Jeux sans frontieres
9 December 1995
The 25th anniversary of the IBA Section on Business Law is a good chance to reflect on developments in the practice of law in Europe and to speculate about what the future may bring.
Perhaps the most striking changes since 1970 have been the enormous growth in the size of firms and the extent to which lawyers have had to become more efficient and business-like. They have been forced to develop expertise in a wider range of specialities, some of which barely existed 25 years ago. The market for legal services in Europe has become more competitive, and lawyers have had to become more attuned to the business needs of clients. One of the results of this has been the need to think on a more international scale.
On the legislative side, we have seen the enactment of the Services Directive of 1977, the Diplomas Directive of 1988 and the CCBE Common Code of Conduct. However, the road to greater liberalisation has been long and hard, and one of the main pieces of the jigsaw, a directive safeguarding the right of establishment on non-restrictive terms, is still missing; it is to be hoped that in the final version liberal views will prevail.
There are also signs that the old division between 'exporting' and 'importing' countries, the underlying economic cause of most of the rights of establishment disputes, has begun to break down. Not only the UK but also the Netherlands has seen the growth of the large law firm, and the wave of mergers leading to large firms in Germany has been a dramatic development. Increasingly such firms are also competitors on the international scene, and it can only be a matter of time before the southern countries of Europe follow suit.
It seems clear that the law regulating lawyers has failed to keep pace with the internationalisation of the profession. But, international trends have proceeded slowly in comparison with the even faster internationalisation of the business world. A particular challenge which all major firms now face is that of delivering services on a Europe-wide basis to meet the expectations not only of domestic and other European corporate clients but also those from other countries such as the US and Japan. Many different formulae have been tried for delivering such services through links with foreign firms - from alliances of varying closeness to the occasional international merger. Other firms have opted to "go it alone" by transforming into something closer to a multi-national organisation.
However, the true European law firm, not identified with any particular country and able to serve its clients at a consistent level of quality across the continent, has still to emerge.
In many respects, lawyers are far behind accountants in the extent to which they are internationally organised. Lawyers believe they still have something distinctive to offer to clients, and long may this continue. However, the firms which succeed in Europe over the next 20 years will be those which find the right formula to become truly multi-national. The achievement of such a goal will require on the one hand a willingness to jettison national restrictive attitudes and practices, and on the other the more efficient management of law firms as businesses, without losing sight of the standards which are ever more vital in today's profession.
Edwin Godfrey is international managing partner at Simmons & Simmons.