The Association of Southeast Asian Nations (ASEAN) is one of the most important global developments for law firms. The ten-state single market has a combined GDP of $2.6trn (£1.8trn) and a population of over 622 million. It could be the world’s fourth largest economy by 2050.
To find out which firms are doing well in the region and which aren’t, The Lawyer has investigated the 30 largest international firms ranked by headcount. Stories of ill-fated ventures are abundant. Several firms have got their fingers burnt by the region’s notorious economic and political volatilities and cut-throat competition on pricing.
White & Case, for example, opened a Bangkok office in 1993 but axed it in 2009 in a profitability push. Clifford Chance’s Vietnam offices had the same misfortune: they closed in 2000 after six years. Freshfields exited Singapore in 2007 but has since come back.
A few, like Allen & Overy, have endured the test of time and built up one of the widest regional footprints among international firms. But it is not without its challenge: headcount growth for the firm has been flat due to a stringent efficiency push for full utilisation of every lawyer in the firm’s existing offices in order to remain competitive on pricing while preserving profitability.
But successful growth stories for international firms in Singapore, and to a larger extent in the region, have only come about in the past three years. Only recently has the region offered concrete opportunities, winning greater appeal among global firms and their clients alike. Dentons’ decision to close its Singapore office in exchange for a 100-lawyer local outlet and Morgan Lewis & Bockius’ return after its 2000 exit are testimony to the renewed importance of the ASEAN.
However, servicing the region out of a Singapore hub will only get firms so far. There’s a recognition among the leading global firms that a strong local presence, expertise and real understanding of the rapidly changing legal and regulatory landscape in each of the key member states will play an equal part in winning new mandates.
Whichever model these firms choose to expand their businesses, it is important to bear in mind that they are in a long and painstaking marathon. Firms that are really serious about ASEAN work will have to realise that the potential of the ASEAN Economic Community will take years if not decades to realise and competition is already fierce. Partners who start grumbling now about return on investment will need to be patient. The race for success in ASEAN has only just began.
