Ahmad Fikri Assegaf, managing partner of Indonesia’s Assegaf Hamzah & Partners, speaks to Ranajit Dam about cross-border collaborations, the changing legal market in his country, and why the firm’s belief in client service is real, and not just a mantra
ALB: It’s been about 15 years since AHP was founded. What are some of your memories of the early days?
Fikri: Obviously, things were very different indeed when we started out in 2001. The country had just emerged from the 1997 Asian Financial Crisis and it was far from certain as to how things would work out. We had only two partners and a handful of associates, compared to the 19 partners and some 70 associates we have at present. And like all new firms, we had to work day and night simply to make sure the electricity and phone bills were paid on time. So there is no doubt that it was a struggle but it was that experience that honed our commitment to client service. We realised very quickly that we had to offer a superior product to win the trust and loyalty of our clients. And that is what we did. Client service, knowledge of their industries and awareness of their needs are the foundations on which we have grown. Our belief in client service is real, not just a mantra.
We now no longer focus solely on the small number of practice areas that were our initial specialisations, but have spread our wings to take in emerging practice areas that we believe hold out significant potential, such as tax, shipping and competition.
ALB: Recently AHP became a part of the Rajah & Tann Asia network. What was the motivation behind this?
Fikri: Clearly, the process of worldwide consolidation in the legal-services industry has been underway for a significant period of time in the more mature legal markets. Here in Indonesia, the process really took off about five years ago as increasing globalisation brought a growing awareness among our law firms that, like it or not, we would need to seek out alliances in order to keep abreast of the rapid changes taking place in the legal sphere around the world, and to afford our clients the type of cross-border or transnational services that they need so as to successfully grow their businesses. In addition, as Indonesia is still primarily an inward investment destination, such tie-ups help to smoothen out the FDI process and M&A deals involving overseas firms looking to expand in Indonesia.
For our part, we looked around long and hard for a suitable partner, and we had plenty of suitors, I can tell you. However, in the end we settled on Rajah & Tann as we found their culture and way of doing things to be pretty similar to ours. I’m happy to report that our choice has proved to be correct, and no significant difficulties have arisen as we continue to tighten our collaboration.
ALB: On a related note, there have been a number of international agreements and initiatives of late: the AEC, China’s One Belt, One Road, the Trans-Pacific Partnership and so on. How is the firm set to benefit from these?
Fikri: We have long been readying ourselves for the AEC, and in fact it was one of the reasons that we elected for R&T as our tie-up partner. We were very aware from the outset that the AEC would lead to even greater economic integration in the region, and that, of course, would be fully reflected or replicated in the legal sphere, such as through increasing cross-border M&A activity. While our expectations in this regard haven’t been entirely fulfilled thus far, we believe that this is primarily due to the economic downturn in the region, rather than to any inherent problems with the AEC.
As regards the TPP, this is still very much a work in progress as far as Indonesia is concerned. While President Joko Widodo has stressed that Indonesia cannot afford to remain aloof, there are many obstacles that would have to be overcome before this country could realistically expect to join. However, given that many of our competitors in the region, such as Vietnam and Philippines, are members, I think that membership is also something that Indonesia will have to aim for. This, I believe, will have profound implications for both the Indonesian legal system and the way business is done in this country, in terms of modernisation and transparency. But it is still very much early days.
In contrast to the TPP, the impact of China’s OBOR policy is already being felt here. The Jakarta-Bandung High Speed Rail Project is a prime example. Indonesia’s participation in the Asian Infrastructure Investment Bank is another. However, increased ties with China are not just apparent in the infrastructure arena. Over the last year or so, we have also seen a growing number of Chinese firms operating in other sectors coming into Indonesia for the first time, including consumer goods and electronics firms. Presumably, as the Chinese economy slows down, they are looking to expand their overseas markets.
ALB: How have you seen the Indonesian legal market develop during the time you’ve been a lawyer?
Fikri: I think the biggest change has been the move towards greater specialisation in line with the development and increasing complexity of Indonesian law. When I started out, I think almost all of us were generalists, although we would naturally have more of an affinity with some areas of the law than others.
However, at least for Indonesia’s leading commercial law firms, the future is very much specialisation. This is not only necessary because of the vast amount of primary and subsidiary legislation being produced across the board in Indonesia these days, but also because of the need to keep abreast of international best practice and norms in our individual areas of specialisation. However, this trend is most apparent at the upper end of the legal-services market, and in particularly among firms that deal with international commercial clients. At the other end of the market, the end that is primarily focused on purely domestic matters, generalisation is still the norm. But even there, things are also slowly changing.
The opportunities are enormous. Indonesia’s legal-services market remains relatively underdeveloped, with the big law firms all being very much Jakarta-centric to date. As the full economic benefits of regional autonomy kick in, there will be ever-increasing demand for top-class legal services in other tier-one cities, such as Surabaya, Bandung, Makassar, Medan and so forth. We have been aware of this for quite some time and took our first step recently towards responding to the demand by establishing a new office in Surabaya, which is manned by two partners and a number of associates. Should this venture prove to be a success, which we are convinced it will be given the excellent response thus far, then we plan to expand our reach to other cities around the country.
ALB: How would you describe your strategy for the firm as managing partner?
Fikri: If we talk about strategy, there are two aspects that I always stress to my colleagues. First, the basics: responsiveness to and an awareness of client needs are the two great fundamentals (besides legal expertise, obviously). As a relatively compact law firm, we also greatly value the personal touch. As such, clients can contact our lawyers at any time, and we always make a point of keeping them fully updated on what we are doing. We also pride ourselves on rapid turnaround times. It is only after a law firm has fully internalised these qualities that it can expect to prosper and grow. While size has never been our foremost consideration, there is no doubt that scale is important so that we can provide clients with the cross-cutting services they need at reasonable rates. For example, in an M&A deal, it is not enough solely to be able to provide advice on general corporate matters, but it also essential to have the capacity to advise on the regulatory, competition law, banking & finance, IP, taxation and other relevant aspects. At the moment, we have achieved sufficient bulk to advise across all practice areas — only a very few Indonesian law firms have the ability to do this. Going ahead, we plan to keep expanding, although probably at a slower pace than has been the case over the last few years. We will continue our policy of maintaining close ties with Indonesia’s top universities, particularly the University of Indonesia, the nation’s top college, so we can recruit the best legal talent at the entry stage. We’re also willing to look into the possibility of further “bolt-on” mergers with boutique law firms, similar to our merger with boutique competition firm Rizkiyana and Iswanto in 2013.
On the “microstrategy” front, we recently decided on a policy of rotating the managing partner position starting next year so as to encourage the introduction of new ideas and fresh approaches. To that end, Senior Partner Bono Adji has been named co-managing partner (alongside me), and will take over as managing partner next year. After that, we plan to have regular rotations. For my part, I will continue to focus on my legal practice, serve on the firm’s management committee and represent AHP in Rajah & Tann Asia.
