Odds are, the American law firms will win in Australia

“If there is one principle more deeply rooted in the mind of every American, it is that we should have nothing to do with conquest.” Thomas Jefferson

Forty-one American law firms dominate the 2011 AmLaw Global 50, that is the 50 largest law firms in the world. Drawing on Jefferson, while these American firms have shunned military conquest per se they do seem set to be the victors in the globalising legal industry.

White & Case was the first American firm of the Global 50 to venture offshore through the opening of its Paris office in 1926. And Baker & McKenzie, by far the most globalised American firm, has expanded into 42 countries through its greenfield-only strategy since 1955 with the opening of its first offshore office in Venezuela – just six years after Russell Baker and John McKenzie founded the firm in Chicago. Just as Great Britain did in its colonisation era, these American firms have established more offshore presence than their British counterparts in today’s knowledge economy.

As firms jostle for market share and race each other to globalise, some have chosen the apparently fastest  route – a trans-Atlantic ‘merger’ with UK firms in federated entities. These firms are DLA Piper (Gray, Cary Ware & Freidenrich with Piper Rudnick and DLA), Hogan Lovells (Hogan Hartson and Lovells), SNR Denton (Sonnenschein Narth & Rosenthal and Denton Wilde Sapte) and Squire Sanders (Squire Sanders and Hammonds). These federations are enabled by Swiss verein arrangements in which firms are managed as separate profit pools while being branded as one firm. This structure (and strategy?) has been popularised by the Big 4 accountancy and advisory firms.

These 41 American firms have each occupied an average of eight countries. For each firm, these offshore offices are staffed by an average of 96 partners. This contrasts with an average of 324 partners per firm who still work out of America.

Since the 1960s Australia has seen the arrival of only seven American firms – Baker & McKenzie, Sullivan & Cromwell,  Skadden Arps, Jones Day, Dorsey & Whitney, DLA Piper and Squire Sanders. As the Australian resources and infrastructure boom continues and Chinese investment pours in, more globalising American law firms will undoubtedly look to consolidate their position in the Asian Century via an Australian presence. The only questions are: how many and how quickly?

Tags — #globalising law firms

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