In the past year or two, it has felt like not a month has gone by without news of law firms alliances being forged by firms in the Southeast Asian region. September saw Japan’s Nishimura & Asahi expand its reach into Indonesia by tying up with local firm Rosetini & Partners, while Duane Morris & Selvam, Duane Morris’ Singapore joint law venture, entered the largely untapped Sri Lanka market following an alliance with Gowers International Legal Consultants in that country. Towards the end of August, though, was an announcement that gave an indication as to the long-term strategy of law firms in the region: Rajah & Tann, one of Singapore’s Big Four firms unveiled its Southeast Asia network named Rajah & Tann Asia.

With the aim of providing integrated cross-border transactional and dispute resolution services across the region, Rajah & Tann Asia covers eight ASEAN countries, currently missing only the Philippines and Brunei. Aside from the established Singapore outfit, the network consists of a few firms that are fairly large in their home countries, and others that are still making their way up the ladder: they are R&T Sok Heng Law Office in Cambodia, Assegaf Hamzah & Partners in Indonesia, Rajah & Tann Laos, Christopher & Lee Ong in Malaysia, Rajah & Tann NK Legal in Myanmar, Rajah & Tann Thailand, and Rajah & Tann LCT Lawyers in Vietnam.

“We see the clients that we serve moving within the region, and outside the region as well,” says Patrick Ang, deputy managing partner of Rajah & Tann, explaining the motivations behind the setting up of the network. “Secondly, we decided to focus on Asia, particularly Southeast Asia, because we feel that this is where our competitive strengths lie. We have a lot more credibility within this region than we would have in other parts of Asia. Finally, we are planning for the future. The advent of the AEC next year is set to kick-start the growth of the ASEAN region, so we felt it was prudent to get ourselves ready for the future.”

Brad Hildebrandt, a leading expert on the management of the legal profession, notes that with Asia’s demand for legal services growing rapidly, many of the larger foreign firms want to be here, and thus it is important for local firms to think beyond national boundaries if they want to stay competitive.
“So what does the local firm do – just sit there and be local?” he asks. “The fact is they’re not just local, since they’re practicing in a global market. And, therefore, they have to think about serving their clients, who will likely have cross-border businesses.” The one thing that can really hurt a local law firm, he says, is that its clients start doing business globally. “That client says, ‘Well, ABC law firm: You’re great in Singapore, but actually you’re not helping me, since you’re not helping me do my work elsewhere.’ That results in something of a marginalisation of the local firm.”

The answer, he says, is to start growing outside the region. “Rajah & Tann is one example,” says  Hildebrandt. “They’re trying one mechanism – that of best friends – and that approach has its pluses and minuses. The pluses include geographical reach. The minuses are that most firms who take this route don’t always market these services to their clients as well as they should. Also, as consolidation happens in the legal sector in various countries, some of these best friends might start to disappear. So it’s a good way to start, but can these compete against the growing presence of global firms?” He adds that he expects to see more of this happening from larger domestic firms in Asia, particularly places like Singapore, Japan, South Korea and China. “In Singapore, you can see Rajah & Tann doing it,  WongPartnership doing it, and even Allen & Gledhill to a lesser extent,” Hildebrandt says. “And we could see it happening among Indian firms as they look to expand beyond their home markets.”

Regional reach

But Rajah & Tann is not the only firm with a regional presence. Fellow Singaporean law firm RHTLaw Taylor Wessing has established its ASEAN+ strategy, which provides clients access to legal services via relationships in Japan, Taiwan, Hong Kong, Thailand, Philippines and Malaysia, along with offices – either formed through joint ventures with local firms or through the Taylor Wessing network – in Beijing, Shanghai, Hanoi, Ho Chi Minh City, Jakarta and Seoul. “Business has become increasingly global,” says Azman Jaafar, a founder of RHTLaw Taylor Wessing and head of the firm’s corporate practice.

“Being able to offer services across jurisdictions is paramount to our survival. There are a number of firms across Asia that we had been very friendly with, but we had dealt with them on a very ad hoc basis. We decided to deal with this in a more organised manner by entering into negotiations with them on working together, and this has led to where we are now.”

And one firm has had a cross-border reach in Asia longer than most. DFDL was founded in Laos two decades ago; since then, it has opened offices in Vietnam, Cambodia, Thailand, Singapore and Myanmar and also Bangladesh. In 2012, the firm entered into an association with Indonesia’s Mataram & Partners, and even has a Bhutan desk for hardy investors keen to explore the mountainous South Asian country. The next country appears to be the Philippines, says Martin Desautels, the managing partner of DFDL, with a firm there expected to join the DFDL network by the end of the year. “Our initial goal was a fully integrated firm within the Greater Mekong region,” he says. “That goal was achieved five years ago when we became the top law firm in many of these countries. Then we decided to train our sights on ASEAN, as we found that our clients, from about two years ago, had started to looking beyond the ASEAN nations as individual countries and creating strategies for the ASEAN region as a whole.”

