Updated: Dec 1, 2020
Legal networks that showcase their efficiency, project management capabilities and focus on collaboration will be positioned for success, despite an increasingly turbulent global economy
Global legal networks (GLNs) have existed for decades, but as the global marketplace becomes increasingly fractured – owing in part to the coronavirus (COVID-19) pandemic – they are gaining new significance for both clients and members.
The current health crisis has changed the face of the global economy – at a national, corporate and individual level. The International Monetary Fund (IMF) has warned that the world will plunge into a deep recession this year, with only a partial and uneven recovery expected next year. The body projected in June that global GDP would contract by 4.9% in 2020 – the worst recession since the Second World War – which was a worsening from its April projection of a 3% contraction.
Businesses have invariably begun reviewing their investments and expenses – including legal costs – as they seek to weather the storm. While demanding the same quality of service from their legal providers, corporate leaders are also seeking out more efficient and cost-effective solutions.
Legal networks are well-positioned during this time of limited travel as we are adept at utilising collaborative technologies to meet the needs of our member firms and clients.
Eliza Tan, Asia Regional Director, Meritas
It was this very search for value that led to the creation of the first GLN in the 1980s and, with the market once again entering a period of cost consciousness, these legal structures are in a unique position to capitalise.
Globalisation and technology
The first networks emerged as progressive globalisation of business drove small and mid-sized law firms to think creatively about how to overcome their size disadvantage. GLNs have since expanded as clients sought out more flexible, nimble and value-focused legal services than traditional international law firms could provide.
While GLNs offer a greater degree of flexibility, comprised as they are of smaller firms focused on their local jurisdictions, they also frequently have a far more extensive international reach than the traditional mega-firms.
The business activities of our clients have lessened and the demand for legal services has decreased. However, COVID-19 has also created new business opportunities such as those relating to the facemasks and diagnostic kits. We are advising our clients on the regulatory issues and export-import for such businesses.
Jihn Rhi, managing partner of Seoul-based law firm Rhi & Partners
Meritas, for example, boasts a network of more than 190 independent law firms located in 96 countries. The network has 12 offices in Asia.
COVID-19 has disrupted the traditional ways of doing business and providing legal advice, thanks to severe international and domestic quarantine orders designed to curb the spread of the virus. Networks, which already relied on technology-based solutions to collaborate internationally, were able to quickly adapt to the situation by scaling up communication and information sharing among member firms.
Meritas’ Asia Regional Director, Eliza Tan, said: “Legal networks are well-positioned during this time of limited travel as we are adept at utilising collaborative technologies to meet the needs of our member firms and clients.”
Tan added: “We’ve continued to enhance our capability through various technology platforms, through which we can efficiently deliver co-ordinated advice to help clients and members make informed business decisions as they navigate this challenging legal landscape.”
The global legal network has adapted to the pandemic by facilitating webinars, regional networking events as well as a virtual Meritas Week in order to help members and clients across the globe exchange best practices and learn from one other.
Jihn Rhi, the managing partner of Seoul-based Meritas member Rhi & Partners, said his firm had seen a decline in traditional opportunities following the pandemic.
Rhi said: “The business activities of our clients have lessened and the demand for legal services has decreased. However, COVID-19 has also created new business opportunities such as those relating to the facemasks and diagnostic kits. We are advising our clients on the regulatory issues and export-import for such businesses.”
The connectivity and professional relationship between Meritas members in each jurisdiction is very good. The fact that we have a global network and yet are able to maintain our own independence is very rewarding
Nini Halim, managing partner of Jakarta-based law firm Hutabarat Halim & Rekan
COVID-19 has forced all sectors of the global economy to adapt and embrace technology, though the rush to do so can often highlight gaps in existing infrastructure. GLNs, however, have thrived on ensuring clients can lean on their networks to find solutions to issues that might straddle borders or disciplines. The challenge for networks then, lies in how to avoid stagnation.
Restrictions and growth
Meritas has done so by inviting the best of a local market’s independent firms to join, ensuring the quality of its membership. It has been actively recruiting new members, while conducting ongoing reviews of current members to ensure they are meeting Meritas standards, even throughout the pandemic.
Tan said Meritas has welcomed on board a number of new firms since the start of the pandemic. “The recruitment process for new member firms has always been a rigorous process and previously was dependent on visiting the offices of potential member firms,” she said, adding: “In order to ensure that our rigorous quality standards continue to be met, we now conduct exhaustive research and interviews with candidate firms virtually, via phone calls and videoconferencing, and through close co-ordination with members and industry experts in the region.”
Adding new jurisdictions to achieve a truly global reach is more important than ever and GLNs cannot afford to become complacent. Offering a high-quality, multidisciplinary and multi jurisdictional networks is not just a benefit to clients but also to prospective law firm members.
We emphasise the fact to our clients that wherever there is a legal need in any major jurisdiction in the world, we can quickly find a qualified Meritas member firm ready to provide highly professional services at reasonable costs.
Liu Hongchuan, partner at Beijing-based law firm, Broad & Bright
Nini Halim, the managing partner of Jakarta-based Hutabarat Halim & Rekan (HHR), said: “The connectivity and professional relationship between Meritas members in each jurisdiction is very good. The fact that we have a global network and yet are able to maintain our own independence is very rewarding.”
More than that, however, GLNs continue to offer international coverage at a substantial discount to traditional mega-firms, which have greater infrastructure overheads to service.
