The problem with planning ahead is that it is a bit of a guessing game. As Scottish poet Robert Burns once wrote: the best laid plans of mice and men often go awry.
That does not render all strategies useless of course. But when is planning for all eventualities prudent, and when is it more work and stress than it is worth?
The situation in Ukraine and its border tensions with Russia offers some good examples of the different ways law firm leaders think about the future.
At Kinstellar—a regional East European firm whose Kyiv office last year added 60 lawyers from DLA Piper—the firm has gone into overdrive, setting up a “contingency committee” to formulate plans in case of an emergency. It has offered to relocate staff to other countries, offered salary advances of several months’ pay and set up a 24-hour information hotline.
Contrast this with Kyiv-headquartered Ilyashev & Partners Law Firm, whose managing partner Mikhail Ilyashev said he did not believe that “any invasion is possible in the 21st century, so we continue our business activities on a normal basis”.
The two extremes in response demonstrate the spectrum of options available to the leaders of law firms operating in the region – of which there are many. An insightful piece by European correspondents Anne Bagamery and James Carstensen explores the sentiment of those on the ground in Ukraine and Russia.
It may become apparent very soon which approach proves most sensible—though it is worth pointing out that even if no military conflict breaks out, Kinstellar’s measures may still prove useful. One leading local Ukraine lawyer told Law.com International about the likelihood of an increase in state-backed terrorism and cyberattacks.
In other situations the most sensible law firm strategy may not become apparent for many years.
Norton Rose Fulbright is turning the focus of its Hong Kong office towards mainland China. So clear is this new strategy that it is even looking to make sure its hires can speak Mandarin.
Such a move obviously holds political and cultural ramifications and a fascinating analysis by Hong Kong-based Jessica Seah found several partners are unhappy about it. “It’s like a kick in the teeth,” said one NRF Hong Kong partner. “It’s almost like being anti-colonialist, saying we’re going to kick out all the ex-pats.”
Jessica explains that, as with many strategies, the focus on China may have evolved to this point rather than starting out as an active decision. Much of it seems to hinge on the influence of Psyche Tai, the firm’s Hong Kong managing partner and one of the firm’s top rainmakers globally. Her team, which focuses on Chinese corporate finance, is described as the “engine room of the office”, and as she becomes increasingly senior—she was recently appointed to the firm’s management committee—the strategy is more likely to reflect her stance.
You can read Jessica’s great piece here, I would highly recommend it.
Other moves that have long-term consequences may not be conscious decisions at all. Junior lawyers are unwittingly conflicting themselves out of ever joining a litigation-only law firm because they advise banks early on in their careers, say several firm leaders.
An important investigation by Hannah Walker found litigation firms such as Quinn Emanuel Urquhart & Sullivan in London are struggling to find candidates to hire because most lawyers who have spent time in a large law firm will probably have advised banks at some point meaning they will be conflicted from ever acting against that bank in future litigation. Not that they will have realised it at the time.
One litigation firm partner said: “Being placed on a [bank] investigation as a junior lawyer is a death to your career.”
Meanwhile, some plans may appear inevitable but may not be as straightforward as assumed. Take the Big Four for example.
After a week in which PwC’s legal arm unveiled a series of Middle Eastern launches and EY’s growth in Australia emerged, surely those consultancy giants have used their considerable expertise to develop a thorough plan to conquer the legal industry? Well, not according to several partners who have since left.
They tell Jack Womack about how lawyers inside Deloitte, EY, KPMG and PwC have to fight for attention, have to cope with politics on a much larger scale than in any law firm and have to deal with a much wider set of potential conflicts. The Big Four? Big Flaw more like.
After all, breaking into new markets is not easy. Linklaters, which has been trying to build in the U.S. for years, last week suffered a setback as a partner and counsel in New York defected to Hogan Lovells.
Then again, some international strategies drawn up by law firms in the last couple of years are proving fruitful. As our local correspondent Linda A. Thompson writes, many class actions firms are setting up shop in the Netherlands, which appears to have become the European jurisdiction of choice for such litigation.
“I would expect at least 30 new [class action] claims this year,” said Isabella Wijnberg, counsel in Houthoff’s Amsterdam office. “There’s [been] an exponential growth.”
Finally, did anyone have a future plan in place regarding the pay war? Thought not.
A report by Thomson Reuters has found direct expenses for law firms were 8.4% higher in the final quarter of 2021 compared with Q4 of 2020. Firms saw an 11.4% growth in average associate compensation, resulting in increased costs. The industry’s economic outlook for 2022 has been dampened accordingly.
And even associates aren’t as happy about the situation as you might expect. Plenty of juniors revealed their frustrations to Varsha Patel about how it is “a bit rich” for partners to complain about the rising costs. One added: “If you were to ask most lawyers whether they’d rather make an extra £10,000 or have their evenings and weekends free, most would choose the latter.”
Keeping up with the market rate feels vital right now. But perhaps in years to come a few firms will rue not having had a long-term strategy in place.