Opinion

Peter Scott, drector, Horwath Consulting

If law firms really do need to develop their businesses internationally in order to meet their clients' needs, then the starting point should be to examine those needs to find ways to better service them. That way they will be adding value and building competitive advantage for themselves.
It is sometimes said that one of the easiest ways to lose a client is to recommend them to a law firm abroad. That is a reflection of the difficulty in finding the right lawyer in the right place to do a good job. It is your recommendation, and if it goes wrong, it will more likely reflect badly on you rather than on the other lawyer.
So do clients really want to be looked after by one law firm for everything, wherever they operate, or is a more correct and sensible approach to do whatever is in the client's best interests? If the client partner is managing the relationship well, then they will take steps to ensure that whoever the adviser is abroad, someone from the UK firm who is known and trusted by the client will always be involved to sort out problems and to help achieve the result the client wants.
Many UK firms will argue that their offices abroad have been established for this very purpose, to ensure common standards of service for the client, wherever that service is delivered. A laudable aim, which is only likely to be achieved by a few firms, and even then only in some locations. After all, how many UK law firms have anywhere near sufficient resources to effectively manage their overseas offices and ensure uniform quality service?
Your client will not be impressed by the local outpost of your firm, which, if lacking sufficient resources and expertise, will perform badly against the best local firm or against a truly international firm which does have a substantial operation there and which can service its clients to the standard they expect.
Even worse problems can arise with so-called 'alliance partners', which are often branded with the name of the UK firm. For any alliance to be successful it has to be worked at and that involves putting a great deal of effort into building standards of quality throughout the alliance – a chain is only as strong as its weakest link.
So what drives firms to try to expand overseas? Given that many firms do not have sufficient client demand to justify opening their own overseas offices, or, if it comes to that, not even enough regular flows of work to justify constructing alliances, what are they seeking to achieve?
In reality, is it just a very expensive branding exercise to build some name recognition abroad and some kudos here at home within the profession and with their clients? If that is the aim then they would do better buying advertising space on periphery boards at England's international games for less money.
If the rationale behind international expansion is merely to enhance the brand, then some firms may instead be seriously risking the brand reputations they have so carefully and successfully spent many years building.
Trying to manage people businesses at home is difficult enough, but at a distance it can be a nightmare. Managing the delivery of legal services in far-flung overseas territories under difficult conditions, with only limited access to resources, can put any legal brand at risk, even the best. As they say – when the cat's away the mice do play.
So given these risks, even with overseas offices over which firms have control, what hope is there for a firm which lends its cherished name to a loose alliance of overseas law firms, over whom the UK firm has no control whatsoever? The likelihood is that the risks of things going wrong may well outweigh any supposed branding gain.
The real test of success is if the firm's clients, when told about the firm's latest foray into international waters say: “Wow – that's great news for us.” Following your clients and adding value should be your guiding principles if you wish to be successful internationally.