A Comprehensive Guide to the Asia-Pacific Legal Markets JOHN GRIMLEY

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3 A Comprehensive Guide to the Asia-Pacific Legal Markets JOHN GRIMLEY PUBLISHED BY IN ASSOCIATION WITH

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5 Contents Executive summary... IX About the author...xiii Acknowledgements...XV Part One: An analysis and definition of the Asia-Pacific region Introduction: Analyzing whether the expected growth in the region is realistic... 3 Chapter 1: What is the Asia-Pacific region?... 7 A region characterized by diversity... 8 Emerging markets... 9 An illustration of market differences in the region The case of franchising... 9 The region s impact in the global economy Growth of economies...11 Innovative launching pads for expansion into new markets...11 New focal points to advance effectiveness Investments in technology Conspicuous U-turn Long-term local talents Partnerships to offset barriers Market entry via public-private partnerships Domestic priorities Novel technologies Challenges to regional growth: Long-term sustainable economies Chapter 2: Australia and its role in the Asian legal market Australia s positioning Is Australia part of Asia? The current Australian legal market Australia s unique attraction as a gateway to Asia Australia riding a wave of Asian legal market expansion Australian law firms going overseas Australia in Asia s legal market III

6 Contents Chapter 3: Emerging trends impacting legal services in the Asia-Pacific region Economic growth Trade liberalization Price competition Intra-Asian law firm growth Japanese law firms among the leaders in intra-asian law firm growth Law firm mergers Legal market liberalization Alternative business structures Influx of foreign law firms Singapore as a model for future local competition? The future of NewLaw in Asia What is the future of legal services in Asia? Conclusion Emerging trends in technology and law in Asia Part Two: In-depth analyses by country The Chinese legal market An overview China s importance in the Asian economy May foreign lawyers practice in China? Participation at government proceedings Key law firms in the China market Key foreign trade agreements and their impact upon the market An interview with Paul Kossof, author of Chinese Trademark Law, The New Chinese Trademark Law of The Hong Kong legal market An overview Hong Kong s importance in the Asian economy May foreign lawyers practice in Hong Kong? Key law firms in the Hong Kong market Key foreign trade agreements and their impact upon the market E-discovery in Hong Kong The South Korean legal market An overview South Korea s importance in the Asian economy May foreign lawyers practice in South Korea? Key law firms in the South Korean market Key foreign trade agreements and their impact upon the market Trends in the South Korean legal market Interview with Ryan Russell, author of the Kimchi Law Blog in Korea IV

7 A Comprehensive Guide to the Asia-Pacific Legal Markets The Japanese legal market An overview Lawyer numbers increase, but opportunity remains Legal market value Japan s importance in the Asian economy May foreign lawyers practice in Japan? Key law firms in the Japanese market Key foreign trade agreements and their impact upon the market The Myanmar legal market An overview Myanmar s importance in the Asian economy May foreign lawyers practice in Myanmar? Key law firms in the Myanmar market Key foreign trade agreements and their impact upon the market The Malaysian legal market An overview Malaysia s importance in the Asian economy May foreign lawyers practice in Malaysia? Key law firms in the Malaysian market Key foreign trade agreements and their impact upon the market The Indonesian legal market An overview Indonesia s importance in the Asian economy May foreign lawyers practice in Indonesia? Key law firms in the Indonesian market Key foreign trade agreements and their impact upon the market The Australian legal market An overview Australia s importance in the Asian economy May foreign lawyers practice in Australia? Key law firms in the Australian market Key foreign trade agreements and their impact upon the market Observations on the Australian legal market by Richard Smith, author of the Australian Law Firm Business Development Blog The Indian legal market An overview India s importance in the Asian economy May foreign lawyers practice in India? Key law firms in the Indian market Key foreign trade agreements and their impact upon the market Q&A with Anuj Agrawal, associate editor of Bar & Bench The Philippines legal market An overview The Philippine s importance in the Asian economy May foreign lawyers practice in the Philippines? Key law firms in the Philippine market V

