DLA Piper’s Asia leadership question

With none of the three committee members based in Asia, will DLA Piper’s new US-led Asia management structure help the firm to achieve its ambition to be bigger and stronger in the region?

In a surprising move, DLA Piper revamped its Asia management structure at the end of last year, replacing the managing director role, which was most recently held by finance partner Bob Charlton, with a newly created three-member US-led Asia advisory committee (18 December 2013).

J Terence O'Malley

The committee consists of global co-chief executive officer Terry O’Malley, Americas co-chair Jay Rains, the new global co-CEO elect (4 February 2014), and Australia managing partner Andrew Darwin. Both O’Malley and Rains are based in San Diego while Darwin relocated to Sydney from London last year (17 January 2013) on a two-year term.

The lineup clearly suggests a shift from DLA Piper’s long-standing UK heritage in Asia to a US-driven strategy.

Since the firm first entered Asia with a Hong Kong opening in 1988, the Asia managing partner role had always been held by UK partners until the recent change. From the initial regional managing partner, Stewart Crowther, and Nick Seddon, the firm’s former Edinburgh managing partner who took over the role in 2004 (22 March 2004), to Alastair da Costa, former Europe, Middle East and Africa corporate head who relocated to Hong Kong in 2007 to take charge (8 October 2007) and his predecessor Bob Charlton, who moved from London for the role less than two years ago (3 April 2012), all four previous regional heads had been parachuted in from the UK to Asia.

“It has come to a place where we’re now moving quickly to fully integrate our global leadership and make adjustment to allow offices in Asia to have much closer ties with the US business,” says O’Malley. “What we’ve learned over the years is that the largest flow of work is between Asia and US. It is not a surprise that the strengthening Asia-US effort is consistent with the level of trade between the two regions.”

O’Malley adds that 60 per cent of the global Fortune 500 companies are clients of DLA Piperin the US and the majority of them have significant business activities in Asia. In recent months, the firm has also completed a number of large transactions for Asian clients acquiring assets and companies in the US. A highlight was the firm’s role in advising Chinese property developer Greenland Holdings on the purchase of a 70 per cent stake in the Brooklyn Atlantic Yards project.

O’Malley notes that the firm’s strategic shift has been 18 months in the making.

“Back 18 months or so ago, we thought about the biggest challenges that will be faced by the firm over the coming four to five years,” reveals O’Malley. ”One challenge was to continue integrating the global leadership and another one was to continue developing and strengthening business in Asia and to do it in a completely joined-up global effort.”

The rationale and the US-driven strategy have their merits, but it took the firm nine years to make the shift after the 2005 merger between DLA, Piper Rudnick and Gray Cary (25 October 2004). In addition, to many people’s surprise, none of the committee members will be based in Asia. So how does the new set up work?

O’Malley, who is leading the Asia committee’s effort, told The Lawyer that Asia is currently a primary focus in his global co-CEO role and even when he steps down from the top management role next year, he will remain focusing on Asia over the next a couple of years. However, he has ruled out the possibility of relocating to Asia.

“The three committee members will have meetings weekly to discuss issues and progress in Asia. I’ve also committed to spend 12 weeks of this year in Asia and I spend on average three to four hours a day on the phone with Asia offices,” adds O’Malley.

Modern day communications technologies, he notes, make it possible for him to manage the Asia offices remotely. For example, he uses Cisco’s Telepresence system to interview lateral hire partner candidates in Asia.

He recognises that the Asia practice is still in the early stage of development, even though the number of lawyers has doubled to 300 lawyers over the past five years. The firm will beef up a number of areas through support from the US offices and lateral hires in the local markets. 

Key areas the firm is looking to increase its offering in include foreign investment in Asia, intellectual property (particularly relating to data protection and privacy issues), regulatory and compliance, and dispute resolution. 

Since the Asia committee took over, the firm has already made a number of notable hires, including restructuring partner Mark Fairbairn from O’Melveny’s Hong Kong office (24 January 2014).

Apart from investing in and growing certain practices, there is market speculation that DLA Piper will axe certain practices that are mostly domestic focused in Hong Kong. The firm undertook a similar restructuring exercise in Australia under the leadership of Andrew Darwin last year (8 November 2013).

O’Mally responds by insisting, “the firm is clear in articulating its vision and goals. That allows people in the firm to make good decision on whether it’s the right place for them. We will continue to have changes in personnel over the time, but we will end up growing and more successful”.

Lastly, and perhaps, more importantly, O’Mally’s other goal is to find and nurturer the next managing director in Asia, whom he described as a lawyer practising law on a full-time basis in Asia.

“As the Asia practice continues to mature, there needs to be a strong leader that can represent the Asian voice of all Asian partners. Part of my mission is to assist in the development of the next generation of leaders in Asia,” he confirms.

As the Asia markets continues to grow in diversity, importance and sophistication, it is sensible for the global firms to exercise devolution of power from the headquarters to regional centres.  

With ambitious growth plans, top-level commitment and a fresh direction in strategy, DLA Piper has a good chance to move its Asia practice into a higher gear. But the road ahead of O’Malley will be no less bumpy and challenging than those before him.