The global co-chairman of the world’s largest law firm, DLA Piper’s Tony Angel, is targeting significant growth in China and Asia along with potential expansion to other emerging economies such as Africa and South America over the next decade.
In a video interview with The Lawyer, Angel also points to the increasing importance of business services professionals and investment in new technology as global firms seek to differentiate themselves. He also offers his view on the question of which firm will be doing best in a decade, his former home Linklaters or DLA Piper.
Angel makes his predictions in a video interview (scroll down) to accompany The Lawyer’s wide-ranging predictions issue, published yesterday (2 September).
“We need to be bigger in Asia,” said Angel, adding that there were new emerging markets including Africa and South America where DLA Piper could need to be present over the next decade.
“There are many areas of the world where we’re not present and if you want to be a global firm with the aspirations we have, servicing your clients across a range of practices around the full range of their operations, then we will need to be in a lot more places and a lot stronger in a number of our practices,” admitted Angel.
The biggest competitive pressure will come from clients, he continued, as demand more from their legal services providers rises and in-house counsel turn to alternative providers for a range of services, often on more cost-effective terms.
“Meeting those requirements is going to be a really tough competitive pressure for law firms,” said Angel. “Differentiation is a key challenge.”
Angel insisted that despite these pressures the market has not seen the end of the billable hour but will increasingly see firms employ a range of different pricing models. In that context, he warns that firms will need to take care that the professional relationship between lawyers and clients is preserved.
“One of the dangers is that increasing commercial pressure could damage that longstanding, and really important, professional relationship that needs to exist between solicitor and client,” said Angel.
Answering a careers-related question, he said the role of mid-ranking associates at the world’s largest firms will change significantly over next decade.
“Clients are not happy to pay high fees for relatively inexperienced lawyers,” said Angel. “So there’s a real challenge in how you train up your young people and make them effective really quickly.”
Angel added that firms needed to get “much better at training” junior lawyers and continue investing more heavily in technology such as knowledge management systems and document management systems that give those more junior lawyers an edge.
He adds that “there is no doubt at all” that business services professionals will become more and more important over the next 10 years.
“The big global firms have become much more professional organisations,” said Angel. “That range of support services, the value that it can bring to bear whether it be technology, business development, knowledge management, all these things can be very powerful enablers and differentiators for a law firm. So that’s a trend that is going to continue.”
In a decade Angel believes the key measure of a firm’s success will no longer be average partner profits but whether a firm, within its chosen market segment, is perceived by clients to be a market leader. If so, he says, it should be able to generate higher profits than its competitors rather than targeting profits as an end in itself.
“The measure of success is going to be whether you can retain and attract the people who enable you to sustain your success at the top of your market segment,” says Angel. “It’s not necessarily an absolute number, it’s about whether in the different areas in which you practice you can generate the profits required to fund the investments you need to make and, in particular, the investments in retaining and attracting the best people.”
As to the question of which firm will be winning in 10 years, Linklaters or DLA Piper, Angel said: “I think both firms will be winning; different races.”
In a separate video interview, Allen & Overy senior partner David Morley argued the world’s top firms will need to reinvent themselves over the next decade if they are to remain competitive.