8 Contents Key foreign trade agreements and their impact upon the market Practicing in the Philippine legal market The Singaporean legal market An overview Singapore s importance in the Asian economy May foreign lawyers practice in Singapore? Key law firms in the Singaporean market Key foreign trade agreements and their impact upon the market Singapore: A snapsot of recent legal developments The New Zealand legal market An overview New Zealand s importance in the Asian economy May foreign lawyers practice in New Zealand? Key law firms in the New Zealand market Key foreign trade agreements and their impact upon the market Q&A with Jonathan Boswell, Chief Executive Officer at TGT Legal The Brunei legal market An overview Brunei s importance in the Asian economy May foreign lawyers practice in Brunei? Key law firms in Brunei Key foreign trade agreements and their impact upon the market The Taiwanese legal market An overview Taiwan s importance in the Asian economy May foreign lawyers practice in Taiwan? Key law firms in the Taiwan market Key foreign trade agreements and their impact upon the market The Thailand legal market An overview Thailand s importance in the Asian economy May foreign lawyers practice in Thailand? Key law firms in the Thai market Key foreign trade agreements and their impact upon the market The Vietnamese legal market An overview Vietnam s importance in the Asian economy May foreign lawyers practice in Vietnam? Key law firms in the Vietnamese market Key foreign trade agreements and their impact upon the market Trends in Vietnam s legal market The South Pacific islands legal markets An overview The South Pacific islands importance in the Asian economy May foreign lawyers practice in the South Pacific? VI

9 A Comprehensive Guide to the Asia-Pacific Legal Markets Key law firms in the South Pacific Key foreign trade agreements and their impact upon the market Part Three: US and European Firms in the Asia-Pacific market Chapter 4: Overview of the growth of US and European firms in the Asian markets The top legal firms in the Asian market Major opportunities available to foreign law firms Technology helps global legal services firms Law firms are following their clients American legal firms have dominated the move to Asia Foreign firms face unique challenges in Asia Unique locales of Asia-Pacific opportunity NewLaw and domestic law firms within Asia Key expansion strategies The risks of expansion Factors for succeeding in Asian markets Have international law firms been successful in Asia? Geographic coverage of the region Profitability Adherence to a common vision and values Chapter 5: What are the major sectoral growth areas? Booming purchasing power What drives the Asia-Pacific region s growth and development? Conclusion Part Four: The global impact of the Asia-Pacific legal markets Chapter 6: Asian law firms face the challenge of rapid evolution The Asia-Pacific legal industry and its major players State of legal services industry life cycle across Asia-Pacific Rapid evolution facing Asia-Pacific s law firms Successful Asia-Pacific law firms of the future Chapter 7: Foreign direct investment (FDI) in the Asia-Pacific region Will Asia-Pacific FDI overtake other major world economies? FDI developments worldwide The US and EU Conclusion VII

10 Contents Part Five: Case studies Case study 1: AdventBalance Growing Australasia s largest alternative legal service provider The market opportunity The strategy The story so far Challenges and opportunities Case study 2: K&L Gates Examining a globally integrated model The Asia-Pacific region Helping businesses capitalize on China s growth The firm s expansion down under New frontiers in Asia Conclusion Case study 3: Conventus Law A different focus A focus on quality Certainty and control Case study 4: The Tonga legal market Case study 5: Clyde & Co Sector strategy dictates expansion activity Asia-Pacific development at pace The Australian experience Appendix 1: Thoughts on technology and law in Asia How is technology impacting the practice of law? Early tech pioneers in law Are computers helpful or a hindrance? Taking an active role in law practice Changing times globally Trends in How is generational marketing becoming more important for law firms? The state of the legal industry Maximize human resources via understanding the generations Appendix 2: Seizing opportunity in a growing market ) Education and training ) Innovating within existing organizations Conclusion VIII