Meanwhile, the network of Malaysian-headquartered ZICOlaw has a presence across much of the Southeast Asian region – in Cambodia, Indonesia, Laos, Myanmar, Singapore, Thailand and Vietnam – and also in Australia. And Singapore’s Kelvin Chia Partnership lists offices in Bangkok, Hanoi, Ho Chi Minh City, Phnom Penh, Shanghai, Tokyo, Yangon and Pyongyang on its website, making it possibly one of the very few foreign firms in North Korea.

Maintaining quality

One of these challenges that these networks face is unifying standards when it comes to service quality and other aspects. The ASEAN countries are not homogenous in terms of political systems, economic progress, legal systems, sophistication of the legal services sector and availability of talent, and this is usually reflected in the law firms emerging from that country. “Firms in the Rajah & Tann network are at different stages of their development, and the reason is that their countries are at different stages of their economic and legal development,” says Ang. “Thus, more work needs to be done to bring them up to standard.”

One way the firm is doing this is having Singapore partners act as country coordinators for each jurisdiction, with Ang acting as the CEO of Rajah & Tann Asia. “At one level, quality and standards are drilled down in each office through the country managing partner,” he says. “At another level, we have practice area heads across six corporate areas practice and five litigation areas of practice, and each of these has a team that meets to train and looks at how to enhance quality of delivery.”

Desautels agrees that maintaining uniform standards can be a challenge. “We have training, certainly, and certain rules that every lawyer across the offices must follow,” he says. “For example, all lawyers across our 12 offices must reply to their clients’ emails within 24 hours. And that’s an example of a process that drives and increases the quality of our services.” Another issue arises when the firm enters a new country.

“When we first expanded into Myanmar, we needed to quickly beef up our team there, so we carried out a lot of intensive training initially by foreign lawyers who would take the Burmese lawyers with them on client meetings in order to show them the ropes. The training includes English lessons, legal writing, training related to client services and so on. This helped bring them up to our standards, particularly the younger generation of Burmese lawyers who needed to be brought up to speed in terms of the services expected by the clients of an international law firm.”

Firms within RHTLaw Taylor Wessing’s ASEAN+ network make it a point to share best practices, but Jaafar notes that difficulties still crop up in trying to integrate law firms across a wide range of geographies.

“Sometimes we want to tell other firms that we would like to have something done one way,” he says. “But then we realise that we are only one law firm of many that have come together. But what we have done is share with them our experiences, our suggestions on how we can do things better, and we look at attachments and mutual secondments.”

AEC coming

Networks spanning Southeast Asia seem particularly well-equipped to better provide services to the ASEAN Economic Community, expected next year. The AEC aims regional economic integration with the following characteristics: A single market and production base, a highly competitive economic region, a region of equitable economic development, and a region fully integrated into the global economy. “The creation of the AEC is expected to lead to an increase in cross-border trade between member countries, as well as with countries within and outside the rest of Asia,” says Jaafar of RHT Law Taylor Wessing. “Having member firms in different countries can definitely be an advantage, as we look forward to helping clients penetrate different markets within the AEC.”

Desautels of DFDL says that the firm is preparing for the onset of the AEC by raising awareness by  conducting research across every business unit and practice area. “We are also promoting external awareness by publishing a lot of the research that we do internally,” he says. “The legal treaty we are focusing most on is the ASEAN Comprehensive Investor Agreement, which we think will have the most impact for our clients. Already, clients are asking which countries they should invest in, open a factory in and so on. People are strategising most about supply lines; aside from import-export and duties going down, I think supply line strategies will be key to the ASEAN development of several of our clients.”

According to Ang of Rajah & Tann, the advantage the network has in relation to the AEC is that a lot of lawyers are already thinking of ASEAN-wide issues that will affect clients. “As one example, our firm has taken the lead in writing a book on competition law in ASEAN,” he says. “The thought leadership we have in the area is plain for the market to see, and we hope to build on this kind of focus and expertise that we hope will provide clients a unique product than just ‘tell me the law in this country.’ In areas like banking, for example, there will be initiatives by various central banks to bring their systems together, likewise in trade and arbitration.

When these areas become more integrated across ASEAN as a whole, a firm like ours, with the local knowledge and expertise and a body of lawyers focusing on the region, can bring real value to the clients.”