As reported recently in this blog, Indian lawyers anticipate a liberalization of restrictions on foreign lawyers and law firms in the near future; although the concept is not without opposition from some members of the profession. Walker Clark clients elsewhere -- in southeast Asia, South Korea, Turkey, eastern Europe, Russia, and the Americas, for example -- also have had to respond to the effects that the entry of foreign lawyers and law firms have in markets that previously were largely insulated, either by local market conditions or by regulatory design, from foreign competition.
Each market, the proposed regulatory framework (or lack of it), and the specific practice orientation and client base characteristics of each firm make each situation truly unique. However, our observations and experiences advising national and local firms in these markets suggest five basic questions that lawyer and law firms should ask -- both of themselves and their clients -- as they start planning to meet these new competitive challenges.
1. What is the basic orientation of your law practice: retail or commercial? New entrants into a legal market, whether they be foreign law firms or non-traditional providers of professional services such as accountants, affect retail or "high street" practices differently than they do firms with a primary orientation toward corporate and business clients. For more information about the differences in strategic options available to retail and commercial firms, click here to read "The Coming Seismic Shift in Law Firm Business Development," published in this blog in October 2015.
2. What expertise and service capabilities are most important to your best clients now, and which ones will be even more important to them in the next two to three years? Don't guess at this information; ask specifically as part of a systematic inquiry of the 20% to 25% of your clients that produce the largest portion (often as much as 80%) of your fees. These clients are critically important to your firm's ability to continue to compete in a more open legal market; because your new foreign competitors will use all of their resources and marketing skill to lure them away from you.
3. What are your core strengths now? What can you offer clients that foreign competitors will not be able to offer at all? What can you offer better than your new foreign competitors, at least over the next two or three years?
4. Are you prepared to sustain your profitability in the face of possible price competition? If not, what improvements to your profitability and fee-earner productivity that you can make now?
5. How can the entry of foreign lawyers and law firms strengthen your ability to deliver expertise in areas in which you might currently be weak?
I hasten to point out that these questions are not even a starting point for specific planning for each firm, but they are important intellectual preparations by national and local firms as they begin the process of planning to meet the challenges and the opportunities -- and never forget the opportunities -- that liberalization of the legal market will present.