Freshfields busts Asia lockstep in bid to keep rainmakers

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  • China is certainly happening – Linklaters promoting two relatively juniors Chinese associates into partnership last year and Freshfields busting the lockstep are all reflective of this mood. However, query if it is the right move: (i) is it healthy to create inequality amongst equals (or at least people who are perceived to be as equals)? (ii) is it right to give one jurisdiction so much of importance?

    Don't get me wrong, I know there are many firms with modified locksteps and with the “eat what you kill” model and many of these firms are successful. That, however, is not the “MC culture” and that is not how MC firms became who they are. I know change is important, but I only ask is this the right direction. What happens if these so called “rainmakers” are not relevant or the markets they operate in cease to be “happening”. Once you have created the imbalance there is no going back! Also attracting talent in the “home jurisdictions” will be challenging – ask yourself if you were in university in the UK why would you apply to an MC firm when your prospects are so remote.

    Another more important issue is profitability – Asian clients are unwilling to pay MC rates. Having been in Asia for the past 2 years I can assure you that unlike their western counterparts, Asian clients are more driven by “price” than “quality” or “relationships”. There is plenty of talent in the Hong Kong market and I believe there is no guarantee of institutional relationships (at least that is my read of this market).

    Lawyers have always been terrible at management and query if this “reactionary mode” which the MC firms are currently operating in will prove to be a mistake in the long run.

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  • Freshfields have been losing talent faster than you can say busted lockstep - they have upped their lawyer scales to try and keep people (unsucessfully) and now they are doing the same with partners. Anon is right about China - fee depression is endemic with Chinese SOEs squeezing each deal more than the last. Fact - only 2 non PRC firms made a profit last year and neither were MC or even top US firms. Everyone thinks that China is a pot of gold large enough for all to trough in but this is not the case and only the meanest and leanest are likely to do well financially. Good luck to FF - if they price themselves out or make China a loss leader due to their cost base then that is their choice.

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