Beyond network membership fees, members have zero exposure and do not subsidise other offices the way an international firm must. While global firms enjoy recognisable and trustworthy brands, the associated costs of this is baked into the services they provide.
GLN members, meanwhile, are able to offer referrals to a carefully curated international list of firms without significant additional cost, which allows these savings to be passed on to clients.
Liu Hongchuan, a partner at Beijing-based Broad & Bright, said Meritas’ network of mid-sized and highly capable law firms was a primary factor in why his firm joined.
He said: “We emphasise the fact to our clients that wherever there is a legal need in any major jurisdiction in the world, we can quickly find a qualified Meritas member firm ready to provide highly professional services at reasonable costs.”
That focus on quality is as important for a network’s members as it is for their clients. Given the impact that COVID-19 has had on local and international business, winning work now is tougher than ever, and firms cannot afford any reputational risks.
Through a network, member firms can hope to receive client referrals, either from other members or via the GLN’s regional hub, and, just as importantly, know that any network referral they make to a client will not tarnish that relationship.
Khairuzzaman Muhammad, a partner at Malaysia’s Zul Rafique & Partners, said: “We are happy to recommend Meritas members, considering the stringent requirements and quality standards placed within the membership. We trust and are assured that member firms are able to meet the highest standards of service for our clients.”
This focus on quality assurance is what continues to attract firms looking to enhance their client value.
GLN members are able to do more than refer and receive referrals, however. They can collaborate with one another to provide multi-jurisdictional advice for clients. This can either lead to cross-border collaborations or lay the foundations for a referral, with all parties involved confident in the level of service on offer.
Collaboration and creativity
Liu said his firm had teamed up with other network members to write articles about import and export controls and regulations of medical equipment in the midst of COVID-19. He said: “We wanted to show existing and potential clients that Meritas member firms can work together seamlessly on complicated cross-border legal matters.”
We are happy to recommend Meritas members, considering the stringent requirements and quality standards placed within the membership.
Khairuzzaman Muhammad, partner at Malaysia law firm Zul Rafique & Partners
Meritas’ firms have also been quick to learn from one another during the pandemic, with members in Asia advising their counterparts in the western hemisphere in real time about market shifts and the challenges COVID-19 presented to doing business. Although each country has approached the crisis in a different way, Tan noted that lessons learned in one part of the world have helped inform preparations elsewhere during the pandemic.
Muhammad praised Meritas’ strong Association of Southeast Asian Nations (ASEAN) presence, which he noted surpassed that of many other networks. He added: “Meritas’ dedicated ASEAN committee oversees various initiatives and activities, ensuring that fellow regional members remain active, relevant and connected.”
As companies weigh up their financial risks, independent law firms that can not only demonstrate their international exposure but also their network’s increasingly interconnected knowledge base will present a more compelling value proposition to both international and local clients.
Sesto Vecchi, partner at Vietnam’s Russin & Vecchi, said: “Being able to say that we are a member of an international network is helpful in positioning ourselves as a firm with international capabilities both inside and outside of Vietnam.”
That positioning will become more important than ever in the months ahead. The global economy is in a downturn and law firms benefiting from global relationships within a network will not only survive the lull but will be well placed to capitalise on the ensuing economic revival.
GLNs have a history of evolving to meet shifting client needs and it will be this attribute that helps them weather the current changes to the global market.
Being able to say that we are a member of an international network is helpful in positioning ourselves as a firm with international capabilities both inside and outside of Vietnam
Sesto Vecchi, partner at Vietnam law firm Russin & Vecchi
Meritas is using a regional approach to understand how best to adapt and evolve. Tan said: “Our process has included numerous group and individual conversations with our members and the rapid adjustment of programming to provide timely and accessible opportunities. This knowledge gained from our members will inform our strategic planning process, which will lead our organisation through the next five years and beyond.”
Beyond the global pandemic, legal networks have had to adapt to ongoing market changes. The responsibilities of the corporate general counsel have grown in recent years, with the role increasingly expected to contribute to business strategy. As such, the services they have sought from their legal providers has changed as well and, according to Tan, this remains both a challenge and an opportunity for GLNs.
Tan added: “Networks that find new ways to facilitate the delivery of services are well positioned to compete against the mega-firms and alternative legal service providers (ALSPs). Enhancing those capabilities is, and will continue to be, key.”
She said Meritas had ramped up its focus on webinars, articles and white papers during the pandemic in order to address the new challenges clients were suddenly facing.
GLNs will need to continue raising awareness of their value proposition to those companies that have never worked with them, however. Networks need to simultaneously ensure, and highlight, that they not only offer highly localised, right-sized business solutions but also efficiency, project management and collaboration.
Tan said: “It’s important networks continue to find ways to lower the barriers of collaboration for our members, stay focused on a vision that best serves their clients and members, and invest in tools and people that will keep them as leaders in the industry.”
GLNs must also continue to discover unique ways of finding business success for their members – both in terms of work gained through the network, as well as access to industry-leading knowledge and management tools. The successes enjoyed so far place Meritas and other GLNs in a favourable position.
As networks of highly skilled independent firms, GLNs are able to compete with mega-firms in terms of localised knowledge, reach and quality of service but at a reduced rate.
Moreover, GLNs’ focus on international and remote collaboration and project management over the decades only accentuates their value proposition and outlook both during COVID-19 and in the long-term.
This article was written by Andrew Kemp for Conventus Law in association with Meritas
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