Michael Rose has both good and bad news. The bad news is that he isn’t predicting a recovery for the legal services sector any time soon. “It is our sense that activity across the market as a whole is down. We would expect that things will stay relatively flat or decline further over the next 12  months,” he says.

The good news, at least as far as AAR is concerned, is that the firm’s core practice areas such as energy & resources, banking & finance and insolvency have remained strong. The firm has chalked up a string of landmark deals over the past year, including BHP’s bid for Rio Tinto, the St George/Westpac merger and the BHP/ Rio Tinto iron ore joint venture.

“Our growth is driven by significant levels of activity among a large proportion of strategic clients and not by one or two very large transactions,” says Rose. “We’ve had a year of what we believe was above-market growth and increased market share.”

It’s an intriguing claim which calls for further elaboration, but when Rose is asked to put a figure on revenue, his normally amiable face becomes stern. “We don’t talk about our numbers outside the firm, that’s our policy,” he says. “That’s the private information of the partners who own the business and we don’t think it’s something … to talk about. Our clients don’t want to read about how much money we’re making.”

Surely it must be difficult to resist the temptation to talk about figures if Allens is outperforming its rivals? “I’m resisting it now,” Rose says firmly.

Regional plans

While AAR has offices in predictable Asian locations such as Hong Kong, Singapore and Shanghai, it has also established itself in lesser-known markets – Vietnam, Papua New Guinea and Indonesia.

“Our long-term vision for the firm is built around the recognition that over the next 20  years, the region we live in will become the most important, politically and economically, in the world,” Rose says. “We believe we have the real skills which are crucial to growth and we have a footprint which

Mallesons, Freehills and Allens might be the cream of the local legal profession, but AAR chief executive partner Michael Rose believes his firm is the crème de la crème. Renu Prasad finds out why

Rose without thornsspreads right across the region. We’re in the right places at the right time with the right practice offerings.”

Rose’s focus on Asia contrasts with the expansion plans of other firms: the ambitions of Deacons, which has linked with UK-based firm Norton Rose; and Mallesons, which in the past has flirted with the likes of global giant Clifford Chance.

“Europe and the US are very mature markets which are highly competitive and already have many excellent firms,” says Rose. “The emerging markets of Asia present a real opportunity to be market leaders.”

While he acknowledges the importance of China, Rose notes that this market is starting to present the same challenges as the US and Europe. “It is a very competitive market and local firms are attaining a degree of expertise and sophistication. Over time it will become increasingly difficult for foreign firms to compete – whereas in South-East Asia, in markets such as Indonesia and Vietnam, there is the opportunity to be dominant.”

“The Asia practice is more exposed to the downturn because we don’t have the counter-cyclical hedge – but on the other hand, the recovery has been quicker in Asia,” Rose explains.

Friendly interests

Rose regards his firm’s presence in South-East Asia as a strong differentiating factor from other top-tier rivals. “If you compare us with Freehills and Mallesons, what we have is an Asia network – which they don’t. Mallesons has a strong presence in North Asia, we have a presence in North Asia and one of the strongest presences of any firm in South-East Asia.”

A particularly interesting aspect of AAR’s Asia operations is its non-exclusive “best-friends” relationship with Slaughter and May. “One thing that Slaughter and May has done with its best-friend mechanism is that it has brought together a group of the leading independent firms in Europe,” says Rose.

“Our relationship with Slaughter and May involves us in a network of leading firms and that relationship proves to be very beneficial for us in Asia. So you might have a leading firm in Europe which wants to do something in Indonesia or Vietnam or Singapore but doesn’t want to send work to the likes of Freshfields or Allen & Overy because they compete in their local market. So we are often chosen as the Asian network for the leading independent European firms.”

On the home front, Rose is a voracious reader and can be found cycling or kayaking when time permits. His very first job was working as a cleaner in a swimming centre, for the princely consideration of $3.50  an hour. “It was a rip-off, even back then,” he laughs. The chief executive partner describes the management of AAR as his day job, while his “night job” involves the chairmanship of ChildFund Australia, an independent and non-religious international development organisation that works to reduce or eliminate poverty for children in the developing world.

And with three children of his own, Rose often finds himself involved in “Year Seven science projects and Saturday morning sports”. ALB

Whether through a lack of investment or depth – or maybe just poor timing – other Australian firms have had a patchy history in South-East Asia, but Rose is confident that AAR has the right approach.

The firm’s workload includes intra-Asia business with no Australian component, and it has worked to offer both international and local advice where possible. In the boom years, as much as 15% of revenue was derived offshore, but Rose says that this declined last year as a result of the financial crisis.

“The Asia practice is more exposed to the downturn because we don’t have the counter-cyclical hedge – but on the other hand, the recovery has been quicker in Asia ”