JOHN GRIMLEY

A Comprehensive Guide to the Asia-Pacific Legal Markets

IN ASSOCIATION WITHPUBLISHED BY

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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? ................................................................................. 7A region characterized by diversity .................................................................................. 8Emerging markets ......................................................................................................... 9An illustration of market differences in the region – The case of franchising ............................... 9The region’s impact in the global economy ...................................................................... 10Growth of economies ...................................................................................................11Innovative launching pads for expansion into new markets ...................................................11New focal points to advance effectiveness ...................................................................... 12Investments in technology ............................................................................................. 12Conspicuous U-turn ..................................................................................................... 12Long-term local talents ................................................................................................. 12Partnerships to offset barriers ......................................................................................... 13Market entry via public-private partnerships ..................................................................... 13Domestic priorities ...................................................................................................... 13Novel technologies ..................................................................................................... 13Challenges to regional growth: Long-term sustainable economies ......................................... 14

Chapter 2: Australia and its role in the Asian legal market .......................................................... 15Australia’s positioning .................................................................................................. 15Is Australia part of Asia? .............................................................................................. 15The current Australian legal market ................................................................................. 16Australia’s unique attraction as a gateway to Asia ............................................................. 16Australia riding a wave of Asian legal market expansion .................................................... 16Australian law firms going overseas ................................................................................ 18Australia in Asia’s legal market ...................................................................................... 18

Contents

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Chapter 3: Emerging trends impacting legal services in the Asia-Pacific region ............................. 19Economic growth........................................................................................................ 20Trade liberalization ..................................................................................................... 22Price competition ........................................................................................................ 24Intra-Asian law firm growth ........................................................................................... 25Japanese law firms among the leaders in intra-Asian law firm growth .................................... 26Law firm mergers ........................................................................................................ 26Legal market liberalization ............................................................................................ 27Alternative business structures ........................................................................................ 28Influx of foreign law firms ............................................................................................. 28Singapore as a model for future local competition? ........................................................... 28The future of NewLaw in Asia ....................................................................................... 29What is the future of legal services in Asia? ..................................................................... 30Conclusion ................................................................................................................ 30Emerging trends in technology and law in Asia ................................................................ 30

Part Two: In-depth analyses by country

The Chinese legal market – An overview ................................................................................... 35China’s importance in the Asian economy ....................................................................... 36May foreign lawyers practice in China? ......................................................................... 36Participation at government proceedings ......................................................................... 38Key law firms in the China market .................................................................................. 38Key foreign trade agreements and their impact upon the market .......................................... 38An interview with Paul Kossof, author of Chinese Trademark Law, The New Chinese Trademark Law of 2014 ............................................................................................... 39

The Hong Kong legal market – An overview .............................................................................. 41Hong Kong’s importance in the Asian economy ................................................................ 41May foreign lawyers practice in Hong Kong? .................................................................. 42Key law firms in the Hong Kong market .......................................................................... 42Key foreign trade agreements and their impact upon the market .......................................... 43E-discovery in Hong Kong ............................................................................................ 43

The South Korean legal market – An overview ........................................................................... 45South Korea’s importance in the Asian economy ............................................................... 45May foreign lawyers practice in South Korea? ................................................................. 46Key law firms in the South Korean market ........................................................................ 46Key foreign trade agreements and their impact upon the market .......................................... 47Trends in the South Korean legal market .......................................................................... 47Interview with Ryan Russell, author of the Kimchi Law Blog in Korea ...................................... 48

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The Japanese legal market – An overview ................................................................................. 53Lawyer numbers increase, but opportunity remains ............................................................ 53Legal market value ...................................................................................................... 54Japan’s importance in the Asian economy ....................................................................... 54May foreign lawyers practice in Japan? .......................................................................... 54Key law firms in the Japanese market.............................................................................. 55Key foreign trade agreements and their impact upon the market .......................................... 55

