Editor's letter: Going global

With around half of the UK’s top 25 law firms sourcing more than 40 per cent of their fee income from abroad, international strategy is on the minds of many managing partners as they look forward to 2013.

For two groups of firms in particular, this has meant undertaking mergers to form new firms that will rank among the largest in the world. In early November 2012, SNR Denton announced plans (which were confirmed yesterday) to combine with Salans and Fraser Milner Casgrain to create a $1.3bn (£816m) firm in the first quarter of 2013, with a presence in 79 locations around the world. Just one week later, Norton Rose confirmed that it would combine with Fulbright & Jaworski ?in June 2013 to create a US$2bn firm with 55 offices worldwide.

Many other law firms are currently considering or discussing plans to expand their presence abroad through a merger. However, this approach depends, of course, on finding ?the right merger partner.

Another (perhaps interim) option is to build the firm’s practice in a foreign market from afar, with partners flying in and out, as required, to meet clients. However, a lack of familiarity with the rules of the game in an emerging market may result in the firm being exposed to a wide range of client, financial and criminal risks.

The risk averse may be inclined to take a wait-and-see approach. However, risk is an inherent part of any growth strategy – the question is how much risk the partners can bear and how long they are willing to wait for their investments to pay off.

Clearly, gold mines do not stay full for long. As the rapidly-changing legal markets in ?Asia and Africa demonstrate, those who take too long to set sail for the frontier may find ?many of the best investment opportunities and merger partners already taken by new and existing competitors.

Managing partners who can help their partners to both expand beyond their ‘programming’ of risk aversion and think of themselves as long-term business owners will find themselves much better equipped to lead their firms into the future. But, until partnerships can become greater than the sum of their parts, they will continue to struggle to achieve greatness.

May the upcoming holidays provide you with time for rest, reflection and renewal.

Until next time,

Manju Manglani, Editor

mmanglani@wilmington.co.uk