 21,000 lawyers in 600 offices across more than 100 countries sounds too good to be true, doesn’t it?

That’s because it is.

But Lex Mundi, a global association of independent law firms that has been in existence since 1989, offers just that: a sprawling network of top-tier lawyers working together to provide clients with access to legal expertise in a huge number of jurisdictions.

In the 1990s and early 2000s, being a part of a global alliance – such as Lex Mundi, Meritas, World Law Group, Terra Lex or ALFA International – was seen as giving firms the edge over their competitors and offering clients something rare and valuable: access to trusted international affiliates.

But now, as global firms expand their reach and offer clients a “seamless, one-stop service”, is the power and relevance of these associations dwindling?

Changing opportunities

According to Simon Truskett, a partner at Clayton Utz and the chair of Lex Mundi, global associations still have a place in the market and are in demand from clients.

This is because, says Truskett, there is recognition that independent law firms working in association with one another gives clients access to the world’s best, full-service law firms – with both international and local knowledge – over a range of jurisdictions.

“One of the differentiators between Lex Mundi firms and global firms is simply the depth of resources and the global reach,” he says.

“No global firm has the number of lawyers at their disposal that Lex Mundi has. No global firm has the coverage across the globe that Lex Mundi has. On any number of transactions I have worked on in the last decade, where we have worked closely with top-tier firms in other jurisdictions, clients have universally said it has worked very well.”

Matthew Hall, a partner at Sydney-based boutique firm Swaab Attorneys, believes associations such as Meritas, of which the firm has been a member since 2009, are becoming even more relevant in today’s globalising legal services market.

“There are plenty of opportunities for us, and firms like us, to attract the mid-market Australian and international clients who are no longer the focus of the so-called new breed of globalised firms, but which still need a global or international aspect to the practice,” he says.

“There are even great opportunities – and we have certainly seen these opportunities increase in recent times – for servicing global clients in the local market when they are looking for a two-tiered approach to their external legal service providers. They might have a global law firm that provides services to the business globally, but are looking for local law firms with skills and experience, and also international connections, to provide local support on matters that don’t warrant the fees of a global mega firm.”

All of these aspects, according to Hall, create tremendous opportunities for firms like Swaab, and the ability to service clients with global ambitions or global needs, whether they’re Australian businesses with global interests or global clients looking locally, means that having an international network, like the one provided by Meritas, is crucial.

Global expectations

Tony Holland, the Australian managing partner of the world’s largest law firm, DLA Piper, says global law firm associations simply can’t offer what a global law firm can: seamless service at a one-stop shop.

“We can offer one integrated law firm, one point of contact,” he says. “We also have a single invoice, which clients like, because you don’t have to deal with different law firms and different billing practices. When we are referring or receiving work from our colleagues overseas, they are our partners, so we take just as much concern and interest in looking after that work as we do for our own individual clients.

“It is very much part of the make-up of the firm that you really look after each other’s clients.”

Tony Holland, managing partner, DLA Piper

While this may be true of global law firms, both Hall and Truskett stress the rigorous nature of selection for firms within an alliance, as well as the strict “quality control” mechanisms that ensure standards are maintained.

“You only join as a result of invitation from the association. You can’t apply to join,” explains Hall.

“The association determines that there is a need for a particular firm in a particular market. It will then conduct market analysis and research to determine who are likely candidates in that market. It will then set about interviewing, background-checking and reference-checking those firms. It is a very rigorous selection process, because the underpinning philosophy of the whole organisation is to ensure quality and consistency, and also a cultural fit.”

According to Truskett, firms that fail to maintain the standards expected of Lex Mundi firms are promptly shown the door.

“We have regular reviews of existing firms to make sure they continue to meet the member-firm criteria and are providing the level of service that clients expect,” he says.

“Legal markets are dynamic and ever changing, and no member firm has got a monopoly on being a top-tier firm in their jurisdiction. We all have to constantly work at it. Sometimes, for a variety of reasons, firms might slip out of that top tier or they might merge with another firm that no longer makes them an appropriate firm for Lex Mundi.

“We have had member firms resign or we’ve asked them to resign because of those sort of factors.”

Despite this, Holland believes alliances still fall short of client expectations.