The Myanmar legal market – An overview................................................................................. 57Myanmar’s importance in the Asian economy .................................................................. 57May foreign lawyers practice in Myanmar? ..................................................................... 58Key law firms in the Myanmar market ............................................................................. 58Key foreign trade agreements and their impact upon the market .......................................... 59

The Malaysian legal market – An overview ............................................................................... 61Malaysia’s importance in the Asian economy ................................................................... 61May foreign lawyers practice in Malaysia? ..................................................................... 62Key law firms in the Malaysian market ............................................................................ 62Key foreign trade agreements and their impact upon the market .......................................... 63

The Indonesian legal market – An overview ............................................................................... 65Indonesia’s importance in the Asian economy .................................................................. 65May foreign lawyers practice in Indonesia? ..................................................................... 66Key law firms in the Indonesian market ........................................................................... 66Key foreign trade agreements and their impact upon the market .......................................... 67

The Australian legal market – An overview ................................................................................ 69Australia’s importance in the Asian economy .................................................................... 69May foreign lawyers practice in Australia? ...................................................................... 70Key law firms in the Australian market ............................................................................. 70Key foreign trade agreements and their impact upon the market .......................................... 71Observations on the Australian legal market by Richard Smith, author of the Australian Law Firm Business Development Blog .............................................................................. 71

The Indian legal market – An overview ..................................................................................... 75India’s importance in the Asian economy ......................................................................... 75May foreign lawyers practice in India? ........................................................................... 76Key law firms in the Indian market .................................................................................. 76Key foreign trade agreements and their impact upon the market .......................................... 77Q&A with Anuj Agrawal, associate editor of Bar & Bench .................................................. 78

The Philippines legal market – An overview ............................................................................... 81The Philippine’s importance in the Asian economy ............................................................. 81May foreign lawyers practice in the Philippines? ............................................................... 82Key law firms in the Philippine market ............................................................................. 83

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Key foreign trade agreements and their impact upon the market .......................................... 83Practicing in the Philippine legal market ........................................................................... 84

The Singaporean legal market – An overview ............................................................................ 87Singapore’s importance in the Asian economy ................................................................. 87May foreign lawyers practice in Singapore? .................................................................... 88Key law firms in the Singaporean market ......................................................................... 89Key foreign trade agreements and their impact upon the market .......................................... 89Singapore: A snapsot of recent legal developments .......................................................... 89

The New Zealand legal market – An overview ........................................................................... 93New Zealand’s importance in the Asian economy ............................................................ 93May foreign lawyers practice in New Zealand?............................................................... 94Key law firms in the New Zealand market ....................................................................... 94Key foreign trade agreements and their impact upon the market .......................................... 95Q&A with Jonathan Boswell, Chief Executive Officer at TGT Legal ....................................... 95

The Brunei legal market – An overview ..................................................................................... 99Brunei’s importance in the Asian economy ....................................................................... 99May foreign lawyers practice in Brunei? ....................................................................... 100Key law firms in Brunei ...............................................................................................101Key foreign trade agreements and their impact upon the market .........................................101

The Taiwanese legal market – An overview ............................................................................. 103Taiwan’s importance in the Asian economy .................................................................... 103May foreign lawyers practice in Taiwan? ...................................................................... 104Key law firms in the Taiwan market .............................................................................. 105Key foreign trade agreements and their impact upon the market ........................................ 105

The Thailand legal market – An overview ................................................................................ 107Thailand’s importance in the Asian economy .................................................................. 107May foreign lawyers practice in Thailand? .................................................................... 108Key law firms in the Thai market .................................................................................. 108Key foreign trade agreements and their impact upon the market ........................................ 109

The Vietnamese legal market – An overview ............................................................................. 111Vietnam’s importance in the Asian economy .................................................................... 111May foreign lawyers practice in Vietnam? ...................................................................... 112Key law firms in the Vietnamese market .......................................................................... 112Key foreign trade agreements and their impact upon the market ......................................... 113Trends in Vietnam’s legal market ...................................................................................114

