Global and local: Creating a new global law firm

Key takeaway points:

1. Growth must serve the interests of clients

2. Strategic growth is the wise response to client demands for value, quality and consolidation

3. Growth requires foundational members with a shared vision and complementary strengths

4. Successful integration requires a ‘one firm’ approach to lawyer collaboration and client service

5. Continued success requires offices to be portals for services

 

The legal services market is at an inflection point – an inflection point created by clients looking for law firms that can deliver value and top legal talent in an increasingly globalised and competitive world. In such an environment, any law firm wishing to thrive – rather than merely survive – must respond by listening to its clients and acting accordingly.

In November 2012, the partners of Salans, Fraser Milner Casgrain (FMC) and SNR Denton chose to do exactly that. We looked at the horizon and agreed that joining together as foundational members in a new global law firm, to be known as Dentons, was the best way to meet client needs and to succeed.

Our motivation was not to become bigger just for the sake of it. Our goal was to undertake strategic growth in order to serve our clients better and to meet their expectations.

Client requirements

What do clients tell us they want?

Services on a global scale

The globalisation of the world economy is leading clients to look for firms that mirror their own model:

• firms with lawyers who can manage the lawyer-client relationship locally or at the client’s headquarters, in the right language;

• firms where the people they work with have a stake in the business as a whole and how it is run; and

• firms where consistent quality, global best practice and local knowledge are all delivered as standard.?

General counsel are increasingly seeking ?firms with which they have experience that ?also have a presence in the markets they ?wish to enter.

Value

Compounding these evolutionary changes in the nature of the international legal marketplace are the current realities of the global economy.

From 1998 to 2008, total expenditures for companies in the Russell 2000 rose by 22 per cent. The two largest drivers of the increase were technology, up 42 per cent, and legal budgets, up 72 per cent. The increased expenditures for technology led to increases in productivity, but legal spend was still seen by most as a cost, not an investment.

Not surprisingly, once the full impact of the financial crisis of 2008 became clear, general counsel sought to share the pain and cut costs by negotiating lower rates, bringing more work in-house, increasing efficiencies by reducing the number of outside firms with which they dealt and engaging lower-cost alternative service providers for more commoditised ?legal work.

Market consolidation

Because of these economic pressures and others, a recent survey of general counsel in the Global 1000 revealed that 45 per cent agree that these conditions will lead to significant structural change in the legal marketplace during the next two years.

Similar evolutions have already occurred in other professional services, such as accounting, engineering and advertising. Clients see a legal world with fewer and bigger firms – broader in service offerings, yet even more specialised in expertise and capable of providing advice in a variety of regions.

Understandably, general counsel enjoy the convenience and time and cost savings of turning to one trusted global firm rather than having to ‘shop around’ for a new law firm in each and every jurisdiction in which they do business. Clients welcome the consolidation and the reduced management responsibilities of dealing with fewer firms if it saves money or adds value.

In short, clients want fewer law firm relationships, but with greater accountability. And this is as true of clients who operate in only one region as it is of multinational concerns.

Strategic growth

More than ever before, clients want law firms that are capable of connecting them to top legal talent wherever they need it.

Our plan for strategic growth is based on bringing together talent found at the intersection of geography, industry knowledge and substantive legal expertise. The lawyers at that nexus are more likely to share the key attributes of:

• understanding the importance of providing high quality, inventive legal counsel in a competitive environment;

• being likeminded in client service standards;

• being responsive to the needs of clients; and

• being driven to innovate.

They know the business of their clients ?and offer them a choice of law most compatible to the regions in which ?the clients operate.

These common traits foster a cultural and financial compatibility that make for efficient operation and create the environment to build a ‘one firm’ ?approach in a large organisation.

Three firms, one vision

The partners of Salans, FMC and SNR Denton share a vision of creating a firm skilled enough to challenge – and demand a place among – the world’s most elite providers of legal services.

The key was finding likeminded combination counterparts who wanted to be foundational members of a new firm – and a new kind of firm. Each legacy firm was committed to meeting the needs of our clients and attracting the talents of world-class lawyers and professionals, and shared a proud legacy of pioneering change.

Similar strategic paths

Salans was launched as a European multinational firm in 1978, combining the skills of lawyers trained in European civil law and Anglo-American common law. It was the first Western law firm to enter Russia and pioneered and expanded in some of the world’s most dynamic emerging markets in Central and Eastern Europe. In 1998, it undertook the first transatlantic law firm merger with an internationally-focused New York firm.

