Last week, Baker McKenzie announced the promotion of eight partners in its Bangkok office. Of all the firm’s far-flung offices around the world, only Singapore saw more lawyers promoted (nine). And this year’s promotions followed those of last year, when Baker McKenzie promoted another eight lawyers in Thailand.
This sizeable partnership expansion in Bangkok, which is not normally considered a key legal market like Singapore, Hong Kong or London, comes as the firm’s revenue in Thailand has increased by 8% over the past year, not accounting for foreign currency inflation, the firm says.
And the firm will continue to expand in Thailand, according to Bangkok managing partner Thinawat Bukhamana, particularly in areas of fintech, digital assets and tokens, dispute resolution, technology, M&A and restructuring. It has had great success attracting top talent, being the largest international practice on the ground, he added.
Deals, Deals, Deals
Thailand posted a trade surplus of $1.46 billion in the first quarter of this year, almost double the value for the same period last year and beating market predictions of a $150 million deficit. Lawyers on the ground say work is finally picking up after a fairly lackluster 2021.
Lawyers are hopeful that major deals are on the horizon. And so far, the outlook is promising. Strategic discussions are happening between the U.K. and Thailand for bilateral cooperation in tackling issues including climate change, sustainability, health, technology and innovation. In addition, Chinese automakers are grabbing big slices of Thailand’s rapidly growing electric vehicle market. China’s Great Wall Motor is already the best-known electric vehicle brand locally.
Japanese corporates, banks and major trading houses are also continuing their investments in the country with MUFG Bank recently announcing its $150 million acquisition of Nomura Holdings’ local securities subsidiary.
The domestic market is also picking up, Thailand’s telco company, Advanced Info Service (AIS), is planning to purchase local broadband internet provider 3BB for over $900 million.
The largest deal this year may very well be the upcoming initial public offering of Thai Life Insurance, which is planning to raise over $1 billion. Baker McKenzie is advising the underwriters on the listing and Allen & Overy is acting for the issuer.
Last year, Baker McKenzie advised Thai energy venture company, Univenture BGP Co., Ltd., on a $313 million acquisition of Bangkok-based Eastern Cogeneration Company Limited. the deal was one of the largest M&A deals for 2021. The firm also recently acted for the Export-Import Bank of Thailand as part of lender group on a $35 million loan to Vietnamese companies, Truong Thanh Quang Ngai Power and High Technology Joint Stock Company.
True Localization is Key
Despite its potential economical growth, the legal market in Thailand has shrunk. Baker & McKenzie is the largest international law firm in the country with around 60 partners on the ground. It competes with such firms as Allen & Overy and Linklaters, although both are much smaller in size, with 29 and 27 lawyers in Bangkok, respectively.
Interestingly, all of Baker McKenzie’s equity partners in Bangkok are Thai locals, and Bukhamana says the firm’s localization strategy is key to its growth and also the reason some of its competitors have failed to build market share. Baker McKenzie acts for both local and international clients, and doesn’t prioritize international clients over local businesses, which has become an increasingly important clientele for the office.
In 2017, Clifford Chance shuttered its Bangkok office and started serving Thai clients primarily out of Singapore. Last year, Mayer Brown also called it quits, saying that “maintaining a very small office in Bangkok is no longer the most effective way of servicing our clients, whose legal needs are usually cross-border in nature.”
While the approach differs from Baker McKenzie’s, that rationale and strategy can also work. Last year, Clifford Chance advised Thailand’s petroleum exploration company, PTT Exploration and Production Public Company Limited, on the issuance of $500 million 2.587% senior notes due 2027. The deal was led by its partners in London and Singapore. The year before, it advised Tyson on its acquisition of the Thai and European food businesses from Brazilian food processing company BRF. The purchase included four production facilities in Thailand.
A handful of foreign firms continue to operate in Bangkok, though with much smaller offices. DLA Piper has six partners, half of whom are disputes lawyers; Norton Rose Fulbright has nine lawyers there; Herbert Smith Freehills has nine; Watson Farley & Williams has six; and Hunton Andrews Kurth has 21. Most of their lawyers focus heavily on advising on energy and infrastructure projects.
To be sure, the bigger international firms with a fairly balanced percentage of local to international partners are also competing with some of Thailand’s largest domestic firms. Some of the smaller players, Bukhamana says, have struggled to weather the pandemic’s impact and have closed.
The stronger domestic players include Tilleke & Gibbins, Blumenthal Richter & Sumet, Weerawong, Chinnavat & Partners, Kudun & Partners and Chandler MHM.
But the competition is steep, says Jessada Sawatdipong, Chandler MHM’s co-managing partner, particularly as firms, including foreign advisors, are driving down fees to win work. To give itself an edge, legacy Thai firm Chandler & Thong-ek Law Offices merged with Japanese Big Four firm Mori Hamada & Matsumoto in 2017.
The combination has proved fruitful, said Sawatdipong. Not only has the firm gained a stronger brand but it now also is on the radar of clients who wish to do deals where Mori Hamada has offices outside of Thailand. Approximately 70% of its foreign clients are Japanese, and the other 30% are spread between Europe, the U.S and the rest of Asia.
The flow of Japanese investments into Thailand, particularly in real estate, is notable. Technology, banking and the automotive industries are key sectors to Japanese clients, Sawatdipong said.
In 2019, another Japanese Big Four firm, Nishimura & Asahi, followed Mori Hamada and also acquired a Thai firm: SCL Group. The other two of the Big Four, Nagashima Ohno & Tsunematsu and Anderson Mori & Tomotsune, also have local offices in Bangkok though neither have acquired local practices.
Other Asian firms have also made calculated moves. Last year, Singapore firm Rajah & Tann launched its Thai intellectual property practice with the hire of Nuttaphol Arammuang, who joined from ZICO IP, where he was managing partner. In 2020, accounting giant KPMG also launched a legal services arm in Thailand.