The South Pacific islands legal markets – An overview ...............................................................117The South Pacific islands’ importance in the Asian economy ...............................................117May foreign lawyers practice in the South Pacific? ...........................................................118

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Key law firms in the South Pacific ..................................................................................118Key foreign trade agreements and their impact upon the market .........................................118

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 .................... 123The top legal firms in the Asian market ...........................................................................123Major opportunities available to foreign law firms ............................................................123Technology helps global legal services firms ...................................................................124Law firms are following their clients ...............................................................................124American legal firms have dominated the move to Asia ....................................................124Foreign firms face unique challenges in Asia ...................................................................124Unique locales of Asia-Pacific opportunity ......................................................................125NewLaw and domestic law firms within Asia ..................................................................126Key expansion strategies .............................................................................................126The risks of expansion ................................................................................................126Factors for succeeding in Asian markets .........................................................................126Have international law firms been successful in Asia? .......................................................127Geographic coverage of the region ..............................................................................127Profitability ...............................................................................................................127Adherence to a common vision and values .....................................................................127

Chapter 5: What are the major sectoral growth areas? ............................................................ 129Booming purchasing power .........................................................................................129What drives the Asia-Pacific region’s growth and development? .........................................129Conclusion ...............................................................................................................132

Part Four: The global impact of the Asia-Pacific legal markets

Chapter 6: Asian law firms face the challenge of rapid evolution ............................................... 135The Asia-Pacific legal industry and its major players .........................................................136State of legal services industry life cycle across Asia-Pacific ...............................................141Rapid evolution facing Asia-Pacific’s law firms .................................................................142Successful Asia-Pacific law firms of the future .................................................................. 143

Chapter 7: Foreign direct investment (FDI) in the Asia-Pacific region ........................................... 145Will Asia-Pacific FDI overtake other major world economies? ............................................ 145FDI developments worldwide ...................................................................................... 145The US and EU .........................................................................................................149Conclusion ...............................................................................................................149

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Part Five: Case studies

Case study 1: AdventBalance – Growing Australasia’s largest alternative legal service provider ... 155The market opportunity ...............................................................................................155The strategy ............................................................................................................. 156The story so far .........................................................................................................157Challenges and opportunities ......................................................................................157

Case study 2: K&L Gates – Examining a globally integrated model ............................................159The Asia-Pacific region ...............................................................................................159Helping businesses capitalize on China’s growth ............................................................ 160The firm’s expansion down under ..................................................................................162New frontiers in Asia ................................................................................................ 163Conclusion .............................................................................................................. 163

Case study 3: Conventus Law – A different focus ...................................................................... 165A focus on quality..................................................................................................... 165Certainty and control ................................................................................................ 166

Case study 4: The Tonga legal market ......................................................................................167

Case study 5: Clyde & Co .......................................................................................................171Sector strategy dictates expansion activity ......................................................................171Asia-Pacific development at pace .................................................................................171The Australian experience ...........................................................................................172

Appendix 1: Thoughts on technology and law in Asia ...............................................................175How is technology impacting the practice of law? ...........................................................175Early tech pioneers in law ...........................................................................................175Are computers helpful or a hindrance? ...........................................................................175Taking an active role in law practice .............................................................................176Changing times globally .............................................................................................176Trends in 2014 ........................................................................................................ 177How is generational marketing becoming more important for law firms? ...............................178The state of the legal industry .......................................................................................179Maximize human resources via understanding the generations ............................................179

Appendix 2: Seizing opportunity in a growing market...............................................................1811) Education and training ............................................................................................1812) Innovating within existing organizations ......................................................................183Conclusion .............................................................................................................. 184

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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

Executive summary

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of major factors are influencing the legal services sector globally and in the Asia-Pacific market in 2014. 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

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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.

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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.

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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.