FMC became one of the first truly national Canadian firms in 1990 by seizing the initiative to bring together firms in the east and west within a year after such mergers being permitted. It has increased its reputation while adding to its diversity, including capabilities in English and ?French and both common and civil law. ?Its commitment to capitalising on opportunities early has brought it to this moment as it is poised to become the first Canadian firm to be a foundational partner in a truly global firm.

The combination that catapulted SNR Denton into the ranks of the global top 25 may be just two years old, but it was the culmination of more than two centuries of growth in the UK, Middle East, Russia, Central Asia and Asia, and more than a century of expansion in the US. The expanded global presence of SNR Denton resulted in a material increase in the amount of work that would not have come to either legacy firm on its own.

Complementary geographies

As each firm sought potential combination candidates, several factors were taken into consideration. The three firms are largely complementary in geographic reach. In the few instances where there was overlap, it strengthened the offerings in those locations through the combination of lawyers and practices in key markets in Europe, the UK and the US.

Reinforcing practice strengths

Each firm also sought combination partners that would allow it to extend existing strengths on behalf of clients doing business in other regions. It is no accident that our upcoming combination brings together leading practices in energy, real estate, insurance, banking and finance, health and life sciences, hotels and resorts, and technology, media and telecommunications.

Shared polycentric culture

Significantly, all three firms shared ?a philosophical commitment to ?being polycentric.

‘Polycentric’ most accurately captures what we think will be different about Dentons, so we have used it as a collective label for a group of related concepts.

First, we do not have one dominant national culture.

Second, we will be diverse in terms of geography, language and culture and, of course, in terms of gender, race and ethnicity, religion, sexual orientation ?and background.

Third, we will have no single headquarters.

Fourth, we will foster an environment that understands that our clients hire us because we understand the nuances of getting things done in different cultures and different geographies.

Fifth, while we will seek out the best practices for all that our new firm does, we will not strive for rigid uniformity in a complex, multifaceted world.

Thus, we are creating a new law ?firm that does business just as our ?clients run their businesses.

This shared philosophy not only led our firms to one another but also guides our search for additional combination members, both in regiwons we currently serve and in regions we have targeted for future growth in order to better serve our clients. In turn, our expanded capabilities and geographic reach make us more attractive to future colleagues.

A ‘one firm’ approach

Based on SNR Denton’s experience with its 2010 combination, we know that successful integration requires the adoption of a ‘one firm’ philosophy that focuses on the seamless delivery of services across regions and practices.

Our first focus in the near term is to make sure every lawyer is able to meet our commitment to client service by knowing the capabilities of his or her new colleagues. In anticipation of our launch in the first quarter of 2013, we are already undertaking an aggressive integration effort, focused on familiarising lawyers with the strengths of their counterparts.

Firmwide sector and practice groups are developing integration plans that require lawyers to learn about each other’s key clients and about the capabilities of their new colleagues, in order to educate clients about the expanded capabilities of the firm.

We have already begun the formation of key client service teams that bring together the expertise of the teams at each legacy firm who work with clients shared by the firms. Clients who are served by only one legacy firm will also be the focus of initiatives to introduce them to the expanded capabilities of the firm in other regions.

Lawyers are enthusiastically racing ahead with these integration efforts and organically seeking out their colleagues in the other foundational firms. The spirit of collaboration we imagined for our new firm has already taken hold even before our formal launch.

Client response to the combination has been overwhelmingly positive. Even prior to our formal launch, we have opened dozens of matters based on outreach efforts among the legacy firms.

Offices as portals

Having more lawyers in more places to offer more services to our clients also reflects the changing nature of the practice of law.

Once, offices were the principle places in which services were performed. Warsaw lawyers served a client in Poland. A Canadian client was served in Vancouver or Montreal, and so on. But we view our offices as portals that increasingly connect clients to legal talent in other regions where their services are needed.

To take just one example, a tech client who first came to the firm’s Silicon Valley office is now served by tax lawyers in London and is seeking to break into several markets in Africa with the help of our affiliated network of offices. Even solely domestic clients are likely to receive services from various offices in a single country or region depending on the expertise required.

Our integration efforts emphasise the importance of informing clients of the ?full array of services we offer from around the world.

The law firm we have created is just a beginning. We intend to continue to seek ?the highest calibre of talent around the world in order to provide services wherever they are needed.

Most importantly, clients clearly see the value of having a law firm that is responsive to their needs and that meets their expectations – which is exactly where our journey began.

Joseph J. Andrew is the global chair ?and Elliott I. Portnoy is the global CEO of SNR Denton ?(www.snrdenton.com)