“We are hearing from clients that they like to have one or more global law firms on their panels, because it gives them the coverage across the main business centres and countries across which they may be operating. It gives them control and that single point of responsibility,” he says.

“They like the global law firm offering. It takes things a step further from what [is available] in some of these alliances, where it is still independent firms providing the services.”

Friends with benefits

For law firms that are not part of a single, global behemoth like DLA Piper, Hall says that being part of a global alliance of independent firms has many benefits.

One of them is the ability to share knowledge and best practice – something that can be invaluable for small firms like Swaab.

“There is tremendous knowledge sharing and access to information across the network,” says Hall.

“For example, with the introduction of the Personal Property Securities Act (PPSA) in Australia, all of the Australian member-firms were able to benefit greatly from the long experience of the New Zealand member-firms (which has an Act on which the PPSA is based). At a very practical level, we have been able to ask questions about how it works and get some really practical, useful examples of the implementation of the system from our New Zealand colleagues. We can then share that with our clients.”

Truskett agrees that knowledge sharing is an extremely valuable aspect of alliance membership. He does, however, acknowledge that the alliance model presents challenges.

“One of the big challenges for Lex Mundi firms is fine-tuning the provision of legal services in a seamless manner across multiple firms, to give clients the feeling that they are dealing with a single firm,” he says.

“But we are getting very good at it. While I wouldn’t like to compare ourselves to a global firm and how well they do that, we have certainly had [positive] client feedback on it.”

Despite these challenges, Truskett says alliances like Lex Mundi are becoming increasingly attractive to clients wanting access to law firms that are top tier in their jurisdiction, but that also have a thorough understanding of local law – “not just selected aspects of a mergers and acquisitions or capital markets transaction”.

Ticket to fly

For small firms like Swaab, another major advantage of being part of an alliance is in relation to attracting talent as globalisation in the profession becomes more apparent and there is an ongoing battle for talent.

“One of the things we need to be able to offer our employees are opportunities for personal and professional growth, including opportunities for secondment,” he says.

“As a single-office firm, that is pretty much impossible unless you are part of a network where you can say to someone, ‘There is an opportunity for you to work in Perth or Hong Kong’. You don’t have to be at Baker & McKenzie, Allen & Overy or King & Wood Mallesons to get that opportunity. Our employer brand is very important to us. We don’t want to be left behind because we can’t offer those opportunities that young lawyers are increasingly looking for.”

Truskett, too, believes Clayton Utz’s membership of Lex Mundi helps attract and retain talent.

“We have had dozens of our lawyers on secondment to Lex Mundi firms in Japan, China, India and a number of European cities,” he says.

“That has been very attractive to lawyers, and it’s a great way of getting member-firms closer to each other and understanding the way they practise law and work with clients.”

Despite this, Truskett says there is a need to improve the awareness of such associations, amongst both law firms and clients.

Simon Truskett, partner, Clayton Utz

“We have just completed our strategic plan for the next three years, and one of the key elements of that plan is to increase the awareness of Lex Mundi,” he says. “While the Lex Mundi brand is well known in some parts of the world, it is less well known in other parts. The global firms have the benefit of a single brand and a huge marketing budget that stands behind it. In Lex Mundi’s case, that is not the position.”

According to Truskett, the “bottom line” is that whilst a significant number of general counsel and senior executives of multi-national corporations know about firms such as Clayton Utz, their awareness of the fact the firm is a member of Lex Mundi, as well as who the other member firms are and what Lex Mundi stands for, is not as high as they would like it to be.

“We certainly would like that position to change over the next several years and we have in place a plan to achieve that,” he says.

“Part of it will be about repositioning the brand to promote awareness of Lex Mundi with clients, and for clients to understand who is behind it and what the benefits are for them.”

Swaab has also recently completed a strategic review, and Hall says the firm is determined to remain a part of Meritas and take advantage of the opportunities presented by a changing legal landscape.

“The current movement in the Australian legal services market presents some tremendous opportunities, and I think there will be a lot of clients who won’t feel much love in the new law firms that have been created from their traditional legal service providers, because they are not the target market for a global behemoth,” he says.

“We see maintaining our role in the Meritas network as a key part of [those opportunities]. It allows us to deliver quality service to those clients that require service throughout the region and internationally, and it also helps us provide our staff with an exceptional place to work.”