11 Executive summary THIS REPORT begins by analyzing whether projections for dramatic growth a potential doubling of the market by 2017 or 2020 in the region are realistic. The report goes on to discuss the individual markets within the region, the unique opportunities and challenges these present, and how changes in the Asia-Pacific market may impact upon law firms in the west. This report brings together the information firms need as they consider whether to enter into or expand within the Asia-Pacific market. Part One seeks to analyze and define the Asia Pacific market. As this book aims to serve as a comprehensive guide to the Asia-Pacific legal markets, it is important to consider what comprises the Asia-Pacific region. This is an expression frequently used yet, what actually does it mean? The Asia-Pacific region covers an extensive geographic region comprising some 2.8 billion hectares of land or roughly 22 per cent of the global land area. It is a vast region that stretches from the perimeters of China-Mongolia in the north to the southern tip of Australia and New Zealand to the south. While narrowly focusing on the Asia- Pacific region, this study shall also use what is generally observable coverage in the legal services sector to define the parameters of the market. This report, therefore, will seek to cover the following markets in greater depth: China, Hong Kong, South Korea, Japan, Myanmar, Malaysia, Indonesia, Australia, India, Philippines, Singapore, New Zealand, Brunei, Taiwan, Thailand, Vietnam, and the South Pacific Islands. Some of these markets are considered both developed and/or developing. Either way, they are all widely regarded as key markets in the context of legal services in the region. Part One of this report goes on to consider the role of Australia in the Asian legal market. Asia-Pacific regional integration has been brought about by many years of national and regional collaborative initiatives and strengthened by increasing cross-border trade, financial integration, improvement in mechanisms of human interaction, shifts in technology, and transfer of skills. Australia has been an integral part of this integration. Since 2004, Australian commerce has carried out more trade with Asia than with the rest of the world combined and that trade is on the rise. Three of Australia s five prime trading partners China, Japan, and the Republic of Korea are in Asia. Together with the ASEAN group, these nations account for approximately half of Australia s overall international trade activities. Global law firms view Australia as attractive due to its strong ties with major trading partners across the Asia-Pacific region. Too, a number of Australia s top legal firms have offices based abroad in places such as China, Hong Kong, Singapore, and Indonesia. For international law firms, Australia is viewed as a destination offering both a gateway into Asia and ample domestic opportunity. This first section of the report then addresses the emerging trends impacting legal services in the region. A number IX

12 Executive summary of major factors are influencing the legal services sector globally and in the Asia- Pacific market in Some of the factors which will be explored in greater depth include: increased competition; commoditization hastened by new technology; novel forms of rivalry from new service providers; a change in the role of in-house general counsel; globalization; changing foreign direct investment (FDI) trends; economic growth; a shift from a seller s market to a buyer s market; more decisions being made by clients; the appeal of Asian markets to western law firms; legal market liberalization; the rise of the internet economy; price competition; intra-asian law firm growth; law firm mergers; and alternative business structures. Part Two of the report provides a detailed analysis of the most important nations in the region, including an explanation of why each is important, plus a look at some of the developing and less recognized nations and their potential in the future. The country analyses include projections for growth, information on what is permissible in terms of foreign practice, information on the key players already in the market, the challenges to economic growth, key free-trade agreements (FTAs), and commentary from key industry insiders who provide unique insights into specific local markets. In Part Three, the report then goes on to discuss the impact of the Asia-Pacific region on US and European firms. It considers the interest and track record of US and European firms in Asia-Pacific markets and presents the major opportunities in the region available to these international firms, including market liberalization; economic growth; outbound FDI; and inbound FDI (as outlined by Nick Seddon, partner with Beaton Capital and former head of Asia for DLA Piper and Eversheds). Reports reflect that the Asia-Pacific is one of the fastest-growing economic regions in the world. GDP in the Asia-Pacific region is projected to rise at 6.4 per cent per year between 2011 and 2020, compared to 2.5 per cent in the US and just 1.3 percent in the Eurozone. This report considers the five key industry sectors that will drive growth: e-commerce, tourism, infrastructure, energy, and machinery and transport equipment. These sectors, and the conditions surrounding their importance in the market, will be analyzed in-depth in the pages of this report. Part four of this guide addresses the global impact of the Asia-Pacific legal markets. George Beaton and Eric Chin of Beaton Capital in Australia analyze how regional macro-environment forces and the legal services industry life cycle are accelerating the pace of change for indigenous law firms. Beaton and Chin first outline five major reasons why the world is now in the Asian century. They then provide market-specific analysis of how economic changes are impacting local law firms in key markets within the Asia-Pacific region and an analysis of the state of the legal services industry lifecycle across the region. Foreign direct investment (FDI) is a major part of international economic integration. It generates long-lasting bonds between economies and helps stimulate the exchange of technology and expertise between nations. FDI permits host countries to support its manufactured goods more extensively in the global market, is an excellent source of funding for investment, and, with the support of a tailored policy, it is a significant vehicle for development. The Asia-Pacific region has demonstrated high growth in both inbound and outbound foreign direct investment flows. The region has also demonstrated remarkable flexibility in a challenging global economic environment. Key statistics will be presented X

13 A Comprehensive Guide to the Asia-Pacific Legal Markets in the fourth part of this report, demonstrating that the Asia-Pacific region is poised to lead the world in the future in both inbound and outbound foreign direct investment. The concluding fifth part of this report is composed of case studies detailing unique and successful approaches to the Asia-Pacific legal market, outlined by a very diverse range of service providers in the region. Major international law firms Clyde & Co and K&L Gates outline their unique regional stories. Australia-based law firm AdventBalance provides a unique insight into the NewLaw experience in the region. Hong-Kong-based legal social media publisher Conventus Law provides unique insight into the emergent role of social media in the region. Finally, the experience of running a local regional law practice in Tonga in the South Pacific is provided by John Walter Appleby of Ladbrook Law. Two insightful appendices to this report provide special analysis on future developments in the Asia-Pacific legal market: Chris Dale of The e-disclosure Information Project, Oxford, discusses technology and the law in Asia; and Ivan Rasic, CEO of LegalTrek writes about the ecosystem of constant innovation that is essential for those who seek to be successful legal services providers in the Asia-Pacific legal market of the future. Whether the Asia-Pacific legal market doubles by 2017, 2020, or later, in the estimation of many observers of the global legal profession, this market will be one of the most (if not the most) important legal markets in the world in the not-too-distant future. XI

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15 About the author JOHN GRIMLEY specializes in the provision of writing and research services to the corporate and professional services sectors. He also edits and publishes Asia Law Portal. For over 13 years he has helped lawyers market their practices internationally. Most notably, he established and directed the European representative business development office of US AmLaw 100 law firm Patton Boggs LLP. At the inception of his career, he served as a writer to the President of the United States in the White House. A licensed American lawyer, he holds a Juris Doctor from the University of San Diego School of Law. XIII

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17 Acknowledgements THIS BOOK would not have been possible without the support and encouragement of Helen Roche and Laura Slater at Ark Group. The professionals at Beaton Capital George Beaton, Eric Chin, and Nick Seddon provided invaluable input and contributions. My thanks also to Kirsten Hodgson of KScope Marketing and Gaythri Raman of LexisNexis for their counsel. Thanks also to those legal professionals who contributed commentary or case studies to this book. Their contributions have indeed helped to make the region come alive within the pages of this book. They include Stephen Lai of Conventus Law, Therese Gallenero and Clinton Swan of Clyde & Co, John Appleby or Ladbrooks, Ken Jagger of AdventBalance, Kent Wong of VCI Legal, Sangeet Kauar of Legal Brokers Compliance, Ivan Rasic of CaseTrek, Chris Dale of the e-disclosure Information Project, Paul Kossof, author of Chinese Trademark Law: The New Chinese Trademark Law of 2014, Paul Cornelius Castillo of Platon Martinez Flores San Pedro Leaño Law Offices, Richard Smith, author of Australian Law Firm Business Development, Jeff Berardi of K&L Gates, Jonathan Boswell of TGT Legal, Kengo Miyamoto of Miyamoto International Law Offices, Anuj Agrawal, associate editor of Bar & Bench, and John Formichella of Blumenthal Richter & Sumet. XV

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